Bambooman, I agree with your analysis and would add that a large part of Apple margins come at the cost of its suppliers. This is not a good business strategy for the long term. Eventually Chinese producers will figure out that they need to raise their bids in order to make a profit on Apple jobs. So add that as a large cost that will increase in future years.
Also, labor costs in developing countries are not stable. As workers become more educated in western economics, and as job availability increases, the workers demand more pay. I remember when I was working for a software company that was outsourcing part of its workforce to India. That area of India was seeing a rapid rise in job availability. We started to see a big employee retention problem right away. Often a new hire would simply fail to show up for work as they had gotten a better job offer between the time they accepted our offer and the first day of work.
What If Apple Weren't A Tech Stock? [View article]
"... this company should be rationally trading at a PE ratio somewhere between 20 to 25 times earnings." There's really no need to read the article further than this. Even a PE of 20 is getting irrational! No company can keep growing indefinitely at a compounded growth rate of 20 percent or more. That Apple has done so until it is the largest company by market cap in the entire market is a tribute to its success, but sadly, it is simply not sustainable. If you don't believe me, figure out for yourself how long it would take for Apple to consume the entire GDP of the US at this rate. Since people need to eat as well, Apple can't simply assume that a never-ending supply of consumers with a never-ending supply of ready cash for luxury goods will continue to exist in the future. Exponential growth curves always end. Period. They are not sustainable.
Expect Apple To Surge In Coming Months [View article]
Good point Victor. I don't hear anybody saying "I'm short a shopping week this year so I'm going to have to trim down my gift-giving list." It just doesn't work that way. People short on time might cut corners by giving a gift certificate, (or the universal gift certificate--cash) but they still give. And people usually do redeem those gift certificates (and even cash) for real goods.
People might cut back on the costlier gifts if they don't have enough cash and credit though. Kids might be getting less expensive tablets than the Apple brand if the budget doesn't stretch that far.
Expect Apple To Surge In Coming Months [View article]
I agree. Apple has grown so big so fast that maintaining the same percentages going forward is almost impossible, therefore it must slow down and it is bound to disappoint no matter how wonderful the results objectively are. We've already seen a couple of quarters of that, and you're looking at the result in a stock price down at least 10% from its high.
It just so happens that now is also the time when the Steve Jobs product pipeline is emptying out. Can Apple keep coming up with home run hits without Jobs? Only time will tell, but the iPad mini product and launch weren't really good omens. The product didn't innovate, just put the same app platform in a smaller form factor to better match the competition. The launch itself was a yawner, not the "this product will save the world, and the whales, too" kind of launch that Jobs would have done.
6 Business Friendly Features In iOS 6 And What They Say About The New 'Surface' Threat [View article]
The last few paragraphs are a non sequitur for the rest of the article. You suddenly switch from talking about Apple's chances to make inroads into the enterprise with its mobile devices to Microsoft and Surface. The mobile enterprise field is not at all locked down, and it won't necessarily resolve to Apple versus Microsoft. Remember that Apple is not the volume leader in mobile devices, and neither is Microsoft.
Microsoft's advantage in having Office is less important than you might think. If you're a heavy Office user you want a bigger screen and a real keyboard and mouse that you can't get on a mobile device.
Apple Is Sandbagging More Than You Think [View article]
I read recently that Apple already accounted for 1 percent of our GDP and if it kept growing at the same rate would equal 8 percent in 5 years (if I recall correctly). That is what is meant by big numbers... numbers too big to keep going the way they are going. Apple has to slow down simply because it is too difficult to keep growing at the same rate.
If that weren't enough, Steve Jobs is no longer there to be the idea man. You can't keep people that excited about the next iPad mini. It's just a change of form factor from the old iPad not-so-mini. Plus Steve Jobs had a way of making each launch momentously exciting in a way that nobody else could. No matter how good Tim Cook is, he can't make people believe that the next iPad will save the world, or even the whales.
Most of your readers are using their comments to express their loyalty to Apple and insist that you're wrong. I might as well take the contrarian approach and say that I, too, worry that Tim Cook doesn't have the vision that Steve Jobs had. The pipeline should be just about empty by now, so the next few product launches will be most telling for the future of Apple. If they continue to wow us with totally new products, then fine. But IMHO they are too big to continue growing at the same pace no matter how good a CEO Tim Cook is.
Apple Investors Should Be Wary Of The Next Shoe To Drop [View article]
This article reacted poorly to what is generally being viewed as good decision making by Tim Cook. He got rid of Forstall, who everyone agrees is a cause of significant friction, and he got rid of Browett, who is such an embarrassment that he barely rated a mention at all at the end of the announcement. No "thank you", and no severance contract like Forstall got.
The article also misses the highly significant fact that Tim Cook apologized for the maps app. By doing so he recognized the high level of perfection customers expect from Apple, recognized that they had fallen short in this instance, and most importantly, he put someone on the job who is fully capable of correcting it.
That said, I think a bit of caution is due in regard to Apple simply because it is now too big to keep growing at its former pace. As one person pointed out, it represents 1 percent of GDP all by itself, and in order to keep growing at its present rate for 5 years (IIRC) it would be 8 percent.
Thoughts On Apple's Ousting Of Forstall And Browett: Asserting Cook's Authority, Solidifying Jobs' Vision [View article]
By focusing on the personalities getting fired, we are losing part of the message here. Tim Cook felt that the maps problems were serious enough to warrant a letter of apology. That's big, people. It shows he recognizes the level of perfection that customers expect from Apple, recognizes that they fell short in this instance, and intends to do better in the future. And he's put the right person in charge to follow through. Jobs probably wouldn't have apologized, but that was one of his less endearing qualities.
