Apple's Tim Cook: Fear not, worried investors, new product salvation is 'absolutely' on the way Apple cranked out its best quarter of iPhone and iPad sales to date, thanks to a strong 2013 holiday shopping period, but its projections for the opening three months of 2014 have investors nervous. As might be guessed, however, CEO Tim Cook says there's nothing to worry about, and that there are new products coming later this …
All the growth is now in the low end feature phone replacement market. Samsung reported a significant drop in sales for the quarter following the release of their flagship phone. Apple reported record sales this past quarter but the upcoming quarter (i.e. quarter following the release of their flagship) they expect flat growth.
Why are analysts surprised, did they think Apple was going to keep growing until they sold 7 billion iPhones every year?
So let's see - total revenues were $57.6bn and AHEAD of Wall Street expectations - Apple's own forecast was $55-58bn (so at the top end) and earnings of $14.50 were 40 cents AHEAD of expectations.
They sold a record number of iPhones and have just signed a major deal with China Mobile - the largest telco in the world as well as smaller deals elsewhere.
Yet somehow this is suddenly bad news - reckon I could do with some of that sort of news.
Indeed, Sir:- bad news of that sort pertaining to my earnings/bank account would be most welcome.
Analysts are the bad news in this scenario; I cannot understand how they manage to persuade someone to part with oodles of money to them, giving in return 'guesses' that are about as reasoned and accurate as those coming from a seaside fortune-teller.
As regards Tim Cook:-
'"We're working on things that you see that we're shipping today, but we're [also] working on things that are not," Cook told analysts and reporters'
In other words, Apple is continuing to operate just as it always has by not announcing work in progress or future projects. Why the hell should they happily inform their competitors what's in the pipeline?
If a few cretinous analysts end up with egg on their faces, and some greedy speculators/gamblers get their fingers burned, who gives a damn?
Before all the anti-Apple brigade down vote this, I would sal that the foregoing applies to any technology company.
Perhaps a cull of analysts & speculators could be a new team sport?
...........the problem is that the markets (and the analysts in this instance) are driven by fear and greed rather than by intelligence, genuine analysis and a sense of proportion. Cupertino is not going to enjoy stratospheric capital gains forever? "Oh woe is us, the end of the world is nigh - sell, sell, sell I tell you, the sky is falling in."
Apple is highly unlikely to stop making serious money (although they will be getting any of mine any time soon :P) but that is not enough for the stripey-shirted-brigade and the rest of their fellow sharks. Irrationallity and the aforementioned fear and greed - Masters of the Universe?
But Apple has P/E ratios that barely crack double digits, and are single digits if you factor out their cash.
Amazon, on the other hand, has had a triple digit P/E ratio forever, and despite reporting barely any earnings at all, since their sales keep growing the analysts give them a pass year after year and claim their inflated stock price is justified.
Agreed. Even when people get new smartphones, it's generally not because they're unhappy with their old one, it's because they like spending money on high priced contracts and don't really think too much.
Smartphones have definitely gone from a slightly painful and sluggish experience to one that's pretty universally fine for doing what the majority want to do.
So now it's like a toaster, or a kettle. Just another appliance.
That's why "wearables" are trying to be pushed now - watches, glasses, butt plugs, who knows - but I'm not sure any of these are going to stick, because frankly it's nice to have jettisoned the watch already (and all smart watches suffer from a problem: why do they exist?) - and do people really want to wear glasses when they don't have to?
I wonder if the last bit of your last sentence reveals the key revelation behind this whole Google Glass thing.
I agree, I don't think anyone wants to wear glasses unless they have to (or want to). But that is straw man argument.
For everyone who *has* to wear glasses - surely a good percentage of them will want to augment the sight-improving benefits with some Google-y cyber benefits? There is little reason not to, and in time the percentage will probably climb to near-100% in wealthy countries as costs fall, styling options widen, size and weight of the technology diminishes (as all these factors surely will - today, who on the average wage or above doesn't have a smart phone....hardly anyone).
