twolf2919

Anyone else feeling underwhelmed by the iPhone 15 rumored features?  Between faster processor, thinner bezels, and larger storage, there isn' much to get excited about this time around.  I was a bit excited about the prospect of a periscope lens as I had always wanted my phone's camera to go beyond its anemic optical zoom of 3x in my 14 Pro Max after seeing the the amazing zoom capabilities in some Chinese companies showcased over the past 2-3 years (e.g. clearly seeing the chess board of people playing in the park - from the 20th floor!).  But since the periscope rumor came out, I also saw another rumor that it'll be < 10x optical zoom - if it shows up at all.

I guess if we want innovative new Apple products, we have to look to the Apple Watch and new sensors - since a Vision Pro people would want to buy in mass is still a few years away.

Apple's price isn't going down because Apple missed some arbitrary consensus figure in iPhone sales.  I believe on the conference call someone mentioned that it has been 3 quarters of iPhone sales declines YoY.  You mention analyst "missing" the growth of services and Apple's journey to diversify away from being a one-trick (iPhone) pony.  Since that has been going on for years now, I don't think any analyst missed such an obvious thing.  But even now - almost a decade after services began to contribute to Apple's bottom line, they still only contribute 20%.  Yes, that's much better than just a couple years ago, but Apple still gets most of its revenue from iPhone sales.

And the growth in services has definitely slowed.  Just a couple years ago, I think that segment was growing at 20%?  I think they said in the last quarter it was 8%.

So with iPhone sales slowing, services revenue growth slowing, and no new growth drivers on the horizon for several more years (until Vision Pro becomes a set of affordable glasses people would actually want to wear), analysts are coming to the realization that Apple doesn't deserve its current 32 P/E valuation.

 think Apple is a great company - we have every conceivable Apple device and are happy inhabitants of Apple's walled garden - but I agree with the analysis that AAPL doesn't deserve its current valuation.  It would have been a different story if the Vision Pro announcement had been more compelling than the technical tour-de-force it was and previewed something that could actually take iPhone's place as the next major growth driver.

Apple has been bringing out some amazing AI-based solutions in the last couple years, including object recognition in the Photo app.  But Siri advances continue to be pathetic.  If Siri is an example of Apple's AI prowess, it's definitely behind on the AI curve.  I'm a big Apple fan - have all their devices - and was very enthusiastic when Siri first came out.  But over the years, Siri has moved inches, while competitors have moved miles - I can't believe a company that spends $22b on R&D can't make its voice assistant more useful in people's day-to-day lives.  So disappointing.

Not much motivation to write apps for the platform for a long while.  Whatever money/resources developers put into writing apps for it won't be recouped until there's a mass market, which won't happen until the prices come down by 2/3 at least and the headset becomes glasses.

eightzero said:

mayfly said:

eightzero said:

OK, I really don't get this. How does GS lose money on a credit card? Are they paying Apple a disproportionate amount of their rake from the cardholders? The article says "credit losses" so somehow more Apple Card holders are welching? 

Or...it is possible GS thinks they just aren't making the billion they planned? Not sure that's a "loss."

Nope. They're losing plenty. Their customer acquisition cost is $350 per account. In addition, the Apple Card attracts a much more affluent demographic who pay their balances every month, depriving GS of interest charges. On top of that, there is the "buy now, pay later" program that allows customers to pay over 4 months without interest charges. That's how they're losing money. I wouldn't cry for GS, though. They made $10.9 billion in the second QUARTER of this year, even with the Apple Card losses.

OK, so I understand: GS pays Apple $350 for each new account, and since those new accounts generally don't pay GS interest (affluent customers) GS can't make back the $350? And who gets the swipe fee from merchants (that I am always asked to reimburse the merchant for)? Is there no swipe fee charged to a merchant on the Apple Card? GS doesn't get a cut of each transaction?

I am sure GS has overhead on these operations. They have to pay staff to provide customer service; and other infrastructure like IT and the like. But a billion in losses to that? Really?

The $350 "customer acquisition cost" is the cost of acquiring the customer - not the amount GS paid Apple.   These costs include advertising, sign-on incentives, etc.

The "swipe fee" consists of three things: a fee paid to the issuing bank (GS), a fee paid to Apple,  and a fee paid to the credit card company (Mastercard) for use of its network.

I suspect GS, which has never really been in consumer banking, has a lot of overhead that hasn't been optimized away yet and, as the original comment to you indicated, the users of Apple Card are more affluent than the average Joe and, likely, more financially savvy - especially with the help Apple Wallet gives them to keep on top of their spending - and, less likely to go into debt.  Add to this the other card benefits - Apple Cash, interest free repay on Apple products, etc. and I can see where a novice bank like GS ends up in the red.