Apple Loses Trillion Dollar Company Status Due to 10% Slide on Stock Market Since Thursday

[ftaok]

Mkt studies will prove different and be more precise in your initial asessment, but the rest is OK.
Apple could have chosen to stay a premium brand but chose to go for volume where its insane success now has become its weakness: has become such a moloch that it’s defending marketshare and can’t innovate at that scale - so it only files patents to discourage others, i.e. to defend itself.
Smaller companies will attack, innovate and disrupt their business model and at some moment they will take over.
Going premium while being a mass supplier is the end game. That can not stand very long.

Market studies are only as good as whoever paid for it. They can make it say anything they want just by asking the questions differently.

The biggest company in the world (measured by market cap) famously eschews market studies.

One of my favorite companies of all time, Motorola, couldn't get out of their own way due to market studies. Staying out of business because some report told them not to. Now look at 'em.

Anyways, the foldable phone thing is just my opinion. If I'm wrong, it wouldn't be the first time. But I certainly wouldn't want one. I doubt they would want them in China either (which is a key region for anything to be a mass market success) - I say this because the Chinese wouldn't want to have a part like the screen that could weaken with repeated usage. That's a major reason that Apple got rid of the physical home button. I couldn't imagine the level of OCD with a foldable phone in China.

Peaking smartphone sales is not a surprise. They've been predicting this for years now. This is why Apple is focusing on other sources of revenue, namely Services. AAPL is notoriously cheap. The P/E is well under 20 and had traditionally traded around 14 before the recent run up. Other tech companies that command more generous P/E deal with services. Apple is trying to flip the script and is choosing to emphasize their Services for two reasons. One, they need another sector that has growth potential. Two, they want Wall Street to properly value AAPL.

They've never cared to protect marketshare. No one can innovate hardware at scale, so it's not just an Apple problem. Patents are a cost of doing business anymore. Own enough of them to cancel out the other guy's patents.

 

[Baymowe335]

Nikkei reports are always perfectly timed, I'd say engineered, to extend AAPL losses in down moments, and always turn out to be completely made up.

Most intelligent post here and exactly correct.

I have started to wonder if Apple themselves leak this garbage to buyback more shares on the cheap. Blackout period ends tomorrow, so Apple can start buying back shares.

I say good, I'm not selling 40% revenue and 20% EPS growth.

 

[mistasopz]

Quick Tim, release another 100 emojis!

 

[harriska2]

Going premium while being a mass supplier is the end game. That model can not endure very long.

That might explain why they dropped the iPhone SE.

 

[BayouTiger]

Ah.. that’s the definite sign the dip has completed
NOT

Well, I got in at $199.75 and an hour later it's $201.50 so I'm up!

 

[TallManNY]

It only takes about the 1/2 the people to stop buying iPhones. All their other products combined couldnt keep them afloat

While that would be a disaster for the stock, even if iPhone sales dropped in half, Apple would be fine from a cash flow perspective.

 

[Falhófnir]

Apple's trillion dollar status is at a lower per share price now because of the buyback. So, at ~$200 per share it got back up to the trillion dollar rank again.

How can that be right?

1,000,000 shares @$1000 each is $1,000,000,000
900,000 shares @$1000 each is $900,000,000

The fewer shares in circulation, the higher the individual shares have to be priced to reach a $1T valuation, surely?

 

[fathergll]

What is this speculation based upon?

US debt is closing in on 22 trillion
US household debt exceeds 2008
Feds are finally forced to raise inflation rates
Auto Loan bubble is could pop
Student debt bubble could pop(this debt is close to twice as large as 2008). Baristas making $9 per hour have a Masters in Philosophy but are in the hole for 100k tuition.
The dollar itself has a serious chance of severely falling hard which could end up in stagflation.


Remember the last 2008 recession which bailed out banks by the feds did not fix the long term issue. It just made the bubble bigger. There is no free lunch.

 

[imageWIS]

Looks like tim's going to be worth a few million less (of his hundreds of millions) while the kids at Foxconn will have their salaries slashed: let the suicides commence.

 

[Breaking Good]

That might explain why they dropped the iPhone SE.

I just looked at AT&T's Web site and both the SE and 6S are available for purchase. Apple lists both "available for sale from retailers" on its own Web site when you look to compare iPhone models.

