I have never been an "Apple is doomed" person, but with the latest move by AT&T to remove subsidies (and Verizon is sure to follow), I am worried about long-term iPhone sales. I, an avowed device nerd/geek who has been on iPhones the 3G, and Windows Mobile and Palm Pilots before that, am actually considering ending my addiction and going back to a flip phone because I am disgusted by the cost (when my cellular bill + device lease payment rivals my car payment, it gives me pause). I know there are many customers who are already on these newer non-subsidy plans, but I have to believe a significant chunk of the population will be mad enough to just walk away now, or when the next shoe drops. I think this is built into the stock price and is also part of the reason it is undervalued, compared to other companies who can control their own destinies.
No, to preemtively answer sog35, I have not compared to valuations for other phone manufacturers. This is just something that seems like a substantial, inevitable hit to the biggest part of Apple's business; and if I were an investor, it would scare me and make the stock less valuable to me.
The end of subsidies is no big deal. Tim Cook has said before that 80 percent of iPhones are sold without subsidy. The lease plans are actually better for customers anyway. They are superior to subsidies.
I'm sorry but a huge portion of the population is not willing to go back to flip phones. That's like expecting people to get fed up with the cost of gasoline and going back to horse and carriage.
I totally agree. In all of its product categories, Apple has always priced its produces more expensively than competitors' products. For example, Macs cost comparatively more than Windows machines. But in spite of that, Apple has grown its share at the expense of Windows manufacturers. With that said though, iPhone sales could go the way of iPad sales in that we won't ever see massive growth. People keep their iPads for a lot longer than they keep their iPhones. People could start keeping their iPhones longer too.
This is a replay of 2008 fellow individual investors. If you have faith in Apple (as I do), then the time is now to BUY and BUY hard.
This is the time to show large institutional investors we are smarter than they are...
I have never been more optimistic about Apple than I am now. The iPhone is more "sticky" than any cloud service will ever be...those Wall Street types trading on their windows work stations don't see it, but we do.
Have a little faith Sog. I know your exile is upon you and the days are dark
Here's something I think Apple could do that would have a positive impact on the stock:
Right now Wall Street is obsessed with the Cloud and companies like Amazon, Google and Microsoft have been rewarded for it. Wall Street is also looking for more recurring revenue streams outside of hardware. Cook should poach a top notch cloud expert and make them an SVP running Apple's cloud business, maps and Siri. I think it's pretty clear the cloud is not Eddy Cue's forte. Brining someone in from the outside and making it an executive level position would signal that Apple is serious about the cloud, machine learning and improving all of Apple's cloud services. This would free up Eddy Cue to focus all of his efforts on Apple's content businesses and expanding Apple Pay. This would show everyone that Apple TV, Apple Music and Apple Pay aren't hobbies but serious platforms Apple wants to expand and better monetize.
Second I think Apple has to become better at controlling the narrative and presenting their vision. On John Gruber's latest podcast he said this years WWDC was the worst Apple keynote ever mostly because of the Apple Music section and that it ran over 2 hours. The first question is, why was Apple Music even part of that keynote? It's first and foremost a developer conference. And when they did a run through why didn't anybody tell Eddy the Apple Music piece was a bit of a mess and it should have been tightened up (and shortened)? The 60 Minutes piece took us inside Jony's lab but we didn't really see anything. Why not use it as an iPad Pro/Apple Pencil marketing opportunity and show us the development of those products? And why let CBS even bring up taxes and China manufacturing? In theory this is supposed to be a puff piece, but all the media focus ended up being about Tim's comments on taxes. Then just after Tim gets done saying Apple pays every tax dollar it owes we find out about this $300M+ settlement with the Italian government over taxes. Wut?!? Maybe Steve Dowling is in over his head and Apple needs to bring in a stronger PR chief.
excellent points.
I think Apple should buy Box and get a step ahead in cloud.
Thankfully, you're not in charge because that's a terrible idea.
