the way it really works is that stock price is artifically driven down so that the rich can capitalize on low price opportunities. that's why you constantly see rebounds.
I respectfully disagree that market "saturation" is a problem. If that were the case, all the car and TV manufacturers would be considered crappy businesses. Smartphones have the added advantage in that the churn rate is much higher than cars or TV's. I don't see a problem with the iPhone comprising 56% of their revenue as long as Apple can maintain the base and from what I can see, odds are pretty good. Growth of iPhones is not the problem. It's what they plan to do with that huge base of users via software.Media content is a small margin market. Apple is already in it, look at what its netting them, 3-4% of their revenue.
There's the 3rd scenario you're forgetting : the smartphone market will reach saturation at one point as it reaches maturity. Then where does the growth come from ? Remember, the reason the stock is down today is because Apple showed a stalled profit growth.
With 56% of their revenues depending on the smartphone sector and penetration already being 55% of the big markets for the segment, it means potential growth going forward might not be there. That's one of the big reasons you see Apple trying to expand into markets where smartphone penetration is still very low (India, China, Brazil) :
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The problem is we're discussing growth. You need to understand that the iPhone can't keep growing at the same pace as it did in the past with current market realities such as segment saturation, market penetration and current markets Apple operates in.
Then there's the fact that emerging markets might not show the same explosive growth that more established markets did when switching from feature phones to smartphones.
So really, going forward, iPhones being such a big part of the pie can end up hurting Apple on the growth front, which is the very reason they were hurt yesterday, the numbers were great, but signaled some stalling as far as potential growth goes.
Apple grew too much, too quickly and now the signs that the growth can't be sustained are showing (and frankly anyone who thought Apple could sustain such growth was living in a dream world).
Anyway, what's with the defensiveness gnasher ? What are you gaining here by twisting the facts around to make it seem Apple doesn't need to fix things ?
IMHO Apple would have a great 2013 if they would just give us a bigger screen to compete with the larger Android phones and a revamped iOS that gives us more and better features than Android. That shouldn't be too difficult for a company that is sitting on a $150B cash stockpile. Yet the perception is that Apple is sitting on its laurels - which I don't believe for one single second.
You forgot Amazon. And people think only Steve Jobs sold kool-aid.Yep....
I wish Apple would take some of that cash and buy up a ton of the stock back.
Fundamentals are more sound then any company out there.
The true 'bubble' is GOOG and MSFT...both don't have rosy futures.
Yep....
I wish Apple would take some of that cash and buy up a ton of the stock back.
Fundamentals are more sound then any company out there.
The true 'bubble' is GOOG and MSFT...both don't have rosy futures.
I respectfully disagree that market "saturation" is a problem. If that were the case, all the car and TV manufacturers would be considered crappy businesses. Smartphones have the added advantage in that the churn rate is much higher than cars or TV's. I don't see a problem with the iPhone comprising 56% of their revenue as long as Apple can maintain the base and from what I can see, odds are pretty good. Growth of iPhones is not the problem. It's what they plan to do with that huge base of users via software.
I realize that it's only anecdotal evidence, but among my non-techie friends, all of them plan on getting a new iPhone when their contracts with the 4 or 4S is up. I know a few people who have switched from Android to iOS. I don't know anyone who's gone the other way. Obviously there are. I'm just saying that I think the inflow outnumbers the outflow. Yes, the Android marketshare is growing, but that's because the pie is getting bigger, not because the iOS base is shrinking. If there's ever evidence of the base shrinking, I'll worry then.
Furthermore, I don't even think the US market is saturated. T-mobile has yet to announce their partnership with the iPhone, but it's definitely coming. And I believe it will happen without subsidies and that Apple will announce a similar financing program as the one have now for China. After all, most people are financing their iPhone without realizing it, except they continue to pay the higher rate after the phone has already been paid off and they're STILL locked to the carrier.
IMHO, as I alluded to above, selling iOS devices is just the first step in the long game with the purpose of establishing a large unified user base (like Facebook, but with profits). Once you have that large base, everything you do is suddenly magnified by a hundreds of millions. It's a virtual certainty that Apple is working on ways to monetize that user base because companies will want access. iAd, Passbook are what I view as early experiments by Apple to see how effectively they can monetize.
Let's see... 2010-2007 = 3 years.
2012 - 2010 = 2 years.
Needed? Methinks you are being a little unrealistic.
None of this says Apple is doomed or is going to crash & burn. But if you don't maintain the slope of growth, AAPL must come down. Investors go where the accelerating profit potential is... and other companies will show the steeper slope to draw them away from AAPL. No big deal- that's how it's always been. But if we're interested in AAPL returning to record highs, we need Apple to roll out the next big thing (that is not one of the existing big things tweaked or refined) and roll out great new version of existing NBTs too. They've milked the existing NBTs for several years now. The milk doesn't keep achieving blowout records forever.
