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What does the future hold for Apple?

Apple Q2 earnings beat estimates, despite falling iPhone sales as they were expected to make $1.39 per share of revenue on $42.1 billion. The bottom line is that Apple was able to satisfy those who weren't as optimistic about themselves and they saw stronger customer demand and business performance than they anticipated.

Here are some of the highlights:

-iPhones: 40.39 million, down by 21 percent on the year-ago quarter
- iPads: 9.95 million, down by 3 percent on the year-ago quarter
- Macs: 4.25 million, down by 11 percent on the year-ago quarter
- Services (which include iTunes and Apple Pay): $5.97 billion, which is flat compared to the year-ago quarter.
- Other products (accessories and Apple Watch are included, but not broken out separately): $2.2 billion, up 1 percent on the year-ago quarter

The stock is back above $100 as well as App Store sales growth of 37% YoY which is accelerating for the fourth consecutive quarter. Services and apps are becoming a bigger and bigger factor for the stock and more people are beginning to realize that.

Bullish Sentiment:
When listening to Apple bulls, they tend to agree that the quarter will bring up many concerns for Apple, but will also mark a bottom for the stock. They also expect iPhone sales will become more firm and investors will focus more on apps and potential future movers like auto and subscription services. Most bulls have upgraded ratings and price targets.

Bearish Sentiment:
On the other hand, Apple bears fear that there is too much risk in the upgrade rate for the next iPhone. In addition, some do not wholeheartedly agree with Apple's positioning for new revenue streams. In a sense, this quarter's results are not much to get excited about given the lack of new product sales that are releasing this year. Bears also point to areas where Apple has no presence in (streaming video, content, advertising and VR) alongside not a great software. Popular bearish belief also points to the company plateauing under new CEO Tim Cook.

So what's in the cards for Apple? Thoughts?

Source[/embed]

Comments (315)

Jul 27, 2016

my mom was about to sell it last night (she owns quite a bit) but held on and is enjoying the comeback today (up ~7% last time i checked)

i'd be long appl if i were in the game, i think?

WSO's COO (Chief Operating Orangutan) | My Linkedin

Jul 27, 2016

I think one of Carl's analysts made a fat finger mistake in his model

Jul 27, 2016
Punchey:

I think one of Carl's analysts made a fat finger mistake in his model

I fully agree the $1.3 trillion valuation is extremely high. However, the two guys running point on Carl Icahn's Apple stock valuation are his son Brett Icahn and David Schechter. These two run the Sargon fund within Icahn Enterprises. Since 2010 the fund's annualized return is 36.5%. I'm interested to see where these guys will invest next.

Robert Clayton Dean: What is happening?
Brill: I blew up the building.
Robert Clayton Dean: Why?
Brill: Because you made a phone call.

Jul 27, 2016

If I held stocks in a company and people gave a shit what I thought, of course I'd tell people the company was worth the sun and the moon.

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Jul 27, 2016

I'm betting Icahn sells way before that $216 price target.

Jul 27, 2016

I agree completely... he has probably the biggest incentive imaginable to exaggerate Apple's valuation.

Jul 27, 2016

So now Tesla has to grow at 40% / yr.

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Jul 27, 2016

I told the PE company that ended up buying my share of the company I owned that the company was worth a hundred trillion dollars. Doesn't make it true.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Jul 27, 2016

From a bit of a younger perspective, all I can say is that whenever a new product comes out, kids my age go ape s*** for it. One of the few companies I know like that, so maybe valuation is a bit low...but 1.3 tril seems a bit high. I also dont know a crazy amount of valuation, just the basics.

Jul 27, 2016

People used to buy stocks that were undervalued. Now everyone just goes on CNBC and talks about them.

Jul 27, 2016

Good, that's exactly what I like to hear. Leaves more room for investors who know what they're doing.

"As they say in poker, 'If you've been in the game 30 minutes and you don't know who the patsy is, you're the patsy.'" - Warren Buffett (1987)

Jul 27, 2016

I don't think 1.3T is necessarily way over-optimistic, but also...he's got a massive bias here. If the watch turns out to be huge, and this rumored "iPad Pro" comes to fruition, and the iPhone sales stay strong...1 trillion isn't impossible after a while. Also, if rumors of a new music streaming service are true...that could be a huge revenue generator. And there's also rumors of perhaps intruding high-def audio into the iTunes store.

The future is very bright for them. I don't think this is too far off the mark, gut feeling.

"When you stop striving for perfection, you might as well be dead."

Jul 27, 2016
PeteMullersKeyboard:

I don't think 1.3T is necessarily way over-optimistic, but also...he's got a massive bias here. If the watch turns out to be huge, and this rumored "iPad Pro" comes to fruition, and the iPhone sales stay strong...1 trillion isn't impossible after a while. Also, if rumors of a new music streaming service are true...that could be a huge revenue generator. And there's also rumors of perhaps intruding high-def audio into the iTunes store.

The future is very bright for them. I don't think this is too far off the mark, gut feeling.

WSJ is claiming they're making a car as well

Jul 27, 2016

I'm very conflicted on Apple.

On the one hand, things look bad for the long term. Really bad. Tech bubble 2.0 is heading towards the critical mass stage where people are investing in companies that aren't even operational yet. Apple was a creation of Jobs, and he's not around to bail them out again if they wander off track. That they're shooting in a bunch of directions, cars, watches, TV's, etc and often talking about them before they even have a deliverable product is a huge red flag in my mind. Competitors are catching up in most product areas and it's less an innovation game than a price war in the cell phone and tablet space. They've been sitting on a huge cash hoard instead of pouring it into the next venture: the company is running on momentum at this point.

But that might be too grim an opinion.

Obviously they have strong sales as well as a huge pile of cash to throw at new business ideas. In addition, they are right on the forefront of developing technologies that would be massively disruptive if they get it right before everyone else does. Also, the huge amount of resources could easily be used to buy out a bunch of profitable ideas and they could reinvent themselves in any number of ways. The current leadership worked closely with Jobs for many years and they understand how to make money. It's also likely that a lot of people will keep buying the brand for a while simply because they're comfortable with them.

Either way, I've got a few bucks in the game so I'll be watching....

Jul 27, 2016

Well....you know what they say.. as long as there's a bigger noob who will buy it, you sell at whatever price you want

Jul 27, 2016

Seems about right.

I'm bi-winning. I win here, and I win there.

Jul 27, 2016

At the rate they are going, crossing 1.0T is very likely. APPL is not overvalued at 700B. Having made 93% of all mobile profits in Q4 seems to indicate that Apples best years lies ahead. They just need to be careful, not cocky, and keep the eye on the ball. Tim Cook is doing an amazing job. Happy shareholder here :)

Jul 27, 2016

They're going to buy a bunch of shit.

