Yet he kept spewing about rapid iPhone grow even up to Oct?
It is not just AAPL that is getting hit. There are many factors at work here. It is a global economy and around mid-November last year a lot of crap happened worldwide that affected the markets, including financial slow down in China, oil price collapse, wars, Iran, Russia, sanctions, refugee crisis, euro collapse, CAD and AUD collapse, strong dollar, global warming hurricanes, and severe weather, smartphone saturation. A lot of stuff came to a head at the same time. It has been a rough couple months for many investors. I don't think you can put all the blame on Tim Cook. After all he was hand picked by Jobs as a successor and until two months ago the stock was doing pretty well.
That must hurt. It will be the year of the big decline for Apple; keeping product prices that high is eventually unsustainable. I hope Apple will recognize that quickly and also stop burning its money (why not give it to the current employees, that would be a nice bonus).
you realize apple has had expensive computers since the 1980s, right?
that being said, the starting prices are quite inexpensive:
ipod: $50
ipad: $269
mac: $499
macbook: $899
...the apple tax is a myth these days.
But the problem is that over 60% of Apple sales are in foreign countries. The USD has appreciated so much that Apple product and services are becoming too expensive in those currencies. This in combination with the already premium pricing is not great.
I still believe buying Apple stock at $92 is a decent price if you are willing to hold for 5 years.
Nobody knows where AAPL will be tomorrow, next week, next year. Investing in the stock market can be risky. You know that going in. There are other investments with lower risk/reward ratios, but if you are going for the big win, you risk a big loss. That is why financial advisors always urge you to diversify.
That must hurt. It will be the year of the big decline for Apple; keeping product prices that high is eventually unsustainable. I hope Apple will recognize that quickly and also stop burning its money (why not give it to the current employees, that would be a nice bonus).
you realize apple has had expensive computers since the 1980s, right?
that being said, the starting prices are quite inexpensive:
ipod: $50
ipad: $269
mac: $499
macbook: $899
...the apple tax is a myth these days.
Lying doesn't get you any further, mini starts from €570, iMac from €1280, iPhone from €750 (+ from €850!!!). Prices are astronomical compared to the build cost, people are not buying because of it. Like I said: unsustainable.
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).
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???
No one remotely familiar with Apple would argue they are sitting still and doing nothing. The iPhone and iPad were in development for years before a product was announced. Just because things suddenly look "grim" (LOL) is no reason to doubt there is plenty going on behind the scenes.
2. Selling MacMini that can't be upgraded 3. Selling iMac that can't be upgraded and a fusion drive with less memory 4. Selling expensive iMac with POS slow spinning hard drives 5. Ridiculously expensive prices to upgrade memory on iPads and iPhones 6. Not updating iPad Air2 last year and charging the same price 7. Not putting touchID on Mac's 8. Charging ridiculous prices on Apple accessories 9. Only giving 5GB of free iCloud no matter how many devices you have
This all reeks of bean counters taking control.
That stuff is trivial. On the other side of the coin they have made huge investments in enormous projects, like the partnership with IBM, building dozens of new Apple stores, major data center investments, inventing Swift, ApplePay, Siri improvements, Map improvements, Beats acquisition, several other acquisitions, CarPlay, perhaps even a car, Mac App Store, Gatekeeper, A series chips, Metal, rapid OS X development and making it free, 100s of patents, 5K iMac, Mac Pro, Apple Watch, medical research, Photo Stream, Music Match, Continuity, new headquarters, stock buy back, dividend and new latin American emphasis, just to name a few. If anything Apple has too many irons in the fire lately, yet you think they should get into more. I believe they are taking a careful measured approach in all these areas and not jumping in too fast for the sake of market cap or share price. There needs to be balance and that is what I think they are trying to accomplish.
You're still crying about your shares. And you're pissed that Cook didn't say more, for *your* benefit, beyond what he's legally bound to say. There's a limit to what shareholders are entitled to. You're blaming Apple for your bad decisions.
Additionally, expecting Apple to innovate *at the pace you expect them to* is unreasonable. Further, not every product will get an update exactly when you'd like. The Mini? You can't be serious.
Your problem is with SEC rules for financial/outlook disclosure, not with Apple. Tim Cook's first responsibility is to his company's revenue and profit, via pleasing the consumer, and not to line your pockets.
iPhone growth was unprecedented all this time, and now Apple lowered their outlook, within the rules. You're upset not over products, not over company performance, but because Cook didn't inform you of the obvious in a timeframe you would have liked, nor did he provide you with information on the Next Big Thing... as if you have a right to that information!
You're a clueless investor, and your thinking is irrational, not to mention incredibly arrogant.
