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Apple Stock Forecasted to Rise as Lifetime iPhone Sales Reach 1 Billion
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I hope people aren't running out and buying apple shares based on this article. Apple shares may rebound...but Apple will most certainly report another quarter of declining iphone sales at their upcoming conference call for the previous quarter. So in all likelihood, Apple shares will go down. That would be a good time to buy. Not now. Apple shares should rebound after the iphone 7 comes out and sales improve slightly. Just my humble opinion.
Oh, really? The idea of "shareholder value" is no more than 40 years old, and the stock market in for example Sweden is somewhat 700 years old.
The idea of stock is for a company to "lend" money from shareholders and repay them with part of the company in terms of profit (dividends) and decision rights. This was the basic promise. What happened with SHV is something completely different and focused mostly on share price, which mostly is based on the promise of future profit (dividends).
Anyone that steps back and think about it sees the pyramid scheme, but as the stock market is the driving force of the liberal economy (and the current world order more or less), the return to the "original" stock market idea would mean disaster.
Really. What you are thinking of is bonds. Stock is derived from the company's equity (earnings). It is not a loan, and is never paid back. If a public company is bankrupted, bondholders are paid back, to the degree they can be, from the liquidated assets of the company. Stockholders typically get nothing because what they owned no longer exists.
Yes and no.
A stock is still a way to raise money for the company but not by putting it in debt as with bonds. At the IPO, the company raises money for expansion (or whatever they want to spend money on) and the people buying into the company initially (and now we're talking way back) assumed the return on investment would be better than putting their money somewhere else by "believing" in the company and that the future dividends that would be achieved by the earnings of the now expanded company would give them great return on investment.
A "simple" bond means that the return on investment would be negotiated at the time the bond was issued and any future profit would not be shared with the holder of the bond, only the interest agreed upon. This would be a safer investment but on the other hand not as (presumably) profitable as stock which holds the promise of future dividends.
The stock turned out to hold a second profitable part: to sell the stock on the free market and capitalize upon that. The promise when buying a stock on the free market, initially, was that you could still get a good return on investment as the company grew and dividends would be paid handsomely and the desire to own that profitable stock drove stock prices up. The dividends part never seemed to materialize though and what was left was to capitalize on the rise of the stock price, which then has become the driving force of the stock market.
A stock is still a way to raise money for the company but not by putting it in debt as with bonds. At the IPO, the company raises money for expansion (or whatever they want to spend money on) and the people buying into the company initially (and now we're talking way back) assumed the return on investment would be better than putting their money somewhere else by "believing" in the company and that the future dividends that would be achieved by the earnings of the now expanded company would give them great return on investment.
A "simple" bond means that the return on investment would be negotiated at the time the bond was issued and any future profit would not be shared with the holder of the bond, only the interest agreed upon. This would be a safer investment but on the other hand not as (presumably) profitable as stock which holds the promise of future dividends.
The stock turned out to hold a second profitable part: to sell the stock on the free market and capitalize upon that. The promise when buying a stock on the free market, initially, was that you could still get a good return on investment as the company grew and dividends would be paid handsomely and the desire to own that profitable stock drove stock prices up. The dividends part never seemed to materialize though and what was left was to capitalize on the rise of the stock price, which then has become the driving force of the stock market.
I agree. The problem is people correlate sales by quarter (market share) with active users (subscriber share). People say things like "85% of the smartphones in use around the world are Android" or which is not true.
You're both right
The main idea behind stock is generally an ownership stake in the company that pays back dividends from owners equity.
The price of stock is generally based on the future growth or expectations that profitability will be returned from ownership.
However short term trading looks to benefit from the fluctuations in prices, based on the market reaction to the forecasting.
Both are completely legitimate investment strategies.
One of the problems seen today with Apple, and it's relatively low price vs actual profitability is that Apple has stockpiled cash reserves while having a fairly low dividend payback to owners. Because of this, the stock will be more volatile because traders are still playing the "growth" game.
Apple needs to realize their large enough with enough cash to start giving a better rate of return on the stock. Or continue to grow. With forecasted decreased sales, and an already low return on dividends, long term ownership isn't super promising.