And for those of us who do not need glasses, well having a pair of sunglasses that is Google-ised would be mighty handy when out and about on a bright day, when being a tourist, when snowboarding, sailing, etc.
'To that point, when one analyst asked Cook whether new product categories – not just new products – were still on track for release later this year, Cook was succinct in his answer. "Yes. Absolutely. No change," he said.'
I bet Samsung are salivating at the thought that they will have a new type of product 6 months after apple have released theirs, maybe apple will show them how to actually build a smart watch.
Mind you pebble have already done this :o
With the exception of Dick Tracy, who is still looking forward to strapping a shit phone to their wrist? That's the only new-ish product I can think of that could be in Apple's pipeline; unless they somehow have yet another market-changing product up their sleeve, Cook is just paying lipservice to the nutjobs who believe in unlimited growth.
quote: "With the exception of Dick Tracy, who is still looking forward to strapping a shit phone to their wrist?"
They aren't shit phones though; the intended function of a "smart watch" is a discreet remote Bluetooth display device to go with a Bluetooth audio device (aka headset). For the mooted iWatch (tbc) it would effectively be a way of checking who was calling, or what the notification was, without needing to take the phone out of your pocket / handbag / marsupial pouch to do so.
To that end if (when?) they announce an iWatch, I would expect it to have an accompanying headset for hands-free calling, or to expect the user to be wearing the Apple headphones (with mic) to use as a headset. Without hands-free talking the watch becomes far less useful as a remote display or control of the phone.
A friend has the Pebble, and while I wouldn't spend that much to buy one myself, I can see the use case. It's not something that 100% of existing iPhone owners would genuinely want though, so I suspect Apple are spending their time trying to work out what the killer features are to try and maximise the potential buyers.
A Tv set, with a screen, from Apple?? Would be doubtless supplied by Sharp, or Japandisplay, whichever display provider they have sourced, will be much better than a TV made by Sharp? Apple does not make any of the Apple displays on any Apple product. They don't 'make' anything, but instead source parts from different suppliers and source an assembler (foxconn) to put all those outsourced parts together, and load Apple software onboard.
But as always, the fanbois just assume the clouds part and down comes a shiny new product from the same apple tree where once under sat Adam&Eve
'when one analyst asked Cook whether new product categories – not just new products – were still on track for release later this year, Cook was succinct in his answer. "Yes. Absolutely. No change," he said.'
You see this worries me. Cook on the surface is cool. But he has allowed himself to be bounced into confirming there will be new product categories later this year, and he first indicated that last year. Apple are a product company and secretive to boot. So people can't see the next product and investors get jittery. Over the years Apple have faced continual predictions of their imminent demise. But Steve Jobs was ruthless about avoiding pre-announcing the next big thing because he understood, the way to avoid a Galaxy Gear type situation is to mature a new product and live with it for a bit and to be prepared, right up to the last minute, to cancel it if it is't good enough. All focus should be on building the right product, saying no to what doesn't work and releasing only when good and ready. It's ordinary companies who dance to the beat of market analyst demands who do ordinary things and have a tendency to fail with new product categories more than succeed.
Plus the mobile phone market is surely a once in a lifetime deal. To find another device almost everyone on the planet wants/needs, that costs what a smartphone costs and that gets promoted by massive cross subsidy from monthly subscriptions is surely a hard act to follow. It's not going to happen until we get glasses with a reality enhancing true HUD that look near as damnit *no different* to normal glasses or super effective and accurate computer / brain interface implants, or robot house cleaners that also happen look and can perform like Lisa Anne (or Charlie Hunnam, depending on your sex and what you're into). I don't expect too much tech-wise in 2014.
Well, houses might be cleaner, and sewers and public spaces and offices and... unemployment through the roof.
Lets hope it takes as long as expected so that redeployment can take place.
