I don't know if you are valuation blind or what. I've been following this stock very closely for the last 11 years. It is clear as day, that AAPL profit growth can't support its current stock market. Please, do not refer to Apple's low P/E ratio or other backward statistics that essentially boils down to "look, Apple was great in the past, so it must be great in the future"
At the very heart of the ongoing demise of Apple is that its products are not that impressive relative to competition as they had been before. As Jobs said, Cook is not a product guy. Job's foresight is evident in the several misguided steps that Cook took in product development and personnel. For example, take a look at Cook's promotion of Jony Ivy. The guy is a very good hardware designer but he is not a software guy. Ivy tries to perfect minute OS details like curvature or spacing of letters (San Francisco font anyone?), but fails to address the elephant in the room: Apple sucks, and sucks mightily, in the cloud! Without a strong cloud and everything that comes with it (effortless syncing, AI assistance, ability to move smoothly from one device to another), today's smartphone or computer company can't succeed. Apple Watch is another manifestation of Ivy's misguided drive for perfection. I could go on but am afraid Apple die hards would call me a troll (you probably would call me a troll anyway because you are so invested in Apple that it hurts to hear the painful truth).
In short, under Cook's wings Apple products are not so much above and beyond the competition to justify Apple being the most valuable company in the world. The profit growth will decline, low P/E be damned, and with the lower profit growth so will go AAPL price. Mark my words, the day is coming when Apple will be dethroned from its "the most valuable" title, as said as it might be.
I think you're quite confused as Jony Ive has nothing to do with Apple's cloud services nor does he run Apple's software engineering teams. Eddy Cue is responsible for running iCloud and Craig Federighi software engineering. But again, Apple stock is down for one reason: rumors of iPhone production cuts. We've already gone through this before while Tim Cook was CEO; in 2013 the sky was falling, Apple was Doomed™ and Apple investors were scared shitless over Samsung, the Next Big Thing™. I swear this is just a cycle Apple goes through and anytime there is even the slightest whiff of possible bad iPhone news the nervous nellies run away from the stock in a panic.
I did want to mention the disaster Eddy Cue is to Apple, who's claim to fame is now long outdated iTunes, but wanted to keep my post concise. As big a role as Eddy Cue has for Apple, Jony Ivy still looms large having the ultimate control of both Industrial Design and Human Interface parts of Apple. Now, can there be a successful Human Interface without a strong cloud? Gimme a break, you know it can't anymore. Ultimately, I blame not Eddy or Jony for Apple's loss of profit growth, but Cook - the captain of the sinking ship.
I don't know if you are valuation blind or what. I've been following this stock very closely for the last 11 years. It is clear as day, that AAPL profit growth can't support its current stock market. Please, do not refer to Apple's low P/E ratio or other backward statistics that essentially boils down to "look, Apple was great in the past, so it must be great in the future"
At the very heart of the ongoing demise of Apple is that its products are not that impressive relative to competition as they had been before. As Jobs said, Cook is not a product guy. Job's foresight is evident in the several misguided steps that Cook took in product development and personnel. For example, take a look at Cook's promotion of Jony Ivy. The guy is a very good hardware designer but he is not a software guy. Ivy tries to perfect minute OS details like curvature or spacing of letters (San Francisco font anyone?), but fails to address the elephant in the room: Apple sucks, and sucks mightily, in the cloud! Without a strong cloud and everything that comes with it (effortless syncing, AI assistance, ability to move smoothly from one device to another), today's smartphone or computer company can't succeed. Apple Watch is another manifestation of Ivy's misguided drive for perfection. I could go on but am afraid Apple die hards would call me a troll (you probably would call me a troll anyway because you are so invested in Apple that it hurts to hear the painful truth).
In short, under Cook's wings Apple products are not so much above and beyond the competition to justify Apple being the most valuable company in the world. The profit growth will decline, low P/E be damned, and with the lower profit growth so will go AAPL price. Mark my words, the day is coming when Apple will be dethroned from its "the most valuable" title, as said as it might be.
Perhaps you have followed Apple stock, but not so much the company it would seem. As you don't seem to grasp why Apple has been as successful as they have been. Apple has never sold the "highest spec" device, but had found ways through UE, design, ecosystem, etc - to make desirable products that people are willing to pay a "premium for". Macs, iPods, iPhones, iPads, Apple Watches & associated services. Apple has consistently grown its shipments & value of devices for almost 20 years, through endless competition and ups/downs in the economy. This doesn't mean that success is a given, but tells me that Apple is focused on how to do this. They have a track record of doing this. They have a huge installed base, extremely high customer satisfaction, strongest ecosystem, and ever increasing in-house development over their key technologies.