Jul 27, 2016

apple will be fine

WSO's COO (Chief Operating Orangutan) | My Linkedin

Jul 27, 2016

We get this type of thread every 4 days

Jul 27, 2016

Hate to break it to you... But no one cares about chart formations. Trading should be systematic and I'm not talking about Algo or quantitative trading. I'm saying having a defined strategy without any bias. The lines you drew means nothing in the market because that's your opinion. That's your bias. Traders on the desk don't look at the charts and say "Oooh! A bear flag is appearing. I should short!" Keep working at it. Don't give up. Six years ago, I was just like you. Six years ago, a market maker from Scott Trade that I've met at a meet up told me the same exact thing and I was like "What the hell is this guy talking about?"... With experience and knowledge, you'll understand soon enough. Keep learning. No matter what.

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Jul 27, 2016

But I do agree. Comparing the top ten tech stocks, in terms of percentage change at a mean of 0, AAPL is relatively high at 35% amongst its peers, excluding MU and NVDA. Maybe for a possible longer term, it could be a good trade if you're expecting a mean reversion.

Jul 27, 2016

So many other stocks i'd comfortably short like gamestop or jcpennys but interesting point!

What concert costs 45 cents? 50 Cent feat. Nickelback.

Jul 27, 2016

hope it goes lower eat it bads

Jul 27, 2016

I doubt that Apple can be considered a good long-term value investment. They make excellent hardware however they just won't be able to compete with Google in the future due to inability to integrate real time information. Think Google Now, Google Glass and how Android is able to harness the power of Google and put the info on the fingertips of the users.

Jul 27, 2016

SHORT THIS MOFO WOOOOOO

Jul 27, 2016

since the release date of iphone 5, i know we have to move on with this company

Jul 27, 2016

You didn't seem to make any case for why someone should buy, or even hold AAPL. Why should I/we?

Jul 27, 2016
peinvestor2012:

You didn't seem to make any case for why someone should buy, or even hold AAPL. Why should I/we?

I don't understand your comment, did you not read the post? It's not an equity report or intending to be one.

"My caddie's chauffeur informs me that a bank is a place where people put money that isn't properly invested."

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Jul 27, 2016

i'm short

Jul 27, 2016

this is nothing original

zerohedge posts Stolpers trade reccommendations every time he comes out with a note, so please do not make this your original idea

Jul 27, 2016
jrtr8der:

this is nothing original

zerohedge posts Stolpers trade reccommendations every time he comes out with a note, so please do not make this your original idea

Thanks for the tip! Now, next time, if you take a quick peek at the hyperlinks (all zerohedge) you'll be able to avoid making somewhat obnoxious comments.

"My caddie's chauffeur informs me that a bank is a place where people put money that isn't properly invested."

Jul 27, 2016

I have no idea what happened to Apple but in the last year or so they really haven't done anything at all. Still waiting to see anything new from Cupertino. Apple isn't bad, but Google and others seem to be really taking over in the new products / innovation category.

Jul 27, 2016

I own shares for the long haul. However currently I have puts on this bad boy. Think it may grace $400.

Jul 27, 2016
TheBigBambino:

I own shares for the long haul. However currently I have puts on this bad boy. Think it may grace $400.

Not a bad way to do it! If you don't mind me asking, at what price did you originally buy Apple?

"My caddie's chauffeur informs me that a bank is a place where people put money that isn't properly invested."

Jul 27, 2016

I see a small pop leading up to earnings as rumors of share buyback/dividend increases make their way around. Remember they have $140B of retained earnings and its gotta go somewhere. Not seeing/hearing of much innovation though.

Jul 27, 2016

Faster, lighter,better performance, easier to use for a wide range of applications + ancillary products and significantly improved security. What other 'innovation' did you have in mind?

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Jul 27, 2016

I can get all this without throwing out $2,500. I don't see that I'm getting much for the premium that I'm paying - that's my point.

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Jul 27, 2016
ConPanna:

Faster, lighter,better performance, easier to use for a wide range of applications + ancillary products and significantly improved security. What other 'innovation' did you have in mind?

Haha, fanboy of the year. Are you Tim Cook's husband?

Apple's run is over now. You can get a better device (Pixel) for less money and use whichever network you want. I suggest Google Project Fi because I now pay <$40 a month.

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Jul 27, 2016

Great. But those arent things that get consumers flocking to stores and camping outside for nights like they did for the iPad, iPhone 4s, etc. They aren't doing anything new, just improving old products but selling it for more. Nobody has incentive to blow a fat check for something that's nearly identical to the one they have.

Jul 27, 2016

I don't know about that...latest iPhone was lighter and showed improvements in hardware. Latest software update is still a pain in the ass. I don't get how Apple messed up so many easy things in the new iOS

Best Response
Jul 27, 2016

I have a slightly older MacBook Air, loved it, until it started crashing and getting bogged down. Loved the iPhone until higher end and cheaper Droid phones came out.

Going to get a surface 5 when it is released. Apple is a fine product, but you're paying to be cool, not because it's better or more reliable.

And sorry, no touchscreen option shows how outdated they are. Apple just makes micro improvements and Jack's up the price. It's like a car company making slightly lighter wheels when everyone else is coming out with cars that fly.

Jul 27, 2016
TNA:

And sorry, no touchscreen option shows how outdated they are. Apple just makes micro improvements and Jack's up the price. It's like a car company making slightly lighter wheels when everyone else is coming out with cars that fly.

Great point

Jul 27, 2016

I don't get this argument at all. Having a touchscreen laptop has got to be one of the most pointless things ever. My work laptop is touchscreen and foldable and I haven't used either feature since the day I got it.

1) Your hands are on the keyboard, why do you want to reach up to the screen? Just slows you down
2) Holding your arm in the air to operate a machine is just awkward. It works on iPads because they're usually on your lap rather than held up in front of your face.
3) OSX is not a touch-optimised OS. Pecking away at the interface with big fingers just wouldn't give you a good experience at all
4) Many of the features touch screens are used for (pinch to zoom, swipe to navigate, scrolling etc.) are already down from the trackpad. It's fairly undeniable that Apple produce the best trackpads on the market.
5) Fingerprints?!?!?! Maybe it's just my OCD.

I think features like integrating touch systems into the keyboard are a much better way forward. However, I do not think the Touch Bar is at its full potential yet, we will have to wait to see what app developers do.

