I figured this was going to happen when Google shot up after Facebook announced earnings. Wall Street loves so-called services companies right now, especially ones with little exposure to China. Not sure there's much Apple can do about that. I hope Apple management doesn't overreact and start doing dumb things (like buying Time Warner) just to try and change the Wall Street narrative on the company.
Doing the "dumb" things is exaclty what Apple should do, not because of Wall Street, but because of the future sustainable growth and existance. They need to find new revenue streams based on huge and loyal customersp database. So far they've been sitting on pile of cash and moving in other departments like snails...
People can spin it any way they want, but this is just not good news. The market currently has absolutely no confidence in Apple's ability to generate value from future growth opportunities. And, we can criticize or chuckle at Google all we want (I often get in on it too), but they have a narrative that the market is buying in droves. As it currently does with Facebook and Microsoft ...
Winner, winner, chicken dinner.
Market multiples are often broadly and on company-specific basis just a reflection of sentiment from the collective crowd. The sentiment from the market today on Apple is that nobody has any confidence in their ability to navigate this road bump and continue to grow. I don't get this hardware vs software crap..... apple has been sitting on tens of billions of cash for years, they could have diversified their revenue stream but chose not to. Why should management get a pass now for doing nothing when many people have for years said they law of large numbers and saturation would catch up to them. Guess what Tim Cook, it did, you just had your head buried in the sand.
I have no idea what Apple wants to be in 5 years nor does anyone on this board nor does the market. Their primary product growth is negative/shrinking (according to mgmt), why should the market give them a market multiple when mgmt can't articulate a vision for what they will be in 3 years let alone 5, something every other company on earth does???
To the point! Apple was slow in changing it's business and market saturation caught up sooner that they anticipated.
I figured this was going to happen when Google shot up after Facebook announced earnings. Wall Street loves so-called services companies right now, especially ones with little exposure to China. Not sure there's much Apple can do about that. I hope Apple management doesn't overreact and start doing dumb things (like buying Time Warner) just to try and change the Wall Street narrative on the company.
Doing the "dumb" things is exaclty what Apple should do, not because of Wall Street, but because of the future sustainable growth and existance. They need to find new revenue streams based on huge and loyal customersp database. So far they've been sitting on pile of cash and moving in other departments like snails...
Exactly, the idea that they could sit around with all that cash, do nothing and that iPhone market opportunity would just keep growing and growing was absurd. This slowdown was easy to see years ago (many called for it) and one would have expected Apple would have been hard at work diversifying their revenue stream. By the panic in Cook's voice on the conference call, my guess is they haven't done anything that was obvious and rested on their laurels too long.
MacDailyNews Take: Again, while “most valuable company” is a nice title to have, “maker of the best products and services” is really Apple’s goal, not to have the higher result of shares outstanding multiplied by share price.
If losing this symbolic crown – to Google, no less – makes Apple redouble their efforts to delight customers with excellence, we welcome the coronation wholeheartedly.
Google will never live up to expectations. Period. It can't happen. It's absurd to punish Apple because Wall Street can't belive a tech company can be the most profitable ever and then betting that other one, totally dependent of ad revenue can beat it big, because to give it that valuarion well in advance of beating Apple revenue, not of this year, but for at least three to four years ago, and to beat its cash reserves they can only be betting that those guys will grow forever and earn at least double of what Apple can earn in a sustainable basis. Its impossible to achieve, so be prepared for the next Goigle miss. They got it in the past, they will got in the future. That will be a big crash.
Google is in the business of selling the information. Apple is in the business of selling the product with some services. Apart from music and the apps, they are not very good in anything else and even here it takes them years to move over a single milestone partly due to nature of the business and partly due to nature of Apple . Google on the other hand changes and adapts to trends easily and quickly and is un disputable market leader in advertising by far. I'm sorry to admit that Apple with its honest policy of privacy and other morals stands no chance in competing with Google in service industry.
Guy, unless you have hard fact to prove. Apple this year will add another 50billion to its cash reserves. Think what you want but predicting the future of a company with a quarter alone is as predicting a teendline with only a point. Apple has passed through speed bumps before. That said, maybe is the beginning of the end, but judging from the overall sentiment in the forums, and knowing that broad sentiment in something is most of the time wrong. I feel confident in the company. Even stagnating, something that seing the capex and investment plans I think will not happen, Apple must accumulate until 2020 between 200-250 additional billions to its cash reserves, if you prefer, no less than 400 billion in cash-flow.
