i said it before and i will say it again..Apple is just not the same without steve jobs. tim cook is a good man, a smart man, and a good ceo but he is not steve jobs. apple ran a few hundred points on the anticipation of the Iphone 5, a great phone, i have one. that said, what is the next must have product? the TV ? its going to be tough to make deals with all the cable providers and what not but i guess it can be done eventually. today was the first time i actually saw an analyst lower apple estimates this much. after looking at the revised estimates, he only lowered his target to 700 ..that makes no sense and doesnt add up. i think he was trying to minimize the hit. I love everything about Apple but as a long term hold, its very scary at the moment because there is a lack of confidence. 2 years ago no matter how much apple was hit, investors always fely confident in its long term trajectory( upward). now that confidence has now eroded its easy to shake investors out of their position on any negative news. it can be a great trading stock no doubt but a long term investment, i am not so sure until there is some significant support.
The stock is cheap if the upgrade cycle remains. They don't need to create any new hit products/markets for the stock to rally. They jsut gotta keep the same people who bought the iphone 4 to buy the iphone 5. Now if those people don't buy a iPhone 5 or if they buy an Android phone, things can be bad.
Apple makes an unprecedented 30%+ operating margin which I've never seen sustained in the consumer electronics sector to the extent that they have. They do this by selling their products at a huge mark up. They are able to do this because they have a great premium brand and loyal customers. However, this is an very fickle space and competition will eventually lead to commoditization. I imagine the greatest threat to Apple is not Samsung but rather a low cost producer who is willing to sell the same phone for $200 instead of $600. There are already companies in China who are selling a fairly compelling phone with equal or better specs than the iphone for 1/3 the price. The market will never pay a high multiple for non-recurring revenue streams on arguably unsustainable margins in such a competitive industry. I imagine a lot of naieve investors may get hurt buying aapl thinking about how cheap the multiple and how 'strong' they think the company is. The stock is rerating quickly at the first signs of weakneses. There are just too many examples of similar situations where companies have blown up. RIMM was another value trap that showed strong growth and had a strong brand before they blew up, and there are many other examples. No position in aapl.
People make too big a deal out of Jobs, I think. When you're running such a huge company and you already have such a good product in the iphone (some would argue that its already perfect), you just don't want to change it because you're afraid of taking risks and hurting something that's doing so well. That's why ever new version of the iPhone looks the same while competitors like Samsung are the ones taking risks and doing the innovating.
Laptops with touch are the new thing. Aple needs to get on board. Also, the Iphone has lost its position of best smartphone or at best share it at the moment.
"Apple makes an unprecedented 30%+ operating margin which I've never seen sustained in the consumer electronics sector to the extent that they have. They do this by selling their products at a huge mark up. They are able to do this because they have a great premium brand and loyal customers. " the reason they have such high margins is because of the Apple stores. without the stores, their margins take a big hit. the stock always went up because of the ANTICIPATION of a new product. where is that anticipation now coming from? i think thats what money managers are struggling with.
I own and IP5 and gave it to my wife. She has a IP4 issued by her employer (Uncle Sam). The upgrade cycle is simply too long when you have Samsung pumping out 5.5" diagonal screens. $700 won't be seen until after Obama's 2nd term.
You are missing the software - ios is exclusive to apple/iphone and plays a significant part. No matter how cheap & nicer the competition hardware is, they are still limited by android, nothing else can run ios.... rimm did not die because of price, they died because of software & poor ui (that's only good for corp users) Until another product comes along that has the software(and hardware) gap over the current ios/iphone, similar to what ios/iphone had over the blackberry/windows mobile when it was released, i will keep buying aapl. And before you say it, android is not it, not even close. Who else can innovate something significantly better over ios? microsoft? heh. Hardware in all honesty doesnt even matter anymore as we have gone pass the threshold, most dont give a shit quad core vs dual core. Or know/care the difference between A6 in iphone vs galaxy's quad core. A very small percentage care about the 0.8" screen size difference, that's about the only thing still matters a little on the hardware side.