And, don't forget, there isn't an iCar (tm) yet so there is room for a better ubiquitous object to be produced.
Then the smartphone will truly be integrated into the car.
I still won't buy one though.
>Plus the mobile phone market is surely a once in a lifetime deal. To find another device almost everyone on the planet wants/needs, that costs what a smartphone costs and that gets promoted by massive cross subsidy from monthly subscriptions is surely a hard act to follow.
Healthcare products? Apple have already bought a hearing aid company, and health monitoring of our ever-ageing population is a justification for 'wearable' technology.
As noted in another Reg article today, healthcare is an area Sony is looking at.
Dipped to 43% market share. You say poor.
But that my business had such a poor market share.... Presumably at "only" 50% android makers are just barely treading water too?
It seems to be the same old problem, regardless of company, analysts and journos are always doom laden and expect actual results + 20% every quarter.
Dipping share in the US *is* poor, they make fantastic profit from the US operator system, which is currently becoming more like the European operator system.
Also, dipping when the sector size is increasing is poor, dipping when the population is increasing is poor.
Dipping is poor, because staying the same share would be poor.
As far as future returns are concerned at least.
Patently, having 43% of such a rich market should make anyone super-happy but it can all go pear-shaped so quickly - after all they were recently on the other side of that equation.
Seven dividend payments in the last 19 years. That'd give investors almost enough to buy a pen to write home about :)
Anyway, all I'm saying (remaining at risk of abuse from the weird downvoters) is that rightly or wrongly, investors only make money from: a) growth and b) dividends. Given the latter are pretty miserly, if the company won't grow then there's no point keeping the money in it, as it may have reached a local maximum. So that's why they ask.
P.S. EPS isn't what the investor gets, it's how much profit a company makes divided by the number of shares, so I'm not quite sure how that's relevant.
The dividend currently runs to about 2.5% of the share price. That's currently not bad for a bluechip stock. If you'd bought Apple shares 17 years ago they would have gained in value by about 13,000%, so they have switched from growth to paying a dividend, which is exactly what you said they should do.
Oh, and EPS DOES matter to investors, as it gives them a measure of how much their fraction of the company has appreciated in value (and, in theory at least, how much their shares have increased in price). Like buying gold or other commodity you only realise the value when you sell, but that doesn't stop people buying.
What happens in the BYOD world when you get to the office and discover you've left your "desktop" at home on the dresser? Or you drop it in a puddle waiting for the train or little Tarquin downloads a pile of virus-riddled porn onto your "desktop" the night before that big meeting?
Computing power today is cheap, data and connectivity are the expensive part of doing business these days. I can't see any benefits of a mobile device if it has to be docked to work well or at all in the office or workplace. Certainly a mobile device can be used away from the desk to keep it touch and do real work but docking it at a desk is pretty pointless if all it does then is replace two hundred quids worth of desktop PC or thin-client hardware. All the data should be on the company network, not locked up in a portable device and a cheap PC with GigE hardwired connectivity to the company servers (or the fabled cloudy-woudy thingy-wingy) is going to be a better option than trying to get a 4G signal in a typical office building.
> Next step is probably the additional capability to drop the mobile device into a dock and it becomes your desktop PC
There are two main reasons to want to do that: 1, access to files that are only on your mobole device, and 2, saving money by not duplicating processing hardware.
There are probably better (and more redundant) ways of synchronising files, and the cost of hardware required to do a good many tasks is very cheap these days.
I love the ascertain that the next Apple product will also be a big hit!
That is by no means guaranteed. It may be a total flop.
It depends on how much tech journalists actually know about it. Most know very little and make some wild comments. There is little wonder iWhatever became so big, ill-informed tech journos, "hipsters" [laughable] and apple marketing are crucial to making the next shiny shiny a hit.
(for example: Apple TV is a joke and most iWhatever owners don't even know it exists let alone want one)
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