I feel that Apple's roots lie not in any one product, but rather, their underlying philosophy to make great products which can change lives for the better. I agree with your premise but not your conclusion.
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Bullish Analyst Says Apple Has Potential to Become Trillion Dollar Company Within 18 Months
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I feel that Apple's roots lie not in any one product, but rather, their underlying philosophy to make great products which can change lives for the better. I agree with your premise but not your conclusion.
Apple Watch with an interconnected ecosystem of medical devices. There's your next big platform right there - wearables.
No doubt Macs still have their place, but I think many people here vastly overestimate their importance in the greater scheme of things. No doubt the critics here would love to see Apple crash and burn, perhaps to serve as some sort of divine karma for daring to neglect their beloved Mac line.
These people will be disappointed as Apple continues its ascent all the way to the top.
Tim Cook has always been a business man, and not a tech visionary. The unfortunate truth is that replacing a tech visionary with another tech visionary was always going to be hard to do.
Suggest you chart these three stocks together over the last year. Your takeaway will be that AAPL is by far the better performer. A lag in the year before that? To be expected, since Apple just got through posting several consecutive quarters of declining earnings and revenue. Investors hate that. You will also see that all of these stocks sell off periodically. None of this matters much if you are an investor, not a trader.
As far as AMZN is concerned, this is a bit of special case, in that they aggressively plow profits back into growth and by so doing, are raising the revenue line rapidly. That investors do like. Eventually they will be expected to convert more of that revenue growth into earnings, but so long as revenue continues to rocket, investors will remain patient. They missed on revenue just last quarter and the stock was hammered. And so it goes.
Anyway, guessing who gets to a trillion dollar market cap first is little more than a party game. The company that makes it first doesn't win anything.
Not to be rude, but... you understand what marketing is, right? Steve Jobs was the absolute master of shaping narrative. Think Different was a masterwork in this regard. Of course he said they weren't in it for the money. That doesn't mean they didn't/don't have ideals beyond that. But come on.
I'm an investor and I trust in Apple. 10-20 new products a year? Are you insane? That's never been Apple's approach. Apple is secretly working on many products, but only one of them will reach market. The Apple Watch is a new product and it has largely been successful. The issue is that critics like you believe that in order for Apple to stay relevant, they need a new product as successful as the iPhone. I don't think that's true and the market agrees. Apple has expanded their non iPhone products/services quite a bit and their non iPhone revenue is larger than all of Google's revenue.
Apple has the stickiest ecosystems out there and with every passing year it becomes stronger and stronger. At this time, I don't see any other tech company overtaking Apple's business. Apple will stay profitable for a very long time.
Further, we need to put Jobs' remarks about wealth in perspective. Of the two Steves, he was clearly the one who understood the power of profit from the very start. If it wasn't for his money-making ambitions, Apple would never have graduated from the garage.
Exactly. People seem to prefer to focus on the times he said and did things they liked and agreed with and just ignore the mountain of evidence that contradicted it. Reminds me of Trump supporters.
You know, it's the first trillion that's the hardest to get.
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or Hillary supporters, or Obama supporters, or athletic suppor... wait... strike that last one.
Without turning this into a political discussion needlessly, it's worth keeping in mind how contrary Steve Jobs could be. He could believe firmly in something one day, then just as firmly in the opposite thing the next. As for Cook, he is going to come under constant criticism from Steve fans whether he makes more money for Apple or whether he makes less. Either way, in their minds, his flaw will always be not being Steve.
Typical response on a pro-apple forum. Sure, I've got an Apple watch now and sure, it has great potential but Apple has to show us that potential. So far they've only had twice a year band releases. In fact, one could argue that Tim Cook's greatest impact thus far has been watch bands.
One could argue that...but one would be incredibly uninformed and shortsighted if one were to argue that.
You hang out on an Apple forum and criticize people's positive feelings about the future of Apple? Time to reevaluate your life...
Analysts predict the future earnings and stock prices every day of the week. The only difference at the moment is an otherwise meaningless "goal" - $1 trillion in market capitalization; a less than 25% increase in current share price.
Market capitalization is a very simple and simplistic number - the number of shares in investor hands, multiplied by the price of those shares.
The prediction boils down to three questions:
1. Will share price increase by 25%?
2. How long will it take for share price to rise 25%?
3. Will Apple's stock buybacks reduce the number of shares outstanding, therefore requiring a greater than 25% rise in share price to reach $1 trillion?
Yawn!
This is little different than looking forward to your next birthday. When "the big day" finally arrives, you're just one day older. It doesn't begin to take on meaning until you compare your life today with what it was 10, 20, 30 years ago.
