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To Beat the Law of Large Numbers, Apple Must Expand Its Product Line
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The fallacy is that you think that there is a fixed value to all gold. For example: all the gold in the world is worth $1000. So if I add good to the supply, the individual units must be worth less. But that is not how it works.
If all of the world's gold does not fill the world's demand for gold, discovering gold will NOT decrease the value of gold. Even if the PRICE of gold drops, the total reserve value will probably remain greater.
Hunter gatherers really weren't at risk from starvation, they were healthier and stronger on average than us and didn't find it difficult to hunt (if you look at how much time they put in every day). Also they didn't just eat meat and they kept moving around so they never used up all the food.
They still had comedy, love, happiness, music etc. and it gave them as much satisfaction as we get today.
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Okay, we'll that's what they taught me at school, genuinely, maybe I'm just misguided and actually capitalism is brilliant and can work forever.
Yeah that's probably it.
The problem with those losers is that they've been saying it, as you mention, for years. When the eventual stumble does finally happen they will be all over the tech forums crowing "I told you so" and taking credit for their "predictions."
Yes, but
1) It's a given Apple's growth rate will slow down between now and 2022. That's not a news story. No company in the history of the world has ever had double digit consecutive growth for two decades. It's a big "duh," and I'm sure NYT readers already understood that reality. No breaking news here, just a waste of ink and energy. Nothing, except maybe invasive vines, grows fast forever.
2) What's really absurd is using 2011 dollars as a baseline for a 2022 valuation as if France and Brazil will be stuck in a growth vacuum and their 2022 GDP will be unchanged from 2011's in 2011 dollars.
As I noted, Apple in 2012 is worth as much as the entire GDP of the US in 1960. A pack of M&Ms was .25 in 1975. But other than cocktail party conversation how useful is that info? Brazil and France's GDP is going to continue growing too so it's only relevant if you keep the dollars constant.
Where did you go to school? The idea that capitalism CAN'T work forever is a major tenant of Socialism. And did that school also teach you the joys of being a hunter-gatherer? As a child, we were homeless and lived on the beach. We never went without food, never had to worry about going to work. Booze was always plentiful. Life was simpler. But as a productive, wealthier capitalist adult, my life is much more satisfying.
The post you quoted suggested that you're conflating satisfaction with wealth, and then you do it again in your reply... And about the second part of your post (not quoted here), don't get all snide just because you were apparently misguided.
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This is pretty much what I was thinking...
Britain
it's a socialist democracy.
Are you happier now than when you were a child?
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If wealth doesn't make you happier then what's the point in it
Britain
it's a socialist democracy.
Are you happier now than when you were a child?
Absolutely. I was never happier than the first time I held my daughter in my arms.
The only issue here is market saturation. But this is not that big an issue yet for Apple. The iPod has seen this. Everyone who wants an iPod already has one. So their sales are declining.
But for the Mac and iPad/iPhone there is still millions of people room left for growth. So market saturation won't happen for those anytime soon. Product self cannibalisation is an issue but Apple has dodged that bullet by making the new product in these cases either as profitable or more profitable then the old one.
But for the Mac and iPad/iPhone there is still millions of people room left for growth. So market saturation won't happen for those anytime soon. Product self cannibalisation is an issue but Apple has dodged that bullet by making the new product in these cases either as profitable or more profitable then the old one.
Well we have more stuff than they did so I can see why it looks like that way, but relatively we aren't any wealthier overall.
Also, I actually would rather be a hunter-gatherer, according to research their diet was better, they worked far less than us (hunted for about 2 hours a day), they weren't as stressed, their problems were real and tangible.
They had dogs and spent more time with their family and friends outdoors than anyone can admit to in 2012, they were small communities that could live of nature and not have to farm anything. They were happier people!
The statement "more wealth makes us happier" can be debated.
The statement "the world is wealthier (higher standard of living) than in hunter-gatherer times" is not controversial in the slightest. And that doesn't mean the top 1%. Do you disagree?
You're in luck -- you can choose to be a hunter gatherer right now! But I think you're imagining being retired in a nice place in the countryside, and working a few hours a day. It doesn't work like that.
Well, I agree that the article is basically saying nothing. But I disagree with the second part. Since the economies of France and Brazil are not growing lately, and shrinking even, their GDP might be even less than today in 2022.
Yes. But I don't have to worry about her dying of starvation. The chance of her living to hold her own daughter in her arms is greater today than ever before. THAT is the benefit of wealth.
+1
But tell that to Apple fanboys who think iPhone will dominate smartphone market once and for all like iPod did with MP3-players. All the article says is: "Yes, Apple seems to be a nice pick if you are into investing. But at the end of the day the tremendous skyrocketing is over. Prepare for a long and healthy but slow growth!"