Your argument isn't an analysis, but simply a view that "Apple is big & it may be harder to sell their stuff in the future". You don't look into the company at all.
Sog is having a nervous breakdown. He isn't the investor that he has portrayed for years. He is a gambler, and he got caught up in the Casino. Unfortunately, he might not be able to wait for the market to shift back to quality, and AAPL.
Personally, and I own no AAPL, I would want Tim to continue on the path of broadening Apple's reach to more markets, and filling the pipeline with more of the niche hardware (merely 10's of millions of units) and continue bolstering the ecosystem.
Easy for you to say that Tim is doing a 'good' job. You don't own any Apple shares. I friken do. And my Apple shares have gone down $40,000 because of stupid ass bullshit rumors and a stupid ass CEO who refuses to dispute those rumors.
Now if Apple was struggling and sales sucked, I would take it like a man and swallow my $40k loss. But that's not what's happenning. I have a $40k loss because the CEO is showing gross negligence in protecting the Apple stock and company reputation.
You're down $40K because you invested with something other than your brain... It's no one's fault but your own. Grow up.
Totally agreed, the idiots that sell its stock pushing the panic button are the ones to blame, not Cook or the Wall Street greedy movers. I have Apple since 2000 I have passed through many of this moments, in 2001 even the management team and the board had lost faith in the stock, so they backdated the stock options. And here I am from 3,57 to 100. So what, another deep, unless I need the money I will never sell until its fairly valued or Wall Street get mad buying the stock again, something that sooner or lated will happen, that's the moment to sell. And never look back again.
Easy for you to say with your sub $4 cost basis.
But what about the people who bought at $100, $110, $120? How the hell do you think they feel?
You blame the people selling the stock. Guess what? If Tim Cook defended the stock from total BULLSHIT rumors these people would not sell. I'm sorry but the average investor does not have time to research if these rumors are true or false. They see it plastered all over CNN, CNBC, WSJ, ect for WEEKS. And no response from Cook. What are they suppose to think?
If a rumor was spreading that Chiptole was serving deer meat do you think the CEO would say nothing? Hell no. He would come out with a statement right away. Yet Tim Cook says nothing when rumors come out that the iPhone is a weak seller and inventory if pilling up.
Exactly the same as me when I look at the value of Repsol, for what I paid 16€ per share a year from now and now are less than 10. But is my fault not the fault of the board, Or when I look at my Telefonicas that I wait to sell at 15 last year instead of accepting the 14,5 that touched, but all that is MY FAULT. And let me say you something; I feel much more nervous about both of them than about Apple, the fundamental value of Apple really exist, so in my more than 20years of experience in the stock market this sooner or later will be reflected in the stock, with a hoard of cash and a solid balance sheet sooner or later Wall St. must stop paying chicken with private investors, risking losing credibility. And would act properly, have in mind that all that reports include a target price way higher than the current one, so they still believe in the potential of the stock. I recognize that I am in a more sedate position because I don't live in the US and don't hear all that crap you speak about. If I know about all this is because I look for it, not accidental, as average US citizen.
On your last issue, as I have said I don't live in the US so I don't know that meat company or if exists for that matter. If the rumor is false I would act immediately, but if the rumor is true, or, as is this case, refers to a product in which we don't disclose exact sales figures, and we are in the silent period I would let it go, in a few days we will know for sure. If you don't need the money calm down, nothing happens. We have go this route before, as I can remember at least this is the third time I passed through this. SO who knows, those reports can be true and we all get screwed.
And, pelase, don't say i am confortable because my purchase price seen from 2016 is low. In 2001 the stock went to less than a third I paid for. And I don't remember for sure but AMZN, in which I invested more or less the same amount of money was even lower and Wall Street "sentiment" was that it would go bankrupt for sure, well both would go bankrupt. But to win in this game you must learn to suffer. I feel sorry for your worries, and I bet you are in the best stock in which to wait a rebound, if it was happening to AMZN you could bet that never would see the highs again. And advise from somebody that have lose the shirt in the stock market twice, and is prepared to lose it again.
If Tim Cook defended the stock from total BULLSHIT rumors these people would not sell. I'm sorry but the average investor does not have time to research if these rumors are true or false. They see it plastered all over CNN, CNBC, WSJ, ect for WEEKS. And no response from Cook. What are they suppose to think?
If a rumor was spreading that Chiptole was serving deer meat do you think the CEO would say nothing? Hell no. He would come out with a statement right away. Yet Tim Cook says nothing when rumors come out that the iPhone is a weak seller and inventory if pilling up.
