Re: pathetically dependent?
Nobody - almost nobody - buys an iPad to do WORK on. It's a toy, a gadget, a contraption, a device, a gimmick, a knicknack.
You want to do some work? Quit reading The Register and get on with it.
I was allowed to write this piece because in November I wrote to our glorious editor after a London Quant's Group seminar to say that the price of Apple shares would tank sooner rather than later. As you all know, that’s just what happened - from just shy of $800 to the mid $400s. The reason I don’t make all that much money …
Not exclusively but I definitely work on my iPad.
I even did an honest hour of good work on an iPhone recently, waiting for my computer to get fixed. I organized all the Pivotal stories for one of our projects using the Pivotal app for iOS. Pivotal for iOS is much better than the web version too.... e.g. it's better to use on an iPad (not so much iPhone because of the small screen)
BEG PARDON? You won't believe how much work you can get done on a tablet. Smaller, lighter, instant-on... perhaps you don't get work done on it, but I and many creatives do. With the right tools, sketching, editing, building maps, writing theses, updating docs whilst on the road are a real pleasure on them.
And by the way, that goes for *any* tablet, not just iPad. Nexus 10 and Galaxy Tab are just as good at it.
BEG PARDON? You won't believe how much work you can get done on a tablet. Smaller, lighter, instant-on... perhaps you don't get work done on it, but I and many creatives do. With the right tools, sketching, editing, building maps, writing theses, updating docs whilst on the road are a real pleasure on them.
Depends what you're doing, naturally. I know artists that love having a tablet to doodle on. I'm a programmer. For me, tablets aren't particularly useful unless you turn them into a laptop, in which case....might as well carry a laptop.
And I do! It's a Macbook, too.
Runs Linux. :-D
"Meanwhile, back in reality, there's a difference between an iPad and a thing you can actually do some fucking work on."
Not everyone is a drone .NET (java or whatever) coder. I bet assembly line fitters cannot use them for anything useful either. For many people, work can be accomplished on a tablet very, very effectively compared to the alternatives (pen & paper).
Broaden your mind and outlook beyond your incredibly tiny space. Oh sorry, you don't have one to broaden, do you?
"I suspect you know that MS is also pathetically dependent on Windows and Office. MS has a greater PE number than Apple, but I know in my mind which has the brighter foreseeable future."
Dependent on software that runs on 90%+ of the world's computers, despite everything its competitors including Apple and the DOJ could throw at it.
MS sells despite the fact everyone hates them, many people buy Apple because they are fashionable, and as we can see by the way Apple is bleeding market share fashions change.
That's why MS has a higher PE.
"As I said earlier, having a nice office helps you attract and retain good staff, but that wears off pretty quickly. The fact is that it makes senior management feel good. Have you ever bought an IBM xServer because Hursley Park has nice sunken gardens?"
The fact is that the Apple employees I've known were intensely proud of working for Apple. Pride can come from working in a great looking building, and remember that Apple try to "impute" - everything is done for a reason, not just the standard executive bullshit.
Don't judge how Apple behaves in the same way as Oracle, HP or Dell do, they just don't operate the same way. To suggest it is so is convenient for the purposes of this piece, nothing more.
There are many reasons why having a cash pile is a bad idea but there becomes a point when even the most capatilistic countries won't let you grow out anymore. Take Google for example; because they make tons of money they've got to do something with it but every time they branch out into non core fields everyone gets bent out of shape. They know the pitfalls of sitting on too much money but get in trouble for trying to spend it...
I decided years ago that small specialty companies can put stupid amounts of money in your pocket & the company coffers but you get to fly under the radar of regulators and the whiny folk who hate it when anyone/company does are distracted by hating on Big Firm (x).
Shouldn't be to speculate in buying and selling the shares, but invest in the company and get a dividend from the profit related to your share of ownership.
Apple don't pay dividends, nor issue new share capital so the only point of buying Apple shares is to speculate. They might as well be Tulip bulbs.
Apple are also hurting the the US economy as their iShinies suck cash out of circulation to feed their Dragon Hoard and off shore suppliers.
They are obnoxious. They spend more on lawyers, patents and market image than R&D or innovation. Jonathan Ives has even admitted the design styles are copied from Braun/Dieter Rams. The last worthwhile things they did was investing in ARM (for Newton) and Ditching OS9 for BSD based OS X.
It's all smoke and mirrors marketing and egotism.
danny does have a point, Apple does pay a dividend.
