They’ve kind of tapped out the phone market imo. Unless a new product came along, growth was going to slow. So Apple went from 1 trillion market cap to 675 billion. Is it really a surprise, though? Was the market honestly that shocked? Normal people of normal means (ex-Bay Area) weren’t going to blindly dump one thousand dollars on a new phone. I mean, I guess good for them for pushing the limit— they didn’t leave any potential revenue on the table for shareholders (as any good corporate steward would do: it is, after all, their obligation to return value to shareholders).
Ultimately, though, things generally can’t just keep growing forever indefinitely.
- Glassdoor 2019kI think AAPL will go back up in 2019 and still be the first trillion dollar company to hit among FAANGM
- New / ProductFreemasonmoreThe iphone has seen no major improvements since the iphone 4 (with facetime). Everything after that was bells and whistles and nobody seemed to care or notice. Apple doesnt work without Steve.
- Bank of America / OthertSWv17The resurgence of Apple will probably take the entirety of 2019, but the fact is that aside from the iPhone shipping going down, they have solid Financials.
1st Example: App Store + iTunes based spending -- it's been growing steadily in the last 5 years and this revenue stream should continue to grow as all they gotta do is take like 0.05% more cut off the stuff they sell vu these streams and revenue goes up!
2nd Example: They are sitting on a shockingly big pile of cash, so it implies they actually have the $$ muscle to buy some big players if they truly want to and change the game
- Glu Mobile PQSK63Example one is horrible as recent news of netflix's iOS app goes around the iTune payment system so apple do not get the 30% cut. It is likely more companies will looking to do this in 2019.
Example 2 is illogical. They been sitting on that cash forever. If they wanted to change the game, they could've done it 5+ years ago. I cannot recall any huge ground breaking moves in the recent years from apple.
For Apple, reduce in # of phone they sell = reducing many channels of revenue since iPhone is gateway to iTune, Apple pay, Apple music, etc. The investors are not concerned about loss in profit from hardware, but the loss in all those future revenue. This is why the market took a dump on them.Jan 42
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- Well how long until the market sees a substantially new project? The best we’ve seen is watches, which is what, a single billion dollar market? The newer ideas haven’t been as profitable as the established business.
I don’t see 5 billion apple watches floating around. What else will they sell people, beyond phones that people buy less frequently? Where’s the growth? I don’t see it.
I do agree they are a highly secretive organization.
- Facebook hiring was up 50% of headcount last year and I’m not seeing anything revolutionary there. Headcount doesn’t necessarily imply there’s a new secret sauce in the mix at Apple (though I agree it *could*). We could try and glean something from the hiring stats, but then our interpretation of that data is based on our own bias. Though I’m happy people that don’t have my outlook are replying to the thread — I want people to change my view and show me things I’m not otherwise seeing.
- Jobs had the right magic for aapl. Tim cook is a wizard as well, but his magic lies in operations/supply chain. He's easily the best executive in the world by far in that regard. That's what aapl needed 10 years ago up until now when demand for iPhone soared. Look at aapls gross margin as hardware company, 38% wtf. Most software companies can't get that kind of margin. No normal executive could accomplish that.
However, he's not the same type of magician as jobs.
- What? This is the guy kicked out of his own company, makes Pixar(super success) and took back what was rightfully his. The wrong leadership creates a biggggg difference. You can't just stick a Pepsi exec and hope it works out(Tim cook is much much better than sculley). The execs don't need to come up with the right ideas, they need to listen and choose the right ones, and drive the product.
- I agree, but if you look at all of their executive team, most of which is super talented and worked with Jobs for years, you already have a very strong team to make the right product decisions. And as much as Tim is an ops guy, he has been around there for a while and I’m sure has strong intuition and sense for what could work and what not. Plus, a lot of what they need to do is entering new markets, where I’m sure Cook can do an awesome job.
- For sure, I agree. The question is how the world will change after the smartphone, and whether companies can adapt. iPhone obviously isn't only product but it drives apples revenue just like advertising drives googs. Goog will have same question to answer(adapting to world where digital advertising isn't as powerful) soon. Hope it works out best for both :-), but you never know for sure.
- Everyone will have to update their phones when 5G comes out so expect another frenzy when that happens.
The stock is an absolute steal right now with a P/E ratio of 12. Compare that to Google (40) Microsoft (42) Amazon (88) Netflix (106)
- P/E relative to other tech companies is a good observation, but quite frankly I don’t see the growth to justify a much higher P/E ratio for Apple.
To me it says, the market doesn’t see more than 12 years of earnings at the current price.
At least with something like the pie high Netflix PE, investors are signaling that the real earnings are yet to come. And with time, Netflix’s PE ratio will decline as E increases.
In other words, the money’s already been made at Apple.
- They don't report separate earnings but you don't just add them up lol. Adding them up implies investors are willing to pay $2000 for goog(which isn't the case).
If anything you would weighted average them(based on ratio of class a to class c stock). https://www.investopedia.com/articles/investing/040215/what-you-need-know-about-googles-pe-ratio.aspJan 52
- Microsoft Big PunYou straight up monday morning quarterbacking bro.
Warren Buffet didnt see this coming either.
- My lower middle class roots gave me a gut feeling they lost their upper hand. People like apple, and they are willing to pay a premium, but there’s a limit to how much premium you can charge. Especially as others have mentioned, they charge more but deliver less. Diminishing improvements with each new generation.
- I find that talking point disingenuous since China isn’t friendly to American tech companies. They never really had a shot there. While it’s true chinas growth is slowing, and that will impact the meager sales they had, the Chinese government wouldn’t allow them to become a major player in the smartphone space.
- Warren buffetts track record with tech is not good. Aapl was a reasonable buy, but he bought them at a pretty high point. You also know he invested in ibm not too long ago lol. He is a super smart patient guy, and someone I admire, but he probably knows as much as Congress(from the hearings) about tech lol
- New asdf1234!I think they've topped out unless they can find the next big thing. Animojis were their biggest innovation in the past couple of years and that's saying something...
- People say this every year, but Apple still has room for growth. The main hits this quarter are from the Chinese market. Chinese GDP growth numbers are likely half of what the Chinese government is stating whereas the US economy is still robust (look at the latest job and wage growth numbers). I think Apple is undervalued right now.
- They have a 200b dollar moat. They can easily expand into new areas. I think the stock is a steal.
- Apple fu manchuHow is this correction drastically different than previous corrections in 2015 and 2012? All of those happened for similar reasons of Demand and growth being tapped out and yadda yadda yadda.
Sure there’s a different factors now like a trade war which penalizes hardware companies the most and a general softening in the global economy. But I’m not really buying the excuse that Apple is going the way of Microsoft and Ballmer’s lost decade. It’s far too early to tell at this point.