Now please, go to Google and tell me how much needs to grow Alphabet to 2020 to match that figure, not beat it, match. And don't tell me that from now on iis downhill for Apple that's as wishfull thinking as two digit grow can be. There are not hard evidence of any of those. The only hard fact we know is that Apple still expands is sales network in China and India. Hardly a symptom of any serious long term slowdown.
so as I ask Tell me how Google can generate with its revenue growth at high teens 400 billion cash flow untill 2020 and I will accept Google is more valuable long term than Appke.
ah, and that fairy tale that Wall Street only value growth, only in your dreams, history says that really succesfull investors (Buffett, Graham, Icahn) are interested in VALUE not in growth. Buffett was the most succesfull investor ever well before buying any red hot growth stock, something that he never have bought. And in VALUE Apple is king.
1. stock price is not the reason I buy Apple product; 2. I like Apple being a underdog; 3. Wall Street, well, is crazy/irrational
You got that right - especially number 2. The bigger Apple has gotten (and particularly in the post-Jobs era), the more complicated and buggy their products have become.
Complete horse-shit. I've been using Apple products for a long time. No, they're not "buggier". They just have 10X the features and 100X the userbase, so obviously 1000X the whining and bitching. There isn't a shred of evidence to suggest anything is empirically buggier, except that for every person who complained online 10 years ago, you now have a thousand. That's what happens when you sell 13,000,000 devices in a single fucking weekend. I can't even recall the last time my Mac crashed or had an issue, and that never used to be the case. As for my iPhone/iPad, they're rock solid, and infinitely more useable and flexible than they were only a few years ago. Try again.
One day advertisers are going to wake up and realize that most of them are pissing their money away with this company.
I don't think so. For example: In the last year I've had all my old apple products no longer run youtube as Google changed the code to force ads. When I use youtube on newer apple products the ads are much longer and more invasive then in the past. Google basically has a monopoly with youtube and can dial up the advertising as much as it wants - it could double or triple the ad revenue ad in a moments notice and I think that's what they did last year. No one talks about youtube but I use it every day (and and my family are I'm very casual lightweight users). Just to support this I googled and found an analyst snippet "We believe the aggregated revenue contribution from YouTube AND Google Play has risen from 4% of Gross Revenue in 2010 to 15% in 2015 and should reach 24% by 2020, given the higher trajectory of growth versus core search"
I would be happy if Apple made at least some share gains and increased dividends even if it only has the second largest market cap. When I first bought Apple stock I never dreamed of it having the highest market cap and I didn't even know what company had the highest market cap at the time. It simply didn't mean anything to me. As an Apple shareholder I was happy to see Apple become more valuable because I thought it would benefit me as a shareholder. I guess it helped a little bit.
I know Apple hasn't turned into a pumpkin because it's behind Alphabet in market cap. I'm not sure if anyone at Apple cares or should care. The crown gets passed around as no company keeps it forever. I think Apple squandered good opportunities to hold onto the crown longer but they allowed their revenue growth to stall terribly (possibly due to a weak economy). From a possible trillion dollar market cap company to only half that amount came very quickly. It's really not that big of a deal. Good for Alphabet being able to turn into a more valuable company than Apple. Let's see how long Google can hold onto the crown.
OT: And more than 1 billion people have let WhatsApp upload their contacts list. If you thought your abstinence from WhatsApp (or by extension/analogy Android) was helping maintain your privacy, it's probably not the case. People are such flaming ignorant @ssholes.
So what you're saying is that they pulled in less than half the revenue, and even less profit than Apple did... Apple stock drops, and Google stock soars because of "expectations"? What a crock.
Whew! I’m glad this is finally over. Maybe now we can start seeing articles about Google being a tax dodger, Android OEMs using slave labor and suicide nets, Nexus devices using Cobalt from mines that employ child labor. Maybe Mike Daisy will come up with another one-man show about Google instead of Apple now. Such will be the fate of the world’s most valuable company, Google. Will Greenpeace go after the world’s most valuable company now, hanging banners off of their buildings?
I figured this was going to happen when Google shot up after Facebook announced earnings. Wall Street loves so-called services companies right now, especially ones with little exposure to China. Not sure there's much Apple can do about that. I hope Apple management doesn't overreact and start doing dumb things (like buying Time Warner) just to try and change the Wall Street narrative on the company.
Doing the "dumb" things is exaclty what Apple should do, not because of Wall Street, but because of the future sustainable growth and existance. They need to find new revenue streams based on huge and loyal customersp database. So far they've been sitting on pile of cash and moving in other departments like snails...
So you just want them to buy growth. Wall Street might love that but most people would probably just say Apple is so out of ideas and innovation that the best they can do is buy growth (and probably destroy the culture along the way). Look I remember 2013 when there were rumors that the board was looking to replace Cook (most likely BS) and everyone was freaked out because Samsung was The Next Big Thing™.
