Apple

[Grieve]

None of those are good arguments.

They are in the middle of the biggest buyback in corporate history, $60 billion, for up to 13% of their outstanding shares. Most of their cash is outside the US and can't be used for buybacks, dividends, or acquisitions. They don't have enough cash in the US to buyback more shares (or do a big acquisition) without borrowing more money, which would result in a downgrade of their credit rating.

Plus how many big acquisitions can you point to that worked out well for the acquirer? And who would they buy? Trying to merge two different cultures together is just going to be a distraction from their main focus. They continue to buy smaller companies - 15 of them in 2013 alone.

And a higher dividend isn't going do much for the share price.

Nope, this isn't something that needs to be artificially "fixed". It's just Wall Street anxiety between product launches. As soon as they have a big successful product launch, all this will be forgotten. Until then, it's just a case of having the balls to hang on through the fallow times.

[Breand]

I agree with you, just stating the ignorant investor's mentality. I think it is crazy the way the stock is punished. But its easy to say that when you own it.

[Vanraw]

I'll tell you what, being an Apple cultist isn't for the faint hearted.

Amazon announces another quarter of zero or negative profit? The stock shoots up another 10%!

Apple announces rev and EPS beating expectations (by 45 cents in the case of EPS), all time record of iPhones (51 million vs 47.8 last year), all time record of iPads (26 million vs 22.9 last year), 17% growth YoY in mac sales, and...the stock is down almost 6% after hours. Why? Because analysts had decided that the iPhone number should have been 55 million.

This happens every time, I should just learn to short before earnings.

This is standard stuff. The market is looking into the future and unless apple becomes innovated in something besides a new version of the same product, they will become a commodity. There is no forward looking view on apple that talks about any new revenue that is significant compared to the iphonepad sales. Nothing.

Google and amazon are both continuing to define and create market opportunities that MIGHT turn into something. Their potential market rhetoric is diversified. Apple has 1 thing at revenue levels that could have an impact. Iphonepad.....

This is what I have been saying all along. They are a single product company with nothing significant on the horizon.

[Jakensama]

But but but appleTV!

[Vanraw]

For the record, I would love it if Apple became innovated product oven. They are an American company. I would much rather see business go to Apple than Samsung.

[Jakensama]

Meh, they will all have their sweat shops in China regardless.

[Grieve]

Just to underline how dumb the "Apple has lots of money so they should buy someone" argument is...Google just sold Motorola to Lenovo for under $3b. Having bought it for $12.4b a couple of years ago. Not a great return on investment, especially since Motorola has had billions of losses in that time, and has lost every one of its court cases (it's patent portfolio was the main reason Google bought them).

So now a great American company is owned by a Chinese company - nice one, Google.

[Grieve]

Google and amazon are both continuing to define and create market opportunities that MIGHT turn into something. Their potential market rhetoric is diversified. Apple has 1 thing at revenue levels that could have an impact. Iphonepad......

Okay, except while it's true that Apple makes something like 70% of its profits from iPhone and iPad, Google makes more like 95% of its profits from ads.

So sure, IPhones could fall out of favor, but equally possible someone could take the ad/search market away from Google, just like Google took it away from Yahoo.

In fact I'd say it's more likely. People have 100s or 1000s of dollars invested in the Apple ecosystem (music, movies, apps), and they are unlikely to walk away from that. But it's very easy to change your search engine.

Anyway, we'll see. I suspect we'll see at least two new product categories from Apple this year. Let's see how they do.

[strife]

Google sells Motorola to Lenovo for 2.91 billion... Well that was quick, and it was a huge loss for Google

Link

[Slamz]

So now a great American company is owned by a Chinese company - nice one, Google.

What's wrong with that? Apple has been Chinese for years! They're so Chinese, they can't even use a lot of their cash because it's stuck overseas.

[Jakensama]

In fact I'd say it's more likely. People have 100s or 1000s of dollars invested in the Apple ecosystem (music, movies, apps), and they are unlikely to walk away from that. But it's very easy to change your search engine.

Between things like spotify and netflix, the value of already owned music and tv shows is becoming less and less relevant.

I havent listened to one of my mp3s in forever

[strife]

I havent listened to one of my mp3s in forever

One of your MP3's that you stole using Napster even, right?

[Grieve]

So now a great American company is owned by a Chinese company - nice one, Google.