Tsk tsk, really bad form for the CEO of such a large and important company to be distracted by hedge fund and analyst machinations, especially such predictable ones. Most people know this drill, except perhaps for newbies. Cook has made statements before, and very publicly, about not drawing conclusions about sales and production from supply chain rumors. He would look rather asinine in my opinion if he was out there beating that drum every time some analyst grasping for a storyline does it anyway.
And then of course, we're probably entering into the SEC quiet period anyway ...
Any dope could see that the 6 would have super strong growth numbers and the 6s would not be as strong. So why didn't Cook mention this? What would have been better?
iPhone6 - 10% growth iPhone6s - 10% growth
or
iPhone6 - 23% growth iPhone6s - 3% decline
Its basically the same. Its 10% growth per year which is awesome. But Cook FAILED to warn Wall Street that 6s would be tough.
When the iPhone7 comes we will be back to 10% growth.
Thats the problem with Cook. All he focuses on is units sold. He needs to focus on INSTALL BASE. Yes 6s sales won't grow like the 6 but the INSTALL BASE will increase with 6s. This is proven with the 33% increase in App store revenue in 2015. Cook has failed to show Wall Street the true vision of Apple. IMO Cook should be preaching this as the vision of Apple:
1. Apple is a ecosystem company. As long as the ecosystem is getting stronger and the install base is getting bigger they are winning. 2. Put less emphasis on unit sales. Hell, it would be good to get rid of all unit sales and just report install base. 3. Set clear goals for install base for 2018 and 2020. There should be specific markers and give updates each quarter on the increase in install base. 4. Put emphasis on Software/Services revenue. That's where the future is.
Right now Apple is viewed 100% from unit sold perspective. That's stupid. That's a game you will eventually always lose. The focus should be on ecosystem, how much people are locked into the ecosystem, and how much each user pays to say on the ecosystem. Everything should focus on that. Tim Cook should immediately:
1. Stop the buyback. Make it clear to investors that they need the money to invest in the ecosystem. Every dollar they spend on the ecosystem today will yield $10 in 5 years. 2. Buy Netflix or other smaller streaming company or build your own. Movies/TV shows is a huge pillar for an ecosystem. 3. Close the live TV deal. Just do it. Even if it means not getting the best deal. Who cares about making profit on the TV deal. Again its all about strengthing the ecosystem. 4. Buy a home security company and integrate it with HomeKit/AppleTV. Again this is all about locking-in customers to your ecosystem. 5. Invest heavy in gaming for AppleTV. 6. Stop pinching pennies with iPhone. Stop with the 16GB base model. Again the focus needs to be on locking people into the ecosystem and increasing install base. Who cares if you sacrifice a few dollars of profit. Think LONG TERM.
7. Make a more affordable iMac and MacMini. Again this is about ecosystem. People are sick of Windows but if the alternative cost DOUBLE the price they won't buy it. Start doing combo deals for iPhone+Mac. Buy an iPhone and get $100 off of a Mac. You need to use the power of iPhone to move more Mac sales.
Agree with everything except #1. Apple is overflowing with cash and will generate $70B in additional free cash flow this year. They can do everything they need + the stock buyback
In five years at the current stock buyback pace, Apple will take 40% of itself off the market. At current profit levels (assuming 0% growth for five years) and PE of 15, the stock would be priced at $227. And, it would open up huge options for dramatically increasing the dividend (easily would be able to afford $6-$8/share)
Taking stock off the market increases Apple's leverage. It is good for the company. And does not come with any impact on investing aggressively in the business
The iPhone 6 brought a larger form factor. The iPhone 6s mid cycle update is understandably less flashy.
So what can an iPhone 7 bring to the table that isn't simply thinner? Wireless earbuds? Removal of home button?, better battery life? OLED? All nice, but is it enough to sway someone with an iPhone 6 to upgrade?
Right now Apple is viewed 100% from unit sold perspective. That's stupid. That's a game you will eventually always lose. The focus should be on ecosystem, how much people are locked into the ecosystem, and how much each user pays to say on the ecosystem. Everything should focus on that. Tim Cook should immediately:
2. Buy Netflix or other smaller streaming company or build your own. Movies/TV shows is a huge pillar for an ecosystem. 3. Close the live TV deal. Just do it. Even if it means not getting the best deal. Who cares about making profit on the TV deal. Again its all about strengthing the ecosystem. 5. Invest heavy in gaming for AppleTV. 6. Stop pinching pennies with iPhone. Stop with the 16GB base model. Again the focus needs to be on locking people into the ecosystem and increasing install base. Who cares if you sacrifice a few dollars of profit. Think LONG TERM.
