If that floats your boat, what don't you invest in Google instead of Apple? Seriously all you have done is claim Apple needs to transform into Google. Why suffer though a transition when you can just invest in the real thing? Then when Google is floundering on services and ads have run their course, you can advise them to step up their hardware business and be like Apple.
Google is valued way to high. Even if it executes perfectly for the next 5 years it will barely justify its valuation.
I'm not saying Apple needs to be Google. I'm saying Apple needs to be a platform company. That means controlling the hardware, software, AND SERVICES. That's why they dominated with the iPod/iTunes. But with iPhone they have let other companies take over services. And that is hurting Apple.
IMO, the first company to reach a TRILLION $ valuation needs to control all 3. Hardware, Software, and Services. Apple already owns hardware and software (iOS). They need to catch up on services. Google sucks at hardware and their software(Android) is compromised.
"hurting Apple" relative to what? I agree their services need to improve and become a bigger part of their business. just as they also need to see more hardware that is not phones and tablets, but the entire iPod / iTunes business duopoly from brith to now is a fart in the wind compared to quarterly iPhone sales and part of the attractiveness of the device now is that people are not locked into OEM services bundles. I can buy an iPhone and use Spotify for music or Dropbox for files and google docs/drive or office 365 for work. Apple should compete with services and deliver a superior offering but don't expect the lock in that they had with the iPod. Also don't expect a dedicated ad division or push into true social for Apple either. It's just not what they do and they have pretty much stated it's not their business to collect and sell personal data. Bot managed iAds for apps is about all you are going to see from Apple.
I just don't think there is a balance where Apple can do what it does well with hardware and also do what google does to maximize profitability on its services without one negatively impacting the other. In the end you will have premium services that appeal to a subset of Apple hardware customers that generate about all the subscription revenue available in the market but still only attract a small subset of users while the rest of the world is happy to exchange personal data for likes and tolerate ads for content using Google or Facebook. And both camps will exist side by side using iPhones.
Compare it to this: borrow 500 billion dollars and buy 450 billion euros with it, then ... burn the euros and hope the value will go up to profit with the euros you just burned. No sane person can support this scheme.
Huh? And how exactly do you know when it stops dropping? No one can call bottoms on a consistent basis. If you could you would literally be worth a TRILLION dollar.
AAPL has been falling since May 18, 2015.... down 28%. Keep in mind that the S&P is only down 2%. Funny thing is, 2015 was a good year for AAPL and the iPhone 6. Unfortunately, the 6s for 2016 has flopped. Carriers aren't subsidizing new phones anymore and iPad sales are in the dumpster. China has been driving AAPL for the past two years and now the party is over. Where's the bottom? Don't know..but I think AAPL will be trading in the low 80's come summer. If the release of the iPhone 7 doesn't wow and impress, expect more hemorrhaging.
Such a waste of money. The stock is lower than it was in 2012. Guess that's not long enough to be an article. lol
It peaked at about $100/share in September of that year but for most of the year it was below the about $93/share it is as of this posting. It only spent about 1 month above today's price as of posting this. In fact, from that peak it slid to its lowest since 2012 in April 2013 at about $56/share.
Huh? And how exactly do you know when it stops dropping? No one can call bottoms on a consistent basis. If you could you would literally be worth a TRILLION dollar.
... Carriers aren't subsidizing new phones anymore ...
Uh, the cost is just not automatically in the cost we pay the carrier, it is now just a separate line item. Also, no more money up front (except sales tax) and spread the cost out over a period of time. Still about the same coming out of your pocket for the most part.
I would say this would entice more people to get a new phone since you do not have the larger upfront cost to contend with.
Most people here own some Apple stock. Having stocks means you believe in the rules of the marketplace. If Apple stock becomes scarcer through their buy back program at a certain point the price will go up. It will and we benefit.
I just don't think there is a balance where Apple can do what it does well with hardware and also do what google does to maximize profitability on its services without one negatively impacting the other. In the end you will have premium services that appeal to a subset of Apple hardware customers that generate about all the subscription revenue available in the market but still only attract a small subset of users while the rest of the world is happy to exchange personal data for likes and tolerate ads for content using Google or Facebook. And both camps will exist side by side using iPhones.