What's wrong with that? Apple has been Chinese for years! They're so Chinese, they can't even use a lot of their cash because it's stuck overseas.

How exactly are they Chinese? What percentage of their workforce is Chinese? I'm guessing less than 1%

Are you saying that any company that offshores manufacturing is Chinese? I guess American companies are in pretty short supply, then.

[Grieve]

Between things like spotify and netflix, the value of already owned music and tv shows is becoming less and less relevant.

I havent listened to one of my mp3s in forever

I very rarely listen to MP3s. But I have hundreds if not thousands of dollars tied up in movies. And plenty in apps as well.

[Jakensama]

I havent listened to one of my mp3s in forever

One of your MP3's that you stole using Napster even, right?

Shit, I have stolen MP3s from when you used to have to get them from bootleg FTP sites... Napster only came out freshman year at college, which was good because it was the first time I had really fast internet.

But seriously, $9 a month for a vast majority of music out there and you can put stuff on your phone to listen to offline.. why would anyone buy music anymore unless they listen to very obscure things?

I very rarely listen to MP3s. But I have hundreds if not thousands of dollars tied up in movies. And plenty in apps as well.

Future is streaming. I bet at some point owning movies will be as pointless as owning tv shows and music is now. I'm not sure how you tie that much up in apps, most people use pretty basic stuff. I guess shitty iGames can add up, but thats why I have emulators (Although you can still buy the SNES games I emulate on Apple store... for $15 a piece.. a steal for a nearly 20 year old game!)

[Slamz]

Are you saying that any company that offshores manufacturing is Chinese? I guess American companies are in pretty short supply, then.

The point is you are calling out Google for selling an "American company", which primarily seems to manufacture things overseas, while supporting Apple, which seems to exclusively manufacture things overseas, when in fact neither of these companies would get a lot of PR traction by trying to tout themselves as "American businesses".

They are American companies in that they are headquartered here. When it comes to manufacturing, Toyota is more of an American company than Apple.

[Grieve]

Future is streaming. I bet at some point owning movies will be as pointless as owning tv shows and music is now.

I agree. I haven't bought DVDs or bluerays for years. But I do buy movies for streaming online, because a) I'm a movie fanatic, and I don't want to wait years for them to appear on netflix streaming (if they ever do), and b) I have four kids, and kids want to watch the same movies again...and again....and again. Try explaining to them they can't watch a movie any more because Netflix's rights expired.

Anyway, while Netflix and Hulu are decent for TV, they sucks balls for movies. I've bought a couple hundred from iTunes. You can often get great deals on them too - a lot of the movies (including recent ones) I've only paid out $8 for.

I'm not sure how you tie that much up in apps, most people use pretty basic stuff.

Again, you don't have kids. The iPad in particular has a lot of great educational apps and games, as well as interactive books.

[Grieve]

The point is you are calling out Google for selling an "American company", which primarily seems to manufacture things overseas, while supporting Apple, which seems to exclusively manufacture things overseas, when in fact neither of these companies would get a lot of PR traction by trying to tout themselves as "American businesses".

Apple employs over 80,000 people, most of them in the US, many of them very high paying engineering jobs. But arguably they enable over half a million jobs in the US (this is from a couple of years back):

http://www.forbes.com/sites/timworstall/...0-us-jobs/

Moreover, JP Morgan said the iPhone 5 release alone added half a percent to US GDP. So yes, I'd say they very much are an American company, and a massive help to employment and GDP.

And yes, they do manufacture in the US - the Mac Pro is made here.

They are American companies in that they are headquartered here. When it comes to manufacturing, Toyota is more of an American company than Apple.

Toyota has 30k us employees. And the profits from the cars they build here and sell go back to Japan. So, no.

[Jakensama]

Toyota has 30k us employees.

If you are going to stretch numbers that much above when you talk about nebulous jobs that apple "enables", then you also have to include everyone who works at a toyota dealership and maintenance sites too. Their website claims 365,000 jobs in the us.

And the profits from the cars they build here and sell go back to Japan. So, no.

Yeah, none of Apple's profits go offshore..

[Jakensama]

Google sells Motorola to Lenovo for 2.91 billion... Well that was quick, and it was a huge loss for Google

Link

They are still keeping the vast majority of the patents (15000 out of 17000), which presumably was why they bought it in the first place... And presumably some of those patents could have been a threat to google at some point (and others I would imagine have residual income streams).