Personally I am fairly disappointed with the new MBPs. Sure they're great machines but the pricing increase simply doesn't justify it. In my opinion Apple are missing a key product from their lineup - a machine for the more 'power orientated' consumer. Real creative professionals will need all the power and therefore don't care about the price. Casual users can get by fine with an iPad or MacBook (once they lower the prices in the next 6-18 months to c.$1000). I use some more heavy usage applications like Logic Pro X, large personal photo libraries, virtual machines for when I need to do some work from home etc. They need a machine in the c.$1200 price point (the 13" non-touch MBP would have fit perfectly here).

Apple, in my opinion, has sort of reached a saturation point. Any device upgrades (across any product category) are going to be incremental from here on unless they bring in some major new changes, and I fail to really see how much you can change the current phone/tablet/laptop design. Is Apple now a cash cow company (still generating $40-50bn in cash flow per annum) or can it reinvent a product category / new product and get back to growth? I think given the sheer size of the company, any new products are going to be marginal to the bottom line. Just look at their services division - standalone it would be an F500 company but it has minimal impact on their overall performance currently!

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Jul 27, 2016

"It's like a car company making slightly lighter wheels when everyone else is coming out with cars that fly." That's a reach but I get what you mean.

Absolute truths don't exist... celebrated opinions do.

Jul 27, 2016

On one hand, you are correct. One could argue that Apple has not come out with a revolutionary product since the original iPad (at least nothing revolutionary like the iPod and iPhone were). On the other hand, however, I think that you are mistaken. What revolutionary products from Apple are you expecting? What revolutionary products have Apple's competitors come out with recently that Apple needs to top?

My only gripe with Apple is the price point and the constant fight to only use proprietary hardware (e.g. no HDMI ports until a few years ago, the Lightning port, no USB male/female charging cable, etc.). But, to be fair, none of those gripes have anything to do with innovation or are relevant to this argument.

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Jul 27, 2016

I mean you could argue that the surface is A pretty bug innovation. Virtual Reality that all the other guys are coming out with. Samsung, Google, Sony have all be coming out with improvements and advanced phones. Better cameras, removable memory, etc.

Laptop wise, you have ones that flip over and become tablets. Detachable screens. Touch screen, etc.

All I'm saying is you have the IPad which has simple gotten smaller and lighter and the same with their computer line. That I watch I junk when compared to the various competitors and fitness trackers coming out.

AppleTV is shit compared to roku, fire or Droid stick.

Just saying their have beautiful products, but innovation has slowed. It's a style and culture product, but it's been surpassed when it comes to tech and function.

Jul 27, 2016

I called Apple's demise when Jobs left and they announced building a HUGE new corporate headquarters. It takes time but that was the beginning of the end.

Jul 27, 2016

from a user's perspective, all of you guys are correct. personally, I'll probably never not use an iphone and use anything but a PC laptop. from an investor's perspective, the jury is still out.

everyone can see apple's cash generation numbers, its earnings growth, dividend growth, and balance sheet strength, but what people forget to take into account is people are already pricing apple for low/no growth at less than 14x trailing earnings when the market is trading at 18x trailing (from Thomson).

what remains to be seen is if apple can have some additional growth engine while their iphone cash cow pays the bills (much like microsoft is doing with azure and other products), or if it becomes a value trap. apple being cheap and still having good numbers (despite having a couple of revenue declines) makes me hesitate to give up on it as a core holding just yet.

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Jul 27, 2016

im so old fashioned, still love my iphone 5s and macbook retina from 2013 (still running great btw)

i don't see myself switching to another brand for my next phone, but next laptop i could go pc (had been almost my whole life until 2013)... haven't really played around with the latest windows much, that will be the most important thing for me

WSO's COO (Chief Operating Orangutan) | My Linkedin

Jul 27, 2016

I hear all the arguments on both sides: on one hand, Apple's products are now too expensive for what they deliver relative to, e.g. Microsoft's new Surface lineup. On the other hand, Apple has an integrated ecosystem of hardware, software and services that is unrivaled. However, the fact that the iPhone 7 cannot connect out of the box to the Macbook Pro is completely antithetical to that very competitive advantage. The designers on these machines need to start talking with each other again.

Apple won't dare add full touch to its Macbook Pro line else it cannibalize the touch experience on the iPad. Meanwhile, Microsoft now has a fairly integrated hardware + software + touch experience from tablet to laptop to desktop. Also refreshing to see MSFT's laser focus on actual pro users rather than prosumers - as Apple once knew, the rest of the market are wannabes following the creative pros. Apple's drop for FinalCut Pro and Aperture, along with its drop of SD card support, no new iMac or Mac Pro, etc. just underscores that they are losing focus. Will it matter to the average consumer? Not in the short run. If things continue the way they are, however, Apple will be a phone manufacturer and nothing more - downside case, the next Nokia / Blackberry.

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Jul 27, 2016

honestly, most people don't care about the strict performance of a product. Combine that with the perception of Apple and the accessibility of its products and you have a reason for people to buy. Also: "loosing"

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Jul 27, 2016

This thread would prob have double the comments if not for that mongoloid title

Jul 27, 2016

Fixed that.. thanks.

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Jul 27, 2016

I think Apple makes fantastic products and for the foreseeable future, I won't buy a computer aside from a MacBook. However, what the company is doing just seems backwards to me. The new iPhone 7 can't plug into the new MacBook without purchasing a separate cord or dongle. How did the teams not have a conversation about that? The iPhone 7 removed the headphone jack because wireless is the way of the future but they didn't add wireless charging. I can get behind the wireless movement, but if you're going to do something as dramatic as removing the only port that is on 99% of devices, add wireless charging as well. Either way, I think Apple will continue to fare well until Google locks down Android for just Google devices (hopefully one day) to allow Android developers the ability to optimize apps for 1-2 phones like Apple developers are able to do.

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Jul 27, 2016

Apple for me has long been doing, well, not much. Even with Steve jobs I could see clearly a some what flattening of the innovation growth curve.

Most of the main new software improvement was not form internal idea generation, but form 3rd party developers in Cydia, I believe.

But because they are almost like IOS hacks, apple could just steal the idea with. Most 'new feature' have been around for years on the jail broke scene.

Jul 27, 2016

I think when it comes to the iPhone, they're either out of ideas or not high enough to come up with new ones. I do like what they have done with the new Macbook. While certainly not something "great", it shows creativity and a first (screen in keyboard). Also something they haven't made already. Imo, Jobs was the creative mind of apple. Ever since he died, Apple hasn't been the same.

Jul 27, 2016

Apple sucks. Consumers are idiots.

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Jul 27, 2016

Apple hasn't been a real tech company for a while. Just a fashion one disguised as tech.

Jul 27, 2016

This topic comes up a few times a year, every year, for the past 10 years or so.