Your reaction just shows you're interested in short term gains from AAPL. Tim Cook, just like Steve Jobs, does not care about the short term stock price. Not evenover the course of a year. Instead of expecting Apple to change how it has always managed its stock, you should never have invested in the stock because they've always handled it exactly how they're handling it now.
To paraphrase George Constanza, it's not them. It's you.
if you buy AAPL today, it will very likely outperform the market over the next 3+ years. That's called investing.
Apple needs a completely new IR team, and a radically different messaging strategy when it comes to major market moves.
Right now, both are frustratingly disappointing, especially given the remarkable fundamentals of the business.
Agree 100%
Either Tim Cook needs to hire some new people who can articulate Apples vision and counter Wall street FUD or he needs to resign.
2015 was the most profitable year for any company in the history of man. Yet the stock is down 5% for the year. The main reason is because Cook failed to control the message of the company. The entire investing community views Apple as a one trick pony with a trick that has peaked. This is so far from the truth. Apple has so many current and future revenue streams to easily double revenue from this point. But Cook has failed at convincing Wall Street that iPad, Watch, AppleTV, ApplePay, Apple Car, Beats, Apple Music, ect have a bright future and can add hundreds of billions in future revenue.
Amazon CEO was able to convince Wall Street that Cloud services would be huge. But Amazon cloud generates less than $1 billion in profit. Apple Watch profits dwarf Amazon cloud. But Cook refuses to release Watch figures so Wall street gives Watch zero credit.
Something is wrong with Apple's investor relations. I can't even speak to a live person. I call the number and all you can do is leave a message. I left 3 messages and no one called back. I mean what the fuck. I have tens of thousands invested and they can't even return a fucking phone call?
Wall Street totally disrespects Tim Cook and pisses on his face. Various analysist have flatout called Tim Cook a liar and a cheat. Other said he was breaking SEC rules and manipulating numbers. WTF. You never hear this kind of shit directed at Google/Amazon/Microsoft CEO. Only Cook. Whatever he is doing, he is doing it wrong.
Cook is doing fine. The problem is people like you are ignoring the huge risk in investing in Apple which is effectively a one horse company at the moment.
Until Apple can balance the income from things associated with iOS it is effectively a one trick pony. If iPhone crashes the so too will everything associated with it. IPad, Watch, ApplePay, Apple Car, even Beats all depend upon iPhone being a success into the future. This isn't rocket science by any means, you just need to wake up and smell the coffee.
As for your ten of thousands invested, you really shouldn't blame Apple for your bad choices. Seriously think about what happened to Nokia, Rim and even Motorola all effectively one trick ponies.
Every quarter, I get a fat dividend check from Apple, for my shares of AAPL.
AAPL share price is down 5% for the year, but I haven't sold (or bought) any shares during the year.
So for the year, the value my AAPL stock is down 5% on paper, but the dividend check I got is real money in the bank. (I know, because the IRS told me so. )
I can't complain. But it would be different if i had to sell some of my AAPL shares at the end of the year (2015). And even then, it wouldn't have been for a lost.
AAPL is a fine dividend stock, but those high growth days are OVER. Amazon is the clear winner.
AAPL posted better growth in revenue and profit despite earning twice as much revenue and profit at Amazon. It's easier to make 20% growth on $100 million than 20% growth on $1 billion. For all the "investing in the future" that Amazon has been engaged in, it should at least be beating Apple in revenue growth. That hasn't happened. Why?
Considering Amazon is in retail, an area were it should be "easy" rack up big revenue, but also an area with routinely very small margins, Amazon would need to get 50 times higher revenue to match Apple in profit even if it could make just the industry average. That's not plausible, so it's PE is total BS.
All it's other ventures are also potentially low margin (when they're mature). So, again PE and stock price : BS.
Stocks have no relationship to actual profit, revenue or anything. It's purely shuffling paper, a kind of very expensive gambling were the last one stuck with the pile of deed loses everything.