Plus the $12.5 billion price tag was misleading. <!-- m --><a class="postlink" href="http://www.forbes.com/sites/timworstall/2012/12/22/did-motorola-mobility-only-cost-google-1-5-billion/">http://www.forbes.com/sites/timworstall ... 5-billion/</a><!-- m -->

[Vanraw]

Google sells Motorola to Lenovo for 2.91 billion... Well that was quick, and it was a huge loss for Google

Link

They are still keeping the vast majority of the patents (15000 out of 17000), which presumably was why they bought it in the first place... And presumably some of those patents could have been a threat to google at some point (and others I would imagine have residual income streams).

Plus the $12.5 billion price tag was misleading. <!-- m --><a class="postlink" href="http://www.forbes.com/sites/timworstall/2012/12/22/did-motorola-mobility-only-cost-google-1-5-billion/">http://www.forbes.com/sites/timworstall ... 5-billion/</a><!-- m -->

Right. This was the point of the purchase. I don't know if any of Motorola tech went into making the nexus tablets better. I suspect they did. But the real benefit is the IP law protection schemes have to go through today.

Google and amazon are both continuing to define and create market opportunities that MIGHT turn into something. Their potential market rhetoric is diversified. Apple has 1 thing at revenue levels that could have an impact. Iphonepad......

Okay, except while it's true that Apple makes something like 70% of its profits from iPhone and iPad, Google makes more like 95% of its profits from ads.

So sure, IPhones could fall out of favor, but equally possible someone could take the ad/search market away from Google, just like Google took it away from Yahoo.

In fact I'd say it's more likely. People have 100s or 1000s of dollars invested in the Apple ecosystem (music, movies, apps), and they are unlikely to walk away from that. But it's very easy to change your search engine.

Anyway, we'll see. I suspect we'll see at least two new product categories from Apple this year. Let's see how they do.

Your missing the point. Your issue is not understanding why the Apple stock is being punished. The stock market is about perception of future earnings. You know this. That why I capitalized the word MIGHT. Apple has been whispering "new product categories" now for 4 or 5 years and there has been nothing but iphonepad upgrades. Apples stock went to 700 on the IDEA of Apple TV. Apple is losing / has lost confidence in investors that it can come up with a "new product categories" that is significant revenue.

iPOD (and iTunes) and then itouch was last real innovation I've seen from Apple. The iPhone and then Ipad are just renditions of the iTouch. They have done a good a job at integrating new technology into their MAC and iTouch technology but these are all just upgrades.

I don't own Google stock right now but if I did I would hold it. If for no other reason then 2 major initiatives they are involved with and taking seriously. Self driven cars (which is carving major patents in, and I suspect will be a standard of every car sold in America in 10 years. And Robotics, which is the inevitable future. Will they win these and be the leader? Don't know, but the fact that IF THEY DO, it would be hundreds of billions in revenue, has the market excited about the future.

In the stock market forward looking new revenue perspective, Apple has no future.

[Grieve]

Your missing the point. Your issue is not understanding why the Apple stock is being punished. The stock market is about perception of future earnings. You know this. That why I capitalized the word MIGHT. Apple has been whispering "new product categories" now for 4 or 5 years and there has been nothing but iphonepad upgrades. Apples stock went to 700 on the IDEA of Apple TV. Apple is losing / has lost confidence in investors that it can come up with a "new product categories" that is significant revenue.

Well it's been a while since you guys had the chance to ridicule me for my Apple worship, so I though I'd feed the animals some more.

Prediction - Q3 and Q4 will be the biggest rollout of new Apple products ever.

o New Apple TV setup box controlled by gestures, and supporting an app store, leading the way for a full TV next year
o iWatch that will shock everybody with it's high cost (running to a couple of thousand dollars at the high end), targeted at the fashion and medical markets. Insurance companies will subsidize the watch, bringing the price down to a reasonable level
o 4.7" and 5.5" super-thin iPhone 6, that will dominate the "phablet" market after weak Galaxy S5 sales
o Update iPads with touch ID

Stock either hits new all time highs on the way to $1000, or falls to new lows and leaves me bankrupt and at the mercy of my creditors (i.e. Jake)

[Vanraw]

Your missing the point. Your issue is not understanding why the Apple stock is being punished. The stock market is about perception of future earnings. You know this. That why I capitalized the word MIGHT. Apple has been whispering "new product categories" now for 4 or 5 years and there has been nothing but iphonepad upgrades. Apples stock went to 700 on the IDEA of Apple TV. Apple is losing / has lost confidence in investors that it can come up with a "new product categories" that is significant revenue.