I've been an Apple user for a while, in my opinion they do a lot of stuff very well, but the pace of innovation has slowed and competitors have gotten better.

Apple had released a number of trendsetting products over the past decade (iPod, iPhone, iPad, Macbook Pro/Macbook Air) and while some of those weren't the first of their kind, they were the most user friendly and defined the direction of that specific product category. Once iPods came out, all competitors starting making MP3 players, once the Macbook Air came out, everyone tried to make a thin and light laptop, etc.

Every year I've always defended Apple regarding their new products and this year is the first time I'm actually starting to become bearish on Apple. I don't think they'll ever collapse as people like to forecast and I think they will continue to be a massive presence in the tech space, but I do think they've slowly losing their grip on bringing out products that truly delight users in the way that they used to.

I have an iPhone 7 that was provided to me by work and to be honest, it isn't much different than the iPhone 6 I had before. I kind of hate that the headphone jack is gone, and even though I own a pair of Bose QC35 headphones, they don't always work perfectly.

I've had Macbooks as my personal computers for over a decade now and with the announcement of the new Macbook, I can honestly say that I'm probably going to end up with a PC the next time I buy a computer. The removal of all the useful ports is going to be a massive pain in the ass and to be just seems very out of touch with what users want/need.

Steve Jobs was uniquely prescient in how he gave users not what they asked for, but what they needed. The new Apple is still trying to do that, but its becoming clear that they're on the wrong side of that delicate balance between innovating and looking foolish.

I want to love Apple, but they're making it tough for me to do so.

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Jul 27, 2016

I think Apple has lost its excitement from a product stand point. Does the company create amazing products still? Absolutely. Could they be better? Sure, but I'm not complaining too much.

I have a 2011 MacBook Pro that still runs after a corrupted hard-drive set me back a pretty penny. I just made the upgrade from iPhone 6+ to the 7+, and I am on the upgrade plan because I believe the 8+ or whatever it ends up being called, may actually be worthwhile getting and I want access to switch as soon as possible. - I think the phones are lacking some of the progressive technology I have seen in the Samsung / Droid world. While I find the new front-facing selfie camera to be great (take a photo in a pitch black room, and your dick pics still come out looking great), I would say the rear facing dual-cameras could use much more work. Still seeing far too much blur (I'm aware I don't have a "real" camera here, but it should be much better than what it is).

I also just built myself an amazing top of the line PC. I'm aware it is cheaper to build a desktop, but for ~$1700 including my monitor / keyboard / mouse, the specs I have blow out anything you can get from the Mac world even with all the options... and at half the price. This set up also doubles as my workstation if I want to work from home, thanks to a simple DisplayPort cable for $5. I also have an Xbox One and buy all my games digitally - many of which I am becoming able to play on either PC or Xbox.

Why does this matter though? It matters because what made Apple products AMAZING, was that your marginal utility from getting another Apple product was still high, but Microsoft and the others are catching up on this topic. You no longer want to buy all Apple products, you are ok having a MacBook with a Samsung S7 Edge. In fact, you may even want to move to all Microsoft products down the line because it makes your life easier. I do not believe having Apple products make my life easier anymore....

...

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Jul 27, 2016

Apple sucks - former Apple fanboy

Jul 27, 2016

I actually think that a lot of this isn't Apple's fault. Mobile phones and PCs don't have any capacity for more innovation IMO. For iPhones, a bigger battery would be nice but that's all that I could really wish for. In terms of touchscreen computers, they sell one. It's called an iPad, and when paired with a keyboard it can do basically every computing task that most of us need to do. As for the laptops and desktops, I think they're smart to not invest in that arena. Personal computers are in secular decline, as most people can do all their daily computing tasks (read: refreshing Facebook, checking email, and watching porn) on a tablet or smartphone. The only people who legitimately need their own computers are gamers, college students, freelancers, and other people who work primarily on their own computer.

Personally, my girlfriend and I are pretty techy but between the two of us we have only one laptop that gets used maybe once a week. We use our phones and her iPad for everything else.

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Jul 27, 2016

To release a touch screen computer, they would need to get rid of their iPad, which will absolutely not happen in the near term as they are looking to compete with the Surface line from Microsoft within that product category.

The touch bar is not a new idea, Lenovo did this years ago. However, they will find a way to nail this and do it better than anybody else (this has become Apple's primary means of establishing market share).

Additionally, their closed-source code allows the company to continue to score the highest marks when it comes to reliability across devices and applications. The OS performance compared to its competitors is unrivaled.

These factors lead me to believe that they aren't going anywhere.

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Jul 27, 2016

" "

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Jul 27, 2016

" "

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Jul 27, 2016

The fact Apple continues to sell products shows how poor an understanding of economics / markets / business in general the average WSO user has. You'll first hear that "markets aren't efficient" than that "their strategy guys know something we don't about consumer preferences."

Stay smart boys and girls.

Jul 27, 2016

Since we're talking about AAPL being "out of ideas":

http://mashable.com/2016/11/01/iphone-8-wireless-c...
Distance charging could be HUGE.

Jul 27, 2016

Has anyone walked past their store at any mall anywhere in the globe? Day or night the place is a mob house.

Not sure if people are buying but there is something to be said using the sight test.

People don't buy coffee they buy Starbucks. They don't buy running shoes they buy Nike. They don't buy technology they buy Apple.

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Jul 27, 2016

I think everyone is misusing the term "innovative" as it applies to Apple.

None of the blockbuster products that apple came out with since the early 2000's were innovative per se. MP3s existed before the ipod, smart phones existed before the iphone, touch screen technology wasn't all that novel. I'm not sure if Apple was first to come out with a tablet, but I don't see that product line as a great leap of innovation either way.

What apple was (arguably still is) good at was making products that worked amazingly well. It was a matter of execution. The fact that they designed both their hardware and software allowed them to create a much more cohesive product than any of their competition. The real innovation is hidden away in the product's development and its code. The incremental optimizations and functional improvements that made the product work seamlessly is hidden from consumers. Most people don't consciously appreciate such nuance, and I think that is testament to the sophistication of Apple's products.

This is a pretty well written article about Apple's hardware development endeavors:

http://www.bloomberg.com/features/2016-johny-srouj...
That is the real front of innovation not fucking stupid detachable-touchable laptops. That shit is such a bad gimmick. Those laptops just wreak of shitty MBB strategy.