I received higher dividend paybacks this year on far smaller and less profitable companies. It makes longer term investing in AAPL not the best option.
would be cool if they had engraved the count into each phone they made and you got like a willy wonka tour or something for opening the billionth phone. wonder if they even keep track closely enough where they would know exactly which phone was their billionth sale? maybe at least give it to the person for free signed by the team.
Plenty of phones get broken, stolen, lost, etc. not every iPhone sold is in use and that's for a fact.
You're both right
The main idea behind stock is generally an ownership stake in the company that pays back dividends from owners equity.
The price of stock is generally based on the future growth or expectations that profitability will be returned from ownership.
However short term trading looks to benefit from the fluctuations in prices, based on the market reaction to the forecasting.
Both are completely legitimate investment strategies.
One of the problems seen today with Apple, and it's relatively low price vs actual profitability is that Apple has stockpiled cash reserves while having a fairly low dividend payback to owners. Because of this, the stock will be more volatile because traders are still playing the "growth" game.
Apple needs to realize their large enough with enough cash to start giving a better rate of return on the stock. Or continue to grow. With forecasted decreased sales, and an already low return on dividends, long term ownership isn't super promising.
I received higher dividend paybacks this year on far smaller and less profitable companies. It makes longer term investing in AAPL not the best option.
Well, no, because saying that stock is a "loan" is fundamentally incorrect. Companies do borrow money, but through the sale of debt, not stock. Stock raises capital, shares of which represents a fractional ownership in the company. That is why they are called shares. Short term traders are attempting to benefit from price fluctuations, which can be caused by anything or nothing; long term investors are investing in future earnings growth and care little about fluctuations.
In fact most publicly traded companies pay no dividends at all, and Apple did not pay one until quite recently. Apple's dividend is not a problem. In fact it is a benefit to long term investors with patient money, but they still expect the company's earnings and thus their stock price to grow (if they don't they should be investing elsewhere). Some stocks pay very high yields, because that is what they are designed to do. For example, REITs typically pay high yields because they throw off a constant stream of income from real estate portfolios, which are not intended to be expanded or turned over a great deal. They are bought by investors for their dividends and not for growth.
Actually analysts do call them out for that. That's the reason Alphabet was created so they could create a bunch of mini money making businesses under Alphabet. Just so happens Google is the still the main bread winner for Alphabet.
A chart with cumulated numbers always is... Since the bars can't ever shrink, only grow.
As for the the upcoming "best iPhone we have ever made" I am extremely underwhelmed so far... IF the rumors turn out to be accurate...
iPhone, or iOS, still prevails in the sense that it is still largely hassle-free.
But to say that android/Samsung is still "laggy", that the Edge screen is "useless"...that's a bit over the top. After trying in store, I'm convinced that the Galaxy Edge's screen and camera are much better than the iPhone's.
But to say that android/Samsung is still "laggy", that the Edge screen is "useless"...that's a bit over the top. After trying in store, I'm convinced that the Galaxy Edge's screen and camera are much better than the iPhone's.
Why does this upset you so much? It has no bearing in your life what so ever but you are constantly trying to dismiss it.. who cares, all the share figures are meaningless to the man in the street.
I am not sure the market for a rugged iPhone is large enough to consider creating a new product line. Plus, why not just keep your iPhone in an otter box or some other shockproof case?
You're right... market share is different than usage share. They are measuring two different things completely.
However... they might be more closely related than you think. There is truth to what those people are saying. Here's why:
Android has been between 78%-85% market share for the last few years.
The iPhone has been between 12%-21% market share for the last few years.
So over that length of time... usage share would eventually mirror market share. It has to.
If approximately 8 out of 10 smartphones sold every quarter over the last few years were Android phones... it only makes sense that approximately 8 out of 10 smartphones *in use* today would be Android phones. How could it be anything else?
Look at the chart below. Android and iOS market share percentages have essentially leveled off over the last few years. No more giant swings... just gentle peaks and valleys.
