Well most of us already knew that although undervalued Apple is fine LT and ST, while company like Amazon is like sitting on time-bomb. Only a few people like soggy who are too short sighted to blame Apple's CEO for their buyback program instead of seeing what really matters.
The challenge for Apple now is how do you keep everyone on the upgrade cycle every year?
But wouldn't that same question be applicable for every other company too?
You could just as easily say "The challenge for Samsung/LG/Xiaomi now is how do you keep everyone on the upgrade cycle every year?"
The truth is... however... no one expects people to upgrade their phones yearly. And for the most part... they don't. While there may be pockets of superfans who buy new phones every year... they are the distant minority. As important as smartphones are... they do not get replaced that often... iPhone or otherwise.
So we have this: a person may only buy a new smartphone once every 2 or 3 years.... but people buy smartphones every day. There is always someone who is looking for a new phone. And companies need to have new models available when those people are ready to purchase.
Apple didn't make the iPhone 6S for iPhone 6 owners. And Samsung didn't make the Galaxy S7 for Galaxy S6 owners either. And this idea isn't limited to just phones. Vizio releases new TVs every year... HP and Dell release new laptops every year... and so on. But no one expects people to replace any of those item on a yearly schedule.
But, again, those new models must exist for when people do start shopping for a new phone, TV, laptop, etc.
I know of some people who still have the iPhone 4s and do have plans for upgrading to the new version in about 6 months. The iPhone 4s still works okay for them. Just like with the normal Apple products, they last a long time.
Still, the iPhone SE sales are doing great.
As they said somewhat in a movie long time ago, "have patience grasshopper."
I hold Apple stock and have been a loyal Apple user for many many years.
Yet I'm tired of reading articles like this that only sees what Apple did right and what Android did terrible. That's why people call us "fanboy" because we can't see things objectively.
Let's face it, the real reason is Apple under-estimated the competition. Esp those from China. If you see stats you should know the biggest gain from Huawei eats into Apple and Xiaomi, both of which, mind you, still iterating nonstop, just not as crazy as Huawei and others have been doing.
In a smartphone industry, you make one less aggressive move, you lose out one year cycle. Just look at what Samsung suffered last year.
For Apple, unfortunately the symptom won't reveal itself until the second quarter because the sales in Q1 is largely determined by production capacity. The real long term demand shows in Q2.
No don't blame the macro environment, look at self and change from within.
We will have some tough near-to-mid term pressure before see the return of growth again. Btw iPad should see some very bright spot Q2.
"Farrell wrote, "as the Chinese economy retracted, overt shows of wealth gave way to functionality. HTC and Samsung phones had more bells and whistles, and looked much better.
"But Apple's refusal to have a good old redesign go at its iPhone, even returning to the iPhone 5 design this year, was just silly. Is it any wonder that Apple sold only 51.2 million iPhones this year?""
This asshat actually managed to write something so fucking idiotic? Oh, and it's 51.2 million phones for the 1st 3 months of the year, not the entire read, as this fucktard implies. "Returning to iPhone 5 design this year"? Can't believe these lying pieces of shit paid to write this blatantly false drivel.
It's fascinating to compare different company's product and services lines, and what is missed so often, is that every other company in the tech hard- and soft-ware industries all have to be compared against Apple as one to match.
I'm sure ms, ss, htc or lg would LOVE to only make 50b$ a year on only one of their product lines! And amzn and alph would fall over backwards for Apple's income-per-customer figures.
Once Apple reveals the profit from its campuses and continuing introduction of new products and services, I imagine most non-Apple companies will be trying to write really good apps.
So stoked for WWDC and iOS 10 (along with some possible hardware announcements).
I'll go out on a limb and predict iOS 10 will see some significant upgrades this year unlike what we've seen the past few years. With phone hardware slowing down in terms of features I think the time is ripe for Apple to knock it out of the park with a major iOS upgrade. One that will further entrench existing users into the Apple ecosystem and provide a strong incentive to convert even more Android users.
I think iOS 10 will be the turning point to put Apple over the top.
I would argue the last few years were very much needed. We had far to much instability in iOS 7 and 8.. iOS 9 really has shored things up.. but I agree, stability cycle complete, time to move into new features again.
Now with Icahn and others dumping Apple it should be noted everywhere how bad these hedge funds lost money on Chespeake and all their poorly timed commodity bets...oh and Valeant too. Apple is down because they lost big at other casino tables. To say Apple is the problem is a joke, but whatever Apple will buy their shares and keep growing.
