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(SFGate)   Remember the happy sounds of September? Kids starting school, baseball playoffs, Apple stock hitting $705 a share   (sfgate.com) divider line 28
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1353 clicks; posted to Business » on 10 Dec 2012 at 11:09 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-12-10 11:17:09 AM
"Why is Wall Street cooling on Apple?"

I don't know, maybe because of the new CEO and the only thing you have this holiday season is a mix between two of your products that were essentially the same thing to begin with.
 
2012-12-10 11:19:15 AM
The Apple business had been largely driven by a cult of personality around Steve Jobs. People were in love with him as much as they were the products. It's no surprise that, after his death, not only does the company have some leadership/vision changes, but the image of the company takes a hit. No longer, in buying Apple products, were you putting a snug black turtleneck on your soul.

Competitors have sensed this. That series of ads for the Galaxy with those people standing in line getting made fun of? That sort of thing hurts the image. Soon Apple will be just another computer company instead of a lifestyle brand.
 
2012-12-10 11:23:35 AM
Because when you are an over hyped number one the only direction you can go is down.
 
2012-12-10 11:26:29 AM
How profitable is Apple? How much reserve cash are they sitting on? And their stock is still doing bad recently. Seems like a bad idea to have the welfare of your country tied to stockholders.
 
2012-12-10 11:28:08 AM
Look, when the price for one share of your stock is more than a 64gig iPad, maybe people will start selling it, you know?
 
2012-12-10 11:30:10 AM

Banacek: How profitable is Apple? How much reserve cash are they sitting on? And their stock is still doing bad recently. Seems like a bad idea to have the welfare of your country tied to stockholders.


For appropriate values of "recently". They're still up 32% in 2012, after a 25% gain in 2011 and a 52% gain in 2010.
 
2012-12-10 11:51:48 AM

Banacek: How profitable is Apple? How much reserve cash are they sitting on? And their stock is still doing bad recently. Seems like a bad idea to have the welfare of your country tied to stockholders.


PE of 12.14. $117 billion on hand. To put this in perspective, Apple could purchase every piece of Intel's stock in the world without going into debt.
 
2012-12-10 11:51:56 AM
Most of these articles feature quotes by people who bought in late and are amazed that stocks don't perennially go up and up and up.
 
2012-12-10 12:08:43 PM
It will keep going up. Right now Apple is going through a correction.

The first quarter reports will jettison Apple right back up. When Tim Cook publicly announces the Apple TV, Apple will rise even more to $800-900. What Tim Cook is attempting to do is to shift the company away from how Steve Jobs ran Apple. It's somewhat working, but Cook should have come down harder on the Apple Maps project. He should have looked at one of the errors, travel to the site of the error, and call the people involved on the project why there is not a farking airport whereas the map says there is.
 
2012-12-10 12:13:16 PM

Funk Brothers: It will keep going up. Right now Apple is going through a correction.

The first quarter reports will jettison Apple right back up. When Tim Cook publicly announces the Apple TV, Apple will rise even more to $800-900. What Tim Cook is attempting to do is to shift the company away from how Steve Jobs ran Apple. It's somewhat working, but Cook should have come down harder on the Apple Maps project. He should have looked at one of the errors, travel to the site of the error, and call the people involved on the project why there is not a farking airport whereas the map says there is.


Stop copying and pasting random comments from macrumors.com
 
2012-12-10 12:29:49 PM
Apple's P/E prices them substantially lower than the usual suspects (Google, Facebook, Amazon), but also blue chips like Microsoft, Oracle, Lenovo, IBM, Texas Instruments, and Cisco. It's sort of silly at this point how low AAPL is relative to other tech stocks.
 
2012-12-10 12:41:40 PM
is that the sound of the bubble popping
 
2012-12-10 01:50:46 PM

thecpt: "Why is Wall Street cooling on Apple?"

I don't know, maybe because of the new CEO and the only thing you have this holiday season is a mix between two of your products that were essentially the same thing to begin with.


Scorpitron is reduced to a thin red paste: The Apple business had been largely driven by a cult of personality around Steve Jobs. People were in love with him as much as they were the products. It's no surprise that, after his death, not only does the company have some leadership/vision changes, but the image of the company takes a hit. No longer, in buying Apple products, were you putting a snug black turtleneck on your soul.

Competitors have sensed this. That series of ads for the Galaxy with those people standing in line getting made fun of? That sort of thing hurts the image. Soon Apple will be just another computer company instead of a lifestyle brand.


wildcardjack: Because when you are an over hyped number one the only direction you can go is down.


These cover it nicely. Not much else to be said, really.
 
2012-12-10 01:54:42 PM

TheBeastOfYuccaFlats: Funk Brothers: It will keep going up. Right now Apple is going through a correction.

