I think there is something that report overlooked, the actual hardware account for a fraction of Apple revenu. Apple is makings a lot more money selling digital media and apps than selling iOS or Mac hardware.
Simply not true. If this is your analysis, you have little business criticising others'.
Not much wrong with the article apart from the comparison to MicroSoft. Apple has the premium end of the market sewn up with iPhone/iPad, and shows no serious inclination to go after the sectors which are growing. (Hey, we'll build a cheaper plastic iPhone and ... still charge a premium price for it.)
Of course Apple could spring on us a whole new category of devices, but I can't imagine it. The iPhone/iOS was brilliantly executed, but smartphones were in existence before the iPhone, and tablets before the iPad, just a world apart in usability. There may be a market for an iWatch, but I can't see this being as big as, or as profitable per device as the iPhone. Anyway, I want fewer gadgets, not another one.
They're not saying "Apple is doomed". It should grow solidly. But it's going to take something special, different, to regain the meteoric growth levels. Non story.
Somehow I dont see analysts stating anything about the law of large numbers as a limitation for Google - now at market cap of 403B - just for Apple at 475B.
Shares of Apple slipped about 4 percent Monday after investment bank Goldman Sachs removed the company from its buy list for the first time in more than two years, citing concerns over consumer spending and a belief that Macworld Expo will not see the company embark on a major new product initiative.
The Goldman Sachs analyst downgraded shares of Apple to Neutral from Buy for the first time since July 20, 2006. He also trimmed his calendar year 2009 per-share earnings estimate to $4.75 from $5.13 and cut his 12-month price target on the stock to $115 from $125.
Analyst re-ratings always come AFTER the stock tanks... then it dips a bit further, someone buys a shitload (plus some apple buybacks) and rides it back to the top... then the same analysts updates their views with a sudden positive bias... and they unload their shares... in a very predictable pattern. Instead of crying about it, small investors should learn to exploit it. Accumulate shares once analysts starts seeing dark clouds everywhere, and sell again when they become euphoric. It's really that simple. When you have listened to them long enough, you learn that they are actually very consistently wrong - or dare i say manipulative. Analysts have ZERO interest in "educating" the public, they are entertaining their own agenda entirely.
Investors have been stepping aside from Apple since the infamous share price fiasco in 2012 when Apple handed over the smartphone market to Samsung. There's probably no recovery from that. It definitely left Wall Street and Apple shareholders with a bitter taste in their mouths. Most successful companies with wads of cash don't give their market share position away that easily. Even after this recent buyback Apple shares are still stuttering and misfiring like some ancient engine with bad plugs and fouled carbs. Everything Apple does is like pouring sugar into a gas tank and the share price tanks. Meanwhile, Google is running like a world-class F1 racer leaving Apple sucking fumes.
Apple really should have gone after Tesla to show that it means business. Every time Apple's share price moves up a bit, an analyst or two will jump in and say Apple has gone up TOO much and downgrade the stock. Apple's iPhone and tablet business has been completely overwhelmed by half-priced Android devices. Most consumers simply can't resist really cheap devices because they think they're getting a bargain. I'm not sure whether Apple deserves a downgrade or not but I always expect it to happen. The stock has no momentum whatsoever. It will move up and bit and then boom, analyst downgrade and share collapse. It's really a pain to be an Apple shareholder nowadays while the rest of the market is on a roll. At least I can count on the dividends to see me through. Apple refuses to play Wall Street's game and would rather sit on a mountain of cash than excite Wall Street investors. That's the breaks. Apple can't seem to increase institutional ownership which pretty much shows Apple has stagnated.
Oh please, maturing smartphone market... Its not a real thing.
Well, it is. Eventually there comes a point where there isn’t a new audience for your product.
It happened with the telephone, then the radio, then the television.
Thing is, it hasn’t even happened with the computer yet. And it won’t happen with the cell phone for quite some time, either.
And even when it does happen, that doesn’t mean the market is dead. Previous owners will always be buying new products of that category. Any fear in this regard is borne of idiocy.
Someone said: "I think there is something that report overlooked, the actual hardware account for a fraction of Apple revenu. Apple is makings a lot more money selling digital media and apps than selling iOS or Mac hardware".