Disagreed heavily. You read about the worlwide recession, didn't you? And even if we argued about GDP-growth rates you have to admit, that except for China they are usually below 5%. And talking about M&Ms you are bringing inflation into the calculation. Inflation has nothing to do with GDP.
Bottom line: If you look at the graphs you can see that dominant iPad and iPod-sales
a) don't translate into relatively more computer hardware purchases from Apple (which is mainly due to the stagnant hardware Apple is offering)
b) absolutely don't translate into more iTunes/AppStore sales (which is a major bummer given the hype of how successful the AppStore ought to be)
c) don't seem to translate into more iAd-revenue (as the graph shows the group "Other" not growing at all - which is also a major bummer as "mobile advertising" was last year's buzzword and some people believed Apple to grow like a major ad distribution player close to Google)
So actually an invest into Apple stock may generate some healthy growth, but for long time stock holders there is a critical point right now on which borderline to place that Stopp-loss-orders.
And still, they don't get it...
"People think focus means saying yes to the thing you've got to focus on, but that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying 'no' to 1,000 things." Steve Jobs
When Jobs returned to Apple, he cut the product line down from 350 to 10.
"People think focus means saying yes to the thing you've got to focus on, but that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying 'no' to 1,000 things." Steve Jobs
When Jobs returned to Apple, he cut the product line down from 350 to 10.
Well, I agree that the article is basically saying nothing. But I disagree with the second part. Since the economies of France and Brazil are not growing lately, and shrinking even, their GDP might be even less than today in 2022.
Well the U.S GDP is in the same boat right now, but it's not forever. Same w/ Brazil. It was a high flier before the global slowdown and should bounce back nicely. France, historically is steady as she goes, but yes, the Eurozone is in a precarious financial spot right now. If France's GDP growth rate gets any lower it will be out of business and that will have a huge ripple effect worldwide and touch every industrialized nation as well as multinationals like Apple. So again, it's all relative.
The iPad is not overpriced. It starts at $500, which is a price that no other company could even touch when it was released in 2010. I don't understand why "specs" would have anything to do with price in this situation. The iPad 2 and iPhone 4S are some of the fastest mobile devices around. Would the iPad 2 be worth more if it had a quad-core processor? No.
Apple isn't trying to turn your Mac into an iPad. They are trying to simplify certain aspects of the computer. Has the Mac lost any key features in Mountain Lion in Apple's attempt to "make it an iPad". No, in fact, it has gained features.
If Apple stopped growing at the current fantasy rate and "only" grew 3-5% a year from now on that would be just fine with me. It would still be an incredibly healthy company.
"the world has a finite amount of money, and for a billion dollars to be in reserve, then that billion dollars has to not be available to anyone else, say, people who would need it more than Apple needs it."
Absolute, total nonsense.
If the world indeed had a "finite amount of money", we would still be at the stone-age level. Because all the "money" that existed then, would be all that existed now. Of course, that isn't true. Where did the additional wealth come from?
"you can't have rich without poor, you can't have capitalist America without immense eastern poverty."
More nonsense.
It is capitalism which has provided the only solid "path OUT OF poverty". Without capitalism, which CREATES wealth (again, this is why your first statement has no meaning), humans would still be groveling in the dust and mud.
Which provided "the path upwards" for the millions upon millions in China -- the "Great Leap Forward", or their embrace of capitalism in the 1990's?
Absolute, total nonsense.
If the world indeed had a "finite amount of money", we would still be at the stone-age level. Because all the "money" that existed then, would be all that existed now. Of course, that isn't true. Where did the additional wealth come from?
"you can't have rich without poor, you can't have capitalist America without immense eastern poverty."
More nonsense.
It is capitalism which has provided the only solid "path OUT OF poverty". Without capitalism, which CREATES wealth (again, this is why your first statement has no meaning), humans would still be groveling in the dust and mud.
Which provided "the path upwards" for the millions upon millions in China -- the "Great Leap Forward", or their embrace of capitalism in the 1990's?
Trouble is Wall Street has latched onto the idea of this continued pace. When the growth does slow there will be a bloodbath. But eventually the stock price will stabilize and Apple will join the ranks of "normal" giant corporations.
Actually, Apple's P/E ratio (Price divided by Earnings) is less than 15. That is on par with a company with little expectancy of growth. If Apple doesn't grow one bit, and you buy Apple shares today, then Apple's profit would be close to 7% of the share price annually. Most investors can live with that. And that is assuming zero growth from now on.
True, but then a stable stock price without a dividend is not an attractive investment -- see the history of Intel and Microsoft. Normal giant corporations pay out a dividend.
I think the point of the article was that Apple likely will have to start paying out a dividend to continue to attract investors for the next decade, or use that cash hoard to expand into new product areas.
Certainly just sitting on the money will not hurt Apple but if growth slows of the existing product lineup, the stock will become irrelevant. Before that is dismissed as unimportant, stock growth is also used to reward/motivate employees.