Jul 27, 2016

Leadership is a major factor..this piece had some good insights, more pointedly, the differecen between a visionary CEO and operations/execution CEO:
"Once in charge, one of the first things these operations/execution CEOs do is to get rid of the chaos and turbulence in the organization. Execution CEOs value stability, process, and repeatable execution. On one hand, that's great for predictability, but it often starts a creative death spiral - creative people start to leave, and other executors (without the innovation talent of the old leader) are put into more senior roles. The company hires more process people, which in turn forces out the remaining creative talent. This culture shift ripples down from the top, and what once felt like a company on a mission to change the world now feels like another job."

http://venturebeat.com/2016/10/25/why-tim-cook-is-...

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Jul 27, 2016

How many followers are in Apple's cult? Close to a billion? Why waste capital innovating when they know they have this many people willing to buy whatever they put out.

Jul 27, 2016

iphone 7 is let down but not losing grip, its just a hiccup

Jul 27, 2016

"Designed by Apple in California" is available in two sizes and printed on specially milled, custom-dyed paper with gilded matte silver edges, using eight color separations and low-ghost ink.

Small - starts at $190
Large - starts at $290

http://www.apple.com/newsroom/2016/11/designed-by-...
Get 'em while they're hot

Jul 27, 2016

I still think it's lying.

Jul 27, 2016

Two words: margin compression. I don't know when its gonna happen, but it definitely will. Company has had a tremendous run (much longer than I would have ever imagined), but such things are not meant to last.

Jul 27, 2016

I doubt all of Apple's success came from a single man.

The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.

Jul 27, 2016
SonnyZH:

I doubt all of Apple's success came from a single man.

well for sure we know there's at least one other who deserves a lot of credit: http://en.wikipedia.org/wiki/Jonathan_Ive

WSO's COO (Chief Operating Orangutan) | My Linkedin

Jul 27, 2016

Do you honestly believe there are enough buyers to pull those number?

Jul 27, 2016

Can Apple continue to attract talent like it has with Jobs as CEO? Post Job's era definitely will be different. But for now it still has a growing market, especially overseas, and a crap load of cash ($100 billion) which gives Apple many options from here.

Jul 27, 2016

This is company that basically sells toys. It sells itself as a luxury, and has a much broader market than most electronics because it is so simple. It is luxury tech for non-nerds.

Apple isn't exactly innovative...it just refines. It has enjoyed such success because its competition sucks. MSFT has been trying its best to ignore consumers since Windows XP...they lost it somewhere between there and Vista. Google is kind of a mess, and Amazon hasn't shown interest in mobile. Nokia and RIM are actively trying to kill themselves. Palm succeeded.

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Jul 27, 2016
West Coast rainmaker:

This is company that basically sells toys. It sells itself as a luxury, and has a much broader market than most electronics because it is so simple. It is luxury tech for non-nerds.

Apple isn't exactly innovative...it just refines. It has enjoyed such success because its competition sucks. MSFT has been trying its best to ignore consumers since Windows XP...they lost it somewhere between there and Vista. Google is kind of a mess, and Amazon hasn't shown interest in mobile. Nokia and RIM are actively trying to kill themselves. Palm succeeded.

Well said.

I didn't say it was your fault, I said I was blaming you.

Jul 27, 2016
West Coast rainmaker:

This is company that basically sells toys. It sells itself as a luxury, and has a much broader market than most electronics because it is so simple. It is luxury tech for non-nerds.

Apple isn't exactly innovative...it just refines. It has enjoyed such success because its competition sucks. MSFT has been trying its best to ignore consumers since Windows XP...they lost it somewhere between there and Vista. Google is kind of a mess, and Amazon hasn't shown interest in mobile. Nokia and RIM are actively trying to kill themselves. Palm succeeded.

Yeah, I think Google will emerge as Apple's biggest rival, but they are trying to do a billion things at once. They are basically competing with Yahoo, Apple, Facebook, Microsoft, Mapquest, and content providers. They need to focus on a few things and perfect them.

Jul 27, 2016

My friend just audited Apple. They are cooking the books.

Jul 27, 2016
Connor:

My friend just audited Apple. They are cooking the books.

say what? Not unless they are faking their cash balances (they deliver consistently above net income FCF)

Jul 27, 2016
Connor:

My friend just audited Apple. They are cooking the books.

Scrolling through AAPL's 10K in yahoo finance doesnt count

Jul 27, 2016

Apple should buy Facebook.

Jul 27, 2016
blackrainn:

Apple should buy Facebook.

why ?

Jul 27, 2016

Samsung shipped 44.5 mio. smartphones while Apple shipped only 35.1 mio. in Q1.

http://www.bloomberg.com/news/2012-04-27/samsung-o...

Jul 27, 2016
mrbeancounter:

Samsung shipped 44.5 mio. smartphones while Apple shipped only 35.1 mio. in Q1.

http://www.bloomberg.com/news/2012-04-27/samsung-o...

guess there are different reports of how many were shipped.

In the smartphone segment, Apple shipped 35 million units in the first quarter compared with 32 million for Samsung. Apple's smartphone shipments declined 5% from the fourth quarter, compared with 11% for Samsung.

http://www.latimes.com/business/technology/la-fi-t...

Jul 27, 2016

I believe that if Apple continues to make products that are extraordinary they will continue at the same pace, im not so sure about the trillion dollar valuation, but only time will tell. they need to continue to find different markets and make a product that will change those markets entirely. I am curious to see if there actually will be an apple tv. if so i believe that if they make this product as well as they have done with every other product they will change the tv market. Obviously their growth of iphones/ipad will slow down at some point. so they need to find new places to destroy the competition and make their revolutionary products.

Jul 27, 2016

I agree with the statement that Apple's dominance will only remain for a few years. If u actually take a look at android handsets and the iphone (same goes for tablets) then there arent really any differences in terms of software anymore, and if then only minor. Apple outperformed because they were always innovating, but did u see much innovation in the 4s or new ipad? I personally dont. Then again they just copied some software designs from android, like the pull down notifications menu. Same goes for hardware unless u really think u need that retina display.

So unless they come up with something truly magical sometime soon there is only growth from markets they havent served yet.

Then the interesting thing is gonna be the carrier subsidies everybody is discussing. Carriers love apple for bringing in customers, but now that the deal aint exclusive anymore what gives. Those subsidies hurt their margins bad so why not some tacit collusion to improve industry profitabilty by reducing subsidies. If i were a carrier that is what i would do so i guess they are having it in the back of their head as well. As in estimated in some report a $100 reduction in subsidies would cost apple $6 in eps, which definitely hurts.

Jul 27, 2016

Apple is doomed to failure.
Over priced products for a bunch of hippies. Eventually the hippies will run out of mom and dad's mommy !