This would make sense if iOS users did not use Google or Facebook.
So how would an Apple based Ad engine hurt iOS users? They already use Google and Facebook already!
It would require Apple to collect personal data from sources that it has already declared off limits. Google and Facebook do well because they are platform ubiquitous which is something Apple has shown little interest in doing beyond iTunes on Windows and Apple Music on Android. If Apple were to go after Google it would be through search first and it would not be ad supported much as they did with maps. It would be a premium experience you got by owning an Apple device. Probably called Siri and would have both voice and text interfaces.
Tim Cook is getting paid $100 million. I expect him to be an elite level CEO.
Frankly he has not been that the last 3 years.
But I still believe in Apple as a company and as a platform. They are succeding DESPITE having a weak CEO.
I think Tim Cook has to go to, but not for the reasons Sog gives. I think that every time people see Cook they think of Jobs. Apple may be a different company than it was five years ago, but in the minds eye it still is the runner up with the brightest ideas and the one that is trying to beat behemoth Microsoft. And since Microsoft isn't in the phone business, small bright Apple is fighting there against an other behemoth, Samsung. Jobs was David, and we know where the sympathy lies.
In that thinking it is hard to believe Apple has turned into the most valuable company ever. We still like the idea of Apple being small and bright. Every time people see Cook their loyalty to what Jobs meant gets a little boost. And all the time Apple silently grows, builds its ecosystem locking in more and more people.
The moment Cook goes people wake up from their pretty dream, see Apple for what it is, and a lot of the loyal feeling connected to Jobs and what he stood for will fly out of the window. And the stock will surge. Yes.
So tmo Cook should stay on as long as it is necessary to tap this undercurrent of loyalty so Apple can grow relatively unopposed.
For 2014-2016 they spent about $96 billion on buybacks and bought 1 billion shares. Average cost was $96 per share.
I did not look up 2013 buybacks. Those should be much cheaper on $18 billion.
So they are probably close to break even at this point on the buyback.
Gotta love the clown who just "Dislike" clicks any comment made by sog, no matter what it is. Total a55clown.
?? I'm not seeing it. Only one of the nine on this page got one if I counted right. There's a few on this page alone with neither likes nor dislikes so not "every one of them" gets downvoted. But I wouldn't be surprised to see quite a few recently with a thumbs-down considering the subject matter.
Smart money would be to wait until it stops dropping like a rock to buy back shares. Let it find a support level then buy. You can only manipulate the price for so long after that the market always tells the tale.
Huh? And how exactly do you know when it stops dropping? No one can call bottoms on a consistent basis. If you could you would literally be worth a TRILLION dollar.
My basic question: Is Apple going to be worth significantly more in 10 years? Will Apple out perform the market in the next 10 years?
IMO, at $93 and even at $100 the answer would be yes. But if you are just trying to time the market you can easily lose out when the stock quickly moves to $110 before you had a chance for it to reach your bottom.
First, we're going into May which doesnt have a saying "Sell in May and go away" for nothing. So we have a lagging stock entering what is normally a bad period for the market (May to start of Oct). So given those circumstances where would you expect the price to go? Second, the quarter wasnt good and guidance isn't good so it's safe to say the stock is going to continue to drop. Third, there's no catalyst on the horizon. You think a leather watch band or a thinner phone is going to get people back out and upgrading again? Fourth, I'm not saying they have to buy at the exact bottom, I am saying stay on the sideline and wait for the market to tell you when there is enough demand to support a price (i.e. at least wait until it has some up days prior to buying) You don't have to be a rocket scientist to figure out Apple is going to continue to drop unless they throw money at it in the form of buybacks.
Buying at other times is just a waste of money in a futile effort to prop up the share price. If you think this stock is moving "quickly" upwards any time soon you are out of your mind.
sometimes I wonder if people actually realize what buying back shares does for Apple: It retires the dividend payment, now, and as it grows in the future:
If shares are trading around $110, for example, and Apple is paying 1.3% in interest to repurchase those shares, it is effectively paying $1.43 per share to retire those shares. But right now Apple pays a total of $2.08 per share in dividends, so it realizes a net savings of $0.65 per share, in this example. Paying $1.43 to save $2.08 already sounds like a pretty good deal, but it actually gets even better from there. Interest expense is tax deductible, whereas dividend expenses are not, so Apple's after-tax savings are even greater.