I'm not surprised at all by Apple's move not to release unit sales anymore. It's part of the direction they've been heading for some time as they start to emphasize services over products. Frankly, I wouldn't be surprised if Apple started to release more Apps in the Google Play Store so that their services would be compatible with Andriod.

Apple is doing what all the hardware manufactures do which is release products across as many price points as possible.

Take Dell for instance. You can buy a $3,000 laptop from Dell or a $300 laptop from Dell. Different experiences for sure. But both run Windows 10.

You can buy an iPhone XS Max for US$1,099 or you can buy an iPhone SE from a Mobile Virtual Network Operator here in the US for less than US$100 if you look around. Different experiences for sure. But both run iOS 12.

Apple always knew the smartphone gravy train wasn't going to last forever. Were just seeing it now pull into the station.

 

[BayouTiger]

I just looked at AT&T's Web site and both the SE and 6S are available for purchase. Apple lists both "available for sale from retailers" on its own Web site when you look to compare iPhone models.

I'm not surprised at all by Apple's move not to release unit sales anymore. It's part of the direction they've been heading for some time as they start to emphasize services over products. Frankly, I wouldn't be surprised if Apple started to release more Apps in the Google Play Store so that their services would be compatible with Andriod.

Apple is doing what all the hardware manufactures do which is release products across as many price points as possible.

Take Dell for instance. You can buy a $3,000 laptop from Dell or a $300 laptop from Dell. Different experiences for sure. But both run Windows 10.

You can buy an iPhone XS Max for US$1,099 or you can buy an iPhone SE from a Mobile Virtual Network Operator here in the US for less than US$100 if you look around. Different experiences for sure. But both run iOS 12.

Apple always knew the smartphone gravy train wasn't going to last forever. Were just seeing it now pull into the station.

And you'll start buying apps and content for that $100 SE and Apple gets 30%. That's why they are saying that the service side is more important going forward than units.

 

[joeswamp]

Trust me, no one is suffering at Apple because of this.

That's what the Blackberry guys said.

Apple needs to start innovating again (and not in the direction of making keyboards thinner). Right now they're jacking up prices and spending away brand equity. That can't go on forever.

 

[Falhófnir]

And you'll start buying apps and content for that $100 SE and Apple gets 30%. That's why they are saying that the service side is more important going forward than units.

True to an extent, but if volumes start slipping consistently then the installed base will shrink and so will service revenues. It's a balancing act thats starting to get a little lopsided if this move really is an attempt to hide disappointing future sales volumes...

 

[Squeak825]

Corporate is probably having a heart attack right now.

Why? It has no impact on what they do at all!

 

[dwaite]

Apple could have chosen to stay a premium brand but chose to go for volume where its insane success now has become its weakness: has become such a moloch that it’s defending marketshare and can’t innovate at that scale - so it only files patents to discourage others, i.e. to defend itself.

Going premium while being a mass supplier is the end game. That model can not endure very long.

Apple's strategy may very well be to have the new design and innovation be in the iPhone X/XS as a premium tier phone. This gives them both a way to make it a boutique product (higher price, smaller volume) and flexibility to test ideas against a smaller market (such as iPhone X FaceID and gestures).

So it may be a first/second tier tick/tock strategy - odd years get design/tech changes on the high tier and refinements to the lower tier, even years get refinements and a lower tier version of the previous year's technology/case design changes.

Having years which alternate between iPhone X (high sales of expensive unit) vs XR (higher sales of cheaper unit) are probably the main justification for dropping this #. People are trying to predict sales and profits with out of date models then shoving that back in Apple's faces in terms of incorrect third party guidance.
[doublepost=1541448679][/doublepost]

True to an extent, but if volumes start slipping consistently then the installed base will shrink and so will service revenues. It's a balancing act thats starting to get a little lopsided if this move really is an attempt to hide disappointing future sales volumes...

Volumes are going to fall, even if user #s don't fall. People are moving from 1-3 year upgrade cycles to 2-5 year cycles as new devices become less compelling.

So you have things like an Apple focus on subscription services revenue and taking steps like eliminating the base tiers of products to increase average selling prices.

 

[Defthand]

In all seriousness, even though Apple won’t be disclosing unit figures to investors, will it no longer mention it during keynotes? Without those stats, what will developers and phone collectors have to applaud?

 

[apolloa]

Apple didn't fall short of anything on earnings. They far exceeded anyone's expectations for earnings in the last quarter.

