- fred stein
- Last Active
Apple is 4% of the S&P. Apple earns internally about 7%. Apple can buy back 10% of the company and get a 7% ROI. That knocks out any major risk to AAPL.
A 10% hit to AAPL is a .4% hit to S&P 500. How long would this last? Apple will have another $350B to spend on buybacks over the next five years.
When AAPL goes above $250, we can talk about risk.
Great article. Thanks.
I would add to the refutation that Apple needs to lower prices. There is already a robust used iPhone market of over 100M units per year at "Android" prices. This used iPhone market provides two benefits:
1) It reduces the effective cost for upgrade buyers who resell their older iPhone.
2) It addresses the price sensitive market, bringing new people into Apple's ecosystem which is growing at Android's expense.
Tim Cook reported that last year, their ecosystem grew by 10%. That is phenomenal for a 40 year old company.
Still, trade wars and global economic worries can impact Apple
Thanks, excellent refutation.
Tripp's biggest miss is Apple Watch, a breakthrough. Apple Watch has already relegated Android Wear based Watches to the "other" category occupying fragments of 25% of the SmartWatch / Fitness tracker category.
This goes beyond Sir Jony Ive's (and his team's) beautiful design. No other SmartWatch maker comes close to Apple in terms of the chips inside. And it is hard to see how they can catch up and achieve positive ROI. The only company that may seriously compete in SmartWatches is Huawei. Apple is not going to rest. They will sustain chip, software, and partnership investment to keep AppleWatch ahead.
This became political when the US congress and the EU started poking. Putin joined too. Epic prepared their lawsuit and provoked Apple. Apple responded predictable and the papers were filed immediately.
Is Apple's 30% fee fair? Apple provides all the tools and services to all developers for a tiny sign up fee. Plus Apple provides provides security and privacy for both consumers and developers. For developers, they offer some protection against copy cats. The BIGGEST benefit for Apple developers is access to the BEST demographic in purchasing power to all developers - it's 5th avenue, Knightsbridge.