Actually that's not true - Apple makes the vast majority of it's profits from selling hardware. It's not making 'a lot more money' selling digital media and apps. Where are you getting this information from?
They called it right
Apple needs a new product line very soon.
And they just figured this out today? This meme has been said for a year plus now. Why is this one any different than the others, except that someone might have an interest in driving the share price down today.
I can't speak to the "current range" or specific time frames, and I'm sure Apple will be a success for a very long time to come--both in terms of income and user satisfaction (the latter meaning the most to me). They'll also have some big product hits and some "flops" (just like under Jobs--although an Apple hardware "flop" is a success most companies would kill to have).
BUT... I'm certain that Apple's iPhone-spurred profit growth will never be repeated. Smartphones, as re-invented by Apple, are in a unique position to be a fairly pricey product that almost everyone on Earth could potentially use. (Cars could be similar, except limited to a smaller number of buyers and kept running much longer. And lots of cheap products like toothbrushes count... but have little profit.)
I don't think anyone--not Apple, not anyone--will ever invent a product that is as WIDELY desired as a smartphone, AND costs as much. A watch? A TV? Health tracker? In-car systems? Smaller markets, smaller price tags. They could be successes, but none like the iPhone. Tablets? Yes, as they replace computers for most people (gradually) that's pretty big--but still not as big as smartphones. More people will have their own personal phone than their own personal tablet. Apple can hold onto the huge market they created (high-end modern smartphones), and that's terrific, but that market can't grow forever and no other product can have the same kind of market. I just don't see it (and that's fine by me).
So the stock SHOULD reflect that Apple's done something that can't be repeated. Which is why I don't consider stock price a measure of success as much as it is a measure of the market's craziness (and the influence of PR/press/manipulation). But even a purely sane, fair stock price wouldn't rise forever.
What price would reflect that reality? I don't know--probably higher than it is! I think people have underestimated Apple for a long time (or pretended to). But whatever the fair price may be, it can't rise forever at the same rate the iPhone caused. (And for the record, I don't think the iPhone growth is anywhere near over yet--even if Apple stays away from the profit-free bottom end. And the iPad growth is just beginning.)
Oh please, maturing smartphone market... Its not a real thing.
Samsung thinks the smart phone market is a maturing market because they can't sell shit to idiots after spending billions on marketing. Meanwhile Apple just booked their best quarter ever and see a lot of future in the iPhone market.
Apple is positioning their iDevices for being able to do much more then currently imagined. When that becomes obvious during this year, their stock will soar...
Been reading this board for several years but first time post. Yeah, I am a share holder. I have to laugh to the responses here when investment firms downgrade APPL, Face it folks, until Apple develops new products the stock is range bound. I think we have been fortunate it has stayed above $500. Apple is a growth company and until there are signs of growth, no buy back, dividend increase, etc., is going to really move the valuation or the stock price. Its the way of the market. I own a few shares of Tesla, unfortunately not enough, and it announced it is going to sell an additional 3-5,000 cars next year and the stock price doubled. makes no sense, but that is the way it is....
You're on the wrong forum if you own APPL stock. The fundamental issue is that AAPL's valuation is already artificially low. When you remove cash, it's P/E is less than 8. For sure, a company's actual value versus the stockmarket's valuation is not going to match up because most stock traders are nothing more than gamblers. Over the next 10 years, AAPL will continue to increase in actual value. Whether the stock price reflects that is, as always, a guess.
Why does AI publish this garbage....the same garbage that gets trotted out on Business Insider for page views. Ooh someone compared Apple to Microsoft, quick throw up an article because we know it will get lots of clicks and will be great for trolling.
Well, we have to separate what Wall Street wants from Apple from what WE want out of Apple, and they are two different things. Wall Street wants continuous growth to justify the stock price. WE want great, quality products, innovation, etc., and don’t really care about marketshare and the race to the bottom. Instead of Microsoft let’s take AT&T. T has been trading in a narrow range ($30-$35) for at least the last decade and they are still one of the most widely held stocks in the world. They pay a nice dividend and nobody is worried about AT&T going out of business. It’s a safe stock for mom and pop’s retirement IRA. As a few analysts have pointed out Apple is bedeviled by the law of large numbers. There’s no way they can continue to grow at the pace they have for the last decade. So Wall Street is apoplectic.