Yeah, I own Apple shares, it'd be cool if the predictions turn out to be true. But that's (pardon the expression) trumped by a much greater truth: The future is unpredictable.
So let's compare Apple to where it was 10, 20, 30 years ago. One billion Apple computing devices in use today (iPhone, iPad, Watch, Apple TV, and Mac combined). 30 years ago? Apple sold about 4 million Macs annually. The only other computing device sold was Newton, which barely made a blip. They now sell about that many Macs quarterly. If we assume an average useful life of 5 years for a PC, then there were around 20 million Apple computers in use. 30 years later, there are 50 times as many.
As to the inevitable chorus of Mac-focused complaints/demands, it's besides the point. Conventional PCs are becoming less important with every passing year. There will never be a time when every worker and every member of a household will have a PC, and it never came close to happening. It's a totally unreasonable to expect that every person on earth (over the age of 5 or 10) would carry a laptop wherever they go. However, a remarkably huge number already do carry a computer in their pockets, a computer that is far more non-tech-user-friendly than any PC..
Apple changed its fortunes by following a dream that goes back to the foundations of the company - putting the power of computers into everybody's hands. The conventional PC form factor and design philosophy could only take that dream so far. Anyone who believes Apple needs to stick to its roots... that's exactly what they are doing. It's only a matter of how you define "roots."
Market capitalization is a very simple and simplistic number - the number of shares in investor hands, multiplied by the price of those shares.
The prediction boils down to three questions:
1. Will share price increase by 25%?
2. How long will it take for share price to rise 25%?
3. Will Apple's stock buybacks reduce the number of shares outstanding, therefore requiring a greater than 25% rise in share price to reach $1 trillion?
Yawn!
This is little different than looking forward to your next birthday. When "the big day" finally arrives, you're just one day older. It doesn't begin to take on meaning until you compare your life today with what it was 10, 20, 30 years ago.
Yeah, I own Apple shares, it'd be cool if the predictions turn out to be true. But that's (pardon the expression) trumped by a much greater truth: The future is unpredictable.
So let's compare Apple to where it was 10, 20, 30 years ago. One billion Apple computing devices in use today (iPhone, iPad, Watch, Apple TV, and Mac combined). 30 years ago? Apple sold about 4 million Macs annually. The only other computing device sold was Newton, which barely made a blip. They now sell about that many Macs quarterly. If we assume an average useful life of 5 years for a PC, then there were around 20 million Apple computers in use. 30 years later, there are 50 times as many.
As to the inevitable chorus of Mac-focused complaints/demands, it's besides the point. Conventional PCs are becoming less important with every passing year. There will never be a time when every worker and every member of a household will have a PC, and it never came close to happening. It's a totally unreasonable to expect that every person on earth (over the age of 5 or 10) would carry a laptop wherever they go. However, a remarkably huge number already do carry a computer in their pockets, a computer that is far more non-tech-user-friendly than any PC..
Apple changed its fortunes by following a dream that goes back to the foundations of the company - putting the power of computers into everybody's hands. The conventional PC form factor and design philosophy could only take that dream so far. Anyone who believes Apple needs to stick to its roots... that's exactly what they are doing. It's only a matter of how you define "roots."
"4 year obsolescence" is too much an exaggeration. "7 year" is more truthful. And, a lot of them can stay usable for several years after that 7 years, though without official support venue.
The analyst report refers to valuations being constant. That being the assumption, it also means earnings increasing by 25% over the coming 12-18 months. With a potentially major iPhone upgrade cycle coming, the growth of income from services, and possibly a new product category, it's easy to see how this outcome is being modeled.
One minor point I'd make on (3): the impact of buybacks on the market cap is pretty much a wash because in theory at least they support the share price proportionally to the amount of stock bought back. Again assuming constant valuations.
Hmmm...Not that I am an expert but I think the other manufacturers know how to make machines with tight tolerances. There are plenty of ultrabooks in the market that are thinner and lighter than the Macbook Pros. But when it comes to making a similar machine with quad core processors, most of them shy away from making a machine with the same tolerances. I think this is because they prefer functionality over form. Quad cores in a thin, sealed body will undoubtedly lead to thermal issues in the laptop's lifespan. The number of repair programs Apple has for its Pros affected by video issues is a decent indicator of this. Apple will probably get the formula right one day ... their cooling system keeps improving, processors keep getting more efficient but until then, consumers pay the heavy cost.
To me, Apple's Pro laptops are all Macbook Airs in different sizes. I dont have an issue with that per se cause there is a market for that. There is also a market for a thicker Macbook Pro...one that is not shy about its weight and size...Proud to be big and beautiful
Razer Blades have upgradable SSDs. But perhaps, user upgrades might violate warranty. This was the case even with Apple when they were producing those upgradable Pros back in the day.
