AAPL Opens at $144, Sliding Nearly 10% After Major Revenue Cut and Down 35% Since Early November

[ryanwarsaw]

The internet echo chamber is alive and well here. In a year’s time it is just as likely people will be kicking themselves for not investing in Apple right now.

Then go ahead and buy. You buy now and you are right you will get the highest rewards. I think it is smarter to buy on some type of real news on the trade war with China. Apple is closer to $100 now than it is to $200. Any further complications because of the trade war will exacerbate this.

There are still a lot of people that are emotionally married to Apple. If the stock drops much more perhaps they capitulate and then it would be a great time to buy. If they are still down after tax time I would consider selling my small amount of shares I have left for the tax break and getting back in at the real price.

 

[Mr. Dee]

Looks like things are sunsetting now. But you gotta admit, almost 10 years after Steve Jobs death, the company has experienced a good run under Tim Cook. It’s just that nothing truly groundbreaking came out in this period. Oh yes, AirPods and Apple Watch are great products and the HomePod to some extent. At the same time, what is left to make better: cars, tv’s? I don’t see users upgrading those on a regular basis enough to warrant Apple considering either industry.

AR hasn’t indicated any killer applications yet and learning lessen from Google Glass is that people find that awkward. I think areas where maybe Apple can bring value actually core strengths, some of it they are jumping on too late. Acquiring Netflix, possibly merging with Amazon could breath new life in to products and services. Health is ripe for innovation and I think that is something it should always keep a focus on. Hopefully their streaming services will get off the ground.

 

[MacFather]

Deleted.

 

[Baymowe335]

I think it's more of a pricing issue.

Why get a new iPhone when the one you have works great and the new iPhone prices are so high ?

Apple told us iPhone did well in the US, Canada, Germany, Korea, etc.

When the economy slows down, pricing becomes more important, but not necessarily in every market. Being a company selling products in so many countries is not easy.

Based on the data, I'm not convinced dropping prices gets them higher revenue. Maybe would sell a few more units, but with the lower price, it might be wash on the top line.

The iPad, wearables, Watch, Mac, etc were all mentioned as strong performers, and those products are considered here to be "too expensive."

This was limited to iPhone in just a few markets.

 

[ramallite]

One cannot ask Apple to:
1- Build quality long-lasting products,
2- Stop "planned obsolescence" (or outright ban it like the EU is doing),
3- Have the next iOS version be as back-compatible as possible,
4- Lower the price of battery replacement,
5- Keep iPhone prices as low as possible,
-AND-
6- Keep raking in stellar profits and have a skyrocketing stock price.

This is not a defense of Apple. It's just basic math. These forums are always full of complaints (most justified) when Apple takes measure seen as trying to capitalize or improve on its profits. But then people want to fire Tim Cook when the inevitable downturn occurs. Go Figure.

 

[ijlakw]

I think Steve's inertia is starting to wear off. Tim would have been good until they found someone with vision to take over. Tim is a visionless, platitude machine.

I totally agree. IMO Cook was never meant to be anything more than transitional CEO. However, what happened is he became a "Jack Welch"-like CEO that guided Wall St though a handful of techniques including the financialization of the business model and as long as the Fed kept interest rates low and monetized some debt it all worked. He missed his opportunity to take that cheap debt and take some risks and move Apple into some new markets. He's in over his head.

 

[Adam Warlock]

Angela Ahrendts will be the next Apple CEO.

Geez, I hope not! From a visionless wet noodle to an out-of-touch yuppie-chaser.

 

[Plutonius]

no company can innovate around a trade war.

I don't know if you can use this excuse for Apple's sales in China since the iPhone is exempt from the tariff fight for the most part.

I believe the problem is pricing and competing with low cost competitors that offer similar hardware to Apple.

 

[Bornee35]

warren buffet just wants more cheap stock.

 

[Mescagnus]

I think Steve's inertia is starting to wear off. Tim would have been good until they found someone with vision to take over. Tim is a visionless, platitude machine.

I think he has general business vision but not much vision in technology – he's certainly not the CEO to invent what the customers want next.

 

[Baymowe335]

Still the most profitable. Still the industry leader, it's pathetic how an entire industry relies on Apple to do its R&D.
The sooner Apple can buy back all its shares, the better its customers will be. Cook won't be chasing the short term Wall St vote, and we might get compelling products again.