But honestly when aren't people freaked out about Apple? There's constant worry and concern. On the one hand you have investors, analysts, tech press constantly looking for the next iPhone or complaining about the lack of innovation (because Apple, unlike Google and others keeps its R&D secret), on the other hand you have people saying Apple is spread to thin and they need to focus more, none of this VR nonsense just give me my Skylake MacBook Pro already. Basically Apple is a victim of its own success.
Doing the "dumb" things is exaclty what Apple should do, not because of Wall Street, but because of the future sustainable growth and existance. They need to find new revenue streams based on huge and loyal customersp database. So far they've been sitting on pile of cash and moving in other departments like snails...
So you just want them to buy growth. Wall Street might love that but most people would probably just say Apple is so out of ideas and innovation that the best they can do is buy growth (and probably destroy the culture along the way). Look I remember 2013 when there were rumors that the board was looking to replace Cook (most likely BS) and everyone was freaked out because Samsung was The Next Big Thing™.
But honestly when aren't people freaked out about Apple? There's constant worry and concern. On the one hand you have investors, analysts, tech press constantly looking for the next iPhone or complaining about the lack of innovation (because Apple, unlike Google and others keeps its R&D secret), on the other hand you have people saying Apple is spread to thin and they need to focus more, none of this VR nonsense just give me my Skylake MacBook Pro already. Basically Apple is a victim of its own success.
Apple management gets paid hundreds of millions of dollars to figure this stuff out. If they all just rode the wave of Steve Jobs genius - and it appears increasingly likely that is the case - how about they give some of that money back??
People can spin it any way they want, but this is just not good news. The market currently has absolutely no confidence in Apple's ability to generate value from future growth opportunities. And, we can criticize or chuckle at Google all we want (I often get in on it too), but they have a narrative that the market is buying in droves. As it currently does with Facebook and Microsoft as well.
Kudos to them.
Apple truly can and must do better on conveying some sense of who or what it wants to be 2, 5, 10 years out. This is not rocket science. Every major company does it in some form or the other. That's a huge part of what CEOs are paid to do. It involves much more than talking about "industrial era taxes", "dollar versus yuan", etc.
I realize a lot of people here do not own AAPL and therefore couldn't care less, but for those of us who have been very long-term shareholders of the company, this news hurts. There is simply no need for such underachievement. It's bewildering.
(And, please spare me the vacuous stuff about "Wall Street casino" and such; those are simply sound bites).
You think google or Facebook has articulated what they will be in 2,5,10 years from now?
While we need to see if Alphabet holds all of those gains tomorrow to see if they hold the "crown" for long, I personally think Apple would benefit by being out of the number one spot (e.g. target) for awhile. Let Alpha-Google be the darling child, but then also the eventual target of the media.
Such gloom & doom on this board regarding Apple!! Poor company - it was born with a silver spoon in its mouth and never had to innovate or build anything - never had to overcome adversity - what ever will they do? Only $212 Billion in the bank? Clearly never saved for a rainy day. Taking a look over the last two years, it would seem that their main product line is up about 40% - clearly they have no idea how to grow it. Sure their in-house CPU & GPU design teams may be top notch and achieving gains above all others, but now that the iPhone has hit a speed bump with first quarter of declines ever, there is obviously no way they can use such technology for future products.
I highly recommend that anyone with AAPL on this board sell it & buy Alphabet shares. Apple needs to buy back some more shares, so then do need people to sell.
One day advertisers are going to wake up and realize that most of them are pissing their money away with this company.
I don't think so. For example: In the last year I've had all my old apple products no longer run youtube as Google changed the code to force ads. When I use youtube on newer apple products the ads are much longer and more invasive then in the past. Google basically has a monopoly with youtube and can dial up the advertising as much as it wants - it could double or triple the ad revenue ad in a moments notice and I think that's what they did last year. No one talks about youtube but I use it every day (and and my family are I'm very casual lightweight users). Just to support this I googled and found an analyst snippet "We believe the aggregated revenue contribution from YouTube AND Google Play has risen from 4% of Gross Revenue in 2010 to 15% in 2015 and should reach 24% by 2020, given the higher trajectory of growth versus core search"
And they only paid $1billion for youtube. Apple was sitting on WAY more cash than Google at the time and could have bought it instead. They didn't and are now catching up in video. Those that try to insinuate Apple mgmt havent made mistakes are simply mistaken.
Have you perhaps at any point considered that there's nothing else to talk about apart from "dollar vs. yuan" and stuff?
I have, and you're utterly wrong.
Apple has incredible talent, incredible design and product development skills, incredible resources, and a heritage of quality, ballsiness and management skills developed in spades by SJ over a decade and a half. They have had a growth path that is beyond compare, and every one of their current senior managers (except Ahrendts) has been a part of that story and has witnessed that first hand. They have the ability to manage costs -- thanks to Tim Cook -- that few others, in this industry or any other, can match. They have opportunities in enterprise, health, education, automobiles, the living room, home automation, services, payments, India, etc (I am sure I am missing a few) that few companies can dream of accessing.