So we're at the point now where the percentage of current active devices would have to be approximately the same as the percentage of market share prior.
Those people might have overshot it by saying "85% of the smartphones in use around the world are Android"
But it's definitely at least 80%
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Stock isn't a "loan". you're right thats what Bonds are. Stock IS a purchase of ownership. And once IPO has completed, none of the money in day to day stock trading goes towards the company. Company only receives cash on initial purchase only.
And most growing cmopanies don't pay dividends, because they re-invest capital in growth. However, no large, multi-billion dollar corporation, doesn't pay dividends.
There's a point in every company, especially very large ones where the prospect of accelerated growth (like Apple's last decade) isn't feasible. and to maintain stock price growth or consistency, there has to be a return for investors. These stocks are generally considered "blue chip", These large companies with solid reputations keep their stock values because the return on investment to the shareholder is in lengevity of it's dividend payout, not the prospect of stock price increase.
I think Apple is currently in a state of flux. it doesn't know if it wants to be "blue chip" and transition to a reliable dividend yeilding stock with long term investors purchasing it, or still believes they can continue to grow enough to give promise of larger return in the future.
But the guy you're commenting with is also correct in his estimation that if you were to buy Apple stock for dividend payout, at $100 and only $2 dividends, the rate of return on this stock is only 2% / qtr. There are far greater investments than Apple stock that will offer greater return.
Take your pick as far as analysts are concerned. The majority iHater crowd on MacRumors will of course go for the negative reports and dismiss the positive reports. Those who favor Apple will do the opposite. Unfortunately analysts rarely lose their jobs for being wrong and they have been wrong about Apple for the last decade. So we'll see.
The real question isn't why am I dismissing it, but why people would feel the need to constantly lie about Android subscriber share?
And it's not meaningless to developers, accessory makers, websites, online shopping stores or anyone who has to decide if they should invest time & money in a platform. Maybe it doesn't affect YOU, but don't assume it's not important to others.
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You're right... market share is different than usage share. They are measuring two different things completely.
However... they might be more closely related than you think. There is truth to what those people are saying. Here's why:
Android has been between 78%-85% market share for the last few years.
The iPhone has been between 12%-21% market share for the last few years.
So over that length of time... usage share would eventually mirror market share. It has to.
If approximately 8 out of 10 smartphones sold every quarter over the last few years were Android phones... it only makes sense that approximately 8 out of 10 smartphones *in use* today would be Android phones. How could it be anything else?
Look at the chart below. Android and iOS market share percentages have essentially leveled off over the last few years. No more giant swings... just gentle peaks and valleys.
So we're at the point now where the percentage of current active devices would have to be approximately the same as the percentage of market share prior.
Those people might have overshot it by saying "85% of the smartphones in use around the world are Android"
But it's definitely at least 80%
The idea that sales should translate to usage is completely wrong. The majority of Android phones sold around the world are low-end junk devices. Apple only sells high-end phones. You can't claim that people buying $50-100 phones are going to keep them for as long as someone buying a $700 iPhone. There's a multi-billion dollar repair industry built around the iPhone/iPad. There's also a very healthy resale market for used devices. Apple also makes iOS updates available for iOS devices for several years after they were new. In short, iPhones are the types of devices that are kept in service for a very long time. $50-100 phones are simply tossed and replaced with another. In other words, they are disposable.
Another area is to look at is all the other metrics where iOS dominates:
- App Store revenues are 4x higher than Google Play per user than Android (same for last 2 years).
- Online shopping is 5x the revenue on iOS vs Android (been this way for 3 years running).
- Digital content sales (music, movies and the like) were 6x higher on iOS than Android (last time I saw numbers for this was 2 years ago).
These numbers simply don't add up if iOS were to only have 15% of the subscriber share in the world. Surely if Android had 5x the users as iOS worldwide we shouldn't see iOS dominating these categories.
So at risk of repeating myself, considering you are such an Apple fan person, who does the android market share matter SO MUCH to YOU?
I use both and am involved in developing for both (though iOS gets preferred treatment, for obvious reasons).