More than the usual caution is called for at this point. Not only is Apple stock flirting with its 200 day average, and notching up a second quarter of sliding earnings, but the latest new product announcement was a comparative yawner and no-brainer. Apple has yet to prove that it can truly "innovate" without Steve Jobs on the job. They are likely at the end of the pipeline that Steve left them with, so now they are on their own. Their next launch will be the telling one.
Why Apple Doesn't Care About Its Competition [View article]
You don't know Apple very well, yet you are criticizing the author who does. Be less assertive and more studious!
1) Apple has a significant counterfeiting problem throughout Asia and China in particular.
2) The author made the claim that Google does not have this problem with the Nexus 7.
3) The implication is that the Nexus 7 is not a highly prized product valuable enough to spend the time and effort to convincingly counterfeit, but more importantly, Apple products are.
Is this clear enough now, or do you need to be led by the hand to the office of a counterfeit vendor in China with a bitten apple logo on the window where you can witness for yourself counterfeit products with a bitten apple logo being sold?
Silly Patents: The Effect Of Apple's Rejected Patent Claims On The Samsung Lawsuit [View article]
Why would you think a ceramic bladed box cutter would be frivolous?
Patents should be restricted to hardware. We wouldn't be having all this litigation if software was unambiguously governed only by copyright law, as it should be.
It is counterproductive to society to allow patents on user interfaces. Imagine if someone had a patent on car break pedals or steering wheels, or even turn signal lever placement. You want your user interfaces as simple and obvious as possible. That means avoiding complex workarounds because someone already patented the most obvious approach. Yes, I know patents aren't supposed to be allowed for "obvious" inventions, but they are anyway. It ought to be in the law that user controls aren't patentable.
Just Sell Apple If You Are Nervous [View article]
Also, labor costs in developing countries are not stable. As workers become more educated in western economics, and as job availability increases, the workers demand more pay. I remember when I was working for a software company that was outsourcing part of its workforce to India. That area of India was seeing a rapid rise in job availability. We started to see a big employee retention problem right away. Often a new hire would simply fail to show up for work as they had gotten a better job offer between the time they accepted our offer and the first day of work.
Just Sell Apple If You Are Nervous [View article]
What If Apple Weren't A Tech Stock? [View article]
What If Apple Weren't A Tech Stock? [View article]
Expect Apple To Surge In Coming Months [View article]
People might cut back on the costlier gifts if they don't have enough cash and credit though. Kids might be getting less expensive tablets than the Apple brand if the budget doesn't stretch that far.
Expect Apple To Surge In Coming Months [View article]
It just so happens that now is also the time when the Steve Jobs product pipeline is emptying out. Can Apple keep coming up with home run hits without Jobs? Only time will tell, but the iPad mini product and launch weren't really good omens. The product didn't innovate, just put the same app platform in a smaller form factor to better match the competition. The launch itself was a yawner, not the "this product will save the world, and the whales, too" kind of launch that Jobs would have done.
6 Business Friendly Features In iOS 6 And What They Say About The New 'Surface' Threat [View article]
Microsoft's advantage in having Office is less important than you might think. If you're a heavy Office user you want a bigger screen and a real keyboard and mouse that you can't get on a mobile device.
Apple Is Sandbagging More Than You Think [View article]
If that weren't enough, Steve Jobs is no longer there to be the idea man. You can't keep people that excited about the next iPad mini. It's just a change of form factor from the old iPad not-so-mini. Plus Steve Jobs had a way of making each launch momentously exciting in a way that nobody else could. No matter how good Tim Cook is, he can't make people believe that the next iPad will save the world, or even the whales.
Cook's Recipe For Apple Crumble [View article]
Apple Investors Should Be Wary Of The Next Shoe To Drop [View article]
The article also misses the highly significant fact that Tim Cook apologized for the maps app. By doing so he recognized the high level of perfection customers expect from Apple, recognized that they had fallen short in this instance, and most importantly, he put someone on the job who is fully capable of correcting it.
That said, I think a bit of caution is due in regard to Apple simply because it is now too big to keep growing at its former pace. As one person pointed out, it represents 1 percent of GDP all by itself, and in order to keep growing at its present rate for 5 years (IIRC) it would be 8 percent.
Thoughts On Apple's Ousting Of Forstall And Browett: Asserting Cook's Authority, Solidifying Jobs' Vision [View article]
Thoughts On Apple's Ousting Of Forstall And Browett: Asserting Cook's Authority, Solidifying Jobs' Vision [View article]
Forstall at least merits a "thank you" from Cook and a one year consultancy contract. Browett gets a barely mentioned in the seventh paragraph.
Why Apple Is Still A 'Don't Buy' [View article]
Why Apple Doesn't Care About Its Competition [View article]
1) Apple has a significant counterfeiting problem throughout Asia and China in particular.
2) The author made the claim that Google does not have this problem with the Nexus 7.
3) The implication is that the Nexus 7 is not a highly prized product valuable enough to spend the time and effort to convincingly counterfeit, but more importantly, Apple products are.
Is this clear enough now, or do you need to be led by the hand to the office of a counterfeit vendor in China with a bitten apple logo on the window where you can witness for yourself counterfeit products with a bitten apple logo being sold?
Silly Patents: The Effect Of Apple's Rejected Patent Claims On The Samsung Lawsuit [View article]
Patents should be restricted to hardware. We wouldn't be having all this litigation if software was unambiguously governed only by copyright law, as it should be.
It is counterproductive to society to allow patents on user interfaces. Imagine if someone had a patent on car break pedals or steering wheels, or even turn signal lever placement. You want your user interfaces as simple and obvious as possible. That means avoiding complex workarounds because someone already patented the most obvious approach. Yes, I know patents aren't supposed to be allowed for "obvious" inventions, but they are anyway. It ought to be in the law that user controls aren't patentable.