Microsoft surpasses Apple, retakes crown of world's most valuable company

135

Comments

  • Reply 41 of 100
    Rayz2016Rayz2016 Posts: 4,443member
    Microsoft actually is worth more than Apple, on Bizarro World.

    True, but you have to bear in mind that share price is only one measure of a company's value, and since it is often based on little more than an opinion, one could argue that it is not necessarily the best measure.

    Still, Microsoft's cloud offering is pretty much firing on all cylinders. 
    williamlondon
  • Reply 42 of 100
    It's always amusing to see people try to use Xbox as an example of "diversification" versus Apple. That's the giveaway that they know MS isn't really that diversified...."hey, this list is kind of short, let's throw in Xbox for some padding". 
    netmageelijahgcornchipbaconstangmagman1979watto_cobra
  • Reply 43 of 100
    avon b7avon b7 Posts: 2,894member
    Rayz2016 said:

    zoetmb said:
    lkrupp said:
    pjs_socal said:
    Microsoft has a P/E ratio of 45 and Apple has a P/E ratio of 15.

    Apple and Microsoft have similar margins and Apple had better growth in 2018. Apple makes 2.5x more revenue and 3x more profits. So, why are Microsoft shares valued at 3x Apple’s? Because investors are morons.

    In reality Microsoft is worth ⅓ the value of Apple.
    Because Microsoft is diversified with recurring revenue streams which Wall Street loves. With Apple if iPhone sneezes the entire company gets a cold.
    So when did the iPhone sneeze? I must have missed that. The only thing I’ve heard are the predictions of analysts based on supply chain reports which Tim Cook has consistently advised against using to provide meaningful data about Apple. So remind me, when did the iPhone sneeze and give the entire company a cold? In your wet dreams?
    Reality doesn't matter.  It's about perception.   The iPhone is approximately 66% of Apple's gross revenue.  And Apple announcing that they're no longer going to break out iPhone units sales is sending the message, correct or not, that they expect declines in unit sales.  Wall Street doesn't like a lack of transparency and in that regard, I don't blame them.   Combine that with the insanity of believing supplier chain complaints and that's a recipe for killing the stock and that's if the stock is not being manipulated.   

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?   

    On the Mac side, Apple's price hikes combined with the inability to replace the battery, memory and storage as well as the fact that so many people don't really need a computer anymore is going to continue to affect sales, but the Mac is only about 10% of Apple now anyway.   Apple probably thought they could replace Mac sales with iPad sales, but that's only about 8% of Apple.    While I realize that Apple has never wanted to be the low-end, low-margin provider, I think the high salaries paid to Apple managers and executives has completely warped their perception of what most people are willing and able to spend, especially for a machine that can't be upgraded after purchase.    A 15" MBP now starts at $2400 and tops out at $6700.   That's ludicrous.   The MBA starts at $1000 at tops out at $2600.   The Mini tops out at $4300.   $5K for the 27" 5K Retina iMac (topping out at $13,200)?   IMO, this is either desperation to keep revenue high or unbelievable arrogance.     



    There is of course, the third option: you have the details wrong.

    Let's begin with the most obvious stumble (the real drop off the cliff is that Apple actually sells phones at a range of prices, but that's so obvious it doesn't really need covering):

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop? 

    Er, no. Apple doesn't expect that because no one has ever done that.  What happens is that on each new release, Apple gets picks up customers from other platforms, but also gets a massive boost from people with folk with much iPhones much older than two years. I have just replaced my iPhone 6s, which means I missed out on the 7 and the X. The assumption that Apple thinks folk update their phone every two years is laughable. Which brings me to your other point:

    Yes, the price. And here again, the problem is narrow thinking. Saying that no one would buy a $1000 phone is a bit like saying no one would buy a house for $300,000 or a $30,000 car. Clearly they will, because I've seen houses and cars that cost several times that amount. So how do they do it?
    Well, I'm going to clue you in, but you have to keep it under your hat because I'm thinking of taking out a patent on the whole idea.

    Ready?

    This is going to amaze you, but people don't hand over the whole amount for houses and cars all at once. They pay it off in chunks. Buying a $1000 iPhone (which, by the way, is not the most expensive smart phone on the market) is best done on the Apple payment scheme: they throw in AppleCare and you can change the phone after a year if you want. Oh, and it's interest free, so if you're paying the whole cost up front then you're doing it wrong. 

    But that's kind of an aside. The point is that folk have been saying Apple gear is insanely expensive for as long as I can remember, and for as long as I can remember, they've been shifting it. So that leads me to believe that Apple understands basic economic theory better than anyone here who comments on it. All this braying about  Apple pricing always misses one vital piece of information: Apple's demand curve.

    This little bit of paper sitting on Tim Cook's desk will show you is that the demand for Apple kit is comparatively inelastic: movements in price have fairly negligible effects on demand.  If they increase the price, the sales will not drop significantly.

    But far more importantly, dropping the price will not actually produce a significant increase in sales, and this increase may not be enough to cover the price drop.

    So why is Apple's demand inelastic? Simply because the combination of hardware and software is perceived as unique in a very crowded market. 



    The details aren't wrong. You are interpreting things wrong.

    There are pricing ceilings on everything. Financing (including interest free) also has ceilings, or do you think someone will be willing to take on financing to pay for a phone over 5 years when it will be upgraded before it is paid off?

    The increasing cost of iPhones (and every other phone in the same price band) is taking users one step further up to their individual ceilings.

    You are taking his 1,000 dollar point completely out of context. He is speaking in general terms. We already know people buy 1,000 dollar phones every year. The point is those people aren't most people and three or four years of flat sales is telling in itself.

    The higher the price the harder the sale in high numbers, even with financing and upgrade options but that ceiling becomes ever nearer or you are hitting it. And if the cheaper options mean sacfricing features or getting an older iPhone, then the sale is equally hard.

    People argued that users were on longer upgrade cycles (provoked in part by pricing itself) and that is probably another reason while sales flattened, but how many people do you think are still using iPhone 6?

    But that argument doesn't take into account the vast potential pool of Android users that are there for the taking, right? 80% of the market. 1,000 dollar Android phones sell in the millions even while they are a fraction of the 80%. Why isn't Apple able to take a slice of that premium Android Pie (sic)? Why aren't people switching from Android in enough numbers to move the Apple needle off 'flat'? It's clearly not price for those users. It's value (among other things). The longer upgrade cycle really isn't doing much except allowing Apple tread water.

    Apple is on an 's' cycle - through its own choice - which only makes the sale look worse when compared to rival flagships that are pushing the pedal to the metal. So while Apple takes a breather on innovation and brings the A12 and little else to the table while still including a 5W charger in the box, others are innovating on everything and showing no signs of slowing down. That means 'new' tech is flowing down the lines into the middle ground at an incredible pace and upping the value proposition of those phones.

    How can you say that movements in price have a 'fairly negligible effect on demand? Apple doesn't break down unit sales on price.

    Price is the number one factor for most people when it comes to buying a Phone. The iPhone X hit new price highs for Apple. It was the 'most popular' 2018 iPhone for Q1, 2 and 3. But Q4? Estimates said demand for the 'most popular' iPhone dropped off sharply in Q4. Far more quickly than any other Apple flagship from previous years in the same quarter. But 'most popular' isn't truly quantifiable is it? 

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.


    elijahgcgWerksmuthuk_vanalingam
  • Reply 44 of 100
    Rayz2016Rayz2016 Posts: 4,443member
    carnegie said:
    viclauyyc said:
    Microsoft is Office. 

    Then Windows. 

    Azure isnt a monymaker. It’s a foot in the door. 

    Microsofts hardware business is nothing. 

    Basically, today’s valuation of MS is a charade. 

    Good imitation of success, but no actual success. 

    Meanwhilr Apple has a very healthy and stable PC business. 

    Then it has a psychotically great and stable phone business. 

    Then it has has an amazing wearables business. 

    Then it has an pustsnding services business. 

    It also boasys a second second to none retail business where it not only profits off its own products, but third party offerings as well. 

    The iBooks, iTunes, and App Store business are the stuff Microsoft can only dream of. 

    The idea that MS is even mentioned in the same sentence as Apple is laughable. 

    If office tanks, all of Microsoft goes with it. Windows as well. 

    Apple would be fine for a very long time if any number of its businesses went through through a severe famine - and that’s not due to its savings. THats due to cash flow. Apples business is heavily diversified and healthy on all points. Not the same for ms, which bleeds money on pet projects to project the illusion of diversification and relevance. 

    Its hilarious to see how the the stock market is manipulated. One moment, it makes sense and logic rules the day. The next, it’s 2+2=-22. 

    I give this s week before people realize there is no actual money in this error. 

    Its similar to google when people were giving google free money for no reason. It was a terrible investment. A company good at selling online ads. Then blew money like toilet paper on everything else. They would have tanked had an ignorant public not been so naive as to throw money at them. 

    Tjrn you hsve apple. They could go private and still hand the free money people a big blow. But they’re public and it’s like people don’t know what’s actually available to them. 