Over the past fiscal year alone, Apple has retired 289 million shares outstanding, so you can see how quickly all those dividend savings add up, even if Apple does incur interest expense in order to do so. You can also see these savings manifest in the cash flow statement. Apple boosted its dividend payout by 8% in 2014 and another 11% in 2015 (these increases take effect halfway through the fiscal year), but total dividend expense increased by merely 4% in fiscal 2015 to $11.6 billion.
You need to take a class in investing finance. Go calculate the $$$ shareholders would have in their pockets if the $120,000,000,000 had been given to the shareholders as a dividend. I'd gladly pay the taxes on new money in my pocket as opposed to having a pathetic 2% dividend.
$120,000,000,000 / 5,500,000,000 shares outstanding = $21 / share x your number of shares. compare that to the $2/share/year they have dribbled out under the current scheme.
First, there wouldn't be 120B available without the buyback. Second, there would be 6.63B outstanding shares. Your math is way off.
More money WASTED by Cook - the buybacks have done nothing for shareholders or Apple - use that money to give us far larger dividends - not the pathetic 2% a year as it is now.
To my mind, Cook is trying to correct a serious error in judgement he made several year ago: paying dividends at all. I thought it was a bad idea at the time because it made Apple a target for whiners and institutional raiders.
What he's trying to do now is get rid of the whiners and raiders. Cook will not say anything to boost the stock price and he won't increase the dividend by more than a few paltry percentage points (if at all). What he will do is to continue to 'waste' money buying Apple shares at a knockdown price.
Icahn has dumped his shares. This is Cook's first major success in his strategy. As the share price sinks he'll buy more and more of the whiners and raiders will dump their shares driving the price down further. The shareholders left will be those who see the stock as a long-term growth proposition and not a quick profit day trade.
So to my mind, Cook is not wasting the money – he's getting rid of investors who think like you, which is much better for the company long term.
Nice post. Some people can't see the forest through the trees. If they could they would realize that their shares could be worth 5-10X as much in 10 years with the buyback. But they just want the quick money of dividends.
Most people here own some Apple stock. Having stocks means you believe in the rules of the marketplace. If Apple stock becomes scarcer through their buy back program at a certain point the price will go up. It will and we benefit.
Insane comment if the year: we believe, so it is. Are you religious by any chance?
More money WASTED by Cook - the buybacks have done nothing for shareholders or Apple - use that money to give us far larger dividends - not the pathetic 2% a year as it is now.
To my mind, Cook is trying to correct a serious error in judgement he made several year ago: paying dividends at all. I thought it was a bad idea at the time because it made Apple a target for whiners and institutional raiders.
What he's trying to do now is get rid of the whiners and raiders. Cook will not say anything to boost the stock price and he won't increase the dividend by more than a few paltry percentage points (if at all). What he will do is to continue to 'waste' money buying Apple shares at a knockdown price.
Icahn has dumped his shares. This is Cook's first major success in his strategy. As the share price sinks he'll buy more and more of the whiners and raiders will dump their shares driving the price down further. The shareholders left will be those who see the stock as a long-term growth proposition and not a quick profit day trade.
So to my mind, Cook is not wasting the money – he's getting rid of investors who think like you, which is much better for the company long term.
Nice theory, I don't think it's true entirely (I think they try several things at the same time) but it does seem that Apple tries to go private if they can afford it. And that's the only sense in burning $500 billion or so.
I'm still more concerned that for every $1 Apple has in a US-based bank, it has $20 in US cash-equivalents overseas.
There are a few problems with this disclosure.
Overseas money isn't called US Dollars. They should be disclosed in Euros or whatever the bank that has the account counts its currency in. I firmly believe the US Dollar sign is reserved for dollars that can be spent in the US. Repatriation of those funds (and paying appropriate repatriation taxes) is a requisite requirement to counting those as spendable US dollars unless your in the illegal drug trade... Just sayin'. Subtract ~35% from anything held overseas. Call it "Timmy Dollars" or something adorable and cute; but it just isn't US Dollars.