Well it's been a while since you guys had the chance to ridicule me for my Apple worship, so I though I'd feed the animals some more.

Prediction - Q3 and Q4 will be the biggest rollout of new Apple products ever.

o New Apple TV setup box controlled by gestures, and supporting an app store, leading the way for a full TV next year
o iWatch that will shock everybody with it's high cost (running to a couple of thousand dollars at the high end), targeted at the fashion and medical markets. Insurance companies will subsidize the watch, bringing the price down to a reasonable level
o 4.7" and 5.5" super-thin iPhone 6, that will dominate the "phablet" market after weak Galaxy S5 sales
o Update iPads with touch ID

Stock either hits new all time highs on the way to $1000, or falls to new lows and leaves me bankrupt and at the mercy of my creditors (i.e. Jake)

Here we go......
If this is all Apple has in its pocket, then we all need to buy aggressive long term "puts" on Apple. The stock will be a $2xx stock by year end. Unless they get even more aggressive with dividends. Ill say it again, I want Apple to be successful. Its an American Company. I don't see anything on your list that addresses the very concern I have been talking about. Apple has lost its Innovation, and when they show it, its 2 years late. If you buy strong, I hope you cover.

o New Apple TV setup box controlled by gestures, and supporting an app store, leading the way for a full TV next year
- Already been done. Heck Microslop is on version 2 of Kinect. Gestures are a gimmick I used once and then picked up the remote.
- And this will generate Billions in revenue how?

o iWatch that will shock everybody with it's high cost (running to a couple of thousand dollars at the high end), targeted at the fashion and medical markets. Insurance companies will subsidize the watch, bringing the price down to a reasonable level
- And this will generate Billions in revenue how?

o 4.7" and 5.5" super-thin iPhone 6, that will dominate the "phablet" market after weak Galaxy S5 sales
- You and Apple (and Samsung) continues to underestimate the saturation of good competitive and innovated products.
- A bigger iphone? Really? 2 years after saying no one wants them??
- This will equate to Billions in revenue but NOT NEW revenue, but sustainment.

o Update iPads with touch ID
- This will equate to Billions in revenue but NOT NEW revenue, but sustainment.

[Grieve]

Here we go......
o New Apple TV setup box controlled by gestures, and supporting an app store, leading the way for a full TV next year
- Already been done. Heck Microslop is on version 2 of Kinect. Gestures are a gimmick I used once and then picked up the remote.

We've had this discussion before. Doing it first is different from doing it right. There were MP3 players before the iPod, smartphones before the iPhone, and tablets before the iPad.

- And this will generate Billions in revenue how?

Ecosystem.

o iWatch that will shock everybody with it's high cost (running to a couple of thousand dollars at the high end), targeted at the fashion and medical markets. Insurance companies will subsidize the watch, bringing the price down to a reasonable level
- And this will generate Billions in revenue how?

You've got to be kidding me - subsidies are the holy grail! Customer pay $200 for the watch but Apple actually gets $800? That's the model that let them make all those billions from the iPhone.

o 4.7" and 5.5" super-thin iPhone 6, that will dominate the "phablet" market after weak Galaxy S5 sales
- You and Apple (and Samsung) continues to underestimate the saturation of good competitive and innovated products.
- A bigger iphone? Really? 2 years after saying no one wants them??
- This will equate to Billions in revenue but NOT NEW revenue, but sustainment.

I disagree, I think there is a sizable portion of people who went to Samsung/Android purely for the size of the phone. That could result in a lot of new customers.

[Vanraw]

Grieve, the real issue for apple, is that to be considered growth stock they have.to have big hitters. Really big hitters.

A couple notes. Apple is talking about some big ties with Nike. Assuming it is exercise / heath monitors, this might be a good thing, but Nike might be a better play than apple. Also on the iTV front, apple is / keeps talking about large OLED TV. Rumors are LG will be the provider. This, in my opinion is a more viable direction than assuming another set top in a flooded market will be significant. But again, a play that will benefit.from apple direction might be better. However, here we are with delays on time to market. Apple has delayed the 2014 target to 2015.

I might actually jump into one of these.

LPL
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OLED
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