    In reality, Apple is worth over twice what it was a couple months ago. 

    No no other company has ever created and sustained their type of growth with their type of reliability and trust factor with how they handle business - never going in blind. Never taking stupid risks, but calculated ones. And having it pay off. 

    Lets see see how this plays out by next Friday. 

    Going to be a a fun ride. 


    Can Apple buy itself and go private?

    apple sure don’t need outside investors to fund ny project like many company. 
    No. It can't buy itself and in doing so make itself private.



    Yup.

    Apple buying up all the shares will not make it a private company, because shareholders do not 'own' the company. All that a share gives you is a right to a proportion of any dividend. People buy shares to get a dividend, or to sell the share at a later date for profit. No company in its right mind would sell chunks of company ownership because that would give people who have no business running a business a say in how that business is run. And folk wouldn't want a piece of the company because then they might be liable for stuff that is essentially out of their control.

    However, the share price does influence the perceived worth of the company and so a high share price is very valuable if you want to sell your company to a group of investors. Likewise, shareholders can try to influence how the business is run by clubbing together and getting the directors to do something. If it works it's not because the shareholders are the owners, it is because the publicity fallout from this sort of thing will get the board to change their minds.

    However, if you look at some building societies, they are actually owned by the members, and even then they can't influence the board into doing stuff they want doing.

    So what is the point of Apple retiring the shares? Cost of equity.

    The reason for selling shares in the first place is to raise capital. If you're already sitting on a mountain of cash then it there is no need to sell shares in your company. If, like Apple, you have shares in the field AND a mountain of capital, then those shares are actually costing you money because you are expected to pay a dividend on them. 

    So it could be Apple is retiring shares because they don't need the capital and the shares are costing them money they don't need to spend.
  • Reply 45 of 100
    I’m about as rabid an Apple fan as one can find, but at this point, even I have to say that Apple has lost their mojo under Cook.

    Yeah, Apple had misfires under Jobs, but not of the same magnitude or frequency. And the products were generally better designed and tested.

    The Power Mac G3/G4 design was the most elegant tower case I’ve ever seen. It was incredibly easy to work on the internals. It understood that people buying a top-end computer with pro power and features value the ability to customize, expand, and even repair their system. Today, we have the cylindrical Mac Pro, which not only can’t be expanded internally and can’t easily be repaired by the user, but its “elegant design” backed it into a corner meaning it hasn’t seen an update in years.

    The iMac G5 was stylish and compact, but also user-serviceable. Not only could you upgrade the RAM, you could replace the hard drive, power supply, and other components. Apple even offered do-it-yourself repairs, where they’d ship you the replacement part. Today’s iMacs can’t be upgraded and are inexplicably difficult to repair even for a trained service provider. But they’re thin and stylish.

    The iPhone X series, for most people, doesn’t offer much in the way of real, everyday functional improvement over the much cheaper iPhone 8. The CPU in the 8 is fast enough for virtually any normal person. The AR features in the newer processors seem to be a solution in search of a problem, so far. Yes, there’s a better camera, but for most people the more basic camera is more than good enough. It’s difficult to find a compelling reason to push someone from an 8 to an Xs or Xr other than “but it’s newer and will be declared obsolete later!”

    It used to be that I could argue Apple’s operating systems were head and shoulders above the competition. They just worked. They were intuitive. They were secure. They were compatible. They were simple for beginners but offered incredible depth for advanced users. That’s not true any longer. Apple’s software is now frequently unusable on release due to bugs. Features are removed as often as they’re added, particularly advanced features. Serious vulnerabilities are increasingly common. And too often, Design (with a capital D and a patronizing British accent) trumps usability and intuitive operation.

    Never mind bugs like updates bricking Apple Watches... or major features slipping from OS releases... or outright vaporware like AirPower.

    Frankly, Microsoft has caught up, and Apple has slacked off.

    It used to be I couldn’t imagine using Windows every day by choice. Today, although Windows 10 has plenty of annoyances—especially around privacy—it’s stable, it’s usable, it’s flexible, and it generally works about as well as macOS. Microsoft is stepping up its integration game, too: the integration between Windows 10 and the Xbox shows just how little effort Apple has put into the Apple TV.

    Meanwhile, Apple can’t even design a laptop without an overdesigned, overwrought keyboard that has Elegant Design but breaks when presented with a cookie crumb, requiring a $500 repair that may take weeks to process. Not because the keyboard works better; not because the keyboard is more joyful to type on; not because the design solved a fundamental problem with the concept of typing. No, because it shaved a millimeter off the thickness of the laptop.

    Apple no longer designs computers that are the best they can possibly be. They no longer make software that can be used by anyone—rank beginner or serious professional. They no longer make devices that are designed to be the best they can be at what they do.

    Apple designs anorexic computers for casual users with high disposable income. Some of those computers are phones, tablets, and watches.

    Apple is teetering under the weight of its own hubris lately, which is ironic given Apple’s thin fetish under Jony Ives.
    elijahgmike54cgWerks
  • Reply 46 of 100
    Rayz2016Rayz2016 Posts: 4,443member
    avon b7 said:
    Rayz2016 said:

    zoetmb said:
    lkrupp said:
    pjs_socal said:
    Microsoft has a P/E ratio of 45 and Apple has a P/E ratio of 15.

    Apple and Microsoft have similar margins and Apple had better growth in 2018. Apple makes 2.5x more revenue and 3x more profits. So, why are Microsoft shares valued at 3x Apple’s? Because investors are morons.

    In reality Microsoft is worth ⅓ the value of Apple.
    Because Microsoft is diversified with recurring revenue streams which Wall Street loves. With Apple if iPhone sneezes the entire company gets a cold.
    So when did the iPhone sneeze? I must have missed that. The only thing I’ve heard are the predictions of analysts based on supply chain reports which Tim Cook has consistently advised against using to provide meaningful data about Apple. So remind me, when did the iPhone sneeze and give the entire company a cold? In your wet dreams?
    Reality doesn't matter.  It's about perception.   The iPhone is approximately 66% of Apple's gross revenue.  And Apple announcing that they're no longer going to break out iPhone units sales is sending the message, correct or not, that they expect declines in unit sales.  Wall Street doesn't like a lack of transparency and in that regard, I don't blame them.   Combine that with the insanity of believing supplier chain complaints and that's a recipe for killing the stock and that's if the stock is not being manipulated.   

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?   

    On the Mac side, Apple's price hikes combined with the inability to replace the battery, memory and storage as well as the fact that so many people don't really need a computer anymore is going to continue to affect sales, but the Mac is only about 10% of Apple now anyway.   Apple probably thought they could replace Mac sales with iPad sales, but that's only about 8% of Apple.    While I realize that Apple has never wanted to be the low-end, low-margin provider, I think the high salaries paid to Apple managers and executives has completely warped their perception of what most people are willing and able to spend, especially for a machine that can't be upgraded after purchase.    A 15" MBP now starts at $2400 and tops out at $6700.   That's ludicrous.   The MBA starts at $1000 at tops out at $2600.   The Mini tops out at $4300.   $5K for the 27" 5K Retina iMac (topping out at $13,200)?   IMO, this is either desperation to keep revenue high or unbelievable arrogance.     



    There is of course, the third option: you have the details wrong.

    Let's begin with the most obvious stumble (the real drop off the cliff is that Apple actually sells phones at a range of prices, but that's so obvious it doesn't really need covering):

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop? 

    Er, no. Apple doesn't expect that because no one has ever done that.  What happens is that on each new release, Apple gets picks up customers from other platforms, but also gets a massive boost from people with folk with much iPhones much older than two years. I have just replaced my iPhone 6s, which means I missed out on the 7 and the X. The assumption that Apple thinks folk update their phone every two years is laughable. Which brings me to your other point:

    Yes, the price. And here again, the problem is narrow thinking. Saying that no one would buy a $1000 phone is a bit like saying no one would buy a house for $300,000 or a $30,000 car. Clearly they will, because I've seen houses and cars that cost several times that amount. So how do they do it?
    Well, I'm going to clue you in, but you have to keep it under your hat because I'm thinking of taking out a patent on the whole idea.

    Ready?

    This is going to amaze you, but people don't hand over the whole amount for houses and cars all at once. They pay it off in chunks. Buying a $1000 iPhone (which, by the way, is not the most expensive smart phone on the market) is best done on the Apple payment scheme: they throw in AppleCare and you can change the phone after a year if you want. Oh, and it's interest free, so if you're paying the whole cost up front then you're doing it wrong. 

    But that's kind of an aside. The point is that folk have been saying Apple gear is insanely expensive for as long as I can remember, and for as long as I can remember, they've been shifting it. So that leads me to believe that Apple understands basic economic theory better than anyone here who comments on it. All this braying about  Apple pricing always misses one vital piece of information: Apple's demand curve.

    This little bit of paper sitting on Tim Cook's desk will show you is that the demand for Apple kit is comparatively inelastic: movements in price have fairly negligible effects on demand.  If they increase the price, the sales will not drop significantly.