Icahn started selling Apple back in March because he had to. His bet on Chesepeake went from $30 to $2. The guy lost huge! Where does he make up that loss? by dumping his AAPL to cover. I wish Apple comes out with iPhone 7 in June this year. The last thing we need is these hedge funds jumping back in this summer after they've bashed Apple for their poor decisions on other bets.
Bottom line, investors have lost confidence in the company's ability to sustain current levels of cash flows or to create highly sustainable, competitive moat. There is no other way to explain Apple's sub-10 PE ratio
You can try to explain it all away or how Apple may be in fact executing, but its profits are being discounted 50% vs. the market. Your kidding yourself if you think this does not have real consequences to the company, namely attracting and retaining the very best talent
... Wall Street likes to look forward. What you did for the street yesterday has little bearing on what it thinks you will do tomorrow and the next 5 to 10 years. Wall Street is, and has been, betting that apple's fortunes will soon be in decline. This past quarter appears to be the first shoe to drop for all those who believe this. It isn't the fact it was still a large quarter for apple, but it was the TREND down that matters. Investors believe this is a trend that will continue and where it stabilizes nobody knows but many think it will be at a lower base. ... I agree with the article writer on amazon. The comparisons for a shareholder who owns Apple and not amazon must be infuriating. This just goes to investor psychology. Amazon is a more loved company and stock. People believe in Bezos and not in Cook. Same goes for Tesla and Musk. ..
Well written article, and I mostly agree with the sentiment. Just a couple of comments I have: - This is Apple's first "down YoY" quarter for revenue in 13 years. That is not a trend. While I don't doubt the remaining quarters of FY2016 will also be down, it is required to look at a longer timeframe to truly identify a trend (e.g. if Apple is down again in the same quarter in 2017, I would agree that it is a trend). - For all of my investments, I look at the performance on greater than a 1-year timeframe to determine how it is doing. Apple has a solid record there - While the investment community might not believe in Cook, they didn't provide Apple with a much higher multiple under Jobs either, in the last 10 years.
IMO, the iPhone is no where near its "peak". The multi-year growth rate is certainly slowing substantially, but Apple will sell more iPhones in FY 2017 than 2016. The smartphone market itself is still growing and as noted in the article, this form factor is not being substituted by another (yet), as the PC was at the time that market started to decline. The only other mobile computing platform foreseeable right now is wearables, and Apple has a pretty decent first year entry there.
we're all stakeholders some of us are also stockholders this is an editorial written by a sentient being absolute balm on our bruised apple pride thank you
Bottom line, investors have lost confidence in the company's ability to sustain current levels of cash flows or to create highly sustainable, competitive moat. There is no other way to explain Apple's sub-10 PE ratio
You can try to explain it all away or how Apple may be in fact executing, but its profits are being discounted 50% vs. the market. Your kidding yourself if you think this does not have real consequences to the company, namely attracting and retaining the very best talent
This is true. And Tim/Luca's awkward pivot towards services and then sort of a back off on this earnings call doesn't help. Most of what Apple's defining as "services" is really just digital retail. I wouldn't call selling movies, books, music and apps a "service". And what's exciting about that? We're selling fewer products but our existing customers are buying more stuff from other people that we sell through our store fronts and get a commission on. Boring.
Icahn started selling Apple back in March because he had to. His bet on Chesepeake went from $30 to $2. The guy lost huge! Where does he make up that loss? by dumping his AAPL to cover. —
absolutely. AAPL is nearly every investor's piggy bank as it is one of a few stocks where everyone had a profit
Now with Icahn and others dumping Apple it should be noted everywhere how bad these hedge funds lost money on Chespeake and all their poorly timed commodity bets...oh and Valeant too. Apple is down because they lost big at other casino tables. To say Apple is the problem is a joke, but whatever Apple will buy their shares and keep growing.
Icahn started selling Apple back in March because he had to. His bet on Chesepeake went from $30 to $2. The guy lost huge! Where does he make up that loss? by dumping his AAPL to cover. I wish Apple comes out with iPhone 7 in June this year. The last thing we need is these hedge funds jumping back in this summer after they've bashed Apple for their poor decisions on other bets.
Agree.
Icahn and a ton of other hedge funds want to show some type of realized profit after their massive losses in oil and gas. Icahn's excuse about China is a big joke. Nothing in China has changed since 2 years ago.
There's been at least some changes market-wise but I don't think that's what Icahn was referencing anyway.