I respectfully disagree that market "saturation" is a problem. If that were the case, all the car and TV manufacturers would be considered crappy businesses. Smartphones have the added advantage in that the churn rate is much higher than cars or TV's.
Plus the upgrade cycle of a smart phone is every 2 years or so vs every 5 or so for a car and even more for appliances.
The issue is these analysts are clueless and would rather see 'new' customers vs 'returning'...which essentially is the same thing but to them it's different. Growth is what they want. Not revenues.
Why Google don't have a rosy future?
The problem is we're not discussing about sustaining sales and profit. We're talking about growth. What caused the stock to drop today is Apple showing signs of simply going to a sustaining mode. AAPL has been hailed as a growth stock and its traded as a growth stock.
Would AAPL transition to a car manufacturer that's essentially "sustaining sales" (with slow growth as families expand slowly from 1 to 2 to 3 vehicules average, which is years in the making) ? Would that work in the tech sector, a sector that's been about growth for the last 40 years ?
The fact is, you can disagree that lack of growth potential is a problem for Apple, I don't disagree there, Apple can very much be healthy without massive growth, but Wall Street and the people investing in the stock don't see it that way.
And as such, Apple's administrators are stuck trying to keep growth going, trying to expand their offerings where they can and how they can to not reach a plateau of sales that'll result in their transition away from a growth stock.
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You call the analysts clueless, but then you say that "returning" customers are growth. They're not. Only new customers are growth, anything else is simply sustaining the current numbers.
Clicks are down
Click revenue is down
Continually losing money on mobile deal with Motorola.
Apple moving into Asia where Android has it's last stronghold.
We've all seen what happens when the iPhone goes on to a new carrier.
So basically Google is working harder for less of a profit
The unfortunate things is - Apple has to make a change. They have to offer a cheaper iPhone now, because Android has started to saturate the market through cheap adoption of cheap smart phones.
I really wish Apple never signed the 4-5yr exclusive with AT&T way back in '07... it only gave way to this now. This is 5 years in the making now...
GOOGLE IS A BUNCH OF POSERS!
Now, Apple has to make a cheap iPhone for the masses... just you all wait. I hope Tim mentions this to his fell Appleinions... SJ would be pissed if here now, and somehow get the market back in his favor - Android is gaining momentum.
Investors are eating up Amazon though they've been waiting forever for these phantom profits. When it comes to tech stocks I don't see much that's rational out there. Do Apple's results really warrant an 11% drop in the stock especially considering its been on a downward trajectory basically since September? Did anything came out yesterday that wasn't already priced into the stock? Seems to me it's panic overselling not based on rational thought but based on emotion. Or people just like kicking someone when they're down.
Imagine if there are say 50 million total smart phone users and Apple has 25 million and the competition has the other 25. If Apple takes say 20 million and then has 40 million and the competition 10 million the next year..the stock market looks at Apple and goes...Apple can only grow another 10 million...that's not good. EVEN THOUGH Apple is pulling in 40 million customers revenue. If Apple then got all 50 million customers..the stock market would then go..there is no more growth potential for Apple in smart phones and would go negative on it...even though Apple would have literally locked up 100% of revenues. That's how stupid Wall Street is.
Yah and they were only better due to a longer holiday season. Lets see Q2. And yes I mean to say clicks up revenue down hence the work harder for less.Clicks are up and click revenue is up. Cost per click is what was down and it was better than expected. Have you read the quarter results?
So lets continue to celebrate less of a loss...gotta love Wall Street logic. Meanwhile Apple stockpiled 16 billion more with no losses anywhere.And lowering the loses. Have you read the quarter results?
Yah..great wherever they have the same presence as Android. The issue again is Apple isn't in every sandbox while Android is and at all price points. We'll see what happens shortly won't we...36 new LTE carriers, T-Mobile and China Mobile.Have you seen how Apple and Android is doing outside USA?
You tell me.Revenue up and profit flat, where I have seen that?
If you sell your product to 100% of the people that want it, there are no more buyers. Yes, they may be repeat buyers next year, but there is no more growth (unless you are going to raise prices and still magically keep them all). Investors invest in companies with growth potential. If you are presented with an investment in a company and that company can tell you that everyone who wants one of what they sell already has purchased one, why are you going to invest?
In such a situation, the dividend becomes the profit potential of the investment and other companies pay higher dividends than Apple (on stock that costs a lot less than AAPL stock). The dividends are "ho hum" in a market where other stock prices can rise much quicker and some pay good dividends too.
For example, the dreaded Facebook FB stock was around 18 when AAPL was still in the stratosphere. An investor in FB needs it to rise to only 36 to make 100% on their money. An investor in AAPL needed it to rise to $1400 to make the exact same return. Which seemed more doable? FB has now risen to about $30 while AAPL has fallen to about $460. The FB investor aiming for a double needs $6 more dollars in gains. The AAPL investor needs nearly $940 in gains. Which seems more likely now?