    But far more importantly, dropping the price will not actually produce a significant increase in sales, and this increase may not be enough to cover the price drop.

    So why is Apple's demand inelastic? Simply because the combination of hardware and software is perceived as unique in a very crowded market. 



    The details aren't wrong. You are interpreting things wrong.

    There are pricing ceilings on everything. Financing (including interest free) also has ceilings, or do you think someone will be willing to take on financing to pay for a phone over 5 years when it will be upgraded before it is paid off?

    The increasing cost of iPhones (and every other phone in the same price band) is taking users one step further up to their individual ceilings.

    You are taking his 1,000 dollar point completely out of context. He is speaking in general terms. We already know people buy 1,000 dollar phones every year. The point is those people aren't most people and three or four years of flat sales is telling in itself.

    The higher the price the harder the sale in high numbers, even with financing and upgrade options but that ceiling becomes ever nearer or you are hitting it. And if the cheaper options mean sacfricing features or getting an older iPhone, then the sale is equally hard.

    People argued that users were on longer upgrade cycles (provoked in part by pricing itself) and that is probably another reason while sales flattened, but how many people do you think are still using iPhone 6?

    But that argument doesn't take into account the vast potential pool of Android users that are there for the taking, right? 80% of the market. 1,000 dollar Android phones sell in the millions even while they are a fraction of the 80%. Why isn't Apple able to take a slice of that premium Android Pie (sic)? Why aren't people switching from Android in enough numbers to move the Apple needle off 'flat'? It's clearly not price for those users. It's value (among other things). The longer upgrade cycle really isn't doing much except allowing Apple tread water.

    Apple is on an 's' cycle - through its own choice - which only makes the sale look worse when compared to rival flagships that are pushing the pedal to the metal. So while Apple takes a breather on innovation and brings the A12 and little else to the table while still including a 5W charger in the box, others are innovating on everything and showing no signs of slowing down. That means 'new' tech is flowing down the lines into the middle ground at an incredible pace and upping the value proposition of those phones.

    How can you say that movements in price have a 'fairly negligible effect on demand? Apple doesn't break down unit sales on price.

    Price is the number one factor for most people when it comes to buying a Phone. The iPhone X hit new price highs for Apple. It was the 'most popular' 2018 iPhone for Q1, 2 and 3. But Q4? Estimates said demand for the 'most popular' iPhone dropped off sharply in Q4. Far more quickly than any other Apple flagship from previous years in the same quarter. But 'most popular' isn't truly quantifiable is it? 

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.



    Price elasticity doesn't state that there isn't a ceiling on price. All it says is that some products are relatively unaffected by price changes when compared to others, and nothing you've said actually disproves that.  This is why Apple can increase the price of the phone and knows that the amount of sales that they will lose will more than make up for the increase in revenue.

    Secondly, as I pointed out in my post, the whole argument falls flat because Apple sells phones at various price points.

    You are taking his 1,000 dollar point completely out of context. 

    He said folk will not upgrade a $1000 every two years. There's no context.

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    Price inelasticity is new found? Nope. Apple products have always been considered irreplaceable by the most valuable and price insensitive areas of the population, and Apple tends to leave everyone else to the Android manufacturers. Can't say that's right or wrong, but they seem to make a lot more money than everyone else. So in general, Apple products, across the whole range enjoy greater price elasticity than the competition, which is why the competition fights like dogs at the lower end of the market, and Apple would rather not.

    But let's go back to the real point here. The problem you have is the one I have highlighted again and again. Apple sells a range of phones at a range of prices. But oddly enough, everyone always homes in on the most expensive flagship phone as if this is the only one available. Even Gruber has stated that the XR is better deal because it's almost as good and way cheaper. Apple has even said that the XR is it's best selling phone. 
    So the problem isn't that Apple's phones are too expensive. The problem is that folk want the top of the range phone, but want to tell Apple how much they want to pay for it.

    Ah, do want to look at one more point:

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.

    Riigggghty-ho then. So what you're basically asking us to wait long enough to give you a better chance of being right. Got it.

    Well, we could do that, but I'm not sure I see the point. Because the thing about Apple is that it will not stick doggedly to its plans in the face of changing conditions. They never have. They won't keep increasing the price of the phone until they are not bringing in enough revenue to make up for the loss in sales units. The fact is they make these adjustments all the time, but because you're so focussed on the phone at the very top of the range, you completely miss that folk are buying the cheaper phones too.


    elijahgmagman1979roundaboutnow
  • Reply 47 of 100
    netmagenetmage Posts: 236member
    avon b7 said:

    Apple is on an 's' cycle - through its own choice - which only makes the sale look worse when compared to rival flagships that are pushing the pedal to the metal. So while Apple takes a breather on innovation and brings the A12 and little else to the table while still including a 5W charger in the box, others are innovating on everything and showing no signs of slowing down. That means 'new' tech is flowing down the lines into the middle ground at an incredible pace and upping the value proposition of those phones.
    The problem with your story is that it isn’t true. Saumsung owns the high end Android market and the S9 is underselling the S8 which undersold the S7. The Note 9 looks to be wildly successful comparatively yet is under selling the Note 8. The innovation you claim Android is showing isn’t proving a high end sales maker while Apple continues to out sell everybody in the high end market with their “paused innovation” and “‘s’ cycle”. Which for the buyers of the Max and XR, this definitely isn’t. 
    edited December 1 elijahgmagman1979roundaboutnow
  • Reply 48 of 100
    avon b7avon b7 Posts: 2,894member
    Rayz2016 said:
    avon b7 said:
    Rayz2016 said:

    zoetmb said:
    lkrupp said:
    pjs_socal said:
    Microsoft has a P/E ratio of 45 and Apple has a P/E ratio of 15.

    Apple and Microsoft have similar margins and Apple had better growth in 2018. Apple makes 2.5x more revenue and 3x more profits. So, why are Microsoft shares valued at 3x Apple’s? Because investors are morons.

    In reality Microsoft is worth ⅓ the value of Apple.
    Because Microsoft is diversified with recurring revenue streams which Wall Street loves. With Apple if iPhone sneezes the entire company gets a cold.
    So when did the iPhone sneeze? I must have missed that. The only thing I’ve heard are the predictions of analysts based on supply chain reports which Tim Cook has consistently advised against using to provide meaningful data about Apple. So remind me, when did the iPhone sneeze and give the entire company a cold? In your wet dreams?
    Reality doesn't matter.  It's about perception.   The iPhone is approximately 66% of Apple's gross revenue.  And Apple announcing that they're no longer going to break out iPhone units sales is sending the message, correct or not, that they expect declines in unit sales.  Wall Street doesn't like a lack of transparency and in that regard, I don't blame them.   Combine that with the insanity of believing supplier chain complaints and that's a recipe for killing the stock and that's if the stock is not being manipulated.   

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?   

    On the Mac side, Apple's price hikes combined with the inability to replace the battery, memory and storage as well as the fact that so many people don't really need a computer anymore is going to continue to affect sales, but the Mac is only about 10% of Apple now anyway.   Apple probably thought they could replace Mac sales with iPad sales, but that's only about 8% of Apple.    While I realize that Apple has never wanted to be the low-end, low-margin provider, I think the high salaries paid to Apple managers and executives has completely warped their perception of what most people are willing and able to spend, especially for a machine that can't be upgraded after purchase.    A 15" MBP now starts at $2400 and tops out at $6700.   That's ludicrous.   The MBA starts at $1000 at tops out at $2600.   The Mini tops out at $4300.   $5K for the 27" 5K Retina iMac (topping out at $13,200)?   IMO, this is either desperation to keep revenue high or unbelievable arrogance.     



    There is of course, the third option: you have the details wrong.

    Let's begin with the most obvious stumble (the real drop off the cliff is that Apple actually sells phones at a range of prices, but that's so obvious it doesn't really need covering):

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop? 

    Er, no. Apple doesn't expect that because no one has ever done that.  What happens is that on each new release, Apple gets picks up customers from other platforms, but also gets a massive boost from people with folk with much iPhones much older than two years. I have just replaced my iPhone 6s, which means I missed out on the 7 and the X. The assumption that Apple thinks folk update their phone every two years is laughable. Which brings me to your other point:

    Yes, the price. And here again, the problem is narrow thinking. Saying that no one would buy a $1000 phone is a bit like saying no one would buy a house for $300,000 or a $30,000 car. Clearly they will, because I've seen houses and cars that cost several times that amount. So how do they do it?
    Well, I'm going to clue you in, but you have to keep it under your hat because I'm thinking of taking out a patent on the whole idea.

    Ready?

    This is going to amaze you, but people don't hand over the whole amount for houses and cars all at once. They pay it off in chunks. Buying a $1000 iPhone (which, by the way, is not the most expensive smart phone on the market) is best done on the Apple payment scheme: they throw in AppleCare and you can change the phone after a year if you want. Oh, and it's interest free, so if you're paying the whole cost up front then you're doing it wrong. 

