Apple Stock Down 10% in After Hours Trading Amidst Concerns of Flat Growth

flux73 said:

You're assuming that the demand for both is equal. People might be more likely to buy an iPad Mini than an iPad as a gift. People might be more likely to try an iPad Mini because of lower cost. People might be more likely to get an iPad Mini because the weight and size is significantly less. A family might be more likely to get multiple iPad Minis rather than just one iPad. Some people (like me) will get both.

I don't know if any of the above is definitely true. The point is that you're making a comparison using an assumption that the demand for the two products are equal. Furthermore, you're assuming that someone who buys an iPad Mini is buying instead of an iPad, rather than instead of a Nexus or Kindle Fire. I don't think your assumptions are correct.

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I'm assuming nothing. I simply believe, and I felt the same way when the mini was announced, that this is one of Apple's first high profile attempts to react to the market instead of dictate the market. This item was made and sold purely as a way to increase market share, which doesn't make much sense considering Apple's tendency to sell a premium product.

This is why I think a cheaper iPhone model is a mistake. The iPhone is a high margin product, a premium device, that managed 50% of the market. While I don't believe that companies should worry entirely about cannibalization, I'm curious to see just how much a cheaper, lower earning product steals from the premium device. Cannibalization for the sake of market share and appealing to lower income consumers is a great, great mistake.

ifij775 said:

Unfortunately, guidance on margins weren't great. The lack of any mea culpa like statements and insistence on how "incredible" these numbers were seemed silly

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do you know why you think margins aren't "great?" and why 18% growth in a "heavily competitive" phone market and 40% growth int ablet sales aren't "incredible?" just curious if you can think for yourself

EbookReader said:

If Google/LG based the specs for the Optimus G Pro that was launched in Japan for the Nexus 5
especially at the same price as Nexux 4 ($299/$349 no-contract unlocked phones)

-quad-core / 1.7GHZ
-2GB RAM
-5inch 1080p
-3,000 mAh
-16/32GB storage
-3/13megapixel cameras
-LTE
-$299/$349 unlocked

it would put even more pressure on Apple.


And if T-Mobile no subsidy model is successful and is copied by Verizon and AT&T, that would put even more pressure on the stock


As for the Nexus 4, over 752,000 have been produced and it has been sold out for almost 2 months now. Demand was 10 times more than Google expected for UK and Germany.

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sure.. if you sell a 750 smartphone for 299, you will get a lot of demand. LG is selling Nexus 4 and Google is out of stock. You can draw your own conclusion of why... LG will be crazy to produce Nexus 5 for Google again. How is LG going to sell their own phone when Google price a version of LG phone so low?

http://www.mobilemag.com/2012/11/07/lg-nexus-4-sold-at-cost-by-google/

While the LG Nexus 4 might be lacking 4G LTE, it is jam-packed with extremely powerful graphics and processing power. In fact, there is so much great hardware in here, it seems impossible that Google Play is able to sell the Nexus 4 for only $299. That’s because they are actually not making a dime directly on the hardware, it seems.

So far we’ve started to see other retailers get their hands on the Nexus 4 for sell off-contract and it is listing at prices around $750-$800. Of course these retailers need to make a profit after they buy the handset– but even so, that’s a HUGE price difference between the $299 we are seeing Google Play sell the Nexus 4 at.

There are two explanations, one is that Google is relying on their services and ads to make all the money so they are selling this at-cost or even slightly cheaper than cost. The other possibility is that vendors overprice gadgets a good margin. The truth is probably somewhere in the middle. Google knows it can make back the money on its services and search, so why charge a bunch?

For those that need a reminder, the LG Nexus 4 features 8GB of storage, 2GB of RAM and a Qualcomm S4 Krait chipset all for $299. Do you plan to pick one up or is there another phone that seems more up your alley right now?

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iGrip said:

I've said a couple of times that there would be resistance at $450, but I'm not so sure anymore. The P/E is way too high for a company that has no growth and a tiny dividend.

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Uhm, no? Do a proper DCF analysis, or a RIM valuation. At current forecasts, a proper terminal value for the stock is around $1050. Only if you assume zero growth from a FY EPS forecast of $48 do you even get $400 -- and that's a silly projection. At a measly 5% growth rate, you get a valuation of $500. Anyone who thinks the stock is overpriced at current levels needs to take Finance 101.

FrozenDarkness said:

"academic research?" the stock market isn't academic because it's not a science because it's not predictable. you can agree with me or don't but know that if i'm correct, i'd be rich by now.

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Actually, there are hundreds upon hundreds of academic journal articles documenting predictable patterns in the market. Just because you're unfamiliar with the literature and those patterns doesn't mean they don't exist.