And the blades hit high temps cause the graphic cards in them are much more powerful and power hungry. So in that sense, it is not an Apples to Apples comparision. I mentioned the Razers to highlight the build tolerances we were speaking of earlier. Because Apple did not put in a 1060 in their laptops, they will beat the Razer when it comes to temps.
I'm not sure if it is a limited crowd, but I live in NYC and I work in Manhattan. It is certainly an unusual crowd as compared to the rest of the US. But you've heard of business being run out of NYC and the crowd I run in has lots of money going through it. I have been working in a unique environment for the last month or two. My company moved out of our old offices (building in midtown Manhattan owned by our parent company) into a WeWorks (temp rental space with communal aspects, but very corporate) while our new office space was built out. Since the WeWorks has lots of glass walls I see lots of companies in a relatively small space. Macs are vastly more represented than PCs. Since I've been doing a bit of my own companies IT, I've been experiencing the cost associated with using PCs versus what I suspect would have been the costs if we used Macs.
Here is an issue we had setting up our new offices. When people use a smartphone every day and even their retired Mom uses a smartphone, the fact that we need four separate specialists doing individual setup appointments so that we can print in our new offices is kind of crazy. Apple would never consider that acceptable. And since every executive in the company is familiar with Macs and iPhones, Apple and smartphone level simplicity is the expectation that all the decision makers have. That is the reality that we are experiencing setting up our new offices. Folks want their PC to works as easily and consistently as their smartphone. PCs are being judged on that standard. So all OS updates need to be free. Everything needs to connect to WiFi and probably Bluetooth, because that is what our phones do. If it doesn't, then it is a fail. We can work around the fails, but it is a fail if it doesn't.
I know PCs are still huge. But the performance is really a problem. You can look at the cost of the hardware and see a savings. But if PC support from a tech guy consultant is $100 an hour, it doesn't take much work to eat significantly into that hardware cost savings.
but my life doesn't revolve around MacRumors so I don't have to reevaluate anythingOne could argue that...but one would be incredibly uninformed and shortsighted if one were to argue that.
You hang out on an Apple forum and criticize people's positive feelings about the future of Apple? Time to reevaluate your life...
Plus you started the picking on forum members. I simply disagreed with the bullish analyst.
Thanks for your sincere concern about my sanity, I am considered to be quite well, generally.
"It has never been Apple's approach" => No, and Apple has never been the size it currently has, and never been so big and slow either.
It has become a sleeping mammoth, performing well on merely a single product, but average on the rest of its product line, where it has merely lamenting on. Given its unlimited resources, huge R&D investments and gigantic size, its performance is subpar at best when it comes to new products (AppleWatch, MBP, Airpods/Dental-floss box...)
Compare with car manufacturers that are a fraction of its size but launching 5, 10 or more new models (of far more complexity) year over year.
AppleWatch is getting better but not nearly at the level of their success-stories.
Wealth and financial leadership are imminent, but also have become their greatest enemy right now.
It has forced them into a defensive/incumbent position and stalled ambition to make new, revolutionary products. Thus alienated them from their original mission, which is exactly what SJ warned about.
Look at the product catalogue - how stationary it has become.
Look at the latest iPad, a 4/5 year old design that denies every form of inspiration/innovation.
It is supposed to attack the mid-segment in the tablet market (did you say "never been Apple's approach" ?), but its limited price cut shows that Apple doesn't know or want to compete there.
Disruptive innovation (launching new products, initially cannibalizing existing products) has become the opposite of what they want: to keep marketshare, to remain leader, to not disturb current business. Move up the premium laddder, rebranding existing stuff as Pro (adding some gimmicks to justify price increases)
AppleWatch is subject to a worrisome refreshing/mehpgrading cycle already...
So insane budgets, massive R&D, but hardly real incentives to use them. Thousands of patents, but mostly defensive, keeping them in reserve to prevent the competion to innovate. Introducing very few new products and designs.
So looking at financial metrics, you are right to say they perform well (not to say superbly) currently.
But on other metrics (that may or may not interest you), sadly NOT.
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It's never been Apple's approach to release 10-20 new products a year. Big and slow? Find me another company as large as Apple and as nimble.
Apple's "average" non iPhone product is larger than Google. What do you make of that?
Apple doesn't need another iPhone like success to stay relevant or profitable. They're so big now that a similar growth is very difficult. What product do you think in the future will overtake the iPhone? Keeping in mind that Apple's hardware and services are always advancing, I just don't see one.