One of the biggest challenges for Western techs is how to handle new Chinese laws regarding Chinese citizen data, who can access it, and how the Chinese Government controls it. China will this year be requiring some things from Apple that Mr Cook (among others) may not be comfortable in allowing. I don't think the government will have a problem with banning any foreign company from the Chinese market, Apple included, if said company doesn't fully comply with new security laws being put in place. If push comes to shove will Apple walk away, standing up for Chinese users on principle and forgoing the profits, or quietly do what they have to do to sell iPhones and computers there? I think that's what Icahn may be primarily worried about.
Then there's also signs of Chinese protectionism. With the softening economy China may be starting to favor home-grown businesses over huge foreign ones. There's already articles about Australian companies impacted by new trade laws recently put in place. It this is the beginning of protectionism then Apple may well be in the crosshairs sooner rather than later.
Now with Icahn and others dumping Apple it should be noted everywhere how bad these hedge funds lost money on Chespeake and all their poorly timed commodity bets...oh and Valeant too. Apple is down because they lost big at other casino tables. To say Apple is the problem is a joke, but whatever Apple will buy their shares and keep growing.
Icahn started selling Apple back in March because he had to. His bet on Chesepeake went from $30 to $2. The guy lost huge! Where does he make up that loss? by dumping his AAPL to cover. I wish Apple comes out with iPhone 7 in June this year. The last thing we need is these hedge funds jumping back in this summer after they've bashed Apple for their poor decisions on other bets.
Agree.
Icahn and a ton of other hedge funds want to show some type of realized profit after their massive losses in oil and gas. Icahn's excuse about China is a big joke. Nothing in China has changed since 2 years ago.
Use any rationalization you wish, the reality is Apple is living off the fumes of its past glory. I haven't seen one smart move out of Tim Cook yet. Beats, Apple Music, Dr. Dre, Jimmy Iovine, Angela Ahrendts, Anand... Beside squandering a ton of shareholder money what good did any one of these hires do? I'm still waiting! And that chunky Apple Watch, what a useless piece of junk! Does Jony Ive report to work anymore? Name one good product design out of Apple-- besides the iPhone 6 -- since Steve Jobs died? Tim Cook is a loser and its time for him to move on. I've been long AAPL since 2007. Next time the stock bounces I'm selling it all. I have no confidence left in Tim Cook's Apple.
Icahn and a ton of other hedge funds want to show some type of realized profit after their massive losses in oil and gas. Icahn's excuse about China is a big joke. Nothing in China has changed since 2 years ago.
You are unreal.
I'm talking about from a political policy standpoint.
I don't view the threat of China closing down Apple is even worth considering.
I put it in the same category as North Korea sending a nuke to take out Apple headquarters.
Use any rationalization you wish, the reality is Apple is living off the fumes of its past glory. I haven't seen one smart move out of Tim Cook yet. Beats, Apple Music, Dr. Dre, Jimmy Iovine, Angela Ahrendts, Anand... Beside squandering a ton of shareholder money what good did any one of these hires do? I'm still waiting! And that chunky Apple Watch, what a useless piece of junk! Does Jony Ive report to work anymore? Name one good product design out of Apple-- besides the iPhone 6 -- since Steve Jobs died? Tim Cook is a loser and its time for him to move on. I've been long AAPL since 2007. Next time the stock bounces I'm selling it all. I have no confidence left in Tim Cook's Apple.
wow- you are really sticking your neck out , I imagine you really want a reaction eh!
I hold Apple stock and have been a loyal Apple user for many many years.
Yet I'm tired of reading articles like this that only sees what Apple did right and what Android did terrible. That's why people call us "fanboy" because we can't see things objectively.
Let's face it, the real reason is...
Oh really? Articles like DED's are the minority. It's currently fashionable for tech sites to criticize Apple, even when praising it. This site's other writers usually do, for fear of sounding like fanboys.
And welcome to the forums. FYI -- You don't have to tell us that you own Apple stock; it doesn't add credibility to any opinions here.
Comments
You could just as easily say "The challenge for Samsung/LG/Xiaomi now is how do you keep everyone on the upgrade cycle every year?"
The truth is... however... no one expects people to upgrade their phones yearly. And for the most part... they don't. While there may be pockets of superfans who buy new phones every year... they are the distant minority. As important as smartphones are... they do not get replaced that often... iPhone or otherwise.
So we have this: a person may only buy a new smartphone once every 2 or 3 years.... but people buy smartphones every day. There is always someone who is looking for a new phone. And companies need to have new models available when those people are ready to purchase.