Jul 27, 2016

Apple is going to become eradicated from an apple famine..much like the potato famine of ireland

I eat success for breakfast...with skim milk

Jul 27, 2016

I think Apple has very little competition so the sky is the limit for them. Who are their competitors?
* Google and their defragmented Android OS. Google had a good thing going with their OS for mobile however, by not controlling new releases, their mobile market is highly defragmented. Their new OS, Ice Cream Sandwich, has been on the market for about 6 months....only 4% of Android devices have that OS. That's a horrible conversion rate. Think about it, the iphone 3gs, after 2.5 years on the market, can still have the newest iOS and can stay relevant. Android phones are obsolete after about 6-8 months, those phones are not capable of downloading any new software that Google releases. By not having a vertically business model, Google is going to lose out on mobile if they are not careful.

  • Also, on the tablet side. Quick...name one Android tablet that is competing with iPad? Exactly. Now, I am assuming a lot will say the Kindle Fire. Yes, the fire has about 15% of the tablet market however Amazon developed their own software built upon Android's platform. Basically, Amazon did not need Google to develop a software for Fire. Amazon only used Android's platform and created their own. That's a big red flag for Google because it means that companies (Amazon and Samsung) can be successful without the newest release of Android. They can simply build their own software using Android's open platform. If I were Samsung, I would do exactly what Amazon did with the Fire and create my own software in order to control the software on their phones. Samsung could compete with Apple by doing this.

So, that gives Apple a competitive edge on the mobile and tablet sectors. We can argue about laptops and desktops but since iphones and ipads are their biggest money makers, I will leave it at that.

Google needs to worry about Windows OS later this year. Microsoft could essentially take a huge bite out of Android tablets/smartphones.

Keep in mind that the iphone 4S was a minor upgrade of the 4 however it still manages to outsell (depending on what report you believe) all the smartphones out there. They sold over 35 mn iphone 4S and thats with the iphone 5 (rumor is that it will be a huge upgrade) just months away from being announced/released.
Google can not be liking this.

Jul 27, 2016
el georgino:

* Google and their defragmented Android OS. Google had a good thing going with their OS for mobile however, by not controlling new releases, their mobile market is highly defragmented. Their new OS, Ice Cream Sandwich, has been on the market for about 6 months....only 4% of Android devices have that OS. That's a horrible conversion rate. Think about it, the iphone 3gs, after 2.5 years on the market, can still have the newest iOS and can stay relevant. Android phones are obsolete after about 6-8 months, those phones are not capable of downloading any new software that Google releases. By not having a vertically business model, Google is going to lose out on mobile if they are not careful.

An Android phone being "obsolete" after 8 months instead of 12 like with the iPhone doesn't make much of a difference. Additionally I would not necessarily call this a competitive strength of Apple.

el georgino:

Keep in mind that the iphone 4S was a minor upgrade of the 4 however it still manages to outsell (depending on what report you believe) all the smartphones out there. They sold over 35 mn iphone 4S and thats with the iphone 5 (rumor is that it will be a huge upgrade) just months away from being announced/released.
Google can not be liking this.

Everybody thought the iPhone 4s would be a major upgrade, so what's really gonna make the new iPhone so much better? ok, it will have LTE, pretty late to the game with several Android phones already packing it, but what else can u reasonably expect to be so major about it.

Jul 27, 2016
el georgino:

I think Apple has very little competition so the sky is the limit for them. Who are their competitors?

This is kind of my thinking. As was said, Google lacks the central planning needed to produce highly integrated products...their engineers are brilliant, and can put out web-apps day after day. But building an OS from the ground up with a specific hardware layout in mind is a different story.

MSFT has basically stopped trying. I am not sure what sort of group-think is going on in Redmond, but Windows 8? It is terrible. Same with the their continual attempts to create a competitive phone. Developers do not make apps, the phones fail to gain popularity, and they are quickly abandoned. I think they should just refocus on enterprise, buy RIM, and become the leader in business software.

Amazon, in contrast, has incredible planning. Bezos quite frankly reminds me a lot of Jobs with regards to vision, forethought, etc. I think they are the only company that can fight Apple.

Jul 27, 2016

You decide which source is more credible.
LA Times or Bloomberg.

Jul 27, 2016

True technology users know that an OS shouldn't be developed with hardware in mind
but the hardware parts should work together well, then any OS will work.

That's why a well maintained Windows PC will always beat a Mac.

Jul 27, 2016

iphones are great because you already know how to use them when you pick it up where as with android this isnt the case. that being said i cant see where else apple will expand as i personally believe their macs and ipads are destined to fail. microsoft office is the simple reason a pc is more desirable then a mac and that isnt changing any time soon. also every tablet that i see now has a keyboard case so they essentially bought an expensive netbook. personally i think that the intel ultrabooks being launched with ivy bridge are going to be start stealing market share from apple very quickly. if i had to guess, apples iphone 5 later this year will keep the stock moving higher but as many have mentioned above in 2 years or so this stock will become another market performer.

Jul 27, 2016

Folks love apple products not so much for the quality or features but because of the status it conveys (Hell the laptops are twice as expensive and half as good as a regular pc). But with so many of these iphones sold nowadays I think they are losing their luxury good status and Apple will become another faceless tech company like samsung or nokia (esp now that jobs is gone).

Jul 27, 2016

As pessimistic as I am about apple though, I wouldn't short it cause the shareholders are gaga and it will take time for reality to set in.

Jul 27, 2016

^Clearly a victim of Apple marketing.
"luxury good status" "faceless like Samsung, Nokia" LOL

Jul 27, 2016

^It's true though. Apple products have become somewhat of a status symbol, but now that everyone has one, the hispters are getting pissed. Remember the Motorola Razor?

Jul 27, 2016
Connor:

^It's true though. Apple products have become somewhat of a status symbol, but now that everyone has one, the hispters are getting pissed. Remember the Motorola Razor?

anyone that thinks an Ipod or an Iphone is a status symbol is an idiot...they're no more of a status symbol than the type of bread u get at the market

I eat success for breakfast...with skim milk

Jul 27, 2016

I'd argue that iphones are more a fashion accessory than a luxury good.
Though I have to admit that I don't know much about fashion. I leave that
to the ladies.

Jul 27, 2016

What I'm trying to say is that Google is in trouble. What do people want in a smartphone? Apps. Apps make a smartphone what they are today, if there were no apps then we are back to 6-8 years ago with the same old smartphones that we used to have. Now, developers make apps and that's where the problem begins. Developers for the iPhone have very few software versions to worry about and hardware since there is only 1 iphone released every 1-1.5 years. Google has multiple software versions and many many types of mobile phones that are making it difficult for developers to create apps. Android developers have to test their apps on many handsets that have different resolutions, screen size, hardware compatibility, etc. It is becoming more difficult for Android developers to develop apps. Therefore, many are turning to Apple first then they worry about Android. Worry first about Apple, then Google second. This can be a big problem for Google down the road.