You motivated me enough to login & say that, despite the fact that people will nitpick your post: you make A LOT of great points. Obsession with unit sales per quarter isn't needed... Streaming should have happened already considering they're ALREADY in the content delivery business. 16GB iDevices is just frustrating non-techy new customers.
The only way to lock people into an eco system, especially as content has become a flat-rate all-you-can-eat business (so there is no cost to moving from one music service to another), is to have proprietary content, and/or have such a unique (notice I write "unique" not "good") UX that people won't want to incur the switching cost of learning a new OS.
Apple is not implementing neither, so concerns about the future growth are very appropriate; as are your points 2. and 5.
please stop. If no one can see this speculation and sell off is merely the work of hedge fund managers, i have no idea what you will see. Even Kramer has said in the past that when he ran his hedge, whenever he needed a quick uptick in profits, get someone to float bad news about Apple. That would move the meter and he and other folks hedging Apple lower would make a ton. Yet it plays out every earning season, people sell on fear, hedgers get rich, and when the price is low enough they buy again. Wash rinse repeat. And every earnings period, people act like they have never seen the same behavior before. Sad.
SOG is going on as if his stake is more like that of Carl Icahn - someone who probably is really not pleased with the current turn of events.
Could Carl makes a move on the Apple board and Tim Cook? Is his holding big enough to have an impact? Is he so quiet because he's up to something? Pressuring Cook to buy back Apple stock while he hangs on to his own chunk would surely serve to increase the voting influence of his holding. Wait for a rough patch, get some fund managers on-side and go for a spill?
Apple's cash hoard must be such a tempting target.
I'm probably severely overestimating the relative importance of his stake and spouting a load of nonsense. :-)
He's about 1% I believe.
Thanks, very accurate. Having dug around I make it 0.95 %
....and to add to this, DCF models only project earnings forward up to 10 years, and then make assumptions about earnings growth into ALL ETERNITY for the terminal value. This Terminal Value, although it is projected ten years out, for all future cash flows INTO ETERNITY, has the biggest impact on valuations. And given how reliant Apple is on new product development, and lacklustre new products recently, NO ONE will give Apple a high terminal value. Hence the low P/E. Apple share price is buoyed by the cash pile, that's it.
Google only makes $15 billion in profits a year and Apple makes $53 billion. Even if Apple's profits tanked 75% they would still make more profit than Google.
If you understood that the stock price is determined not so much by actual profits, but by the rate of change of profits, perhaps, you'd understand why AAPL is a sell. If Apple profits tanked 75%, an unlikely scenario as it is, the stock would tank mightily
I think you're quite confused as Jony Ive has nothing to do with Apple's cloud services nor does he run Apple's software engineering teams. Eddy Cue is responsible for running iCloud and Craig Federighi software engineering. But again, Apple stock is down for one reason: rumors of iPhone production cuts. We've already gone through this before while Tim Cook was CEO; in 2013 the sky was falling, Apple was Doomed™ and Apple investors were scared shitless over Samsung, the Next Big Thing™. I swear this is just a cycle Apple goes through and anytime there is even the slightest whiff of possible bad iPhone news the nervous nellies run away from the stock in a panic.
I did want to mention the disaster Eddy Cue is to Apple, who's claim to fame is now long outdated iTunes, but wanted to keep my post concise. As big a role as Eddy Cue has for Apple, Jony Ivy still looms large having the ultimate control of both Industrial Design and Human Interface parts of Apple. Now, can there be a successful Human Interface without a strong cloud? Gimme a break, you know it can't anymore. Ultimately, I blame not Eddy or Jony for Apple's loss of profit growth, but Cook - the captain of the sinking ship.
I'm not defending Apple's cloud services and I do think software is the weakest part of the company but I'm not sure how the cloud drives the user interface in terms of look and feel.
Slurpy, please tell me how really really feel. Seems like you are holding something back in your comments.
I see an opportunity for Sog: timcook.sucks is an available domain name. Go get it. Write editorials. Invite others to join in the discussion. Have members indicate if they are a shareholder. Offer petitions to the Apple board. Offer to post any rebuttals from Apple for a fee. Sell advertizing and get filthy disgusting rich. But please, just go.
I'll follow Sog there, and want him to remain here as well. Stop harassing Sog! Ignore his comments if you don't like them.
At 100.00 and change it was just too tempting, I had to get back in the AAPL game. I believe Apple products sold well this holiday season even more so with good discounts from Best Buy and other online retailers. Also before I sold this year a good percentage of my AAPL was bought well below this level, about 27% pre iPod.