Finally, whoever said the stock market is rational? Just look at GOOG for the perfect example of this irrationality.
Investors have been stepping aside from Apple since the infamous share price fiasco in 2012 when Apple handed over the smartphone market to Samsung. There's probably no recovery from that. It definitely left Wall Street and Apple shareholders with a bitter taste in their mouths. Most successful companies with wads of cash don't give their market share position away that easily. Even after this recent buyback Apple shares are still stuttering and misfiring like some ancient engine with bad plugs and fouled carbs. Everything Apple does is like pouring sugar into a gas tank and the share price tanks. Meanwhile, Google is running like a world-class F1 racer leaving Apple sucking fumes.
Apple really should have gone after Tesla to show that it means business. Every time Apple's share price moves up a bit, an analyst or two will jump in and say Apple has gone up TOO much and downgrade the stock. Apple's iPhone and tablet business has been completely overwhelmed by half-priced Android devices. Most consumers simply can't resist really cheap devices because they think they're getting a bargain. I'm not sure whether Apple deserves a downgrade or not but I always expect it to happen. The stock has no momentum whatsoever. It will move up and bit and then boom, analyst downgrade and share collapse. It's really a pain to be an Apple shareholder nowadays while the rest of the market is on a roll. At least I can count on the dividends to see me through. Apple refuses to play Wall Street's game and would rather sit on a mountain of cash than excite Wall Street investors. That's the breaks. Apple can't seem to increase institutional ownership which pretty much shows Apple has stagnated.
Apple really should have gone after Tesla to show that it means business. I do not think you would have been happy because here what would have happened if Apple had done or does as you write... Every time Apple's share price moves up a bit, an analyst or two will jump in and say Apple has gone up TOO much and downgrade the stock. Wall Street would have found a way to shred the purchase and make it a negative. Not one positive would have been written about the purchase.
After selling 51 million iPhones and 26 million iPads, which were more than it had ever sold in a three-month period, Wall Street and you were not happy. Apple earned more money than it had ever earned. The amount ranked Apple as the fourth largest ever earned by any company in the world and the largest by a non-oil company. Wall Street dumped Apple's stock. You now write... Apple's iPhone and tablet business has been completely overwhelmed by half-priced Android devices.
Of the 210 million mobile phones in the USA market in 2013, Apple reportedly captured 45% or 94.5 million of the sold mobile phones. What does Barclay's decide to do? Downgrade Apple. What do you write? Apple refuses to play Wall Street's game and would rather sit on a mountain of cash than excite Wall Street investors.
Apple cannot win because Wall Street has chosen to not allow it to win.
Comments
Yet another anal-y-sis
I think there is something that report overlooked, the actual hardware account for a fraction of Apple revenu. Apple is makings a lot more money selling digital media and apps than selling iOS or Mac hardware.
Simply not true. If this is your analysis, you have little business criticising others'.
Not much wrong with the article apart from the comparison to MicroSoft. Apple has the premium end of the market sewn up with iPhone/iPad, and shows no serious inclination to go after the sectors which are growing. (Hey, we'll build a cheaper plastic iPhone and ... still charge a premium price for it.)
Of course Apple could spring on us a whole new category of devices, but I can't imagine it. The iPhone/iOS was brilliantly executed, but smartphones were in existence before the iPhone, and tablets before the iPad, just a world apart in usability. There may be a market for an iWatch, but I can't see this being as big as, or as profitable per device as the iPhone. Anyway, I want fewer gadgets, not another one.
They're not saying "Apple is doomed". It should grow solidly. But it's going to take something special, different, to regain the meteoric growth levels. Non story.
That would apply if the users were the end game for Facebook.
But Facebook has an ever-increasing amount of personal information that it can whore out to everyone and his mother in law, so they’ll keep growing.
A trip down memory lane to Dec 2008 yields:
GS downgrades Apple, says new product at Macworld unlikely
This analyst's 12 month target price? $115
Apple's actual price Dec 2009? $195
Some analysis...