I just spoke with investor relations. They confirmed the share counts for me because I was questioning my numbers. It appears Apple will have 4.77B shares remaining after this quarter, down from 4.848B, indicating they only bought back around $10B in stock Oct-Dec. That is quite low and I'd expect them to go heavy now that this bad news is out.

 

[Pangalactic]

Don't forget that it was under his leadership that the stock hit its all time high

Doesn't take a genius to rake in short-term profits, any bad CEO can do that. Checklist:

1) Abandon quality control (butterfly keyboards, kernel panics, blown out speakers) => more money
2) Focus on the single money-making product, abandon all else (Mac Pro? Who needs it) => more money
3) Replace innovation with "innovation" (no more SD card slots! Our lives are so much better now) => more money
4) Rebrand products and sell them twice (Macbook air is literally a MBP with a different shape and worse components) => more money
5) Forgot to mention the best part - just ramp up the prices! => more money

Aaaand now the stock is (predictably) falling down and Timmy is crying tears as for some unknown reason the consumers don't want to buy $2000 phones and $3000 laptops.

 

[Baymowe335]

warren buffet just wants more cheap stock.

Let's hope he's buying too, along with Apple. My sense is that he is buying.

 

[euvnairb]

Apple's price hikes make their products extremely out of reach for developing economies like China and India. Even in the US Apple is pricing themselves out of many people's budgets. Trade wars could have some impact, but I think price is really affecting demand here.

 

[RickInHouston]

I think it's more of a pricing issue.

Why get a new iPhone when the one you have works great and the new iPhone prices are so high ?

I think it's more like Moore's Law of Phones. New phones just aren't exponentially inventive each year and people are buying less often.

 

[Vanilla35]

Removed

 

[ijlakw]

They are going to buyback $71B more in stock between now and May. That’s what’s left of the $100B that’s been authorized and earmarked for buybacks. Buying back at lower prices is good for long term investors.

Apple is spending close to $14B/yr on R&D, including AR and VR.

That's just not true... it's only good in the short term for mgmt and employee retention. If Apple doesn't get back to basics and start focusing on some much larger problems that threaten

And here lies what's wrong with our current financial, banking, fiscal and monetary policies. Companies today are no longer allowed to report lower than expected numbers. In today's financial world, companies must grow exponentially or they pay the price. Companies are now subjected to "infinite growth on a finite planet". You can't grow forever.

What makes matters worse is the reason major corporations are buying back their stocks i.e. to make the stock price go higher is because of Federal Reserve policy of zero interest rate lending i.e. "QE". So instead of giving the markets a caffeine jolt, they have since 2008 made the markets heroin addicts. Remove the heroin and the markets crash which is what we are now seeing with trade wars and Fed interest rate hikes. Eventually the whole house of cards will come crashing down globally 10-20x worse than it did in 2008.

Besides that any company on the planet would love to have Apple's numbers but that no longer is allowed so Apple HAS to continue to grow exponentially or face the consequences.

It's misallocation of capital at its worse.

 

[Plutonius]

Apple told us iPhone did well in the US, Canada, Germany, Korea, etc.

Unfortunately, Apple is no longer giving us sales numbers so what does their statement really mean ?

 

[kenypowa]

who says Apple doesn't listen? They slash their share price by 1/3rd! Hot Deal!

 

[Seuck]

Well, they had nothing to sell for almost the whole year on the Mac side, and still have nothing in some categories like professionals, developers, gamers.
This is overall a good news for us.

 

[Baymowe335]

Doesn't take a genius to rake in short-term profits, any bad CEO can do that. Checklist:

1) Abandon quality control (butterfly keyboards, kernel panics, blown out speakers) => more money
2) Focus on the single money-making product, abandon all else (Mac Pro? Who needs it) => more money
3) Replace innovation with "innovation" (no more SD card slots! Our lives are so much better now) => more money
4) Rebrand products and sell them twice (Macbook air is literally a MBP with a different shape and worse components) => more money

Aaaand now the stock is (predictably) falling down and Timmy is crying tears as for some unknown reason the consumers don't want to buy $2000 phones and $3000 laptops.