Apple needs to change the aura of secrecy. This may have worked when Jobs was in charge but nowadays, it is hurting the stock. That being said, the FANG stocks are for sure trading in bubble territory. Amazon is completely out of control with a PE close to 1000:1. It just isn't sustainable. I work in enterprise IT and many customers flock to AWS and then realize they cant stay there forever because it is way too expensive for everyday traditional IT workloads. FB is completely useless as a platform, mainly serving middle-aged people who want to post their entire lives in the world's largest trash can. Google is a one-trick pony dependent on ad dollars. Netflix still loses money on a regular basis.
Apple will survive because the products are real. You can touch them, use them, etc. But there needs to be some more visionary stuff that people can look forward to if you want the stock to continue to grow. Right now, by the time Apple talks about something new the whole world knows about it because it already leaked. Look at the stock during one of Apple's announcements. Once some ridiculous feature is seen to not have been coming (i.e. a sapphire screen) the stock tanks during the trading day.
You mean real like the POS crap Google drops into the media sphere every other day... Yeah, that's sure is "real".
99% never become viable products and everything else is bottom wrung quality.
Amazon and Google are pure bubbles.
Margins on clouds will be as thin as margins on retail, so no money there.
I have never been an "Apple is doomed" person, but with the latest move by AT&T to remove subsidies (and Verizon is sure to follow), I am worried about long-term iPhone sales.
AT&T (plus Verizon etc) are minor players on a world scale. how many countries to they operate in? IMHO, it won't be long before Apple has 2/3rd of its sales OUTSIDE the USA. So what if AT&T change their terms of business? Its impact on the overall business done by Apple would be minimal. Where I live, I don't know of anyone on a 1yr let alone a 2yr contract with their carrier. We've always been able to buy fully unlocked phones from Apple. So my iPhone was purchased outright and I pay my carrier approx $15/month (in taxes) for my service on a one month rolling contract. If I wanna move to another carrier? Easy. Just go to a store and walk out with a new SIM card 20 minutes later. The number will move over to my new carrier in less than 4 hours. Ok, so I might lose $15. How many skinny, half caf Latte's woul that buy in places like Starbucks eh? Most of us got over carrier lock in contracts several years ago.
What I'm trying to say is that please try to look at the bigger picture. Apple is a worldwide business. What happens domestically to Apple really has very little impact on their overall bottom line. Well, if they released a totally dud product like the Zune or the Kin then yes but otherwise? Nah.
It certainly is a mystery why apple doesn't get the sort of love Amazon gets from analysts. I think MBAs just don't want understand Apples business model. They also have think they understand Amazon. If you don't try to own all the market, to them you are in trouble. Also, tech analysts learned that their trade at the feet of tech analysts who wrote Apple off in the nineties.
Also, that the stock declined ev n as buy backs occurred, doesn't that show the directors are just wasting money that could have been used for something useful?
Calm down, c´mon. Look; here in Europe Spain has had one of the biggest GDP growth of the EU this year, but its stock market has been the worst performer.
Yes, sometimes markets get mad for stupid reasons. Apple is the biggest profit maker ever and the stock market has "rewarded" it with a drop. Perplexity is the most accurate term to define this behavior. Wall Street, and investors in general, can´t believe that this can happen because the last time a company outside the oil industry reached this level of profits was in the pre-depression era, if ever.
So clam down, Apple only have to perform slightly better this year for the stock to regain a fairer value, because IMHO, what really drives the stock down is that investors think that what happened this year was an accident, a singularity, something that can´t repeat. But look at the guidance for the first quarter, and the Capex/grow historical ratio and probably, not in the scale of last year, but again, Apple will be the company with the biggest profits ever, bitting itself for the second year, and ignore that performance two years in a row is too much, even for Wall St. Include that it never happened since the beginning of the great recession and dropped despite reaching the biggest profit in Corporate Global ever, and you got all the pieces for a sharp rebound.