Investors have been stepping aside from Apple since the infamous share price fiasco in 2012 when Apple handed over the smartphone market to Samsung. There's probably no recovery from that. It definitely left Wall Street and Apple shareholders with a bitter taste in their mouths. Most successful companies with wads of cash don't give their market share position away that easily. Even after this recent buyback Apple shares are still stuttering and misfiring like some ancient engine with bad plugs and fouled carbs. Everything Apple does is like pouring sugar into a gas tank and the share price tanks. Meanwhile, Google is running like a world-class F1 racer leaving Apple sucking fumes.
Apple really should have gone after Tesla to show that it means business. Every time Apple's share price moves up a bit, an analyst or two will jump in and say Apple has gone up TOO much and downgrade the stock. Apple's iPhone and tablet business has been completely overwhelmed by half-priced Android devices. Most consumers simply can't resist really cheap devices because they think they're getting a bargain. I'm not sure whether Apple deserves a downgrade or not but I always expect it to happen. The stock has no momentum whatsoever. It will move up and bit and then boom, analyst downgrade and share collapse. It's really a pain to be an Apple shareholder nowadays while the rest of the market is on a roll. At least I can count on the dividends to see me through. Apple refuses to play Wall Street's game and would rather sit on a mountain of cash than excite Wall Street investors. That's the breaks. Apple can't seem to increase institutional ownership which pretty much shows Apple has stagnated.
Well, it is. Eventually there comes a point where there isn’t a new audience for your product.
It happened with the telephone, then the radio, then the television.
Thing is, it hasn’t even happened with the computer yet. And it won’t happen with the cell phone for quite some time, either.
And even when it does happen, that doesn’t mean the market is dead. Previous owners will always be buying new products of that category. Any fear in this regard is borne of idiocy.
Actually that's not true - Apple makes the vast majority of it's profits from selling hardware. It's not making 'a lot more money' selling digital media and apps. Where are you getting this information from?
Apple needs a new product line very soon.
BUT... I'm certain that Apple's iPhone-spurred profit growth will never be repeated. Smartphones, as re-invented by Apple, are in a unique position to be a fairly pricey product that almost everyone on Earth could potentially use. (Cars could be similar, except limited to a smaller number of buyers and kept running much longer. And lots of cheap products like toothbrushes count... but have little profit.)
I don't think anyone--not Apple, not anyone--will ever invent a product that is as WIDELY desired as a smartphone, AND costs as much. A watch? A TV? Health tracker? In-car systems? Smaller markets, smaller price tags. They could be successes, but none like the iPhone. Tablets? Yes, as they replace computers for most people (gradually) that's pretty big--but still not as big as smartphones. More people will have their own personal phone than their own personal tablet. Apple can hold onto the huge market they created (high-end modern smartphones), and that's terrific, but that market can't grow forever and no other product can have the same kind of market. I just don't see it (and that's fine by me).
So the stock SHOULD reflect that Apple's done something that can't be repeated. Which is why I don't consider stock price a measure of success as much as it is a measure of the market's craziness (and the influence of PR/press/manipulation). But even a purely sane, fair stock price wouldn't rise forever.
What price would reflect that reality? I don't know--probably higher than it is! I think people have underestimated Apple for a long time (or pretended to). But whatever the fair price may be, it can't rise forever at the same rate the iPhone caused. (And for the record, I don't think the iPhone growth is anywhere near over yet--even if Apple stays away from the profit-free bottom end. And the iPad growth is just beginning.)
Samsung thinks the smart phone market is a maturing market because they can't sell shit to idiots after spending billions on marketing. Meanwhile Apple just booked their best quarter ever and see a lot of future in the iPhone market.
Apple is positioning their iDevices for being able to do much more then currently imagined. When that becomes obvious during this year, their stock will soar...
www.thestreet.com/story/12425384/1/buy-apple-because-it-does-not-participate-in-silicon-valleys-insanity.html?puc=yahoo&cm_ven=YAHOO#comment-1253531005
I don't think anyone--not Apple, not anyone--will ever invent a product that is as WIDELY desired as a smartphone, AND costs as much. <...>
What about something which would enable you to monitor the most precious thing you possess : your health ?
