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Apple Lowers Revenue Guidance for Q1 2019 Citing 'Fewer iPhone Upgrades' Than Anticipated
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Neither of you obviously are corporate executives or major shareholders in any company. Apple's decrease in value, missed expectations, and their share collapse is MUCH more important than what you consider a large quarterly revenue number.
At this share price, Apple is a buy even without any growth expectations.
The P/E is at 10 at the moment, if we take into account the Net Cash position, p/e is 8, hilariously low. They can keep dividend at 2-4%, and buyback 10% of shares per year without any growth and I would be more than happy with that. This would generate a yield of around 15% per year, I would be more than happy with that.
Even if sales in China collapse to 0 (not so far from that it seems), the current stock price is still OK, even that worst case scenario is already priced in.
People are just to obsessed with the growth these days...
The P/E is at 10 at the moment, if we take into account the Net Cash position, p/e is 8, hilariously low. They can keep dividend at 2-4%, and buyback 10% of shares per year without any growth and I would be more than happy with that. This would generate a yield of around 15% per year, I would be more than happy with that.
Even if sales in China collapse to 0 (not so far from that it seems), the current stock price is still OK, even that worst case scenario is already priced in.
People are just to obsessed with the growth these days...
What he is suggesting is not even possible. You need an iPhone to even activate the Apple Watch.
Apple themselves will not do it , as they don’t want to loose iPhones sales. The AW is designed as an accessory for an iPhone .
This. I am extremely worried now about how vicious iOS13 is going to be on its current iPhone users, as Apple will be under extreme pressure to gin up sales.
Really. This is not as important as you make it out to be. Tempest in a tea pot. After 7 years of recording breaking revenue the sky is falling?
Also, please list your majority holdings in major companies and let us know the boards of major companies that you sit on and which companies you are a member of the executive team, so we can judge you as well.
That's not an unreasonable concern. They could also tie that in with a hardware exclusive (new iPhone XI supports a new Apple "golf" Pencil).
I was listening to Ben Thompson on an old episode of the Talk Show and he said this. Basically every phone in China is just thing to run WeChat on. So, Apple is a status symbol but still just runs WeChat.
I think the earnings adjustment falls into this:
- Apple raised their prices to account for both longer upgrade cycles and increased component costs. They knew they would sell less phones, but the profit margins and revenue would still fall into line. Make more money on less devices sold. This is why they stopped reporting device sales, but also said at the time for investors to focus on revenue as the key metric and not devices sold.
- They expected growth in China to be the rising tide that would lift all sales. North America sales would be down, but China sales will account for that, so from Apple's standpoint this would be fine.
- Neither of these scenarios became true. Instead of a growth in China they saw a steep decline, and North American sales saw a steeper than expected decline. Nothing helped offset a loss so earnings took a skid.
- Pricing in America is obviously a factor, but also iPhones and the Ax chips are so powerful that they allow people to keep their devices longer. Some of the pricing is Apple's fault, but the elimination of carrier subsidies cannot be underestimated. Even though the cost of the iPhone was paid for in your contract price with the carrier, people just saw and iPhone as costing $300. Even without Apple raising prices, now the harsh reality of a $750 phone would defer sales. Raising the prices just makes it worse, especially with phones now approaching laptop prices. Most people don't need high performance phones. So upgrade cycles fall off to the thing becoming too slow, or you dropped it in the toilet.
OLED is hard to make in large sizes. And has issues with burn in (like Plasma before it) and longevity. There is a reason it is still niche in large, long life products like TVs. LCD is mature, easy to manufacture, and "good enough" for the vast majority of people. OLED will get there.
I've been thinking for awhile now that Apple under TC resembles a company I worked for in the late '90's. So many similarities:
Top of their market: Check
Visionary Founder/CEO leaves: Check
New CEO has no long-term vision (except growth): Check
Palatable Executive arrogance: Check
Money dumped into expensive R&D projects with no tangible product results: Check
Built $1B State-of-the-art headquarters : Check (Executives had full "isolation Chambers" ffs)
Expensive acquisitions with questionable returns: Check
Product line matured: Check
Innovation stalled due to focus on growth: Check
Product prices increased: Check
All it took was 2 quarters of the 'Asian Flu' financial downturn for the layoffs to start. Nobody in upper management saw it coming. The company still exists but is a shell of its former self.
Top of their market: Check
Visionary Founder/CEO leaves: Check
New CEO has no long-term vision (except growth): Check
Palatable Executive arrogance: Check
Money dumped into expensive R&D projects with no tangible product results: Check
Built $1B State-of-the-art headquarters : Check (Executives had full "isolation Chambers" ffs)
Expensive acquisitions with questionable returns: Check
Product line matured: Check
Innovation stalled due to focus on growth: Check
Product prices increased: Check
All it took was 2 quarters of the 'Asian Flu' financial downturn for the layoffs to start. Nobody in upper management saw it coming. The company still exists but is a shell of its former self.