This is why Samsung should borrow from Amazon and build their own software upon Android's platform. Samsung would be be able to control the software releases for each of their phones and can concentrate and the whole user experience without relying on Android's compatibility with their phones.

I wouldn't be shorting Apple either right now because we just don't know. Apple is barely getting started in China and that will be a huge market for them. If Apple does indeed create a 7 inch iPad at a price point of $250, bye bye Fire. Their stock will be fairly bumpy as new products hit the market and quarterly numbers are released. Eventually, yes, their growth cannot be sustained but for the time being, hold on to your panties as it will be a wild ride!

I would love for Apple to have competition. It would keep everyone in that industry on their toes and always innovating.

Jul 27, 2016

Apple won't make a smaller iPad because the margins would suck.

Jul 27, 2016

I don't need Apps which do nothing more than giving me access to homepages.

Are there really Apps out there which need a lot of hardware horsepower except for graphic intensive games?
You won't open 32000 row Excel sheets on your smartphone or run hardware intensive algorithms.
That's what PC's are for.

Jul 27, 2016

this has always been the dead season for apple. don't worry. wwdc is right around the corner. keep your pants on.

Jul 27, 2016

.

Jul 27, 2016

Rumors that mobile carriers won't be subsidizing the iphone as well, could really hurt margins

Jul 27, 2016

nope

Eventus stultorum magister.

Jul 27, 2016

Unless the iPhone 5 is ground breaking(and not the same bland iPhone), Samsung is going to rape them in sales.

Jul 27, 2016
protectedclass:

Unless the iPhone 5 is ground breaking(and not the same bland iPhone), Samsung is going to rape them in sales.

iPhone has never been ground breaking but will still be the best selling one to date

Jul 27, 2016

You know that isn't true, haha. Is it a surprise that the stock is falling? What exactly have they released in the past 3 months?

Jul 27, 2016

Although not as groundbreaking, rumors of new iphone along with thinner/lighter macbook pros will help them maintain sales. As soon as apple is acting normally and not blowing everything out of the water, everyone gets all nervous. So many people still buy their products (look around in a college classroom) and nothing has come along to make that change yet. Plus, tablet growth is going to help drive sales this year imo

Jul 27, 2016

The problem is, they absolutely need to sustain a huge consumer market. That is very, very hard to do.

Jul 27, 2016

If the iPhone 5, iPad Mini, and Apple HDTV are as successful as past Apple products, it will definitely be a trillion-dollar firm. They'll be like Sony in the early 1990's, post-walkman success: able to do, literally, whatever the fuck they want, even more so than now.

I think that their $100B coffers are just the beginning of even more ridiculous valuations and market numbers that we can't (reasonably) think of right now.

Jul 27, 2016

"Overvalued" is a math convention. In that regard, this zerohedge article is interesting http://www.zerohedge.com/news/guest-post-apple-rea...
As the old saying goes, market can stay irrational longer than you can stay solvent. Or in this case, the stock can stay "overvalued" long enough to make you profitable.

They could get there though. MSFT got to $850b in 1999 (in 2012 dollars). Plenty of smart phone user growth out there...just depends on whether iOS becomes the preferred platform globally. In Japan, android outdoes them 2-1.

Jul 27, 2016

Technically PetroChina was the first trillion dollar company when it floated, but they only floated 2% of the stock and a lot of the trading wasn't recognised on US / Western markets. That said, if a company is going to be worth $1 trillion anytime soon, I think it will be Apple.

Jul 27, 2016

maybe its undervalued...who knows...maybe its actually worth a googol

Jul 27, 2016

I actually recently sold my share of AAPL. I made a good enough return on my short term investment. I was wondering if anyone knew of any historical trends with the stock price: ie what happens to it after a keynote event. I tried to search for all the data online but got frustrated pretty quickly. It would be cool to know.

Cheers,

Jul 27, 2016

Hmm... I wonder why Apple was downgraded today.

Jul 27, 2016

Jul 27, 2016

1. If red, in my stomach; if green, back in the produce section

2. Well typically people prefer red apples to green apples, so the stock of the red apples should have a higher turnover rate to consumers than green apples

3. Typically apples go for $3-4 a pound in NYC, not sure about costs but I figure they're marked up at least 10-15%. However apples and produce in general don't generate too much profit since there are a lot of maintenance costs and spoilage, so eh. Tough to say, gotta run a DCF on apple trees first.

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Jul 27, 2016

Apple isn't going anywhere in the short term. They've got too strong a following to just drop out. In 5+ years with Google/others eating away at them, who knows.

Jul 27, 2016

They're making to much fukin money right now to be considered a Nokia or some other crap. I've got a PT of $550.

Jul 27, 2016

What's your catalyst?

Jul 27, 2016
HFer_wannabe:

They're making to much fukin money right now to be considered a Nokia or some other crap. I've got a PT of $550.

How do you figure?
Timeframe?

"Mr. Perkins poses an extreme risk to the market when drunk."

Jul 27, 2016
RustyFork:
HFer_wannabe:

They're making to much fukin money right now to be considered a Nokia or some other crap. I've got a PT of $550.

How do you figure?

Timeframe?

Timeframe is for the next year and PT is based on comps and a little bit of hope. I don't see it going back to $700 until 2-3 years down the road.

Jul 27, 2016

The catalyst is simply those thinking that Apple still needs a product catalyst to justify it's already low P/E. $400 is a sweet spot and I'd continue to buy if it got closer down to those levels. If you're waiting for a new unexpected product to come out, I think having it at less than $425 gives you a good margin of safety until then.

Jul 27, 2016

So your catalyst for a company with a weakened competitive moat, shrinking margins and no growth drivers (innovative products) on the horizon is beta?

Jul 27, 2016

My only position right now is APPL and I can't open new positions for 2 weeks. I'm up 1% right now.

Sell or hold?

"Mr. Perkins poses an extreme risk to the market when drunk."

Jul 27, 2016
Simple As...:

So your catalyst for a company with a weakened competitive moat, shrinking margins and no growth drivers (innovative products) on the horizon is beta?

You're view (not personal, but general consensus) is why I like it. Buying in the low 400's gives you an opportunity to say "f*ck it", collect a solid dividend, and wait for something to happen. I don't care if it's a special dividend or new product. Its way too early to call Apple a loser. They're still making money and are in a position to leverage that into more cash. I wouldn't usually just "sit" in something, but there's still an opportunity in the near term (1 to 2 years) as we wait for a catalyst.

Jul 27, 2016

I agree that it is too early to definitively call AAPL a loser.