*looks it up*
Seems to be 2.65 USD/share-quarter, which given the current price, means a yield of 2.28%. If dividends are how you intend to make money, there are definitely better options the Apple stock (at least at the moment).
With one exception, this is not at all true.
The exception is buying the shares, when the are issued, from the company itself. If you do that, the company has your cash, you are an investor. For the rest of the lifetime of those shares, the purchase price goes to the seller, which is nothing whatsoever to do with the company named on them.
"They are obnoxious. They spend more on lawyers, patents and market image than R&D or innovation. Jonathan Ives has even admitted the design styles are copied from Braun/Dieter Rams. The last worthwhile things they did was investing in ARM (for Newton) and Ditching OS9 for BSD based OS X."
Behold the iEadon.
Too right, as someone who's staring at a "reduction in force" I just had to order $1.5 Million in equipment that's just going to sit around gathering dust because of the "if we don't spend it well get a cut in next years budget" approach to capital expenditure
But does it matter ? Or does it matter at this time ?
Share price is only significant in a specific case : if you -as a company - need dosh to either keep your company afloat or wish to attract capital for product developement : in both cases if you wish to bring new funds into the company. it does not matter if a share bought foor 700$ by a private investor is now being sold for 400$. This money was not in the company's coffers to start with, and is not returning to roost now.
As far as I can determine Apple is still sitting on a very large pile of filthy lurce : they are able to fullfill their business commitments AND have sufficient funds to develop products with which they can increase their value once more.
This does not have any bearing on the fact that these new products will be succesful : we will have to see what they come up with. A number of investors may be very unhappy at this point, but to Apple themselves it does not matter an iota. They'll only start worrying if they have to go looking for money outside the company.
The attribution of the phrase "Be nice to people on the way up, you may need them on the way down" may be in doubt, but it's value is not. Apple has not been nice to its customers on the way up.
And by customers I don't mean consumers. Consumers are the people who buy phones singly. Customers are those who buy in bulk, the retailers, wholesalers and principally the mobile phone operators.
If there was a theme at Mobile World Congress it was how much the operators hate Apple (and Google in the merging markets), how the operators feel that the Over The Top players have stolen their lunch money.
Ever since AT&T's Ralph de la Vega sat down with Steve Jobs and did a deal which gave the iPhone a clear run at the market the mobile industry has been pouring money into the pockets of Apple and the industry has had enough.
Their solution - Firefox - is not a good one but that won't stop the operators from doing whatever they can to move consumers onto something which isn't Apple, even if it has to be Google, and I see a rosy future for Windowsphone.
When I worked for Motorola, and we were making rubbish phones - a decade ago - there was some sympathy and support from our customers because we'd made money for them in the past. They still ranged our products and maintained a good business relationship with us.
Apple will get no such favours. The operators are itching to drop iPhones from their portfolios and at the first hint of consumers moving to the next new shiny thing they will.
Galaxy S4 anyone?
In the meantime expect lots of new marginal new products from Apple - the first sign of trying too hard will be when they start doing lots of fruity colours.
Simon
It's starting already. T-Mobile US is finally ranging the iPhone, but at the same time has dropped ALL handset subsidies - you want an iOS phone, you pay Apple's inflated retail price, or pay a higher monthly tariff (rental + credit repayment for the handset). This is novel for the US, where typically you pay the same monthly regardless of phone, and all phones are subsidised down to the same low price.
Exposing the US customer to the real cost of their phone exposes Apple's biggest weakness in the market: value for money. Yes, an iPhone is better value to a customer than, say, a Galaxy S3 if both are $150 (and the monthly tariff is the same), but when you remove the unequal subsidies, and the Samsung is $350 to the Apple's $650, you really need to be a fan of the brand to buy the iPhone.
Under this model, The operators will still get the high-spending iPhone customers, but those customers won't change their iPhone for the next model every time their contract expires; now that they have to pay the full price, there's no incentive for them to do so. That's bad news for Apple: they need that operator-subsidised handset churn.
Verizon and AT&T are holding back for now, but they do want to move to the same model as TMobile, and the markets know it.
I think this is the major reason why Apple's shares have tanked. Nothing to do with Maps, or a mediocre iPhone 5. Just simple business: their biggest money tap (the US operators) is in serious danger of being turned off.
with a 150 Billion in reserves , apple can afford to do lots of bet the company stuff . Whats annoying the likes of you , is that the idiots that would like to have all that money to spend on coke and booze, while trying to sell all western companies to the chinese can tget their grubby mitts on it.