On the other hand, some people argued that all companies fall down sooner or later, but seriously; it needed fifty years of continuous mistakes to hammer down GM, and Wall ST. give it the biggest value ever in 2000, forty years after the management pushed the self-destruction button. So thinking that Wall St. will time accurately the "Beginning of the end" of Apple as a company in naive.
It certainly is a mystery why apple doesn't get the sort of love Amazon gets from analysts. I think MBAs just don't want understand Apples business model. They also have think they understand Amazon. If you don't try to own all the market, to them you are in trouble. Also, tech analysts learned that their trade at the feet of tech analysts who wrote Apple off in the nineties.
Also, that the stock declined ev n as buy backs occurred, doesn't that show the directors are just wasting money that could have been used for something useful?
Sorry but don´t you think is absurd that Wall St. values Amazon at more than 900 P/E and thinking it will continue to grow and at the same time thinks that the company with the biggest profits ever is something to be disdain? Profits and potential profits is what drives Wall St. long term, so if Wall St. can´t believe that Apple has beaten the profits till recently reserved to oil companies in boom times why are they so sure this kind of profits will be the "new normal" for AMZN of GOOG?
I give you the answer, because they are WRONG, in both cases.
About the buy back program it started when the stock was at half right now, so you can´t say it had been a waste of money. We don´t know for sure that the share would be at the same valuation if the program have not been there. Insist, calm down, time will put things in context, if Apple performs well this year, and the extension of the stock option to more employees and the growth in Capex are a good indication, the stock will rebound sharply. Or, Wall St. for the first time in history has a perfect timing predicting the start of the decline of a company. And is much more accurate predicting the future performance of a company then its management, who has much more information than any analyst can. Hay, everything is possible. Probable, not...
I'm not worried about the end of subsidies. The only difference for me is instead of getting a new phone every 2 years I get one every year. I'm on the Apple upgrade program and excluding AppleCare + my monthly installment is exactly the same as what I was paying when I was on a 2 year contract with AT&T.
The investor community totally botched 2015 for AAPL. Too many loud dummies probably. It'll take a while, but Tim Cook is buying their stock, so investor quality is bound to improve over time.
Not to sound cynical, but this performance works out pretty favorably for Apple's stock buyback program.
Lol. If Tim Cook had not done the bidding of Carl Icahn, like a good little lap dog, and had instead significantly increased didvidends, I think the share price would have appreciated considerably.
Comments
???—2015
This is a replay of 2008 fellow individual investors. If you have faith in Apple (as I do), then the time is now to BUY and BUY hard.
This is the time to show large institutional investors we are smarter than they are...
I have never been more optimistic about Apple than I am now. The iPhone is more "sticky" than any cloud service will ever be...those Wall Street types trading on their windows work stations don't see it, but we do.
Have a little faith Sog. I know your exile is upon you and the days are dark
f@#kin' AI...am I the only person who hates this
Your reaction just shows you're interested in short term gains from AAPL. Tim Cook, just like Steve Jobs, does not care about the short term stock price. Not evenover the course of a year. Instead of expecting Apple to change how it has always managed its stock, you should never have invested in the stock because they've always handled it exactly how they're handling it now.
To paraphrase George Constanza, it's not them. It's you.
if you buy AAPL today, it will very likely outperform the market over the next 3+ years. That's called investing.
Every quarter, I get a fat dividend check from Apple, for my shares of AAPL.
AAPL share price is down 5% for the year, but I haven't sold (or bought) any shares during the year.
So for the year, the value my AAPL stock is down 5% on paper, but the dividend check I got is real money in the bank. (I know, because the IRS told me so.
I can't complain. But it would be different if i had to sell some of my AAPL shares at the end of the year (2015). And even then, it wouldn't have been for a lost.
All it's other ventures are also potentially low margin (when they're mature). So, again PE and stock price : BS.
Stocks have no relationship to actual profit, revenue or anything. It's purely shuffling paper, a kind of very expensive gambling were the last one stuck with the pile of deed loses everything.