Hopefully the iPad Air 3 will have 3D touch and the Apple Watch 2 improve Apple Watch sales. Not sure how well it's going to sell but damn do I love my iPad Pro.
I see an opportunity for Sog: timcook.sucks is an available domain name. Go get it. Write editorials. Invite others to join in the discussion. Have members indicate if they are a shareholder. Offer petitions to the Apple board. Offer to post any rebuttals from Apple for a fee. Sell advertizing and get filthy disgusting rich. But please, just go.
I'll follow Sog there, and want him to remain here as well. Stop harassing Sog! Ignore his comments if you don't like them.
Sog is repetitious to a fault on stock matters and has become mean spirited towards Tim Cook and irrational.
Add to that, Sog lost his bet, and now has reneged on his promise.
Let's all go back and read Sog's previous posts where he reveals his genius for investing.
Look at the whole market right now. Stocks are getting killed right now. For example, Chipotle Mexican Grill (which has grown spectacularly over the past several years) is down 40% over just one month (although it should be noted they had some serious food problems recently).
@sog (@kraytinprime) I thought you said you were going to ban yourself from the forums. Are you really not going to keep your word by creating a dummy account, all so you can continue to repeat the same anti-Cook diatribe over and over again?
I don't think we need a discussion board with no discussion, though. I don't agree with sog most of the time but he's an interesting poster.
we dont need crazed maniacs operating sock puppets in order to have discussion.
Comments
Ultimately, I blame not Eddy or Jony for Apple's loss of profit growth, but Cook - the captain of the sinking ship.
Your argument isn't an analysis, but simply a view that "Apple is big & it may be harder to sell their stuff in the future". You don't look into the company at all.
And let me say you something; I feel much more nervous about both of them than about Apple, the fundamental value of Apple really exist, so in my more than 20years of experience in the stock market this sooner or later will be reflected in the stock, with a hoard of cash and a solid balance sheet sooner or later Wall St. must stop paying chicken with private investors, risking losing credibility. And would act properly, have in mind that all that reports include a target price way higher than the current one, so they still believe in the potential of the stock.
I recognize that I am in a more sedate position because I don't live in the US and don't hear all that crap you speak about. If I know about all this is because I look for it, not accidental, as average US citizen.
On your last issue, as I have said I don't live in the US so I don't know that meat company or if exists for that matter. If the rumor is false I would act immediately, but if the rumor is true, or, as is this case, refers to a product in which we don't disclose exact sales figures, and we are in the silent period I would let it go, in a few days we will know for sure. If you don't need the money calm down, nothing happens. We have go this route before, as I can remember at least this is the third time I passed through this. SO who knows, those reports can be true and we all get screwed.
And, pelase, don't say i am confortable because my purchase price seen from 2016 is low. In 2001 the stock went to less than a third I paid for. And I don't remember for sure but AMZN, in which I invested more or less the same amount of money was even lower and Wall Street "sentiment" was that it would go bankrupt for sure, well both would go bankrupt. But to win in this game you must learn to suffer. I feel sorry for your worries, and I bet you are in the best stock in which to wait a rebound, if it was happening to AMZN you could bet that never would see the highs again. And advise from somebody that have lose the shirt in the stock market twice, and is prepared to lose it again.
And then of course, we're probably entering into the SEC quiet period anyway ...
In five years at the current stock buyback pace, Apple will take 40% of itself off the market. At current profit levels (assuming 0% growth for five years) and PE of 15, the stock would be priced at $227. And, it would open up huge options for dramatically increasing the dividend (easily would be able to afford $6-$8/share)
Taking stock off the market increases Apple's leverage. It is good for the company. And does not come with any impact on investing aggressively in the business
The only way to lock people into an eco system, especially as content has become a flat-rate all-you-can-eat business (so there is no cost to moving from one music service to another), is to have proprietary content, and/or have such a unique (notice I write "unique" not "good") UX that people won't want to incur the switching cost of learning a new OS.
Apple is not implementing neither, so concerns about the future growth are very appropriate; as are your points 2. and 5.
Hopefully the iPad Air 3 will have 3D touch and the Apple Watch 2 improve Apple Watch sales. Not sure how well it's going to sell but damn do I love my iPad Pro.
Add to that, Sog lost his bet, and now has reneged on his promise.
Let's all go back and read Sog's previous posts where he reveals his genius for investing.
http://fortune.com/2016/01/06/apple-wall-street/
Look at the whole market right now. Stocks are getting killed right now. For example, Chipotle Mexican Grill (which has grown spectacularly over the past several years) is down 40% over just one month (although it should be noted they had some serious food problems recently).