    But that's kind of an aside. The point is that folk have been saying Apple gear is insanely expensive for as long as I can remember, and for as long as I can remember, they've been shifting it. So that leads me to believe that Apple understands basic economic theory better than anyone here who comments on it. All this braying about  Apple pricing always misses one vital piece of information: Apple's demand curve.

    This little bit of paper sitting on Tim Cook's desk will show you is that the demand for Apple kit is comparatively inelastic: movements in price have fairly negligible effects on demand.  If they increase the price, the sales will not drop significantly.

    But far more importantly, dropping the price will not actually produce a significant increase in sales, and this increase may not be enough to cover the price drop.

    So why is Apple's demand inelastic? Simply because the combination of hardware and software is perceived as unique in a very crowded market. 



    The details aren't wrong. You are interpreting things wrong.

    There are pricing ceilings on everything. Financing (including interest free) also has ceilings, or do you think someone will be willing to take on financing to pay for a phone over 5 years when it will be upgraded before it is paid off?

    The increasing cost of iPhones (and every other phone in the same price band) is taking users one step further up to their individual ceilings.

    You are taking his 1,000 dollar point completely out of context. He is speaking in general terms. We already know people buy 1,000 dollar phones every year. The point is those people aren't most people and three or four years of flat sales is telling in itself.

    The higher the price the harder the sale in high numbers, even with financing and upgrade options but that ceiling becomes ever nearer or you are hitting it. And if the cheaper options mean sacfricing features or getting an older iPhone, then the sale is equally hard.

    People argued that users were on longer upgrade cycles (provoked in part by pricing itself) and that is probably another reason while sales flattened, but how many people do you think are still using iPhone 6?

    But that argument doesn't take into account the vast potential pool of Android users that are there for the taking, right? 80% of the market. 1,000 dollar Android phones sell in the millions even while they are a fraction of the 80%. Why isn't Apple able to take a slice of that premium Android Pie (sic)? Why aren't people switching from Android in enough numbers to move the Apple needle off 'flat'? It's clearly not price for those users. It's value (among other things). The longer upgrade cycle really isn't doing much except allowing Apple tread water.

    Apple is on an 's' cycle - through its own choice - which only makes the sale look worse when compared to rival flagships that are pushing the pedal to the metal. So while Apple takes a breather on innovation and brings the A12 and little else to the table while still including a 5W charger in the box, others are innovating on everything and showing no signs of slowing down. That means 'new' tech is flowing down the lines into the middle ground at an incredible pace and upping the value proposition of those phones.

    How can you say that movements in price have a 'fairly negligible effect on demand? Apple doesn't break down unit sales on price.

    Price is the number one factor for most people when it comes to buying a Phone. The iPhone X hit new price highs for Apple. It was the 'most popular' 2018 iPhone for Q1, 2 and 3. But Q4? Estimates said demand for the 'most popular' iPhone dropped off sharply in Q4. Far more quickly than any other Apple flagship from previous years in the same quarter. But 'most popular' isn't truly quantifiable is it? 

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.



    Price elasticity doesn't state that there isn't a ceiling on price. All it says is that some products are relatively unaffected by price changes when compared to others, and nothing you've said actually disproves that.  This is why Apple can increase the price of the phone and knows that the amount of sales that they will lose will more than make up for the increase in revenue.

    Secondly, as I pointed out in my post, the whole argument falls flat because Apple sells phones at various price points.

    You are taking his 1,000 dollar point completely out of context. 

    He said folk will not upgrade a $1000 every two years. There's no context.

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    Price inelasticity is new found? Nope. Apple products have always been considered irreplaceable by the most valuable and price insensitive areas of the population, and Apple tends to leave everyone else to the Android manufacturers. Can't say that's right or wrong, but they seem to make a lot more money than everyone else. So in general, Apple products, across the whole range enjoy greater price elasticity than the competition, which is why the competition fights like dogs at the lower end of the market, and Apple would rather not.

    But let's go back to the real point here. The problem you have is the one I have highlighted again and again. Apple sells a range of phones at a range of prices. But oddly enough, everyone always homes in on the most expensive flagship phone as if this is the only one available. Even Gruber has stated that the XR is better deal because it's almost as good and way cheaper. Apple has even said that the XR is it's best selling phone. 
    So the problem isn't that Apple's phones are too expensive. The problem is that folk want the top of the range phone, but want to tell Apple how much they want to pay for it.

    Ah, do want to look at one more point:

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.

    Riigggghty-ho then. So what you're basically asking us to wait long enough to give you a better chance of being right. Got it.

    Well, we could do that, but I'm not sure I see the point. Because the thing about Apple is that it will not stick doggedly to its plans in the face of changing conditions. They never have. They won't keep increasing the price of the phone until they are not bringing in enough revenue to make up for the loss in sales units. The fact is they make these adjustments all the time, but because you're so focussed on the phone at the very top of the range, you completely miss that folk are buying the cheaper phones too.


    I am certainly not asking anyone to wait for a better chance of being right. I have been proven right already. Flat sales says a lot. The market has spoken. Growth ended in 2015. 

    That in spite of Apple widening its model spread and now releasing three new models each year.

    I have never focussed solely on the premium priced phones and was probably the first person here to highlight the shift in business model as a result of the 2017 iPhone refresh. To the point that I praised Apple for trying that option. All increasing prices has done is increase ASP, (which the vast majority of buyers have no interest in anyway) and help to stifle growth which remains flat.

    "He said folk will not upgrade a $1000 every two years. There's no context."

    This is what he really said:

    "
    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?"

    There is plenty of context there if you had wished to see it.


    elijahgmuthuk_vanalingam
  • Reply 49 of 100
    pjs_socal said:
    Microsoft has a P/E ratio of 45 and Apple has a P/E ratio of 15.

    Apple and Microsoft have similar margins and Apple had better growth in 2018. Apple makes 2.5x more revenue and 3x more profits. So, why are Microsoft shares valued at 3x Apple’s? Because investors are morons.

    In reality Microsoft is worth ⅓ the value of Apple.
    Because Microsoft is diversified with recurring revenue streams which Wall Street loves. With Apple if iPhone sneezes the entire company gets a cold.
    Yeah no. Apple’s othe lines are bigger than other entire corporations. 

    MS relies on Windows, that’s a fact. It’s their iPhone. 
    elijahgmacplusplusmagman1979
  • Reply 50 of 100

    davgreg said:
    Microsoft under Nadella has followed the Jobs pattern of picking a couple of things to do and then skating to where the puck is. Apple under Cook has followed the Ballmer pattern of imitate and iterate instead of innovate. Nadella taught the elephant to tap dance and Cook took a once lean Apple and created a top heavy organization that seems unable to do anything other than design and market cell phones.

    Apple is a one trick pony.
    Utter bullshit. Retina Macs under Cook, Watch, AirPods, X, etc...All amazing devices which lead their categories and are aped by the competitors. 

    iPhone is king to be sure, but the other lines drive more profit than most tech companies. MS is still riding Windows and Office corporate sales. 

    Got any more ignorant bullshit theories?
    elijahgmacplusplusmagman1979roundaboutnow
  • Reply 51 of 100
    mike54 said:
    Tim Cook has made Apple into an iPhone, iOS for Phone, and services around the iPhone company, TV shows, infused with fashion and Tim's politics. It has lost interest in macs, macOS, stopped a number of products, ignored products, quality control needs addressing, etc. They no longer make the best products they can, but instead hobble configurations in order to up-sell and to purchase addition accessories to get functionality that should be included in the product, and all this while they are substantially raising prices. Apple has always been more expensive, but combined with the other factors it's getting out of hand. And look at the product range in a category, it has grown into a convoluted mess.
    Oh look, someone who’s still upset at th idea of equal civil rights for people different than he is. 

    Fashion? You’re still complaining that the AW is about “fashion!” and not a highly successful entrance into wearable computing?

    Quality control is fine, they just sell so many more devices and the internet is obsessed with apple-failure narrative that you hear about it more now. Yet the consumer satisfaction data don’t lie...people love their Apple devices. 

    Hater nonsense. 
    elijahgmacplusplusmagman1979williamlondonroundaboutnow
  • Reply 52 of 100
    Apple just gave an iPhone XR to every audience member of the Ellen show. When’s the last time they did anything like that? https://9to5mac.com/2018/12/01/iphone-xr-giveaway-ellen/
    elijahgmuthuk_vanalingam
  • Reply 53 of 100
    tmaytmay Posts: 3,244member
    avon b7 said:
    Rayz2016 said:
    avon b7 said:
    Rayz2016 said:

    zoetmb said:
    lkrupp said:
    pjs_socal said:
    Microsoft has a P/E ratio of 45 and Apple has a P/E ratio of 15.

    Apple and Microsoft have similar margins and Apple had better growth in 2018. Apple makes 2.5x more revenue and 3x more profits. So, why are Microsoft shares valued at 3x Apple’s? Because investors are morons.