Take your grievances to the SEC, or apply to the courts.
Typical Tim Cook koolaid drinker. The type of person who is satisified as long as Cook says only what he's legally bound to say. Guess what? That does not cut in in the investment community.
I have no reason NOT to be a Tim Cook Koolaid drinker. He's a talented CEO. In addition and more importantly, Jony Ive works with Tim Cook, including a first-class team. I'm all for that flavour of Koolaid.
Look, I understand you're upset. I wouldn't be pleased with losing money on an investment either. But this really doesn't look anything like a reflection of any wrongdoing or lack of innovation on Apple's part.
Apple keeps hitting new highs – record profits, record sales in all the right areas. They keep perfecting and iterating on the Apple ecosystem, whether in big steps or small steps (they've been doing both), and the financial rug is pulled from beneath them. Cook lowers the outlook a bit (which at some point was expected), and the market punishes Apple. You expect him to give you strategic information before (and more than) he's required by law, and then *you* punish Apple even further.
Does the market in this case make any sense? Everyone who invests in Apple KNOWS (or at least is reasonably expected to) that the company plays its cards very close to its chest, and ALWAYS has. They feel it is necessary. Their success story for well over a decade PROVES that it's necessary. You know the caveats with Apple when it comes to expecting disclosure that is over and above what the law requires.
I'm not looking to give you a hard time over this, but let's be reasonable.
The best thing is Apple would not have to spend dime. They could just pay them 100% in stock. The same stock Apple bought back for $60 in 2013.
The same stock? We've had that conversation before. That stock does not exist. Bought and retired, gone, gone, gone. It did not become treasury stock, a tangible asset they could have resold.
The best thing is Apple would not have to spend dime. They could just pay them 100% in stock. The same stock Apple bought back for $60 in 2013.
The same stock? We've had that conversation before. That stock does not exist. Bought and retired, gone, gone, gone. It did not become treasury stock, a tangible asset they could have resold.
In addition to his tendency to lie Sog also refuses to accept common knowledge about Apple.
Why would they announce they have raised the buy back amount budgeted for the coming years and then turn around and issue more stock at the same time? Sounds like counter productive and conflicting strategies.
Why would they announce they have raised the buy back amount budgeted for the coming years and then turn around and issue more stock at the same time? Sounds like counter productive and conflicting strategies.
Why? The buyback is like their personal bank.
Save up for a rainy day and buy a good deal when it happens. If the good deal never happens then at least you have money saved up.
Apple can continue to buy back stock until they see a good company to buy. Then they can issue stock to 'reverse' the buyback.
They already do this on a smaller scale with employee stock rewards.
Not at all comparable to saving for a rainy day. There's no rain, the stock they bought back was burned. Gone. It has ZERO value. The money was spent and no tangible property to show for it. Every time Apple uses their buyback program to remove stock from the market it's simply an expense. No value is created or retained. I've explained it every way I can.
Save up for a rainy day and buy a good deal when it happens. If the good deal never happens then at least you have money saved up.
Apple can continue to buy back stock until they see a good company to buy. Then they can issue stock to 'reverse' the buyback.
They already do this on a smaller scale with employee stock rewards.
Not at all comparable to saving for a rainy day. There's no rain, the stock they bought back was burned. Gone. It has ZERO value. The money was spent and no tangible property to show for it. Every time Apple uses their buyback program to remove stock from the market it's simply an expense. No value is created or retained. I've explained it every way I can.
@gatorguy, you're generally right. But there are instances when a so-called 'contra-equity' account will be created to account for the treasury stock that is kept after a buyback. It gets somewhat complicated to explain. But there are some good resources out there that explain contra-equity. Happy to provide links, or you can just search for the term.
You're right in that Apple does not seem to keep any treasury stock (at least, I don't see any in their equity accounts, perhaps someone else can elucidate). But that could certainly change.
Save up for a rainy day and buy a good deal when it happens. If the good deal never happens then at least you have money saved up.
Apple can continue to buy back stock until they see a good company to buy. Then they can issue stock to 'reverse' the buyback.
They already do this on a smaller scale with employee stock rewards.
Not at all comparable to saving for a rainy day. There's no rain, the stock they bought back was burned. Gone. It has ZERO value. The money was spent and no tangible property to show for it. Every time Apple uses their buyback program to remove stock from the market it's simply an expense. No value is created or retained. I've explained it every way I can.
@gatorguy, you're generally right. But there are instances when a so-called 'contra-equity' account will be created to account for the treasury stock that is kept after a buyback. It gets somewhat complicated to explain. But there are some good resources out there that explain contra-equity. Happy to provide links, or you can just search for the term.