What they lack is the ability to communicate their vision to the market under the current crew. And they have a Board that is populated with a bunch of mediocre has-beens.
Doing the "dumb" things is exaclty what Apple should do, not because of Wall Street, but because of the future sustainable growth and existance. They need to find new revenue streams based on huge and loyal customersp database. So far they've been sitting on pile of cash and moving in other departments like snails...
So you just want them to buy growth. Wall Street might love that but most people would probably just say Apple is so out of ideas and innovation that the best they can do is buy growth (and probably destroy the culture along the way). Look I remember 2013 when there were rumors that the board was looking to replace Cook (most likely BS) and everyone was freaked out because Samsung was The Next Big Thing™.
But honestly when aren't people freaked out about Apple? There's constant worry and concern. On the one hand you have investors, analysts, tech press constantly looking for the next iPhone or complaining about the lack of innovation (because Apple, unlike Google and others keeps its R&D secret), on the other hand you have people saying Apple is spread to thin and they need to focus more, none of this VR nonsense just give me my Skylake MacBook Pro already. Basically Apple is a victim of its own success.
I said nothing about buying growth. Create to maintain sustainable growth.
Wall Street is irrational? Please! Those who listen to rumors obviously are irrational, but those people who create those rumors to capitalize on are not irrational.
Comments
To the point! Apple was slow in changing it's business and market saturation caught up sooner that they anticipated.
MacDailyNews Take: Again, while “most valuable company” is a nice title to have, “maker of the best products and services” is really Apple’s goal, not to have the higher result of shares outstanding multiplied by share price.
If losing this symbolic crown – to Google, no less – makes Apple redouble their efforts to delight customers with excellence, we welcome the coronation wholeheartedly.
Now please, go to Google and tell me how much needs to grow Alphabet to 2020 to match that figure, not beat it, match. And don't tell me that from now on iis downhill for Apple that's as wishfull thinking as two digit grow can be. There are not hard evidence of any of those. The only hard fact we know is that Apple still expands is sales network in China and India. Hardly a symptom of any serious long term slowdown.
so as I ask Tell me how Google can generate with its revenue growth at high teens 400 billion cash flow untill 2020 and I will accept Google is more valuable long term than Appke.
ah, and that fairy tale that Wall Street only value growth, only in your dreams, history says that really succesfull investors (Buffett, Graham, Icahn) are interested in VALUE not in growth. Buffett was the most succesfull investor ever well before buying any red hot growth stock, something that he never have bought. And in VALUE Apple is king.
But honestly when aren't people freaked out about Apple? There's constant worry and concern. On the one hand you have investors, analysts, tech press constantly looking for the next iPhone or complaining about the lack of innovation (because Apple, unlike Google and others keeps its R&D secret), on the other hand you have people saying Apple is spread to thin and they need to focus more, none of this VR nonsense just give me my Skylake MacBook Pro already. Basically Apple is a victim of its own success.
Such gloom & doom on this board regarding Apple!! Poor company - it was born with a silver spoon in its mouth and never had to innovate or build anything - never had to overcome adversity - what ever will they do? Only $212 Billion in the bank? Clearly never saved for a rainy day. Taking a look over the last two years, it would seem that their main product line is up about 40% - clearly they have no idea how to grow it. Sure their in-house CPU & GPU design teams may be top notch and achieving gains above all others, but now that the iPhone has hit a speed bump with first quarter of declines ever, there is obviously no way they can use such technology for future products.
I highly recommend that anyone with AAPL on this board sell it & buy Alphabet shares. Apple needs to buy back some more shares, so then do need people to sell.
And they only paid $1billion for youtube. Apple was sitting on WAY more cash than Google at the time and could have bought it instead. They didn't and are now catching up in video. Those that try to insinuate Apple mgmt havent made mistakes are simply mistaken.
Apple has incredible talent, incredible design and product development skills, incredible resources, and a heritage of quality, ballsiness and management skills developed in spades by SJ over a decade and a half. They have had a growth path that is beyond compare, and every one of their current senior managers (except Ahrendts) has been a part of that story and has witnessed that first hand. They have the ability to manage costs -- thanks to Tim Cook -- that few others, in this industry or any other, can match. They have opportunities in enterprise, health, education, automobiles, the living room, home automation, services, payments, India, etc (I am sure I am missing a few) that few companies can dream of accessing.
What they lack is the ability to communicate their vision to the market under the current crew. And they have a Board that is populated with a bunch of mediocre has-beens.