    In reality Microsoft is worth ⅓ the value of Apple.
    Because Microsoft is diversified with recurring revenue streams which Wall Street loves. With Apple if iPhone sneezes the entire company gets a cold.
    So when did the iPhone sneeze? I must have missed that. The only thing I’ve heard are the predictions of analysts based on supply chain reports which Tim Cook has consistently advised against using to provide meaningful data about Apple. So remind me, when did the iPhone sneeze and give the entire company a cold? In your wet dreams?
    Reality doesn't matter.  It's about perception.   The iPhone is approximately 66% of Apple's gross revenue.  And Apple announcing that they're no longer going to break out iPhone units sales is sending the message, correct or not, that they expect declines in unit sales.  Wall Street doesn't like a lack of transparency and in that regard, I don't blame them.   Combine that with the insanity of believing supplier chain complaints and that's a recipe for killing the stock and that's if the stock is not being manipulated.   

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?   

    On the Mac side, Apple's price hikes combined with the inability to replace the battery, memory and storage as well as the fact that so many people don't really need a computer anymore is going to continue to affect sales, but the Mac is only about 10% of Apple now anyway.   Apple probably thought they could replace Mac sales with iPad sales, but that's only about 8% of Apple.    While I realize that Apple has never wanted to be the low-end, low-margin provider, I think the high salaries paid to Apple managers and executives has completely warped their perception of what most people are willing and able to spend, especially for a machine that can't be upgraded after purchase.    A 15" MBP now starts at $2400 and tops out at $6700.   That's ludicrous.   The MBA starts at $1000 at tops out at $2600.   The Mini tops out at $4300.   $5K for the 27" 5K Retina iMac (topping out at $13,200)?   IMO, this is either desperation to keep revenue high or unbelievable arrogance.     



    There is of course, the third option: you have the details wrong.

    Let's begin with the most obvious stumble (the real drop off the cliff is that Apple actually sells phones at a range of prices, but that's so obvious it doesn't really need covering):

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop? 

    Er, no. Apple doesn't expect that because no one has ever done that.  What happens is that on each new release, Apple gets picks up customers from other platforms, but also gets a massive boost from people with folk with much iPhones much older than two years. I have just replaced my iPhone 6s, which means I missed out on the 7 and the X. The assumption that Apple thinks folk update their phone every two years is laughable. Which brings me to your other point:

    Yes, the price. And here again, the problem is narrow thinking. Saying that no one would buy a $1000 phone is a bit like saying no one would buy a house for $300,000 or a $30,000 car. Clearly they will, because I've seen houses and cars that cost several times that amount. So how do they do it?
    Well, I'm going to clue you in, but you have to keep it under your hat because I'm thinking of taking out a patent on the whole idea.

    Ready?

    This is going to amaze you, but people don't hand over the whole amount for houses and cars all at once. They pay it off in chunks. Buying a $1000 iPhone (which, by the way, is not the most expensive smart phone on the market) is best done on the Apple payment scheme: they throw in AppleCare and you can change the phone after a year if you want. Oh, and it's interest free, so if you're paying the whole cost up front then you're doing it wrong. 

    But that's kind of an aside. The point is that folk have been saying Apple gear is insanely expensive for as long as I can remember, and for as long as I can remember, they've been shifting it. So that leads me to believe that Apple understands basic economic theory better than anyone here who comments on it. All this braying about  Apple pricing always misses one vital piece of information: Apple's demand curve.

    This little bit of paper sitting on Tim Cook's desk will show you is that the demand for Apple kit is comparatively inelastic: movements in price have fairly negligible effects on demand.  If they increase the price, the sales will not drop significantly.

    But far more importantly, dropping the price will not actually produce a significant increase in sales, and this increase may not be enough to cover the price drop.

    So why is Apple's demand inelastic? Simply because the combination of hardware and software is perceived as unique in a very crowded market. 



    The details aren't wrong. You are interpreting things wrong.

    There are pricing ceilings on everything. Financing (including interest free) also has ceilings, or do you think someone will be willing to take on financing to pay for a phone over 5 years when it will be upgraded before it is paid off?

    The increasing cost of iPhones (and every other phone in the same price band) is taking users one step further up to their individual ceilings.

    You are taking his 1,000 dollar point completely out of context. He is speaking in general terms. We already know people buy 1,000 dollar phones every year. The point is those people aren't most people and three or four years of flat sales is telling in itself.

    The higher the price the harder the sale in high numbers, even with financing and upgrade options but that ceiling becomes ever nearer or you are hitting it. And if the cheaper options mean sacfricing features or getting an older iPhone, then the sale is equally hard.

    People argued that users were on longer upgrade cycles (provoked in part by pricing itself) and that is probably another reason while sales flattened, but how many people do you think are still using iPhone 6?

    But that argument doesn't take into account the vast potential pool of Android users that are there for the taking, right? 80% of the market. 1,000 dollar Android phones sell in the millions even while they are a fraction of the 80%. Why isn't Apple able to take a slice of that premium Android Pie (sic)? Why aren't people switching from Android in enough numbers to move the Apple needle off 'flat'? It's clearly not price for those users. It's value (among other things). The longer upgrade cycle really isn't doing much except allowing Apple tread water.

    Apple is on an 's' cycle - through its own choice - which only makes the sale look worse when compared to rival flagships that are pushing the pedal to the metal. So while Apple takes a breather on innovation and brings the A12 and little else to the table while still including a 5W charger in the box, others are innovating on everything and showing no signs of slowing down. That means 'new' tech is flowing down the lines into the middle ground at an incredible pace and upping the value proposition of those phones.

    How can you say that movements in price have a 'fairly negligible effect on demand? Apple doesn't break down unit sales on price.

    Price is the number one factor for most people when it comes to buying a Phone. The iPhone X hit new price highs for Apple. It was the 'most popular' 2018 iPhone for Q1, 2 and 3. But Q4? Estimates said demand for the 'most popular' iPhone dropped off sharply in Q4. Far more quickly than any other Apple flagship from previous years in the same quarter. But 'most popular' isn't truly quantifiable is it? 

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.



    Price elasticity doesn't state that there isn't a ceiling on price. All it says is that some products are relatively unaffected by price changes when compared to others, and nothing you've said actually disproves that.  This is why Apple can increase the price of the phone and knows that the amount of sales that they will lose will more than make up for the increase in revenue.

    Secondly, as I pointed out in my post, the whole argument falls flat because Apple sells phones at various price points.

    You are taking his 1,000 dollar point completely out of context. 

    He said folk will not upgrade a $1000 every two years. There's no context.

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    Price inelasticity is new found? Nope. Apple products have always been considered irreplaceable by the most valuable and price insensitive areas of the population, and Apple tends to leave everyone else to the Android manufacturers. Can't say that's right or wrong, but they seem to make a lot more money than everyone else. So in general, Apple products, across the whole range enjoy greater price elasticity than the competition, which is why the competition fights like dogs at the lower end of the market, and Apple would rather not.

    But let's go back to the real point here. The problem you have is the one I have highlighted again and again. Apple sells a range of phones at a range of prices. But oddly enough, everyone always homes in on the most expensive flagship phone as if this is the only one available. Even Gruber has stated that the XR is better deal because it's almost as good and way cheaper. Apple has even said that the XR is it's best selling phone. 
    So the problem isn't that Apple's phones are too expensive. The problem is that folk want the top of the range phone, but want to tell Apple how much they want to pay for it.

    Ah, do want to look at one more point:

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.

    Riigggghty-ho then. So what you're basically asking us to wait long enough to give you a better chance of being right. Got it.

    Well, we could do that, but I'm not sure I see the point. Because the thing about Apple is that it will not stick doggedly to its plans in the face of changing conditions. They never have. They won't keep increasing the price of the phone until they are not bringing in enough revenue to make up for the loss in sales units. The fact is they make these adjustments all the time, but because you're so focussed on the phone at the very top of the range, you completely miss that folk are buying the cheaper phones too.


    I am certainly not asking anyone to wait for a better chance of being right. I have been proven right already. Flat sales says a lot. The market has spoken. Growth ended in 2015. 

    That in spite of Apple widening its model spread and now releasing three new models each year.

    I have never focussed solely on the premium priced phones and was probably the first person here to highlight the shift in business model as a result of the 2017 iPhone refresh. To the point that I praised Apple for trying that option. All increasing prices has done is increase ASP, (which the vast majority of buyers have no interest in anyway) and help to stifle growth which remains flat.

    "He said folk will not upgrade a $1000 every two years. There's no context."

    This is what he really said:

    "Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?"

    There is plenty of context there if you had wished to see it.


    You seem to miss that Android OS device makers are also in a flat market, and with a recession on the horizon, there will be even more price competition within that space, not less, yet you seem to think that growth for Huawei will be unimpeded.

    It won't be.