I've been giving the stock some thought and I think I've accepted that the price is simply irrational. I think I'm actually somewhat glad they didn't beat expectations. This way, the analyst predictions will finally start coming back down to earth. If the predictions were more realistic, the stock would be fine. There's no other company out there that generates these kinds of numbers, and yet most of them have much higher PE ratios. If the ridiculous hype finally dies down and people start ignoring Apple's stock, perhaps we can get back to reasonable stock price growth again. I'd be quite happy with 10-15% a year, which I think is quite reasonable if you take just T-mobile and China Mobile into account (and assume zero growth in products).

mdlooker said:

No not necessarily. Case-in-point... The subsidized subprime housing market and subsequent crash. It's actually horribly. You're very accurate with our sense of priorities in our country. We, as a general whole, have to have, and we want to have it now. So the market reacts and finds ways to make this happen.

This will, over time, crash! Inflated stocks will decline and what should be, will in time, actually be.

Apple is on a very high tide right now but they have to figure out to keep that high. I don't think the iPhone and tablet will stay extremely high for an extremely long period.

Sorry kind of speaking on two thoughts here.

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Got confused with your post, been up for a while. Our current lubricant is cheap money. Without it we burn our pecker.

FrozenDarkness said:

i think the assumption that the ipad mini will always have lower margin than the regular ipad is overblown. it won't remain that way forever.

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Interesting observation.

pipa said:

This stock is a steal at this price. If/when apple attacks the TV market it is going to take that company into another stratosphere. Just imagine selling millions if tv's at $2,000 to $3,000 a set. I know ill be a day one buyer. And trust me when Steve was alive he said that he cracked the tv and knows what we need. Just remember in 07 when he cracked the cell phone what happened. With apples ecosystem in place and icloud a TV is the last piece of the puzzle and the possibilities of what can be done is incredible. FaceTime, iMessage,apps made for the set, safari. It's going to be amazing.

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TV =/= cell phones. What features is Apple going to add to TV that will make people turn out in droves to spend $2000-$3000...?

imageWIS said:

TV =/= cell phones. What features is Apple going to add to TV that will make people turn out in droves to spend $2000-$3000...?

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Nokia called, and wants its comment about the iPhone from 2006 back.

john123 said:

Uhm, no? Do a proper DCF analysis, or a RIM valuation. At current forecasts, a proper terminal value for the stock is around $1050. Only if you assume zero growth from a FY EPS forecast of $48 do you even get $400 -- and that's a silly projection. At a measly 5% growth rate, you get a valuation of $500. Anyone who thinks the stock is overpriced at current levels needs to take Finance 101.



Actually, there are hundreds upon hundreds of academic journal articles documenting predictable patterns in the market. Just because you're unfamiliar with the literature and those patterns doesn't mean they don't exist.

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are they done by billionaires? are you telilng me that if you can predict the market, you wouldn't have been rich off your ass by now? give me a break. Sure you can predict stuff like moving average and price points of where people probably stake their money, but it's a chicken and the egg problem. Once there's a strategy, someone will take that strategy and take advantage of it. Actual market trends? nope, don't make me laugh.

Bill Killer said:

I'm assuming nothing. I simply believe, and I felt the same way when the mini was announced, that this is one of Apple's first high profile attempts to react to the market instead of dictate the market. This item was made and sold purely as a way to increase market share, which doesn't make much sense considering Apple's tendency to sell a premium product.

This is why I think a cheaper iPhone model is a mistake. The iPhone is a high margin product, a premium device, that managed 50% of the market. While I don't believe that companies should worry entirely about cannibalization, I'm curious to see just how much a cheaper, lower earning product steals from the premium device. Cannibalization for the sake of market share and appealing to lower income consumers is a great, great mistake.

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And I am so glad that you don't run Apple. You can read up about the history of how Apple almost went into BK after John Sculley did just what you layout. When Apple market share become too small, their product is not going to be competitive and customer will jump ship. IOS only has 20% or so ww market share now. And if Apple don't expand their market share, they can got to 10% market share in 2-3 years and developers will start to jump ship follow by customers. Why you described is a 7 years plan to put Apple out of business..

jlasoon said:

Got confused with your post, been up for a while. Our current lubricant is cheap money. Without it we burn our pecker.

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lol

Apple reported stellar results. World panics.

tknelson said:

Nokia called, and wants its comment about the iPhone from 2006 back.

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I'm going to ignore how Nokia really shot itself in the foot around the same time with all the OS spinoff shenanigans. (Palm had the same problem really, which is quite funny.)

While I have no doubt that Apple could make a great TV if given the opportunity, I highly doubt they will be given one. Part of the reason the iPhone succeeded was not just because the software was significantly better than other phone software but because the content was better (started with the iTunes music store content and later to apps). Again, it isn't hard to beat current TV software. But the problem is the content. TV content producers are too in bed with cable companies to allow for anyone (not just Apple) to have sane content delivery. Just look at the rumors regarding Intel magically being able to sell individual TV channels only for people to realize a few hours later that was bs.