Lastly, I don't recall people finding fault with Wall Street Analysts projections when AAPL was on the rise. Just now are they so "stupid" because we can't possibly find fault with Apple itself here. It's got to be someone else making something bad happen to Apple (like "patent system is great" when Apple is winning patent cases- "Die Samsung Die", but "patent system is stupid" when Apple is losing patent cases). The analysts want AAPL to rise as fast and as far as any of us (because they are paid from a flow of commissions which are more easily made by people buying than people selling); that's why there is such an overwhelming bias to "buy" vs. "sell" from Wall Street in general.
My suggestion: recognize that AAPL is not an Apple product. Loyalty to Apple products is very different than loyalty to a stock. Investors are finding better opportunities elsewhere (and thus selling a stock at potentially huge profits to go buy some other stock). When Apple can do things that gets AAPL upside roaring again, they'll flock right back. Investors are simply trying to make money. Blind loyalty to a stock has wiped out many a paper profit.
Not at all. Let's try it again...
iPod (2001)
iPhone (2007) 6 years later
iPad (2010) 3 years later
Needed next big thing (2012) 2 years later
The point was that if any company is going to maintain crazy record growth year after year so that it's stock price is going to go ever-higher at a rapid clip, it's pace of rolling out big innovations must accelerate over time.
In other words, Apple could ride iPod's contribution for about 6 years to grow to where they were when iPhone launched. iPod + iPhone fueled records thereafter. Then iPad rolled out to throw more fuel on that fire just 3 years later. iPods, iPhone & iPads pushed Apple to records (and pushed AAPL to $700).
Funny thing about blowout results year after year though. It takes more and more core product success to replace last year's results before you even have a chance of building on top of last year's numbers. Thus, the need for a new, next big thing a bit faster than the time between the prior NBT and the one before it.
And yes, per my beliefs here, that would mean they needed a NBT in 2012 and then would need another in late 2013 (1 year). And in 2014, they would need 2. And so on.
Else, a giant company selling a finite market (earth in this case) the same small bundle of products will eventually reach a point where they're selling just about everyone who wants one and still not able to blow out last year's numbers to achieve new records (to drive the stock to new records). Thus, the need for a new NBT to add to the pool of products to pile a fresh bundle of revenues & profits on top of those yielded by the existing product mix.
Apple missed the launch window and AAPL is paying for it. Hopefully, whatever was hopefully planned to go in 2012 is just about ready to surprise in early 2013.
So lets continue to celebrate less of a loss...gotta love Wall Street logic. Meanwhile Apple stockpiled 16 billion more with no losses anywhere.
Yah..great wherever they have the same presence as Android.
Investors are eating up Amazon though they've been waiting forever for these phantom profits. When it comes to tech stocks I don't see much that's rational out there. Do Apple's results really warrant an 11% drop in the stock especially considering its been on a downward trajectory basically since September? Did anything came out yesterday that wasn't already priced into the stock? Seems to me it's panic overselling not based on rational thought but based on emotion. Or people just like kicking someone when they're down.
Sorry but they are clueless because any logical person would take up 100% locked up revenues year over end vs growth. Locking up a market is what a company wants. Revenues should be all that matters. Growth doesn't matter once you have the market locked. The only thing growth matters to is a new competitor or for a new product (and for some, a new iPhone or iPad is considered a "new" product and should actually be considered a new growth/product chain).
Myself buying an iPhone the first time and myself buying a new model two years later is the same thing. I can't help it a bunch of morons on Wall Street like to classify them differently or try to view them differently because they aren't. My $$$ is the same thing both times. Same revenues. Going to the same company.
What they should be concerned about is not growth. It's revenues.
Except Apple is already priced lower than other mature tech stocks. So, even with minimal to moderate growth, the stock is already undervalued. P/E of 10 is just silly and the stock is oversold.
Budget may not be the right word, but Mercedes is "broadening their customer base" LINKThey have to offer a cheaper iphone just like how they had to offer netbooks. What's next? Maybe Mercedes Benz should start making budget cars. Or Hugo boss should start making budget clothing. Heck, call Rolex to start making children's watches that teach them to tell the time.
My point is that companies make their names by what they stand for
Apple CEO Tim Cook has sent out an email to employees (via 9to5Mac) congratulating them on the performance and announcing an employees-only town hall meeting scheduled for today.
Now it is clear that you don't know what your talking about. Have a nice day.
Here's the sad truth about Apple:
"Apple Shares Down 11 Percent on Fourth-Most-Profitable Quarter Posted by Any Company Ever"
...the 4th most profitable quarter posted by any company, in the history of time... and it's still not impressive enough.