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'Nightline' Looks at Apple's Woes as Stock Declines 20% from All-Time High

Renzatic

Renzatic

Suspended
Aug 3, 2011
9,561
10,118
Gramps, what the hell am I paying you for?
wikus said:
People are getting tired of Apple, just like they got tired of Microsoft. Apple's time as the megalomaniac company is coming to an end. Thank god.

I like to see some flavour on store shelves and have many companys prosper and battle it out with innovation.
Click to expand...

Eh, no one's getting tired of Apple. They're as popular now as they've been since 2007. Likely moreso.

The reason you're seeing their stocks fall is because the market is valued on the warm fuzzies. It's not so much the worth or power of a company as it is it's propensity to shock everyone, and suddenly make everyone buy up a whole ****ton of stocks. For awhile, Apple was on a roll, bringing out some new and unprecedented thing practically every year, and their stocks soared because of it. Like 'em or hate 'em, you can't deny that Apple played a big part in the mobile revolution.

But no company can revolutionize an entire sector year after year. The mobile market is starting to settle down into the same upgrade and update treadmill that we've seen in the PC sector for the last umpteen years. That doesn't mean we're not going to be seeing brand new, awesome things. They're just not going to be as shocking and OMG WOARLD CHANGIN' as the iPhone and iPad were. The hype is wearing off, the brand new thing is now old hat, and Apple's stocks are settling into a more reasonable price range as a result.
 
LizKat

LizKat

macrumors 604
Aug 5, 2004
6,766
36,273
Catskill Mountains
Rocketman said:
The gross profit on the iPad Mini is something like 150%, so gross margin over 50%, amortized over the annual run. So not only are margins increasing, the annuity of the phone upgrade cycle is proving to be steady and large. Even if growth drops below 100% due to the large numbers after China is first ever saturated by Apple, the growth rate is likely to drift toward 20% over 5 or so years. That means we have 2-3 more good years for AAPL.

Rocketman
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Re the two or three more good years... probably someone said something like that in, say, 1998. Probably got dissed. Meanwhile time was slowly but steadily creeping towards the launch of the iPod.

There's no telling what the future holds. In the 21st century around lunchtime some days, some people can't even tell what the present time holds from hour to hour. For example, this little clip from October 29, 2009:
 

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LizKat

LizKat

macrumors 604
Aug 5, 2004
6,766
36,273
Catskill Mountains
Rocketman said:
Pardon me. That means three minimum.

In this market that is an age.

AAPL is $

Rocketman
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I totally agree. :) What i meant was that people who don't agree with you now might also have dissed you for saying something positive like that back in 1998. It was still quite popular to tack onto the Apple death knell count back then.

We didn't know in 1998 about the then future iPod, never mind iPhone, iPad, the MacBook Air... Who knows what we don't see now that is still future to us but already in the works at Apple. Meanwhile the global appetite is growing now for the iPads.

But I'm old so I'm just buying the gear and letting the youngsters go for the stock. I see the price of the stock and think hey I can buy a new iPad for that. :D

I know Apple must love me but so should the shareholders. I hand down my old gear and the recipients then end up springing for the new on their own, then they hand that down and two generations later we must have paid for a couple outbuildlings full of Apple gear designers by now...
 
B

businezguy

macrumors 6502
Jun 23, 2003
389
456
Renzatic said:
Eh, no one's getting tired of Apple. They're as popular now as they've been since 2007. Likely moreso.

The reason you're seeing their stocks fall is because the market is valued on the warm fuzzies. It's not so much the worth or power of a company as it is it's propensity to shock everyone, and suddenly make everyone buy up a whole ****ton of stocks. For awhile, Apple was on a roll, bringing out some new and unprecedented thing practically every year, and their stocks soared because of it. Like 'em or hate 'em, you can't deny that Apple played a big part in the mobile revolution.

But no company can revolutionize an entire sector year after year. The mobile market is starting to settle down into the same upgrade and update treadmill that we've seen in the PC sector for the last umpteen years. That doesn't mean we're not going to be seeing brand new, awesome things. They're just not going to be as shocking and OMG WOARLD CHANGIN' as the iPhone and iPad were. The hype is wearing off, the brand new thing is now old hat, and Apple's stocks are settling into a more reasonable price range as a result.
Click to expand...