Apple didn't make the iPhone 6S for iPhone 6 owners. And Samsung didn't make the Galaxy S7 for Galaxy S6 owners either. And this idea isn't limited to just phones. Vizio releases new TVs every year... HP and Dell release new laptops every year... and so on. But no one expects people to replace any of those item on a yearly schedule.
But, again, those new models must exist for when people do start shopping for a new phone, TV, laptop, etc.
Still, the iPhone SE sales are doing great.
As they said somewhat in a movie long time ago, "have patience grasshopper."
Yet I'm tired of reading articles like this that only sees what Apple did right and what Android did terrible. That's why people call us "fanboy" because we can't see things objectively.
Let's face it, the real reason is Apple under-estimated the competition. Esp those from China. If you see stats you should know the biggest gain from Huawei eats into Apple and Xiaomi, both of which, mind you, still iterating nonstop, just not as crazy as Huawei and others have been doing.
In a smartphone industry, you make one less aggressive move, you lose out one year cycle. Just look at what Samsung suffered last year.
For Apple, unfortunately the symptom won't reveal itself until the second quarter because the sales in Q1 is largely determined by production capacity. The real long term demand shows in Q2.
No don't blame the macro environment, look at self and change from within.
We will have some tough near-to-mid term pressure before see the return of growth again. Btw iPad should see some very bright spot Q2.
It's fascinating to compare different company's product and services lines, and what is missed so often, is that every other company in the tech hard- and soft-ware industries all have to be compared against Apple as one to match.
I'm sure ms, ss, htc or lg would LOVE to only make 50b$ a year on only one of their product lines! And amzn and alph would fall over backwards for Apple's income-per-customer figures.
Once Apple reveals the profit from its campuses and continuing introduction of new products and services, I imagine most non-Apple companies will be trying to write really good apps.
Icahn started selling Apple back in March because he had to. His bet on Chesepeake went from $30 to $2. The guy lost huge! Where does he make up that loss? by dumping his AAPL to cover. I wish Apple comes out with iPhone 7 in June this year. The last thing we need is these hedge funds jumping back in this summer after they've bashed Apple for their poor decisions on other bets.
You can try to explain it all away or how Apple may be in fact executing, but its profits are being discounted 50% vs. the market. Your kidding yourself if you think this does not have real consequences to the company, namely attracting and retaining the very best talent
- This is Apple's first "down YoY" quarter for revenue in 13 years. That is not a trend. While I don't doubt the remaining quarters of FY2016 will also be down, it is required to look at a longer timeframe to truly identify a trend (e.g. if Apple is down again in the same quarter in 2017, I would agree that it is a trend).
- For all of my investments, I look at the performance on greater than a 1-year timeframe to determine how it is doing. Apple has a solid record there
- While the investment community might not believe in Cook, they didn't provide Apple with a much higher multiple under Jobs either, in the last 10 years.
IMO, the iPhone is no where near its "peak". The multi-year growth rate is certainly slowing substantially, but Apple will sell more iPhones in FY 2017 than 2016. The smartphone market itself is still growing and as noted in the article, this form factor is not being substituted by another (yet), as the PC was at the time that market started to decline. The only other mobile computing platform foreseeable right now is wearables, and Apple has a pretty decent first year entry there.
some of us are also stockholders
this is an editorial written by a sentient being
absolute balm on our bruised apple pride
thank you
There's been at least some changes market-wise but I don't think that's what Icahn was referencing anyway.
One of the biggest challenges for Western techs is how to handle new Chinese laws regarding Chinese citizen data, who can access it, and how the Chinese Government controls it. China will this year be requiring some things from Apple that Mr Cook (among others) may not be comfortable in allowing. I don't think the government will have a problem with banning any foreign company from the Chinese market, Apple included, if said company doesn't fully comply with new security laws being put in place. If push comes to shove will Apple walk away, standing up for Chinese users on principle and forgoing the profits, or quietly do what they have to do to sell iPhones and computers there? I think that's what Icahn may be primarily worried about.
Then there's also signs of Chinese protectionism. With the softening economy China may be starting to favor home-grown businesses over huge foreign ones. There's already articles about Australian companies impacted by new trade laws recently put in place. It this is the beginning of protectionism then Apple may well be in the crosshairs sooner rather than later.
Oh really? Articles like DED's are the minority.
It's currently fashionable for tech sites to criticize Apple, even when praising it. This site's other writers usually do, for fear of sounding like fanboys.
And welcome to the forums. FYI -- You don't have to tell us that you own Apple stock; it doesn't add credibility to any opinions here.