Very wrong and simplistic view of the whole story. You're focused on very small, minor things and acting like it's caused this to happen. "Abandon quality control" is about the most ridiculous premise possible and you can no longer be taken seriously as a result.

Isolated issues with products doesn't mean that quality control has been "Abandoned." It means Apple sells 300M devices annually and products have issues at times.

Also, you failing to see the innovation doesn't mean it's not there. They have made huge steps in wearables, mobile silicon, and even iPhone features like FaceID.

The stock has been hurt for 2 reasons:

1) A global slowdown in emerging markets, particularly China.
2) An overall correction in tech stocks.

Apple is still insanely profitable and will report a record EPS, despite this revenue guidance cut. You have to look at stocks over years, not days. Cook has been great for the stock. Even after today, the stock is still up tremendously since Cook took over.

 

[velocityg4]

They are going to buyback $71B more in stock between now and May. That’s what’s left of the $100B that’s been authorized and earmarked for buybacks. Buying back at lower prices is good for long term investors.

Apple is spending close to $14B/yr on R&D, including AR and VR.

Just think of what it would do for future stock value if they put that $71B into R&D instead. Having an extraordinary tech edge over competitors, leading new product categories and greater cross device cohesion would do more than anything.

Perhaps sending $2Mil to the Mac Pro division. For a small team to take an off the shelf workstation board. Then write a custom UEFI and any missing drivers. Rather than whatever insanely priced, highly proprietary, which much of the potential buyers will balk at, monstrosity they likely have planned. When they say modular.

 

[Baymowe335]

That's just not true... it's only good in the short term for mgmt and employee retention. If Apple doesn't get back to basics and start focusing on some much larger problems that threaten


It's misallocation of capital at its worse.

Don't know what you're talking about. Everything I said is true. They are buying back $71B at cheaper prices than they otherwise could. I'm not saying a stock price drop is a great thing. I'm saying it's a silver lining to an overall bigger picture.

Apple is still going to do $84B in sales in 90 days. Sure, we all wanted more, but it's just a 90 day snapshot and there are reasons it's down. China is not doing well. That's not just an Apple problem.

 

[navaira]

Geez, I hope not! From a visionless wet noodle to an out-of-touch yuppie-chaser.

I realised Apple was turning into a fashion company when the first Apple Watch came out. Specifically, the Edition one. Poor people couldn't afford their products anyway, but fashion industry was thriving. This is how we ended with thin, pink computers with malfunctioning keyboards, and tons of watch bands. This is why I'm typing this on a Windows computer.

There are still a lot of people that are emotionally married to Apple.

I'm one of them. I treat it personally that after 11 years I had to move to a Windows computer simply because its keyboard doesn't break within two weeks. It's silly, I know. Windows to me was always necessary evil. OS X was my baby that I wanted the entire world to see. I went from recommending Macs to everyone to saying "wait until the update, because right now they're really not worth the price" to only being able to recommend the new Mini while still seething about its price. When they talk about "Apple evangelists", I used to be one of them. Note the past tense.

 

[Ryth]

Apple's main future growth is in the Apple Watch for the next years & that will be a huge market paired with health apps/innovations on the watch.

What Apple needs to do with the iPhone is focus it more now on the video/camera features & really push those areas...the watch will become your new communication/chat device and the iPhone your multimedia/photo/camera device.

And here lies what's wrong with our current financial, banking, fiscal and monetary policies. Companies today are no longer allowed to report lower than expected numbers. In today's financial world, companies must grow exponentially or they pay the price. Companies are now subjected to "infinite growth on a finite planet". You can't grow forever.

What makes matters worse is the reason major corporations are buying back their stocks i.e. to make the stock price go higher is because of Federal Reserve policy of zero interest rate lending i.e. "QE". So instead of giving the markets a caffeine jolt, they have since 2008 made the markets heroin addicts. Remove the heroin and the markets crash which is what we are now seeing with trade wars and Fed interest rate hikes. Eventually the whole house of cards will come crashing down globally 10-20x worse than it did in 2008.

They never let the housing market crash & make people pay the price for their stupid investments/buying housing at crazy prices. Instead of letting things readjust back to where they should have been pre-2003 or so they just let them tank a bit...the worst thing out there is easy credit...as long as you keep lending money to people who will never pay it back, you continue to just distort prices. It's too easy for banks/companies to write things off, take loses, etc.