    Unit sales numbers alone are a distortion of the realities of the marketplace, and yet you live and die by them in your posts. Good luck with that.
    adamcmagman1979StrangeDaysroundaboutnow
  • Reply 54 of 100
    chasm said:
    It should be noted that:
    1. There is ZERO hard evidence that the iPhone XR or any other iPhone is doing poorly, and a statement from Apple that points to the XR as the best selling iPhone model.
    2. To be fair, that could be (mis)interpreted that the iPhone XR is doing well but under company expectations. However, assuming that would require believing that all the other iPhone models are also doing poorly (since they're all doing less well than the leading iPhone), and there's no evidence of that. Furthermore:
    3. If the iPhones were doing less well than expected, Apple would be required by law to revise its record-breaking guidance to investors. It has not done so.

    So the bottom line is this: until stronger actual evidence emerges, Apple's lack of a guidance warning suggests that the company is on target for a record-breaking fiscal Q1 again this year. While I certainly don't begrudge Microsoft its moment in the sun, they've done nothing different from the last five years to warrant this sudden re-evaluation as compared to, say, Amazon or IBM or other companies experiencing new growth. Apple's services business -- the core of the reason why MS has suddenly found favour amongst the punditry -- is healthier and wealthier than Microsoft's, and there is no analyst that doesn't think it is growing significantly faster than anyone else's on the planet.

    Conclusion: this downturn in AAPL is driven 100 percent by unproven speculation, which is a sure sign of market manipulation. Microsoft's sudden rise in its stock price is also seemingly driven by speculation and market manipulation. Expect big corrections in January when MS again reports lacklustre results (after its execs cash out on this windfall) and Apple reports exactly what it has promised it will: a record-breaking fiscal Q1.

    Just hope that the general US economy doesn't crash in the meantime ...
    What are the guidlines for announcing earnings warnings? Two weeks before the end of the quarter? Three weeks? ???
  • Reply 55 of 100
    macxpressmacxpress Posts: 4,636member
    davgreg said:
    Microsoft under Nadella has followed the Jobs pattern of picking a couple of things to do and then skating to where the puck is. Apple under Cook has followed the Ballmer pattern of imitate and iterate instead of innovate. Nadella taught the elephant to tap dance and Cook took a once lean Apple and created a top heavy organization that seems unable to do anything other than design and market cell phones.

    Apple is a one trick pony.
    So it can't design and market Watches, which it owns that space? It can't design and market things like EarPods (extreme successful), Macs (still successful today), its services business is a Fortune 100 company in itself, etc, etc. I think you need to research a little more before you spout out pure BS and making your post bold doesn't make it anymore true. 

    Just because you may not like what Apple (and Tim Cook) are doing, doesn't mean they aren't successful. 
    edited December 1 magman1979roundaboutnow
  • Reply 56 of 100
    elijahgelijahg Posts: 688member
    lkrupp said:
    Okay, this news is being plastered all over the Internet. When Apple retakes the lead tomorrow or next week, or next month will THAT be plastered all over the Internet? Can you hear me laughing? Only negative things about Apple are newsworthy.
    Actually it was plastered all over the internet that Apple had become the world's first $1tn company. The loss of $200bn from Apple's value is a mind-bogglingly large number over such a short period, especially since Apple hasn't actually directly said iPhone sales are flat, and guidance still shows growth.
  • Reply 57 of 100
    avon b7avon b7 Posts: 2,894member
    tmay said:
    avon b7 said:
    Rayz2016 said:
    avon b7 said:
    Rayz2016 said:

    zoetmb said:
    lkrupp said:
    pjs_socal said:
    Microsoft has a P/E ratio of 45 and Apple has a P/E ratio of 15.

    Apple and Microsoft have similar margins and Apple had better growth in 2018. Apple makes 2.5x more revenue and 3x more profits. So, why are Microsoft shares valued at 3x Apple’s? Because investors are morons.

    In reality Microsoft is worth ⅓ the value of Apple.
    Because Microsoft is diversified with recurring revenue streams which Wall Street loves. With Apple if iPhone sneezes the entire company gets a cold.
    So when did the iPhone sneeze? I must have missed that. The only thing I’ve heard are the predictions of analysts based on supply chain reports which Tim Cook has consistently advised against using to provide meaningful data about Apple. So remind me, when did the iPhone sneeze and give the entire company a cold? In your wet dreams?
    Reality doesn't matter.  It's about perception.   The iPhone is approximately 66% of Apple's gross revenue.  And Apple announcing that they're no longer going to break out iPhone units sales is sending the message, correct or not, that they expect declines in unit sales.  Wall Street doesn't like a lack of transparency and in that regard, I don't blame them.   Combine that with the insanity of believing supplier chain complaints and that's a recipe for killing the stock and that's if the stock is not being manipulated.   

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?   

    On the Mac side, Apple's price hikes combined with the inability to replace the battery, memory and storage as well as the fact that so many people don't really need a computer anymore is going to continue to affect sales, but the Mac is only about 10% of Apple now anyway.   Apple probably thought they could replace Mac sales with iPad sales, but that's only about 8% of Apple.    While I realize that Apple has never wanted to be the low-end, low-margin provider, I think the high salaries paid to Apple managers and executives has completely warped their perception of what most people are willing and able to spend, especially for a machine that can't be upgraded after purchase.    A 15" MBP now starts at $2400 and tops out at $6700.   That's ludicrous.   The MBA starts at $1000 at tops out at $2600.   The Mini tops out at $4300.   $5K for the 27" 5K Retina iMac (topping out at $13,200)?   IMO, this is either desperation to keep revenue high or unbelievable arrogance.     



    There is of course, the third option: you have the details wrong.

    Let's begin with the most obvious stumble (the real drop off the cliff is that Apple actually sells phones at a range of prices, but that's so obvious it doesn't really need covering):

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop? 

    Er, no. Apple doesn't expect that because no one has ever done that.  What happens is that on each new release, Apple gets picks up customers from other platforms, but also gets a massive boost from people with folk with much iPhones much older than two years. I have just replaced my iPhone 6s, which means I missed out on the 7 and the X. The assumption that Apple thinks folk update their phone every two years is laughable. Which brings me to your other point:

    Yes, the price. And here again, the problem is narrow thinking. Saying that no one would buy a $1000 phone is a bit like saying no one would buy a house for $300,000 or a $30,000 car. Clearly they will, because I've seen houses and cars that cost several times that amount. So how do they do it?
    Well, I'm going to clue you in, but you have to keep it under your hat because I'm thinking of taking out a patent on the whole idea.

    Ready?

    This is going to amaze you, but people don't hand over the whole amount for houses and cars all at once. They pay it off in chunks. Buying a $1000 iPhone (which, by the way, is not the most expensive smart phone on the market) is best done on the Apple payment scheme: they throw in AppleCare and you can change the phone after a year if you want. Oh, and it's interest free, so if you're paying the whole cost up front then you're doing it wrong. 

    But that's kind of an aside. The point is that folk have been saying Apple gear is insanely expensive for as long as I can remember, and for as long as I can remember, they've been shifting it. So that leads me to believe that Apple understands basic economic theory better than anyone here who comments on it. All this braying about  Apple pricing always misses one vital piece of information: Apple's demand curve.

    This little bit of paper sitting on Tim Cook's desk will show you is that the demand for Apple kit is comparatively inelastic: movements in price have fairly negligible effects on demand.  If they increase the price, the sales will not drop significantly.

    But far more importantly, dropping the price will not actually produce a significant increase in sales, and this increase may not be enough to cover the price drop.

    So why is Apple's demand inelastic? Simply because the combination of hardware and software is perceived as unique in a very crowded market. 



    The details aren't wrong. You are interpreting things wrong.

    There are pricing ceilings on everything. Financing (including interest free) also has ceilings, or do you think someone will be willing to take on financing to pay for a phone over 5 years when it will be upgraded before it is paid off?

    The increasing cost of iPhones (and every other phone in the same price band) is taking users one step further up to their individual ceilings.

    You are taking his 1,000 dollar point completely out of context. He is speaking in general terms. We already know people buy 1,000 dollar phones every year. The point is those people aren't most people and three or four years of flat sales is telling in itself.

    The higher the price the harder the sale in high numbers, even with financing and upgrade options but that ceiling becomes ever nearer or you are hitting it. And if the cheaper options mean sacfricing features or getting an older iPhone, then the sale is equally hard.

    People argued that users were on longer upgrade cycles (provoked in part by pricing itself) and that is probably another reason while sales flattened, but how many people do you think are still using iPhone 6?

    But that argument doesn't take into account the vast potential pool of Android users that are there for the taking, right? 80% of the market. 1,000 dollar Android phones sell in the millions even while they are a fraction of the 80%. Why isn't Apple able to take a slice of that premium Android Pie (sic)? Why aren't people switching from Android in enough numbers to move the Apple needle off 'flat'? It's clearly not price for those users. It's value (among other things). The longer upgrade cycle really isn't doing much except allowing Apple tread water.

    Apple is on an 's' cycle - through its own choice - which only makes the sale look worse when compared to rival flagships that are pushing the pedal to the metal. So while Apple takes a breather on innovation and brings the A12 and little else to the table while still including a 5W charger in the box, others are innovating on everything and showing no signs of slowing down. That means 'new' tech is flowing down the lines into the middle ground at an incredible pace and upping the value proposition of those phones.