There's also no date on this page which indicates when Apple used the cash-conversion table from the Wallstreet Journal.
Overseas money can be US dollars. Especially money in China. In Europe it may mostly be Euros but some of it may also be held in dollar accounts. One of the reasons nobody in congress is doing anything about repatriating foreign holdings of US companies is that doing so will kill the market for US treasury bonds and devalue the dollar. When a foreign bank like one in China offers dollar accounts they have to insure the accounts with real dollars (they can't just invent them out of thin air) To do this they buy US treasury bonds. When everybody talks about our debt to China, this is the form it mostly takes.
I'm still more concerned that for every $1 Apple has in a US-based bank, it has $20 in US cash-equivalents overseas.
There are a few problems with this disclosure.
Overseas money isn't called US Dollars. They should be disclosed in Euros or whatever the bank that has the account counts its currency in. I firmly believe the US Dollar sign is reserved for dollars that can be spent in the US. Repatriation of those funds (and paying appropriate repatriation taxes) is a requisite requirement to counting those as spendable US dollars unless your in the illegal drug trade... Just sayin'. Subtract ~35% from anything held overseas. Call it "Timmy Dollars" or something adorable and cute; but it just isn't US Dollars.
There's also no date on this page which indicates when Apple used the cash-conversion table from the Wallstreet Journal.
In general the "overseas" money isn't actually factually "overseas" anyway, Even tho we're often told Apple keeps most of it's cash outside the US it's in name only. For the most part that cash is right here safely in the US, most often New York banks, with just the owner of those accounts being one of Apple's foreign subsidiaries.
The money is here in the US. The technical owners of it aren't so it's considered foreign holdings.
Most people here own some Apple stock. Having stocks means you believe in the rules of the marketplace. If Apple stock becomes scarcer through their buy back program at a certain point the price will go up. It will and we benefit.
Insane comment if the year: we believe, so it is. Are you religious by any chance?
Well Knowitall, lets see how it goes. I think that scarcity means higher prices is a universal rule. If that means that I'm religious so be it.
Comments
I just don't think there is a balance where Apple can do what it does well with hardware and also do what google does to maximize profitability on its services without one negatively impacting the other. In the end you will have premium services that appeal to a subset of Apple hardware customers that generate about all the subscription revenue available in the market but still only attract a small subset of users while the rest of the world is happy to exchange personal data for likes and tolerate ads for content using Google or Facebook. And both camps will exist side by side using iPhones.
No sane person can support this scheme.
Funny thing is, 2015 was a good year for AAPL and the iPhone 6. Unfortunately, the 6s for 2016 has flopped. Carriers aren't subsidizing new phones anymore and iPad sales are in the dumpster.
China has been driving AAPL for the past two years and now the party is over.
Where's the bottom? Don't know..but I think AAPL will be trading in the low 80's come summer.
If the release of the iPhone 7 doesn't wow and impress, expect more hemorrhaging.
Research before you speak with such "authority."
I would say this would entice more people to get a new phone since you do not have the larger upfront cost to contend with.
In that thinking it is hard to believe Apple has turned into the most valuable company ever. We still like the idea of Apple being small and bright. Every time people see Cook their loyalty to what Jobs meant gets a little boost. And all the time Apple silently grows, builds its ecosystem locking in more and more people.
The moment Cook goes people wake up from their pretty dream, see Apple for what it is, and a lot of the loyal feeling connected to Jobs and what he stood for will fly out of the window. And the stock will surge. Yes.
So tmo Cook should stay on as long as it is necessary to tap this undercurrent of loyalty so Apple can grow relatively unopposed.
Buying at other times is just a waste of money in a futile effort to prop up the share price. If you think this stock is moving "quickly" upwards any time soon you are out of your mind.
Nice post. Some people can't see the forest through the trees. If they could they would realize that their shares could be worth 5-10X as much in 10 years with the buyback. But they just want the quick money of dividends.
Are you religious by any chance?
And that's the only sense in burning $500 billion or so.
The money is here in the US. The technical owners of it aren't so it's considered foreign holdings.