Just look at the company’s historic success with the iPhone and you can tell that we are indeed living in strange times! So far Apple has taken down Nokia and left Motorola, HTC and Samsung gasping for air. The profits have not stopped flowing to Cupertino. Apple has reported $42.3 billion in net income so far for the first three quarters of this fiscal year. That’s more than the company’s profits for all of 2012.
I’ve said this before, but no company that reports a profit in the billions of dollars should be worried about doom and gloom. It’s based on what Wall Street predicts, which seems flawed to me.
It gotta be some sort of “the bigger they are the harder they fall” mentality on Wall Street. They’re just waiting for Apple to fall and none of them want to be the one to say “Buy Apple!” when it does.
Jim, when someone as powerful and as absolutely well respected as you says..”Apple Music is a nightmare and I’m done with it.” Thats a more sever blow than some moronic investment idiot talking iPad numbers. I’m not questioning the fact that you hate AppleMusic, and your honesty is always refreshing, but I’d bet your opinion had something to do with the stock tanking too! Obviously this is just my opinion and I have nothing but respect for you. But, when You talk Sir, and people listen.
I think there may be more to it than that. Remember that most analysts have never fully understood Apple’s stated business goals, which fly in the face of conventional short-term-profit thinking. Many of them have never stopped trying to compare Apple to other businesses they thought it should resemble more, but which have fallen far short of Apple’s success.
Just a bit of perspective here….. Amazon surprised Wall Street by posting $92M in profit for the quarter. In after hours trading the stock surged about 17% or about $39B in market cap.
It would take over 400 $92M-profit quarters to return that increased investment in Amazon (or about 105 years).
Overall, this puts the market cap of Amazon at $265B (give or take). That means you need over 2800 $92M-profit quarters to return the total investment in Amazon (or about 720 years worth).
Wall Street makes no sense. People are not investing in companies they are betting on whether or not the analysts are correct about how well each company did.
If Apple did $50B in profit per year (which is about where they are at), it would only take Apple 15 years to earn its market cap (i.e.: if you bought the whole company today you would make back your investment in less than 15 years — far less than 720 years). Also, Apple has been turning a profit for investors and paying dividends — Amazon has only turned about $10B of TOTAL profit in its entire existence. Apple did that this quarter and is only worth about three times what Amazon is worth.
On top of all that, Apple has about $200B of cash in the bank which should be subtracted from its market cap for all these calculations.
Basic math people. Basic math.
Bah. I paraphrase other people’s stuff. 😉
I was also thinking “doom and gloom” on analysts’ views of the iPad a few months ago (http://q10a1.blogspot.com/2015/04/tablet-doom-and-gloom.html). I don’t think the iPad’s sales performance is properly understood and that its declining sales are, oddly, a sign of its success. Not sales success, obviously, but success in meeting its intended purpose.
It’s based on what Wall Street predicts, which seems flawed to me.
Not only is it flawed, manipulative nonsense, the latest round oif numbers Apple “missed” were revised a week before the earnings. A fact that no actual financial blog seems willing to report.
The way I see it is that Wall Street is to real business (e.g., Apple) as Fantasy Football is to the National Football League. They have a tenuous connection in one direction. Wall Street is a place where people gamble on stock prices. Apple doesn’t really seem to pay any attention to it’s stock price, at least to the point where you can say they change their behavior to affect the stock price (other than being careful not to say things that can cause a stock panic).
I’m not “in the market” but it seems like Apple stock price rises just before new product(s) announcement, quarterly earnings announcement, etc. Once the product(s) or the quarterly earnings are actually announced, the stock goes down. It seems people buy on rumor and sell on reality, but that may just be profit taking on the part of Wall Street.
The point is, don’t try to make sense of it. It’s an alternate universe where they play by rules we may not understand. As long as Apple keeps producing great products in their categories, that’s all that should matter to those of us not of the Wall Street persuasion.
The unconventional wisdom (if you go by the Street) is to focus on your business and make sure that is a narrow as possible focus … this means saying no to some – or even many things (that might actually be good).
This is why Apple is an Anti Feature company. Apple will release no feature (or product) before its time. They do get this wrong every so often, like with Apple Maps (they aint bad now) or Apple Music (is this still a big bad of hurt?). But they are also pretty smart too – for say mobile Flash, DRM’d music and Blu-Ray.
Apple is also very lean – employee and engineer wise… which is a pitty, since I would love to see OS X Server back and actually support, LDAP and OD would be nice too. Some even lament at the lack of OS X support – I mean 10.10 – WTF was that?
Yes, Amazon’s valuation is nutz and Wall Street is getting impatient with Bezos. Bezos seems like like pie in the sky projects: Fire phone, HBO/movie/network channel?, drones?
Drones could really pay off for service a delivery of certain products, though Amazon, like most companies has no clue on software – user facing software that is.
the iPad is almost a full computer. They have a big screen… they were critizied as being, “just a BIG iphone” when released. With a BT KB and a real pointing device – the iPad sales could really take off… but I think they have a much longer life cycle – as my iPad 3 is still pretty good on iOS 7.