I find it really interesting that a publicly traded company's long term success is probably more or less at odds with its goals: to appease stockholders in the short term.
Apple's resurrection was thanks to SJ whose primary focus was on building products people want to use.
TC's primary focus is stockholder profitability and that's simply not sustainable, not in the long run.
Apple's resurrection was thanks to SJ whose primary focus was on building products people want to use.
TC's primary focus is stockholder profitability and that's simply not sustainable, not in the long run.
Apple’s problem is they marketed it as Super Retina. I don’t give a squat how hard oled might be. That’s apple’s problem. Besides being “good enough” is the wrong answer for a company that is the premium brand and sets the ceiling of its market. Apple has to better than good enough if they expect people to keep overpaying.
I think Apple, like many big companies, is losing its way. Out of ideas aside from spec bumps, larger screens, removing things people liked (home button, headphone jack) and telling us they're "benefits". Camera bumps and contentious design details such as the "notch".
What happened to just making desirable product? Avoiding gimmicks and just making product that's "cool"?
I've had iPhones since the 3G, a couple of iPads and I have no desire for the X or to change my ageing SE for one (the SE was to replace a 6 which I never loved due to numerous ergonomic factors and which the battery started to die on after 2 year's use).
Recently I've noticed Suzuki are bucking the auto trend with their new Jimny, a car by which most accounts is complete crap - slow, uneconomical, unrefined and basic. It should suck by modern standards... But people love it. It's not a rounded-off, huge, heavy soft-roader as is the trend (like large, unwieldy phones with ever higher specs), it's small, it has live axles, recirculating ball steering and poor safety ratings, the reviews are all quite average but linked by an over-riding theme, the reviewers, their partners and friends all seem to love the car despite its flaws, people are paying more attention to it than the Lamborghini's and Ferrari's the reviewers regularly rock up with, it's got something. The current Apple products are missing this X-factor, they're the same as everything else on the market, the innovation and user experience is now taking second place to box-ticking and profit margins (hence lack of supplied fast charger and adaptors for things they've chosen to remove).
Suzuki have cancelled taking orders in the UK for these now, they're over 12 months on the waiting list (their local garage uses our company land for advertising so we talk to them frequently), I drive a lovely Volvo S90 and I'm seriously considering one of these as my next car, even though I rarely need to go offroad. It's got something Apple has been missing for a while, character, cool-factor, not following the crowd but doing it's own thing.
Apologies for going a bit off-topic, I'm just trying to make a point but needed to explain my reasoning. Apple are coasting, afraid to upset shareholders so put prices up and keep expanding the range, all about the money rather than just making fresh, great product. Mistakes of the past repeating themselves and it's starting to show. No-one I know is excited to get a new iPhone or iPad any more.
What happened to just making desirable product? Avoiding gimmicks and just making product that's "cool"?
I've had iPhones since the 3G, a couple of iPads and I have no desire for the X or to change my ageing SE for one (the SE was to replace a 6 which I never loved due to numerous ergonomic factors and which the battery started to die on after 2 year's use).
Recently I've noticed Suzuki are bucking the auto trend with their new Jimny, a car by which most accounts is complete crap - slow, uneconomical, unrefined and basic. It should suck by modern standards... But people love it. It's not a rounded-off, huge, heavy soft-roader as is the trend (like large, unwieldy phones with ever higher specs), it's small, it has live axles, recirculating ball steering and poor safety ratings, the reviews are all quite average but linked by an over-riding theme, the reviewers, their partners and friends all seem to love the car despite its flaws, people are paying more attention to it than the Lamborghini's and Ferrari's the reviewers regularly rock up with, it's got something. The current Apple products are missing this X-factor, they're the same as everything else on the market, the innovation and user experience is now taking second place to box-ticking and profit margins (hence lack of supplied fast charger and adaptors for things they've chosen to remove).
Suzuki have cancelled taking orders in the UK for these now, they're over 12 months on the waiting list (their local garage uses our company land for advertising so we talk to them frequently), I drive a lovely Volvo S90 and I'm seriously considering one of these as my next car, even though I rarely need to go offroad. It's got something Apple has been missing for a while, character, cool-factor, not following the crowd but doing it's own thing.
Apologies for going a bit off-topic, I'm just trying to make a point but needed to explain my reasoning. Apple are coasting, afraid to upset shareholders so put prices up and keep expanding the range, all about the money rather than just making fresh, great product. Mistakes of the past repeating themselves and it's starting to show. No-one I know is excited to get a new iPhone or iPad any more.
High quality. Profitable. Low price. You can only pick 2.
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Today. That doesn’t always have to be the case. The iPhone originally needed to be plugged into a Mac or PC to activate.