The question is, what new market can Apple open up to continue to grow. It's clear the products they have out right now can carry them with profitability for years, but the market is constantly looking for that next thing.

What concerns me most is when a company loses track of what made it successful in the first place. I don't see Apple to that point yet, but it seems like they could very well be on their way. Apple is a company that sells hardware because it is sleek yet practical, but also mainly because they had a superior ecosystem. Mac OS X was leaps and bounds better then Windows XP/Vista and even arguably Windows 7. But companies like Microsoft are now coming out with innovative products which are clearing the gap.

No longer will Apple be able to rest on the laurels of having the most reliable operating system. It will no longer be the sleekest, or the fastest. That is unless they have already planned some major changes that simply haven't been made public yet. Mac OS X and IOS need to be considerably faster. They need groundbreaking features.

Even with all I've argued above, should they manage to execute on it, that is no guarantee of continued growth. What new untapped market (to Apple) can they enter to ensure further growth over the next 2 to 5 years? It doesn't seem like Apple can convince cable companies to agreements Apple saw with iTunes. Cable companies, while in a pickle, are not still as desperate as music companies were. They should be, but they are too short sighted to see it.
 
V

VXXTRADER

macrumors newbie
Nov 17, 2012
6
0
I trade AAPL everyday both long and short so the current price has little meaning to me (currently long after being short for past couple of days).

If you want a valid explanation why AAPL has been in a downtrend, this article from seeking alpha is as good as any.
http://t.co/MTjw5cuK
 
B

bugzie55

macrumors newbie
Nov 17, 2012
2
0
luist3k said:
$AAPL is a great company with solid numbers (amazing cash-flow, no debt, you name it) and is highly innovative (capability to generate new revenue sources).

BUT... a stock value is built in confidence. And (this is only my opinion) Tim Cook has done a very bad job at this. EDIT: Confidence on expected earnings realisation, of course.

I've been hearing the guy at the conferences calls and compared his tone to the one he uses at keynotes. You can totally tell that he is a fake. Jobs was authentic, and he had investors enchanted.

If you use Apple products, you can tell that lately they have got sloppy. And Cook "I'm sorry" letters have shattered the Jobs confidence shield. What Jobs did well was actually NOT accepting his errors. This is the investors' language, talk to any trader and he will never say he is sorry. They will come with a new convincing rationalisation.

As a trader myself, I'm looking for any of the next signals from this company:
1. Current SKUs reduction (Jobs 2x2 MBA matrix).
2. Venturing into new markets (TV's, Watches, anything that uses screens and processors).
3. Removal of Tim Cook as a CEO.
4. Winning the patent war against Samsung.
5. New breakthrough technology.

The two main problems at Apple are:
1. It's losing its differentiation (look at the margins).
2. Not creating new revenue sources.
Click to expand...

Well, if you are stock trader, this is damn good reason not to buy stocks in the first place... short term anyway. You're too easily swayed by popular opinion and the media. You're talking about the way the CEO talks and public perceptions of apology letters. Surely it's about the medium and long-term earning potential? You sound like you've been examining chicken entrails, not market analyses. The shares were over valued because Apple became a fad. I would hope Apple isn't just about keeping some short-term speculators happy with a few glitzy gizmos in the name of "innovation".
 
Rocketman

Rocketman

macrumors 603
Dec 2, 2001
6,191
1,186
Claremont, The intellectual capitol of the world.
LizKat said:
I see the price of the stock and think hey I can buy a new iPad for that. :D
Click to expand...
With the current price of AAPL it might be quite wise to mortgage the house and trade in the car for a junker and buy AAPL, so a couple months from now you can pay off the loan with a nice profit in hand and get that better car you have been looking at.