    How can you say that movements in price have a 'fairly negligible effect on demand? Apple doesn't break down unit sales on price.

    Price is the number one factor for most people when it comes to buying a Phone. The iPhone X hit new price highs for Apple. It was the 'most popular' 2018 iPhone for Q1, 2 and 3. But Q4? Estimates said demand for the 'most popular' iPhone dropped off sharply in Q4. Far more quickly than any other Apple flagship from previous years in the same quarter. But 'most popular' isn't truly quantifiable is it? 

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.



    Price elasticity doesn't state that there isn't a ceiling on price. All it says is that some products are relatively unaffected by price changes when compared to others, and nothing you've said actually disproves that.  This is why Apple can increase the price of the phone and knows that the amount of sales that they will lose will more than make up for the increase in revenue.

    Secondly, as I pointed out in my post, the whole argument falls flat because Apple sells phones at various price points.

    You are taking his 1,000 dollar point completely out of context. 

    He said folk will not upgrade a $1000 every two years. There's no context.

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    Price inelasticity is new found? Nope. Apple products have always been considered irreplaceable by the most valuable and price insensitive areas of the population, and Apple tends to leave everyone else to the Android manufacturers. Can't say that's right or wrong, but they seem to make a lot more money than everyone else. So in general, Apple products, across the whole range enjoy greater price elasticity than the competition, which is why the competition fights like dogs at the lower end of the market, and Apple would rather not.

    But let's go back to the real point here. The problem you have is the one I have highlighted again and again. Apple sells a range of phones at a range of prices. But oddly enough, everyone always homes in on the most expensive flagship phone as if this is the only one available. Even Gruber has stated that the XR is better deal because it's almost as good and way cheaper. Apple has even said that the XR is it's best selling phone. 
    So the problem isn't that Apple's phones are too expensive. The problem is that folk want the top of the range phone, but want to tell Apple how much they want to pay for it.

    Ah, do want to look at one more point:

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.

    Riigggghty-ho then. So what you're basically asking us to wait long enough to give you a better chance of being right. Got it.

    Well, we could do that, but I'm not sure I see the point. Because the thing about Apple is that it will not stick doggedly to its plans in the face of changing conditions. They never have. They won't keep increasing the price of the phone until they are not bringing in enough revenue to make up for the loss in sales units. The fact is they make these adjustments all the time, but because you're so focussed on the phone at the very top of the range, you completely miss that folk are buying the cheaper phones too.


    I am certainly not asking anyone to wait for a better chance of being right. I have been proven right already. Flat sales says a lot. The market has spoken. Growth ended in 2015. 

    That in spite of Apple widening its model spread and now releasing three new models each year.

    I have never focussed solely on the premium priced phones and was probably the first person here to highlight the shift in business model as a result of the 2017 iPhone refresh. To the point that I praised Apple for trying that option. All increasing prices has done is increase ASP, (which the vast majority of buyers have no interest in anyway) and help to stifle growth which remains flat.

    "He said folk will not upgrade a $1000 every two years. There's no context."

    This is what he really said:

    "Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?"

    There is plenty of context there if you had wished to see it.


    You seem to miss that Android OS device makers are also in a flat market, and with a recession on the horizon, there will be even more price competition within that space, not less, yet you seem to think that growth for Huawei will be unimpeded.

    It won't be.

    Unit sales numbers alone are a distortion of the realities of the marketplace, and yet you live and die by them in your posts. Good luck with that.
    Depends on perspective. As there are multiple players in the Android market and consolidation, as a result of saturation is in progress as we speak, the larger players are picking up (or will pick up) from companies leaving the field in the future. Some players will gain as a result. Apple isn't likely to be one of the gainers as there is only one iOS vendor and pricing is stifling any effort to pick up those new potential users.

    Now add on the developing markets. There is room for growth there. Huawei will hit India hard next year, opening stores, intensifying online channels and manufacturing in India (some Honor models are already built in India).

    The Chinese are gaining today. Perhaps Samsung will pick up for next year with new, interesting phones throughout the year. This year was tough for iPhone. Next year looks like it will be equally tough (at least I see nothing at current prices to see a big improvement in unit sales).

    How will Apple react to the Mate 20 Pro entering India at the same price as an iPhone XR? I don't know but you will admit that it doesn't paint a pretty picture for the company.

    Yes, there is competition for Huawei too and I for one, am glad. Consumers benefit from it.

    Two months in, and there is no market buzz left for the new iPhones and analysts are simply adding negative undertones to what is frankly already a hard sell.

    Personally, I think it's way too soon to evaluate iPhone sales. There will be a spike over Christmas as there always is but beyond that it does look like a bit of a slog for iPhone in 2019. Then you factor in currencies, trade wars etc.

    Premature or not, the buzz will be around 5G and folding screens as soon as we enter 2019 and Apple is still playing catch-up in too many areas, IMO.

    Given these factors (among others) would it be realistic to expect Apple to show major iPhone gains? 


    edited December 1 elijahgmuthuk_vanalingam
  • Reply 58 of 100
    Microsoft is Office. 

    Then Windows. 

    Azure isnt a monymaker. It’s a foot in the door. 

    Microsofts hardware business is nothing. 

    Basically, today’s valuation of MS is a charade. 

    Good imitation of success, but no actual success. 

    Meanwhilr Apple has a very healthy and stable PC business. 

    Then it has a psychotically great and stable phone business. 

    Then it has has an amazing wearables business. 

    Then it has an pustsnding services business. 

    It also boasys a second second to none retail business where it not only profits off its own products, but third party offerings as well. 

    The iBooks, iTunes, and App Store business are the stuff Microsoft can only dream of. 

    The idea that MS is even mentioned in the same sentence as Apple is laughable. 

    If office tanks, all of Microsoft goes with it. Windows as well. 

    Apple would be fine for a very long time if any number of its businesses went through through a severe famine - and that’s not due to its savings. THats due to cash flow. Apples business is heavily diversified and healthy on all points. Not the same for ms, which bleeds money on pet projects to project the illusion of diversification and relevance. 

    Its hilarious to see how the the stock market is manipulated. One moment, it makes sense and logic rules the day. The next, it’s 2+2=-22. 

    I give this s week before people realize there is no actual money in this error. 

    Its similar to google when people were giving google free money for no reason. It was a terrible investment. A company good at selling online ads. Then blew money like toilet paper on everything else. They would have tanked had an ignorant public not been so naive as to throw money at them. 

    Tjrn you hsve apple. They could go private and still hand the free money people a big blow. But they’re public and it’s like people don’t know what’s actually available to them. 

    In reality, Apple is worth over twice what it was a couple months ago. 

    No no other company has ever created and sustained their type of growth with their type of reliability and trust factor with how they handle business - never going in blind. Never taking stupid risks, but calculated ones. And having it pay off. 

    Lets see see how this plays out by next Friday. 

    Going to be a a fun ride. 


    "Azure isnt a monymaker."

    Wrong.  Azure & Office 365 are MS' fastest growing businesses.
    LOL

    Office was my point. It’s MS’ backbone. Break it and they die. 

    Asure isnt a moneymaker. It’s growing “for them” by userbase. Yay. 

    Azure is lame. As is the rest of Microsoft’s portfolio not named Office. They’re actually good at that. 

    Outside of people giving them money, Office is really Microsoft’s business. Once that cracks, they’re in worse trouble than if iPhone does for Apple. 
    And do tell us how Office is going to crack. From iWork? GSuite? People suddenly not needing Excel or Outlook anymore? LOOOOOOL.
    elijahgcanukstormcgWerks
  • Reply 59 of 100
    avon b7 said:
    Rayz2016 said:
    avon b7 said:
    Rayz2016 said:

    zoetmb said:
    lkrupp said:
    pjs_socal said:
    Microsoft has a P/E ratio of 45 and Apple has a P/E ratio of 15.

    Apple and Microsoft have similar margins and Apple had better growth in 2018. Apple makes 2.5x more revenue and 3x more profits. So, why are Microsoft shares valued at 3x Apple’s? Because investors are morons.

    In reality Microsoft is worth ⅓ the value of Apple.
    Because Microsoft is diversified with recurring revenue streams which Wall Street loves. With Apple if iPhone sneezes the entire company gets a cold.
    So when did the iPhone sneeze? I must have missed that. The only thing I’ve heard are the predictions of analysts based on supply chain reports which Tim Cook has consistently advised against using to provide meaningful data about Apple. So remind me, when did the iPhone sneeze and give the entire company a cold? In your wet dreams?
    Reality doesn't matter.  It's about perception.   The iPhone is approximately 66% of Apple's gross revenue.  And Apple announcing that they're no longer going to break out iPhone units sales is sending the message, correct or not, that they expect declines in unit sales.  Wall Street doesn't like a lack of transparency and in that regard, I don't blame them.   Combine that with the insanity of believing supplier chain complaints and that's a recipe for killing the stock and that's if the stock is not being manipulated.   

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?   