You mean real like the POS crap Google drops into the media sphere every other day... Yeah, that's sure is "real".
99% never become viable products and everything else is bottom wrung quality.
Amazon and Google are pure bubbles.
Margins on clouds will be as thin as margins on retail, so no money there.
PE of 1000 for a company which all its business has low margin written all over it, is beyond stupid and patsy written all over it.
AT&T (plus Verizon etc) are minor players on a world scale. how many countries to they operate in?
IMHO, it won't be long before Apple has 2/3rd of its sales OUTSIDE the USA.
So what if AT&T change their terms of business? Its impact on the overall business done by Apple would be minimal.
Where I live, I don't know of anyone on a 1yr let alone a 2yr contract with their carrier. We've always been able to buy fully unlocked phones from Apple. So my iPhone was purchased outright and I pay my carrier approx $15/month (in taxes) for my service on a one month rolling contract. If I wanna move to another carrier? Easy. Just go to a store and walk out with a new SIM card 20 minutes later. The number will move over to my new carrier in less than 4 hours. Ok, so I might lose $15. How many skinny, half caf Latte's woul that buy in places like Starbucks eh?
Most of us got over carrier lock in contracts several years ago.
What I'm trying to say is that please try to look at the bigger picture. Apple is a worldwide business.
What happens domestically to Apple really has very little impact on their overall bottom line. Well, if they released a totally dud product like the Zune or the Kin then yes but otherwise? Nah.
This will never do. I must go and wash my mouth out with soap.
Happy new year to one and all.
Also, tech analysts learned that their trade at the feet of tech analysts who wrote Apple off in the nineties.
Also, that the stock declined ev n as buy backs occurred, doesn't that show the directors are just wasting money that could have been used for something useful?
Yes, sometimes markets get mad for stupid reasons. Apple is the biggest profit maker ever and the stock market has "rewarded" it with a drop. Perplexity is the most accurate term to define this behavior. Wall Street, and investors in general, can´t believe that this can happen because the last time a company outside the oil industry reached this level of profits was in the pre-depression era, if ever.
So clam down, Apple only have to perform slightly better this year for the stock to regain a fairer value, because IMHO, what really drives the stock down is that investors think that what happened this year was an accident, a singularity, something that can´t repeat. But look at the guidance for the first quarter, and the Capex/grow historical ratio and probably, not in the scale of last year, but again, Apple will be the company with the biggest profits ever, bitting itself for the second year, and ignore that performance two years in a row is too much, even for Wall St. Include that it never happened since the beginning of the great recession and dropped despite reaching the biggest profit in Corporate Global ever, and you got all the pieces for a sharp rebound.
On the other hand, some people argued that all companies fall down sooner or later, but seriously; it needed fifty years of continuous mistakes to hammer down GM, and Wall ST. give it the biggest value ever in 2000, forty years after the management pushed the self-destruction button. So thinking that Wall St. will time accurately the "Beginning of the end" of Apple as a company in naive.
price-targets.png
price-targets.png
Sorry but don´t you think is absurd that Wall St. values Amazon at more than 900 P/E and thinking it will continue to grow and at the same time thinks that the company with the biggest profits ever is something to be disdain? Profits and potential profits is what drives Wall St. long term, so if Wall St. can´t believe that Apple has beaten the profits till recently reserved to oil companies in boom times why are they so sure this kind of profits will be the "new normal" for AMZN of GOOG?
I give you the answer, because they are WRONG, in both cases.
About the buy back program it started when the stock was at half right now, so you can´t say it had been a waste of money. We don´t know for sure that the share would be at the same valuation if the program have not been there. Insist, calm down, time will put things in context, if Apple performs well this year, and the extension of the stock option to more employees and the growth in Capex are a good indication, the stock will rebound sharply. Or, Wall St. for the first time in history has a perfect timing predicting the start of the decline of a company. And is much more accurate predicting the future performance of a company then its management, who has much more information than any analyst can. Hay, everything is possible. Probable, not...