I’d be worried about any iOS 12 updates . The throttling was introduced as a incremental release . Apple is going to be looking ways to make us upgrade .
It’s hard to say they are coasting. They have become far more vertically integrated, and jumped out to a massive lead in mobile processor design. Qualcomm’s latest chips are still slower than the one Apple put into last year’s iPhone X. They completely caught the market off guard when they switched to 64-bit in 2013. Apple Watch Series 4 is a massive improvement. I think iOS 13 will significantly improve the iPad (which certainly has the hardware). However, so much of Apple’s fortunes ride on the iPhone that a miss like last quarter’s is significant. The smartphone market had been stagnating for a while. It eventually caught up to Apple.I think Apple, like many big companies, is losing its way. Out of ideas aside from spec bumps, larger screens, removing things people liked (home button, headphone jack) and telling us they're "benefits". Camera bumps and contentious design details such as the "notch".
What happened to just making desirable product? Avoiding gimmicks and just making product that's "cool"?
I've had iPhones since the 3G, a couple of iPads and I have no desire for the X or to change my ageing SE for one (the SE was to replace a 6 which I never loved due to numerous ergonomic factors and which the battery started to die on after 2 year's use).
Recently I've noticed Suzuki are bucking the auto trend with their new Jimny, a car by which most accounts is complete crap - slow, uneconomical, unrefined and basic. It should suck by modern standards... But people love it. It's not a rounded-off, huge, heavy soft-roader as is the trend (like large, unwieldy phones with ever higher specs), it's small, it has live axles, recirculating ball steering and poor safety ratings, the reviews are all quite average but linked by an over-riding theme, the reviewers, their partners and friends all seem to love the car despite its flaws, people are paying more attention to it than the Lamborghini's and Ferrari's the reviewers regularly rock up with, it's got something. The current Apple products are missing this X-factor, they're the same as everything else on the market, the innovation and user experience is now taking second place to box-ticking and profit margins (hence lack of supplied fast charger and adaptors for things they've chosen to remove).
Suzuki have cancelled taking orders in the UK for these now, they're over 12 months on the waiting list (their local garage uses our company land for advertising so we talk to them frequently), I drive a lovely Volvo S90 and I'm seriously considering one of these as my next car, even though I rarely need to go offroad. It's got something Apple has been missing for a while, character, cool-factor, not following the crowd but doing it's own thing.
Apologies for going a bit off-topic, I'm just trying to make a point but needed to explain my reasoning. Apple are coasting, afraid to upset shareholders so put prices up and keep expanding the range, all about the money rather than just making fresh, great product. Mistakes of the past repeating themselves and it's starting to show. No-one I know is excited to get a new iPhone or iPad any more.
Apple was lead by someone with a vision for products and technology (SJ) and what its impact could be on the world.
That's quite unusual- most large publicly traded companies nowadays have finance graduates in the highest positions because the most important thing is to appease shareholders and move the large piles of cash around.
Right. I'm not saying that it is a bad thing, but that Apple may indeed employ the carrot AND the stick.
But that's kind of exactly my point, the car I pointed out shouldn't be desirable, its top speed is 90mph, it has a 1.5l 100bhp engine, nothing cutting edge - yet people are desperate to get hold of them. Processor speed is great and all that, but are Apple customers desperate for it? Did we even get told the specs of the original iPhone when it became the phenomena it was? My iPad 2 still has better battery life than my iPad air 2 for all the tech advancements, it's lower definition screen looks better, more natural and has a better coating that doesn't leave oily looking finger marks like the newer one. I was impressed with my iPad when I got it, it was a present I didn't even want but quickly grew to love it - the newer one seems less in many ways and I find that strange with 5 years extra development in it, I'm sure on paper it's far better though, I'm sure the specs are far better... In the real world that doesn't make it more desirable.
TCs focus is on the customer and that results in stock holder profitability. Peter Drucker 101.
Short term goals trumped long term stability. That's what they got with Tim Cook. Pump up the stock value as fast as possible by getting as large margins and high ASP as possible.
it's worked wonderes for short term growth, but doing so burns good will as consumers overall don't care about a companies profitability, or the 100 or so investors who make the bulk of the return. There have been a lot of case studies over history of companies that focus on maximizing current profits. They generally all end without long term success.
Sometimes it's worth making slightly less today, for long term stability of income.
For anyone who claims it's the CEO's job to maximize profits above all else. You're wrong. And this mentality is WRoNG.
it's the CFO's job to accountingly provide guidance on how to maximize profit. It's the CEO's job to injest that, and understand existing market conditions to formulate a plan to bring stability and long term growth and profitability to the company.
ANY CEO that behaves in "maximize profit above all else" is a bad CEO and should be suitable for lower level executive position at best.
Throttling? As opposed to your android phone just “dying”. The “throttling”(aka power management) at least gives you a choice.