You're right in that Apple does not seem to keep any treasury stock (at least, I don't see any in their equity accounts, perhaps someone else can elucidate). But that could certainly change.
When Apple announced the stock buyback program they informed the SEC what the plans for the repurchased stock were as they are required to do. Under the current program they don't have the option of retaining it as treasury stock as I understand it. Now as far as treasury stock and Apple are concerned I believe they do have a little nest egg (isn't that where the stock given to upper management come from? Not certain), but IF they do there's not a single share of it that came from the current stock buyback program.
EDIT: Anant, looks like you're probably right about Apple not having any treasury stock. I don't find any either. Thanks!
Not at all comparable to saving for a rainy day. There's no rain, the stock they bought back was burned. Gone. It has ZERO value. The money was spent and no tangible property to show for it. Every time Apple uses their buyback program to remove stock from the market it's simply an expense. No value is created or retained. I've explained it every way I can.
He does not want to understand. When Apple retires a share the serial number is voided and cannot be resold. Furthermore he seems to be confused that they buy back at one price and could reissue at a different price is some buy low sell high advantage. The advantage is only that by reducing the number of outstanding shares makes the shares more valuable.
Besides, his idea that they could issue $50 B and pay to acquire TW with just new shares is ridiculous because TW has already refused a $50 B offer from Fox and I'm pretty sure TW shareholders would not accept an all stock deal. Apple shareholders would probably not approve it either.
He is just kicking himself that he was not better diversified. You really shouldn't invest more than 20% of your portfolio in a single stock. I doubt he would be so vocally adamant if it was a slight drop in an investment that only represented a 20% or less of his entire portfolio. From the way he talked earlier he was all in on AAPL.
Bottom line is Apple is known as an innovative company. Yet the CEO is not an innovator.
1. Fire Tim Cook and replace him with an innovative CEO who actually built his own company.
6. The CEO needs to be upbeat and have tremendous energy. He must be confident, almost dilusional. He needs to be supremely confident about Apple's ability to grow and that excitement and confidence needs to bleed through every time he speaks. Cook is like a dead man talking. So dead. So boring.
Who should this be then? Name a name? Should it be Jeff Bezos. Want Delusional then there's Steve Ballmer.
Tony Fadell started his own company and came out of Apple. Maybe he's the one. Of course Apple passed on buying Nest. (If only Larry Page would start an affair with his wife)
What about Elon Musk? Can apple Buy/Merge with Tesla?
Sorry but there are probably few people that would be that good to merit replacing Cook.
I see Apple's main problem as not enough breadth of talent at the top. It took far too long to get the Watch out and to keep updating the iPad.
Bottom line is Apple is known as an innovative company. Yet the CEO is not an innovator.
1. Fire Tim Cook and replace him with an innovative CEO who actually built his own company.
6. The CEO needs to be upbeat and have tremendous energy. He must be confident, almost dilusional. He needs to be supremely confident about Apple's ability to grow and that excitement and confidence needs to bleed through every time he speaks. Cook is like a dead man talking. So dead. So boring.
Who should this be then? Name a name? Should it be Jeff Bezos. Want Delusional then there's Steve Ballmer.
Tony Fadell started his own company and came out of Apple. Maybe he's the one. Of course Apple passed on buying Nest. (If only Larry Page would start an affair with his wife)
What about Elon Musk? Can apple Buy/Merge with Tesla?
Sorry but there are probably few people that would be that good to merit replacing Cook.
I see Apple's main problem as not enough breadth of talent at the top. It took far too long to get the Watch out and to keep updating the iPad.
I guess you could probably add Jon Rubenstein to that list as well.
Not at all comparable to saving for a rainy day. There's no rain, the stock they bought back was burned. Gone. It has ZERO value. The money was spent and no tangible property to show for it. Every time Apple uses their buyback program to remove stock from the market it's simply an expense. No value is created or retained. I've explained it every way I can.
My point is nothing is stoping Apple from buying companies with stock. They would do this by issue new shares.
And if that were the case, then Apple deserves to see its stock go to zero. Nothing screams overvalued like a public corporation selling its own shares to raise cash/buy companies. Look at this way. If you owned an asset that you could sell for $100 today but you believed you could sell that same asset for $150 in six months, it would be asinine for you to sell that asset today. Now on the other hand, if you believed that you would get only $80 bucks in six months for the same asset worth $100 today, then it would be very smart to sell it today.
No one knows the business like the company's own management. That's why in a way, stock buybacks and sales are a form of insider trading. There is a fundamental asymmetry in information. Having access to information that no other market participants have, if a company's management is willing to sell its own shares on the open market, that's a sign the management believes the stock is overvalued. The alternative is that the management doesn't know what it's doing. That's pretty bad too.