The apple share price is decided by whats people think its worth, Apple however makes money faster than the US can print it, when they start making losses come and talk about it!
Paris just for the hell of it !
Einhorn is right in that Apple should pay out huge whacks of that money in dividends.
However, much of that cash pile is currently held offshore and would have to pay 35% US corporate income tax and then the recipients of the divvies would pay 15% income tax on it again.
Given the tax situation it's not actually quite so clear that Apple should hand it all out. Even though the reasons given above mean that they should.......
The Apple price rode so high because of the near religious fever around Jobs and the iPhone/Pad. When Jobs died Apple stuff was already moving from "must sell kidney to own" to "its a nice shiney maybe i will get the next one"
The stock price was rocketing before then as everyone could not shut up about how wonderful Apple were at every single thing (not just on their products, from the way most IT people i met spoke, you would think every single piece of technology from the 60's to today was created by apple). Now after all those years of hype the stock (and people's expectations) are adjusting back down to a more sensible level.
See also: Every single dotcom company between 1998-2001. Some died, some survived and the ones that did had their stock price stay much lower then the bubble high
What people ignore is the sales are still doing very well - iPad sales were up around 50% from the year before - in a global recession by a single company with 2 main models (Mini and 10" versions). 50% up compared to the previous 12 months.
Plus look around - whenever I see someone using an iPad (and they are making their way into work and education) it's almost always an iPad. I know people who have Android tablets - most bought them as they were cheaper and many have never bought an app or any music whereas all the people I know with iPads actually buy media, apps and 'use' their devices much more fully.
Apple are generating a huge amount of cash and have a very low PE ratio - compare it to Google, Amazon (haha) and Microsoft - they have cash reserves worth around 1/3 of the company's market cap making them an even better investment.
If I had 10k to invest today into Apple or Samsung it would definitely go AAPL - Samsung will face much more competition from the likes of HTC, Huawei, Motorola, ZTE etc. than Apple.
Plus everyone assumes AAPL do not have new products in the wings - they make some fantastic products that people are willing to pay for - Macbook Air, Macbook Pro Retina, iMacs, iPads, iPhones and have a huge and loyal installed base.
"they make some fantastic products that people are willing to pay for - Macbook Air, Macbook Pro Retina, iMacs, iPads, iPhones and have a huge and loyal installed base."
20+ quarters of uninterrupted growth in laptop sales, or some such statistic. And the Tablets while cannibalizing it a bit, did not really slow things down as much as the pundits thought.
The idea that Apple is a one trick pony is broken, no matter how many anal-ists announce it
"Apple is thus going to be forced into more “bet the company” launches. It can easily survive an iWatch failure, but to deliver high percentage growth it will need to bet a high percentage of the firm. "
The art of portfolio management is to have a number of projects of differing size and risk. This helps avoid the military dilemma of repeatedly betting on all-out-wins, until your army gets hammered.
Even then, given Apple's size, it may not be possible to find one project big enough to force them to bet the whole company's fortunes.
"every new phone now is basically the same one with a few new features".
Couldn't agree more. I spent an hour or two at the weekend, considering changing my phone. I've an iPhone 4 at present, bought more or less at launch (perhaps a month or two afterwards). I looked at an iPhone 5 and also at 4 or 5 high end Droids and even a BlackBerry Z10.
Innovations I just don't need:
- Voice control of any flavour
- pocket busting screen
- Eye control/hover
I came home empty handed because, frankly, nothing I saw had enough extra going for them than my existing handset to justify the price. So what would I upgrade for? Sorry to be boring but longer standard battery life *from a single battery* and improved radio performance. Sadly they don't seem to be even on the list of "innovations".
You're right that it may not be possible to find a *good* investment big enough, but the point I'm pushing is that *some* investment can always be found and that the perceived need to find the big new thing may mess with Apple big time.
The fact is that to make a big difference to a business, the proportion of it you have to bet is about the same.
That can lead Apple to over bet. Rather than gamble 250 million on the iWatch (or whatever) having more cash means it is tempting to go heavier on the marketing spend and past the point that is optimal. going to 350 million.
If it's sluggish, then having more cash leads you to throwing good money after bad, or trying to change the market because it is "wrong".
Recall that Sony occupied a similar niche to Apple, having lots of up market electronics that sold well. But even though it pretty much invented video recorders, its market share was dismal even though its technology was better, people wanted VHS not Betamax.
So Sony bought some big film studios and music companies which sucked money and management time.
Even if the new project fails