Rocketman
 

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AidenShaw

AidenShaw

macrumors P6
Feb 8, 2003
18,667
4,676
The Peninsula
Rocketman said:
With the current price of AAPL it might be quite wise to mortgage the house and trade in the car for a junker and buy AAPL, so a couple months from now you can pay off the loan with a nice profit in hand and get that better car you have been looking at.
Click to expand...

...and I'll buy your house when AAPL drops under 400 and the bank forecloses on it. ;)

Just kidding, since you couldn't have been serious.

The Pres. campaigns against Congress. D Sen is led by D Sen ML Reid and D VP and Sen Pres Biden, under orders of D Pres Obama.
Click to expand...

And apparently America is fine with that situation.
 
LizKat

LizKat

macrumors 604
Aug 5, 2004
6,766
36,273
Catskill Mountains
Rocketman said:
With the current price of AAPL it might be quite wise to mortgage the house and trade in the car for a junker and buy AAPL, so a couple months from now you can pay off the loan with a nice profit in hand and get that better car you have been looking at.

Rocketman
Click to expand...

Yeah I had thought you were kidding anyway, but thanks for dissolving any doubts. :D
 
LizKat

LizKat

macrumors 604
Aug 5, 2004
6,766
36,273
Catskill Mountains
OK so Rocketman, someone has to shore up APPL, so thank me for buying the gear when you see the stock continue its rise. :)

Me I will stick with the vague notion that one of my funds probably has (or :D had!) some association to Apple more concrete than the iPhone its manager probably owns.
 
Bubba Satori

Bubba Satori

Suspended
Feb 15, 2008
4,726
3,756
B'ham
flopticalcube said:
Due for a bounce here. Oversold.
Click to expand...

:eek:

----------
Rocketman said:
With the current price of AAPL it might be quite wise to mortgage the house and trade in the car for a junker and buy AAPL, so a couple months from now you can pay off the loan with a nice profit in hand and get that better car you have been looking at.

Rocketman
Click to expand...

Folks, do not listen to investment advice on this forum.
You're welcome.

Down 18 at 511 this morning
 
S

smoledman

macrumors 68000
Oct 17, 2011
1,943
364
What woes? Apple is going to sell 50 million iPhones this quarter, along with 17-20 million iPads, 5 million Macs and 8 million iPods for a $14-$15 billion EBITA.

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businezguy said:
The question is, what new market can Apple open up to continue to grow. It's clear the products they have out right now can carry them with profitability for years, but the market is constantly looking for that next thing.

What concerns me most is when a company loses track of what made it successful in the first place. I don't see Apple to that point yet, but it seems like they could very well be on their way. Apple is a company that sells hardware because it is sleek yet practical, but also mainly because they had a superior ecosystem. Mac OS X was leaps and bounds better then Windows XP/Vista and even arguably Windows 7. But companies like Microsoft are now coming out with innovative products which are clearing the gap.

No longer will Apple be able to rest on the laurels of having the most reliable operating system. It will no longer be the sleekest, or the fastest. That is unless they have already planned some major changes that simply haven't been made public yet. Mac OS X and IOS need to be considerably faster. They need groundbreaking features.

Even with all I've argued above, should they manage to execute on it, that is no guarantee of continued growth. What new untapped market (to Apple) can they enter to ensure further growth over the next 2 to 5 years? It doesn't seem like Apple can convince cable companies to agreements Apple saw with iTunes. Cable companies, while in a pickle, are not still as desperate as music companies were. They should be, but they are too short sighted to see it.
Click to expand...

Apple should leverage their Scrooge McDuck cash tower into wearable electronics. Beat Google and everyone with AR glasses and other advanced tech.
 
AidenShaw

AidenShaw

macrumors P6
Feb 8, 2003
18,667
4,676
The Peninsula
iGrip said:
This is the greatest buying opportunity I have ever seen.

Everybody should be taking out home equity lines of credit and using the proceeds to buy Apple stock. See if you can refinance your car loan. Take everything out of your 401(k) and IRA accounts. Buy on margin. Buy options. Take next month's rent money. Do whatever you have to, but BUY!
Click to expand...

How's that working out for you? Are you that guy by the grocery store with all his belongings in a shopping cart?

;)
 
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