Who should this be then? Name a name? Should it be Jeff Bezos. Want Delusional then there's Steve Ballmer.
Tony Fadell started his own company and came out of Apple. Maybe he's the one. Of course Apple passed on buying Nest. (If only Larry Page would start an affair with his wife)
What about Elon Musk? Can apple Buy/Merge with Tesla?
Sorry but there are probably few people that would be that good to merit replacing Cook.
I see Apple's main problem as not enough breadth of talent at the top. It took far too long to get the Watch out and to keep updating the iPad.
I guess you could probably add Jon Rubenstein to that list as well.
Maybe. If Apple can hire the Flash guy for the watch why not Rubenstein.
Good job Tim Cook. You've done something I thought was impossible. Make me think Google's future is brighter than Apple's.
Google's stock future is brighter right now, not the company.
That's a reach. Look at Google's semi-recent release of Tensor Flow. They've published one of their most valuable technologies for anyone to use. This is the basis for speech recognition, AR translation, ad selection, etc. Google has gone from a handful of deep-learning AI projects 5 years ago to 1000s now, all based on Tensor Flow. So they release this to the world to use. Why? Well, if anyone does anything significant with it, they will simply buy that company and add it to their 1000s of deep learning AI projects. FB and Amazon won't base any tech on Tensor Flow, so it's not going to enable any competition.
This is pretty forward thinking. They're basing their future on AI, and it's amazing. Inbox for Gmail offers automated replies for me (at least the first sentence), and it's a useful response more than half the time. It's really amazing, even offering a "Haha, thanks!" if there's a joke with a useful answer in an email I receive.
There's a tone of future with Alphabet.
I'd be more concerned about Apple as they now show us they can count to 7.
Comments
Prices are astronomical compared to the build cost, people are not buying because of it.
Like I said: unsustainable.
Look, I understand you're upset. I wouldn't be pleased with losing money on an investment either. But this really doesn't look anything like a reflection of any wrongdoing or lack of innovation on Apple's part.
Apple keeps hitting new highs – record profits, record sales in all the right areas. They keep perfecting and iterating on the Apple ecosystem, whether in big steps or small steps (they've been doing both), and the financial rug is pulled from beneath them. Cook lowers the outlook a bit (which at some point was expected), and the market punishes Apple. You expect him to give you strategic information before (and more than) he's required by law, and then *you* punish Apple even further.
Does the market in this case make any sense? Everyone who invests in Apple KNOWS (or at least is reasonably expected to) that the company plays its cards very close to its chest, and ALWAYS has. They feel it is necessary. Their success story for well over a decade PROVES that it's necessary. You know the caveats with Apple when it comes to expecting disclosure that is over and above what the law requires.
I'm not looking to give you a hard time over this, but let's be reasonable.
You're right in that Apple does not seem to keep any treasury stock (at least, I don't see any in their equity accounts, perhaps someone else can elucidate). But that could certainly change.
EDIT: Anant, looks like you're probably right about Apple not having any treasury stock. I don't find any either. Thanks!
Besides, his idea that they could issue $50 B and pay to acquire TW with just new shares is ridiculous because TW has already refused a $50 B offer from Fox and I'm pretty sure TW shareholders would not accept an all stock deal. Apple shareholders would probably not approve it either.
He is just kicking himself that he was not better diversified. You really shouldn't invest more than 20% of your portfolio in a single stock. I doubt he would be so vocally adamant if it was a slight drop in an investment that only represented a 20% or less of his entire portfolio. From the way he talked earlier he was all in on AAPL.
Tony Fadell started his own company and came out of Apple. Maybe he's the one. Of course Apple passed on buying Nest. (If only Larry Page would start an affair with his wife)
What about Elon Musk? Can apple Buy/Merge with Tesla?
Sorry but there are probably few people that would be that good to merit replacing Cook.
I see Apple's main problem as not enough breadth of talent at the top. It took far too long to get the Watch out and to keep updating the iPad.
No one knows the business like the company's own management. That's why in a way, stock buybacks and sales are a form of insider trading. There is a fundamental asymmetry in information. Having access to information that no other market participants have, if a company's management is willing to sell its own shares on the open market, that's a sign the management believes the stock is overvalued. The alternative is that the management doesn't know what it's doing. That's pretty bad too.
This is pretty forward thinking. They're basing their future on AI, and it's amazing. Inbox for Gmail offers automated replies for me (at least the first sentence), and it's a useful response more than half the time. It's really amazing, even offering a "Haha, thanks!" if there's a joke with a useful answer in an email I receive.
There's a tone of future with Alphabet.
I'd be more concerned about Apple as they now show us they can count to 7.