Apple also did not fall short on revenue either. They exceeded their guidance and beat the street's estimates for revenue.

What they did, however, was to put out guidance that met with the street's consensus, which was raised over the last couple of months.

No, the sales estimates fell short, earnings mean nothing when they do not have the earnings from services to make up for lower iPhone sales. Sounds like your sugar coating it.
Charging a thousand dollars or pounds to make up the shortfall only goes so far. It could be a different story in 2 or 3 years time.

 

[skinned66]

That's what the Blackberry guys said.

Right now they're jacking up prices and spending away brand equity. That can't go on forever.

Interesting. Yes that's exactly what they've been doing IMO. Maybe they can't do it forever but they've set themselves up to do it for a good while longer at least. I see nothing to indicate they won't.

 

[Falhófnir]

Interesting. Yes that's exactly what they've been doing IMO. Maybe they can't do it forever but they've set themselves up to do it for a good while longer at least. I see nothing to indicate they won't.

How much higher can they realistically pump the prices at this point without really starting to push sales numbers into reverse? That's probably what's caused the consternation on Wall St.

 

[skinned66]

How much higher can they realistically pump the prices at this point without really starting to push sales numbers into reverse? That's probably what's caused the consternation on Wall St.

I really wish I had an answer. I'd like to see a change from the current company course as a consumer, that's for sure. I've never been so close to buying an Android phone in my entire life. When I bought my 6S I would have never dreamed of it. Mac? I've all but checked out out already; I just have no need to buy a new machine for home use right now. The wonderful toys I get to use at work cover all of my needs when my old Macs don't. My house isn't Homekit either.

Still what they have interests me; just not enough to bite anywhere near like I used to. Value for money is certainly a factor.

 

[Falhófnir]

I really wish I had an answer. I'd like to see a change from the current company course as a consumer, that's for sure. I've never been so close to buying an Android phone in my entire life. When I bought my 6S I would have never dreamed of it. Mac? I've all but checked out out already; I just have no need to buy a new machine for home use right now. The wonderful toys I get to use at work cover all of my needs when my old Macs don't. My house isn't Homekit either.

Still what they have interests me; just not enough to bite anywhere near like I used to.

I'm largely in the same position - I used to upgrade fairly regularly for the fun of it, but now the pricing takes a lot of the fun out of it At the moment I'm basically trying to just go longer between updating, but if they keep the big price increases every year or two going, even that's going to quickly become increasingly impractical

 

[carlsson]

Good, time to invest some dollars...

 

[skinned66]

I'm largely in the same position - I used to upgrade fairly regularly for the fun of it, but now the pricing takes a lot of the fun out of it At the moment I'm basically trying to just go longer between updating, but if they keep the big price increases every year or two going, even that's going to quickly become increasingly impractical

Yeah value for money is a big thing for me. And I've learned my lesson a few times after thinking that "this has to be the last straw" on some of the **** they pulled with model tiers and pricing in times past only to see them post great numbers over and over again.

That's not to say eventually the day won't come, just that I'm demonstrably not good at predicting it. I guess now without sales figures, it'll be harder for anyone to do

 

[ftaok]

No, the sales estimates fell short, earnings mean nothing when they do not have the earnings from services to make up for lower iPhone sales. Sounds like your sugar coating it.
Charging a thousand dollars or pounds to make up the shortfall only goes so far. It could be a different story in 2 or 3 years time.

Sales (aka revenue) did not fall short of expectations. Apple exceeded the street's estimates on sales, for both iPhone and the company overall.

I believe you are referring to Apple missing the street's estimate on iPhone unit sales (by a few hundred thousand).

 

[TallManNY]

Most intelligent post here and exactly correct.

I have started to wonder if Apple themselves leak this garbage to buyback more shares on the cheap. Blackout period ends tomorrow, so Apple can start buying back shares.

I say good, I'm not selling 40% revenue and 20% EPS growth.

There is no one at Apple who would authorize a leak with the intent to manipulate the stock price so that Apple's shareholders would be enriched just a little bit by Apple getting better prices on its buyback program. What you are suggesting is a scheme that if discovered would result in the authorizing executives going to jail. Why would anyone take that risk just so their already very rich and successful company could be slightly more successful?

There are people who do securities fraud. Happens all the time. But they do it either (A) to save the company and their job or their investment or (B) so they can make 5x or 10x returns. Neither case applies here.