And no, this doesn't mean I'm one of the Apple is doomed because they didn't innovate the breakfast I ate this morning. I'm quite sure Apple has plans. The iPad was in development for how many years? I mean come on guys.

xofruitcake said:

And I am so glad that you don't run Apple. You can read up about the history of how Apple almost went into BK after John Sculley did just what you layout. When Apple market share become too small, their product is not going to be competitive and customer will jump ship. IOS only has 20% or so ww market share now. And if Apple don't expand their market share, they can got to 10% market share in 2-3 years and developers will start to jump ship follow by customers. Why you described is a 7 years plan to put Apple out of business..

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Your comparison is foolish because Apple's rise to power in the late 1990's/2000's had far more to do than increasing market share. Everyone knows that its rise was due to truly innovative products (iPod, iPhone, iPad) that competing firms couldn't replicate.

Right now, Apple is in a lull. They are offering extensions of current products that competitors are very able to not only replicate, but surpass (say what you want about iOS vs. Android, but on sheer hardware alone, the Galaxy S III is a better phone than the iPhone 5). There is nothing particularly special about Apple's product offerings; their only new products since the iPad have been new versions of the same stuff they've had available for many years.

The market has caught up to Apple, and Apple cannot differentiate itself enough, so it competes with the market on somebody else's terms (the different iPads, the likely different iPhones....).

Rogifan said:

And yet Steve Jobs felt Cook was the right man to replace him.

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So? Steve Jobs also hired John Scully - that did not work out too well.

NAG said:

I'm going to ignore how Nokia really shot itself in the foot around the same time with all the OS spinoff shenanigans. (Palm had the same problem really, which is quite funny.)

While I have no doubt that Apple could make a great TV if given the opportunity, I highly doubt they will be given one. Part of the reason the iPhone succeeded was not just because the software was significantly better than other phone software but because the content was better (started with the iTunes music store content and later to apps). Again, it isn't hard to beat current TV software. But the problem is the content. TV content producers are too in bed with cable companies to allow for anyone (not just Apple) to have sane content delivery. Just look at the rumors regarding Intel magically being able to sell individual TV channels only for people to realize a few hours later that was bs.

And no, this doesn't mean I'm one of the Apple is doomed because they didn't innovate the breakfast I ate this morning. I'm quite sure Apple has plans. The iPad was in development for how many years? I mean come on guys.

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No argument, but we've been surprised before, and could be again.

Rogifan said:

From the main story:


Apple didn't lose $50B in market cap on Wednesday. We don't know where it will end at close tomorrow. That's what I'm confused by.

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Apple lost $50,000,000,000.00 in market cap in a few hours. On Wednesday.

What happens on Thursday remains to be seen.

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Rogifan said:

Who calculates market cap based on after hours trading adjusted stock price?

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Those who wonder, after hours, what the current market cap is equal to.

FrozenDarkness said:

are they done by billionaires? are you telilng me that if you can predict the market, you wouldn't have been rich off your ass by now?

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BTW I didn't ask for an academic paper predicting where apple stock will be in 6 months time. I asked for a source that describes the phenomenon you described about 9 large institutions being on notice to sell based on the recommendation of a 10th institution. I said a general reference to game theory alone is not convincing evidence.

pipa said:

This stock is a steal at this price. If/when apple attacks the TV market it is going to take that company into another stratosphere. Just imagine selling millions if tv's at $2,000 to $3,000 a set. I know ill be a day one buyer. And trust me when Steve was alive he said that he cracked the tv and knows what we need. Just remember in 07 when he cracked the cell phone what happened. With apples ecosystem in place and icloud a TV is the last piece of the puzzle and the possibilities of what can be done is incredible. FaceTime, iMessage,apps made for the set, safari. It's going to be amazing.

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I doubt apple tv is going to be as big as people keep claiming.

Bill Killer said:

I'm assuming nothing. I simply believe, and I felt the same way when the mini was announced, that this is one of Apple's first high profile attempts to react to the market instead of dictate the market. This item was made and sold purely as a way to increase market share, which doesn't make much sense considering Apple's tendency to sell a premium product.

Click to expand...

I look at the iPad Mini as Apple's attempt to create a midrange market sector, not compete with budget market tablets. I think they were trying to expand the market just like they did when they put out the cheaper but still midrange priced iPod Mini. It cannibalized the original iPod a little, but people bought both and it grew the market. Later, they put out the Shuffle and actually went after the budget market.

This is why I think a cheaper iPhone model is a mistake. The iPhone is a high margin product, a premium device, that managed 50% of the market. While I don't believe that companies should worry entirely about cannibalization, I'm curious to see just how much a cheaper, lower earning product steals from the premium device. Cannibalization for the sake of market share and appealing to lower income consumers is a great, great mistake.

