Just a few months back, Apple was the king of stocks. After it hit $700 in September, many Analysts predicted $1000 as the next target with some predicting a $trillion market cap in its future. Anticipated launch of new iPhone and iPad products kept expectations high and not even a lower-than-expected earnings report would deter the confidence of investors in the company.
So what has happened just four months after all that rosy optimism, did we all forget our rose-tinted glasses suddenly? Or had our expectations of the company grown 'too big' that the company had to fail to meet them eventually.
How else could we explain a 12% slump following record sales and revenue numbers?
Suddenly, Social Media is filled with questions of Can Apple's stock recover without Steve Jobs? and ominous warnings of Apple junked! and Has Apple lost its cool to Samsung?
What do you think Monkeys? Have Steve Jobs' demise and the bungled Maps app depleted confidence in the firm? Is this a structural change for the company or do you think the next Apple product will help the company regain the momentum of last year?
I am certain this has nothing to do with the lack of Jobs, no pun intended. While he may have been the key visionary and the perfectionist pushing for incredible products, he himself was not the designer, the engineer or the marketing campaign. Just like I mentioned in the last Apple thread, the company launched financially after introducing some of the most innovative products the industry has ever seen. Yes I know Sony, Blackberry and Samsung had been doing everything the iPhone had for years but Apple was the first one to package it in an elegant manner and market it accordingly. You also have to keep in mind the market saturation with the products, as much as I love new tech I am still running my iPhone 4 and Macbook Pro 2009 because none of the new features are worth the upgrade costs.
The main thing Apple has going for itself is the incredible mountain of cash equity it sits upon, I just read they have the ability to buy out Intel. If the company simply gets its head out of its ass and focuses on building upon new features that are beginning to dominate the market and actually offering consumers something they would drop $XXXX for - then it would be back on its inflated-to-space tracks. Linus Torvald (Linux) wrote in a blog not too long ago about how pathetic it is for companies like Apple to sell outdated technology (in terms of screen resolutions, processing power) knowing that they can sell the UPGRADE a year later. While a few years ago people didn't care about the lower specs because it was still the best thing in the market - thanks to the competition stepping up, people are finally wising up to the game.
That being said the tech industry seems to be run one successful product at a time. Any newcomer can offer the "next best thing" and quickly steal the spotlight. I have no doubt that this downfall will get Apple's brain running again and maybe instead of simply changing the size of the iPad they can work on adding useful features and worthwhile upgrades .
If you removed a zero from its market cap it'd be at 1000 today two zeros and it'd be at 2000
"Record sales and revenue numbers"
1) You realize sales=revenue, right?
2) Record doesn't mean shit. Companies should be recording record sales numbers every year, otherwise it means they're in decline. If you grow revenue 1% year-over-year, you've achieved record numbers. Is an investor going to be excited about that?
3) Stock prices are based on expectations. Expectations weren't met, therefore the stock was down. Imagine you're a tits guy and you bring a hot girl home expecting to see the most perfect pair you've ever laid eyes on, only to find that she has both a push-up bra and excessive padding... sure, you're still having sex with a hot girl, but you're not quite as happy as you thought you'd be.
Haha loving the #3 response!
1) Not talking from accounting perspective. By Sales I meant the number of devices sold.
Interesting analogy on #3, I see you've given this a lot of thought. I was talking about expectations as well. In Q3 last year, Apple's earnings results failed to meet expectations by a higher margin but the stock price still reached a new high post that. However, my point now is that market sentiments might be more negative than warranted by the present results precisely because of the higher expectations set for Apple.
There are plenty of factors which will be driving Apple's stock price back up. First, the company is still growing. Dwindling stock price is not a reflection of whether or not a company is growing. If there were significant changes in Apple's business model and strategy, then we would have an actual reason to worry about the company. Apple is currently growing as one of the largest products used in China, with over 500 million products having been sold there, and the numbers keep rising every day. The reasoning that it's because Steve Jobs is gone is fucking stupid. Jobs said that he would never release an iPad Mini, and that if he did the public wouldn't like it - the iPad Mini is currently one of Apple's most popular products.
The make it or break it moment for Apple will be in the coming months with their plans for the next iPhone. Personally, I'm not looking forward to getting my iPhone 7, 8, 9, 15, 20, etc...there has been a lot of talk about whether Apple will come out with a cheap iPhone to complete with the attractive prices of Android phones - my guess is yes, something will come out. Not necessarily an "iPhone Mini" of sorts, but what I would hope Apple does is take their phones in the direction that they took their laptops and desktops.
Simply having an iPhone and an iPhone Pro would be the best course of action in my opinion. Imagine going to Apple.com and selecting an iPhone, and then getting all sorts of options like screen size, memory, operating chip (A5/A6/etc), retina display, etc. That would make Apple successful once again.
Mass media reporting does a fantastic job of making people freak out about companies performances and stock prices. At this first sign of trouble all of the speculators are jumping ship. The long term investors who stick around will still be the ones who profit in the long run. The stock market is not a child's playground, and right now we are seeing all the children being kicked out of the adult arena.
I agree with sandsurfngbomber. I don't claim to be an expert on Apple, but all of the people I know say the iPhone 5 is the same thing as the iPhone 4, just bigger, which is actually a downfall. In addition, the iPad is not the most revolutionary piece of technology. When I saw the advertisements for the iPad Mini I laughed. Who is really going to pay $300+ for a bigger iPhone? Apple has been continuously putting out the same product with minor enhancements for years and although they have a huge market share, they simply aren't producing groundbreaking products like they used to. Whether that has anything to do with the loss of Steve Jobs, I don't know.
Sony in the '80's was the Apple of today. Very innovative and consumer friendly tech products. You don't hear too many people touting Sony today...I suspect Apple will lose both market share and pricing power. It's almost inevitable.
It's very difficult to stay 'cool', especially with technology. I will be buying a Samsung phone next time.
Samsung is tempting... but Apple's still got a believer in me.
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