Been reading this board for several years but first time post. Yeah, I am a share holder. I have to laugh to the responses here when investment firms downgrade APPL, Face it folks, until Apple develops new products the stock is range bound. I think we have been fortunate it has stayed above $500. Apple is a growth company and until there are signs of growth, no buy back, dividend increase, etc., is going to really move the valuation or the stock price. Its the way of the market. I own a few shares of Tesla, unfortunately not enough, and it announced it is going to sell an additional 3-5,000 cars next year and the stock price doubled. makes no sense, but that is the way it is....
You're on the wrong forum if you own APPL stock. The fundamental issue is that AAPL's valuation is already artificially low. When you remove cash, it's P/E is less than 8. For sure, a company's actual value versus the stockmarket's valuation is not going to match up because most stock traders are nothing more than gamblers. Over the next 10 years, AAPL will continue to increase in actual value. Whether the stock price reflects that is, as always, a guess.
Why does AI publish this garbage....the same garbage that gets trotted out on Business Insider for page views. Ooh someone compared Apple to Microsoft, quick throw up an article because we know it will get lots of clicks and will be great for trolling.
Well, we have to separate what Wall Street wants from Apple from what WE want out of Apple, and they are two different things. Wall Street wants continuous growth to justify the stock price. WE want great, quality products, innovation, etc., and don’t really care about marketshare and the race to the bottom. Instead of Microsoft let’s take AT&T. T has been trading in a narrow range ($30-$35) for at least the last decade and they are still one of the most widely held stocks in the world. They pay a nice dividend and nobody is worried about AT&T going out of business. It’s a safe stock for mom and pop’s retirement IRA. As a few analysts have pointed out Apple is bedeviled by the law of large numbers. There’s no way they can continue to grow at the pace they have for the last decade. So Wall Street is apoplectic.
Finally, whoever said the stock market is rational? Just look at GOOG for the perfect example of this irrationality.
Investors have been stepping aside from Apple since the infamous share price fiasco in 2012 when Apple handed over the smartphone market to Samsung. There's probably no recovery from that. It definitely left Wall Street and Apple shareholders with a bitter taste in their mouths. Most successful companies with wads of cash don't give their market share position away that easily. Even after this recent buyback Apple shares are still stuttering and misfiring like some ancient engine with bad plugs and fouled carbs. Everything Apple does is like pouring sugar into a gas tank and the share price tanks. Meanwhile, Google is running like a world-class F1 racer leaving Apple sucking fumes.
Apple really should have gone after Tesla to show that it means business. Every time Apple's share price moves up a bit, an analyst or two will jump in and say Apple has gone up TOO much and downgrade the stock. Apple's iPhone and tablet business has been completely overwhelmed by half-priced Android devices. Most consumers simply can't resist really cheap devices because they think they're getting a bargain. I'm not sure whether Apple deserves a downgrade or not but I always expect it to happen. The stock has no momentum whatsoever. It will move up and bit and then boom, analyst downgrade and share collapse. It's really a pain to be an Apple shareholder nowadays while the rest of the market is on a roll. At least I can count on the dividends to see me through. Apple refuses to play Wall Street's game and would rather sit on a mountain of cash than excite Wall Street investors. That's the breaks. Apple can't seem to increase institutional ownership which pretty much shows Apple has stagnated.
Apple really should have gone after Tesla to show that it means business. I do not think you would have been happy because here what would have happened if Apple had done or does as you write... Every time Apple's share price moves up a bit, an analyst or two will jump in and say Apple has gone up TOO much and downgrade the stock. Wall Street would have found a way to shred the purchase and make it a negative. Not one positive would have been written about the purchase.
After selling 51 million iPhones and 26 million iPads, which were more than it had ever sold in a three-month period, Wall Street and you were not happy. Apple earned more money than it had ever earned. The amount ranked Apple as the fourth largest ever earned by any company in the world and the largest by a non-oil company. Wall Street dumped Apple's stock. You now write... Apple's iPhone and tablet business has been completely overwhelmed by half-priced Android devices.
Of the 210 million mobile phones in the USA market in 2013, Apple reportedly captured 45% or 94.5 million of the sold mobile phones. What does Barclay's decide to do? Downgrade Apple. What do you write? Apple refuses to play Wall Street's game and would rather sit on a mountain of cash than excite Wall Street investors.
Apple cannot win because Wall Street has chosen to not allow it to win.