Is the possibility of QE ending priced in to your downside? Do you often take contrarian views?

Jul 27, 2016
Simple As...:

I agree that it is too early to definitively call AAPL a loser.

Is the possibility of QE ending priced in to your downside? Do you often take contrarian views?

To be honest, I don't consider economic policies much when I do my thinking. Unless it's something suddenly put in place (QE1, Abenomics kick-off, etc.), it gets difficult to attribute a certain policy to the future growth of a company.

I do often take contrian views because I find it easier. People don't two shts where a company will be in a year if they just had a bad quarter or some crappy news came out, they care about where it's going to be next week. After you sift through the actual crap, gems start to appear. I also like to look for certain special situations where the whole deal is just underfollowed, but of course these are a bit more rare.

Jul 27, 2016
Simple As...:

So your catalyst for a company with a weakened competitive moat, shrinking margins and no growth drivers (innovative products) on the horizon is beta?

b = 25%?

"Mr. Perkins poses an extreme risk to the market when drunk."

Jul 27, 2016

They ain't gunna bust, but market share's going down from here. Samsung products are just as good now. Apple's advantage has always been product design / aesthetic...other tech companies realize the importance of design now

Jul 27, 2016

I think he is right, but not for the reasons he was giving. I think APPL total focus on margins will be what does them in. In my experience with company turn arounds the ones that you see being auctioned off when you look at their financials and road maps are the companies that have a 100% focus on margins. Why? Well what are the first things that get cut when margins start to dip? R&D, product differentiation, M&A, and other similar things. These are the drivers that allow you to stay ahead of the game and keep developing products that have high margin potential. Also high margin is only possible in niche products. The mobile industry is becoming a commodity industry, the hardware is becoming standardized. Market share is what is going to matter in the future. APPL has been loosing market share around the world and in the USA for years now. While I do not see the company totally collapsing but I can see a decades long decline unless they change their stance on margins and start to aggressively attack their market share issues.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Jul 27, 2016

I disagree here. A cursory look at Apple's balance sheet clearly shows that the company has enough financial ammunition to do whatever it wants, whenever it wants. Apple main risk is its ability to innovate, not its focus on margins. IMO, Apple is doing the right move by not following Android hardware makers in a race to the price bottom. Look at Dell, HP, Acer, etc. Despite PC sales growing healthily over the past 15 years due to technological adoption in developed markets and economic growth in developing markets, all of their hardware businesses are in the tank, with Microsoft and other software makers taking most of the profitability in the PC space. Pursuing a high margin strategy enables the company to keep the best customers for as long as possible, which is a good thing. Apple's growth trajectory looks crummy at the moment. When you're slated to sell over 200 million iOS devices per year, your ability to grow becomes much tougher. It's not like there are 1 billion plus in yearly iOS sales out there for the taking.

Therefore, the only way a company Apple's size will be able to post the 20%+ revenue and EPS growth that the market likes to see from growth companies is through new products and M&A. But this is where Apple's size becomes problematic. From an M&A perspective, companies like Nest and Twitter aren't big enough to move the needle for Apple. From a new product perspective, selling 100 million Apple TVs at $99 is only like a $10 billion opportunity for them. That's peanuts for a company that does $156 billion in sales.

From a management perspective, the company looks at the above situation and concludes that milking its iOS business and returning capital to shareholders is the most prudent course of action. However, the market has never rewarded tech companies for this behavior. I also believe that this strategy is probably causing star software engineers to leave or look elsewhere. Engineering talent is key to any tech company. RIMM's demise was caused by its inability to release even a decent touch-screen product until 2013, giving Apple and Android more than 5 years of runway. Why did this happen? It's quite obvious that Apple and Google had better talent than RIMM.

I am 100% sure that Apple is significantly undervalued. But the only way management can convince the market of that is to change its strategy and focus on big opportunities in which the company can use its market power to grow. This is easier said than done of course

Jul 27, 2016

First of all, I believe with any company which relies heavily on an industry as volatile as mobile electronics, there is no long-term safety. As powerful as brand image is and despite the inertia that will benefit established players like Apple, it's still an industry where every year you have to innovate and release a new product to remain relevant. All it takes is for consumer preferences to shift unexpectedly towards a new entrant's product and Apple's entire business is screwed. Seven years ago RIMM was the clear leader in high-end mobile devices and is now a niche player; there's no reason to believe the same can't happen with Apple seven years from now.

Second, I think even if Apple maintains a large position in the industry, there is no guarantee prices/margins will remain high as smartphones/tablets mature. In computers (desktops, notebooks) you are seeing a move towards cheaper and cheaper devices. Computers have gotten powerful enough that there is no need for most to spend a lot on a high-end PC. I can see the same thing happening with smartphones. Right now advancement is so rapid that "everybody" goes out and buys the latest, high-end smartphone; you see it with the 5S being so popular compared to the 5C. But at some point, as smartphones & tablets become so fast they are essentially commodities as computers are today, you may see a shift towards cheaper devices. And then Apple's profits are threatened.

So I don't get how people say Apple is a sure thing at these prices. It's not, it's a company with incredible risk to its earnings, and the valuation of the stock at a relatively low multiple reflects that.

Jul 27, 2016

Comparing AAPL to PRD is absolute nonsense. He sounds like a technological luddite. The ecologies around the iOS and Mac platforms are ENORMOUS and are not going away anytime soon.

Even if AAPL's products start to suck, people will be using them for a long time, cf MSFT.

Jul 27, 2016
justin88:

Even if AAPL's products start to suck, people will be using them for a long time, cf MSFT.

While I agree they're not Polaroid, this statement is also a bit of nonsense. Mac makes up less than 5% of the global PC market. That could go away in the blink of an eye. See also: Windows Vista. Gone in less than 12 months. (And that was an OS with 50%+ of the market)

It might be cool with hipsters, but Mac isn't even a blip on the global personal computer market's radar. Seriously. The vast majority of countries don't even report it because it's such an insignificant market participant.

Jul 27, 2016

Comparing AAPL to RIMM is plain stupid... Agree with justin88.

The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.

Jul 27, 2016

^I mean.... is AAPL's management that incompetent?

Jul 27, 2016

Apple is a design company first and foremost. They were the leaders in innovation, but not anymore. Android has caught up. Samsung and HTC are putting out arguably better phones. Windows based laptops are sleek and stylish now (at least some).

I was thisssss close to going full Apple, then I started looking at Android phones and tablets. I gave my Ipad Mini to my niece, this will be my last Iphone and I am going to stay with Windows for my next Laptop. Just no reason to switch over to a completely closed system.

Jul 27, 2016
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