    On the Mac side, Apple's price hikes combined with the inability to replace the battery, memory and storage as well as the fact that so many people don't really need a computer anymore is going to continue to affect sales, but the Mac is only about 10% of Apple now anyway.   Apple probably thought they could replace Mac sales with iPad sales, but that's only about 8% of Apple.    While I realize that Apple has never wanted to be the low-end, low-margin provider, I think the high salaries paid to Apple managers and executives has completely warped their perception of what most people are willing and able to spend, especially for a machine that can't be upgraded after purchase.    A 15" MBP now starts at $2400 and tops out at $6700.   That's ludicrous.   The MBA starts at $1000 at tops out at $2600.   The Mini tops out at $4300.   $5K for the 27" 5K Retina iMac (topping out at $13,200)?   IMO, this is either desperation to keep revenue high or unbelievable arrogance.     



    There is of course, the third option: you have the details wrong.

    Let's begin with the most obvious stumble (the real drop off the cliff is that Apple actually sells phones at a range of prices, but that's so obvious it doesn't really need covering):

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop? 

    Er, no. Apple doesn't expect that because no one has ever done that.  What happens is that on each new release, Apple gets picks up customers from other platforms, but also gets a massive boost from people with folk with much iPhones much older than two years. I have just replaced my iPhone 6s, which means I missed out on the 7 and the X. The assumption that Apple thinks folk update their phone every two years is laughable. Which brings me to your other point:

    Yes, the price. And here again, the problem is narrow thinking. Saying that no one would buy a $1000 phone is a bit like saying no one would buy a house for $300,000 or a $30,000 car. Clearly they will, because I've seen houses and cars that cost several times that amount. So how do they do it?
    Well, I'm going to clue you in, but you have to keep it under your hat because I'm thinking of taking out a patent on the whole idea.

    Ready?

    This is going to amaze you, but people don't hand over the whole amount for houses and cars all at once. They pay it off in chunks. Buying a $1000 iPhone (which, by the way, is not the most expensive smart phone on the market) is best done on the Apple payment scheme: they throw in AppleCare and you can change the phone after a year if you want. Oh, and it's interest free, so if you're paying the whole cost up front then you're doing it wrong. 

    But that's kind of an aside. The point is that folk have been saying Apple gear is insanely expensive for as long as I can remember, and for as long as I can remember, they've been shifting it. So that leads me to believe that Apple understands basic economic theory better than anyone here who comments on it. All this braying about  Apple pricing always misses one vital piece of information: Apple's demand curve.

    This little bit of paper sitting on Tim Cook's desk will show you is that the demand for Apple kit is comparatively inelastic: movements in price have fairly negligible effects on demand.  If they increase the price, the sales will not drop significantly.

    But far more importantly, dropping the price will not actually produce a significant increase in sales, and this increase may not be enough to cover the price drop.

    So why is Apple's demand inelastic? Simply because the combination of hardware and software is perceived as unique in a very crowded market. 



    The details aren't wrong. You are interpreting things wrong.

    There are pricing ceilings on everything. Financing (including interest free) also has ceilings, or do you think someone will be willing to take on financing to pay for a phone over 5 years when it will be upgraded before it is paid off?

    The increasing cost of iPhones (and every other phone in the same price band) is taking users one step further up to their individual ceilings.

    You are taking his 1,000 dollar point completely out of context. He is speaking in general terms. We already know people buy 1,000 dollar phones every year. The point is those people aren't most people and three or four years of flat sales is telling in itself.

    The higher the price the harder the sale in high numbers, even with financing and upgrade options but that ceiling becomes ever nearer or you are hitting it. And if the cheaper options mean sacfricing features or getting an older iPhone, then the sale is equally hard.

    People argued that users were on longer upgrade cycles (provoked in part by pricing itself) and that is probably another reason while sales flattened, but how many people do you think are still using iPhone 6?

    But that argument doesn't take into account the vast potential pool of Android users that are there for the taking, right? 80% of the market. 1,000 dollar Android phones sell in the millions even while they are a fraction of the 80%. Why isn't Apple able to take a slice of that premium Android Pie (sic)? Why aren't people switching from Android in enough numbers to move the Apple needle off 'flat'? It's clearly not price for those users. It's value (among other things). The longer upgrade cycle really isn't doing much except allowing Apple tread water.

    Apple is on an 's' cycle - through its own choice - which only makes the sale look worse when compared to rival flagships that are pushing the pedal to the metal. So while Apple takes a breather on innovation and brings the A12 and little else to the table while still including a 5W charger in the box, others are innovating on everything and showing no signs of slowing down. That means 'new' tech is flowing down the lines into the middle ground at an incredible pace and upping the value proposition of those phones.

    How can you say that movements in price have a 'fairly negligible effect on demand? Apple doesn't break down unit sales on price.

    Price is the number one factor for most people when it comes to buying a Phone. The iPhone X hit new price highs for Apple. It was the 'most popular' 2018 iPhone for Q1, 2 and 3. But Q4? Estimates said demand for the 'most popular' iPhone dropped off sharply in Q4. Far more quickly than any other Apple flagship from previous years in the same quarter. But 'most popular' isn't truly quantifiable is it? 

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.



    Price elasticity doesn't state that there isn't a ceiling on price. All it says is that some products are relatively unaffected by price changes when compared to others, and nothing you've said actually disproves that.  This is why Apple can increase the price of the phone and knows that the amount of sales that they will lose will more than make up for the increase in revenue.

    Secondly, as I pointed out in my post, the whole argument falls flat because Apple sells phones at various price points.

    You are taking his 1,000 dollar point completely out of context. 

    He said folk will not upgrade a $1000 every two years. There's no context.

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    Price inelasticity is new found? Nope. Apple products have always been considered irreplaceable by the most valuable and price insensitive areas of the population, and Apple tends to leave everyone else to the Android manufacturers. Can't say that's right or wrong, but they seem to make a lot more money than everyone else. So in general, Apple products, across the whole range enjoy greater price elasticity than the competition, which is why the competition fights like dogs at the lower end of the market, and Apple would rather not.

    But let's go back to the real point here. The problem you have is the one I have highlighted again and again. Apple sells a range of phones at a range of prices. But oddly enough, everyone always homes in on the most expensive flagship phone as if this is the only one available. Even Gruber has stated that the XR is better deal because it's almost as good and way cheaper. Apple has even said that the XR is it's best selling phone. 
    So the problem isn't that Apple's phones are too expensive. The problem is that folk want the top of the range phone, but want to tell Apple how much they want to pay for it.

    Ah, do want to look at one more point:

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.

    Riigggghty-ho then. So what you're basically asking us to wait long enough to give you a better chance of being right. Got it.

    Well, we could do that, but I'm not sure I see the point. Because the thing about Apple is that it will not stick doggedly to its plans in the face of changing conditions. They never have. They won't keep increasing the price of the phone until they are not bringing in enough revenue to make up for the loss in sales units. The fact is they make these adjustments all the time, but because you're so focussed on the phone at the very top of the range, you completely miss that folk are buying the cheaper phones too.


    I am certainly not asking anyone to wait for a better chance of being right. I have been proven right already. Flat sales says a lot. The market has spoken. Growth ended in 2015. 

    That in spite of Apple widening its model spread and now releasing three new models each year.

    I have never focussed solely on the premium priced phones and was probably the first person here to highlight the shift in business model as a result of the 2017 iPhone refresh. To the point that I praised Apple for trying that option. All increasing prices has done is increase ASP, (which the vast majority of buyers have no interest in anyway) and help to stifle growth which remains flat.

    "He said folk will not upgrade a $1000 every two years. There's no context."

    This is what he really said:

    "Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?"

    There is plenty of context there if you had wished to see it.

    OK let's see that context then:

    The key point of the "context" is that sentence: "Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?"

    Otherwise why they keep launching iPhones at $1000 range? 

    Because they can !.. Because they are Apple and they can do that!... They can control the upper end of the competition that way. They give the competition a false target to struggle with, they throw a bait in front of the competition to keep them busy devouring.  While the competition lay out the blueprints of 16-camera OLED phones, Apple silently launches a 1-camera state-of-the art LCD iPhone ! And novices like you jump over that 16-camera beast like a thing and applaud the "innovation"! Your reading of contexts is totally wrong because you are new to Apple culture. Think about these to understand the context instead of obsessing yourself with high prices: why Apple has put the same A11 in the 8 series and the same A12 in the XR? The context lies there...
    edited December 1 elijahgmagman1979roundaboutnow
  • Reply 60 of 100
    cornchipcornchip Posts: 1,131member
    Microsoft is Office. 



    If office tanks, all of Microsoft goes with it. Windows as well.


    And really, all there is to Office is Excel. Nothing about anything else in that suite is worth anything to anyone. Word. SUCKS. PowerPoint. SUCKS. The only reason they get used is because they’re already on the computers they use for Excel. 

    If Apple made Numbers on par with Excel and perhaps (less importantly) improved pages a little, they would absolutely CRUSH office. And Windows. And MSFT. It’s gotta happen at some point right?




    elijahg
Sign In or Register to comment.