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I think it's a mistake because you generally don't want to commoditize your own hardware. At the same time there's a budget market out there that's currently being dominated by Android. Google doesn't make any money off that market because it's full of users who don't have internet access so they probably don't care if they lose it. Apple might be able to kick out Google from the low end sector without damaging its brand too much. But who knows

Requested Response

Pages - Please Define academic formatting please.

Sure,

1. Center Page Vertically (APA or MLA format style)
2. Index creation
3. Citation management
4. Handling captions
5. File conversion issues

Numbers - Please Define academic features please.

1. Sorting affects all columns, regardless of the selection, making it difficult to sort a portion of your data.

2. Cannot lock cells within a table to prevent modification.

3. Much slower than Excel on larger worksheets

4. File conversion issues.

iWeb was seen as a selling point because it was included in the price of the machine and worked with the other software already included. No incompatibility issues to worry about.

Students are required in many disciplines to have a working knowledge of web page creation, therefore, iWeb was seen as saving the student from having to research and purchase additional web page creation software. The same logic worked for many small businesses.

iMovie and iDvd

Classrooms are far different than they were even five years ago. Multimedia presentations in High Definition are the norm. Students and clients are demanding the best quality possible for their output. Why shouldn't they with cheap digital cameras widely available. Windows users hand in presentations in full 1080 60p.

Contrary to Apple's statements and wishes optical is far from dead in both academia, the home and business. A quick look at MacRumors own forums should put that issue to rest. The optical debate has been one of the most commented topics on this entire board.

I still have countless requests for a powerful, easy to use flat file database that can be tightly integrated with their word processor for selective offers, specific letters for customers in certain categories and mail merge. This would be a powerful incentive for many small businesses to switch to the mac. Especially since they cannot stand Windows 8.

Bwinski said:

PLEASE TIM – GET YOUR HEAD OUTTA YOUR AS* !!!

The Market for technology products is fickle, flighty, transparent, changes on a nano-turn, has mood swings that NO ONE can predict or explain, yet Tim Cook, as smart as he is, keeps trying to chop it up into manageable little, behaviorally consistent nuggets he can spin up a can of blinking lights, buttons and tightly wound antenna to keep them ‘stable’…… “********”!!!

The last 6 or 7 weeks of press, speculation, lies, manna, arguments, rights and wrongs, strong and weak statements, and a lot of what ever it takes to settle the noise down, has managed to crash the value of Apple down by 40 %….. THAT’ s OVER $ 200 BILLION DOLLARS because people like to scream at each other and calm heads can’t scream as loud as morons. AND, because the morons that have been screaming for the last 6 or 7 weeks like lunatics straight out of the asylum, got EXACTLY WHAT THEY THOUGHT TODAY… A CRAPPY APPLE EARNINGS REPORT – FROM A HOLIDAY PERIOD !! W T F !!!

I don’t care if it was the law of big numbers (they got reduced by $ 200 BILLION over the last few weeks), I don’t care if it’s Klowns making up bad FUD halfway around the world that was a LIE the instant it hit a keyboard. It resulted in a BAD EARNINGS REPORT FROM APPLE TODAY and that’s NOT ACCEPTABLE. ESPECIALLY IN A STONG HOLIDAY QUARTER where they should have had a performance that just left global pundits stunned and speechless …. Instead, Apple got laughed off the stage and the stock went down ANOTHER $ 60 BILLION DOLLARS !!!

Unforgivable.

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If you're going to ride the stock market, you have to calm down. There are people who commit suicide over these things.

FrozenDarkness said:

actually it is just like the lotto. if you have a secret formula for buying high sell low, you'd be much richer than the next lottery winner

this always reminds me of when people say "APPLE IS NOTHING BUT MARKETING" well if it's so simple how come you're not operating the most valuable company in the world?

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you seem to not know what investing is about. in the long term, prudent investors see their portfolio values increase. it's naive to think investing is like the lotto. the market increases over time. value investing is about investing in good companies at prices that give you a margin of safety. plus, they collect a guarantee 3+% from dividends each year. you just have to be patient and look for good opportunities while understanding the business of what you invest in. there are plenty of opportunities to buy low. I won't go through the situations that give you bargains. if you want to learn more, you can read Security Analysis and The Intelligent Investor by Ben Graham.

jlasoon said:

Made enough money to retire when Subprime hit Still can't figure out how Bernanke missed it. $%*&ing idiot.

I'll be honest, what's coming scares me. Like I said, bought real estate outside this country.

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Oh, it's terrifying, especially for those of us who don't have the funds to pick up and leave. Once the worst of it hits we definitely wont have the funds. People keep voting against their own self-interest, and this is what happens.