The first quarter reports will jettison Apple right back up. When Tim Cook publicly announces the Apple TV, Apple will rise even more to $800-900. What Tim Cook is attempting to do is to shift the company away from how Steve Jobs ran Apple. It's somewhat working, but Cook should have come down harder on the Apple Maps project. He should have looked at one of the errors, travel to the site of the error, and call the people involved on the project why there is not a farking airport whereas the map says there is.

Stop copying and pasting random comments from macrumors.com


Pretty spot on, just missing a comment defending their purchase of some item made by Bose.
 
2012-12-10 01:55:20 PM

Justin Bieber's Acne Medication: Apple's P/E prices them substantially lower than the usual suspects (Google, Facebook, Amazon), but also blue chips like Microsoft, Oracle, Lenovo, IBM, Texas Instruments, and Cisco. It's sort of silly at this point how low AAPL is relative to other tech stocks.


See those customers that Oracle have? They're probably going to be with Oracle for at least another decade, maybe longer. Same with Microsoft. People buy Lenovo because they're high quality, professional bits of kit. IBM are about global services, long term relationships, plus again, long-term support contracts.

How long are people going to keep upgrading their iPhones to the latest, greatest £500+ phone when the phone is basically "done" in terms of features, and the Nexus 4 does everything except 4G for half the price? How many people are going to replace their iPad 3 with a new iPad when really, the iPad 3 does all they want? I know a few people who consider their iPads a waste of money. Think they're going to buy another one?

Apple made money because of fast moving markets where they were selling to the cutting edge at high margins. But all the markets they are in are now becoming highly commoditised. They need to open up new markets quickly or see that share price collapse.
 
2012-12-10 01:55:21 PM

pmdgrwr: is that the sound of the bubble popping


PE hovering around 12 isn't much of a "bubble".
 
2012-12-10 02:05:52 PM

farkeruk: Justin Bieber's Acne Medication: Apple's P/E prices them substantially lower than the usual suspects (Google, Facebook, Amazon), but also blue chips like Microsoft, Oracle, Lenovo, IBM, Texas Instruments, and Cisco. It's sort of silly at this point how low AAPL is relative to other tech stocks.

See those customers that Oracle have? They're probably going to be with Oracle for at least another decade, maybe longer. Same with Microsoft. People buy Lenovo because they're high quality, professional bits of kit. IBM are about global services, long term relationships, plus again, long-term support contracts.

How long are people going to keep upgrading their iPhones to the latest, greatest £500+ phone when the phone is basically "done" in terms of features, and the Nexus 4 does everything except 4G for half the price? How many people are going to replace their iPad 3 with a new iPad when really, the iPad 3 does all they want? I know a few people who consider their iPads a waste of money. Think they're going to buy another one?

Apple made money because of fast moving markets where they were selling to the cutting edge at high margins. But all the markets they are in are now becoming highly commoditised. They need to open up new markets quickly or see that share price collapse.


You may very well be right (and probably are) eventually, but this almost exact comment has been made on this website countless times over the last five or so years. Yet AAPL's profits continue to increase.
 
2012-12-10 02:07:45 PM

farkeruk: How long are people going to keep upgrading their iPhones to the latest, greatest £500+ phone when the phone is basically "done" in terms of features.


Hell, I refuse to even update the software in my phone at this point because I LIKE google maps. No way I would consider buying a new one of their phones when I can get an android with equal features and infinitely less walled garden.
 
2012-12-10 02:30:25 PM
125 billion (actually more than that) in the bank, actually probably more than that, terrible, just terrible...

One option that they could possibly implement, fire everyone, and turn themselves into the next Berkshire Hathaway
 
2012-12-10 03:05:13 PM

farkeruk: See those customers that Oracle have? They're probably going to be with Oracle for at least another decade, maybe longer. Same with Microsoft. People buy Lenovo because they're high quality, professional bits of kit. IBM are about global services, long term relationships, plus again, long-term support contracts.


Exactly my point. These are companies operating in mature markets, and nobody expects much new out of them. Yet Apple is being priced like it should substantially underperform them.

How long are people going to keep upgrading their iPhones to the latest, greatest £500+ phone when the phone is basically "done" in terms of features, and the Nexus 4 does everything except 4G for half the price?

They will in the US unless carrier subsidies change (that Nexus 4 costs 50% more than I paid for my iPhone 5), and even if they don't, Apple's sales are likely to continue to grow simply because the smartphone market is growing.

But let's say you're right, and Apple's growth ends. Their revenues and profits are flat. That's about in line with IBM, and still better profit growth than Google (-20%) or Microsoft (-22%). So what justifies the substantial premium that all these companies trade at relative to Apple?

> But all the markets they are in are now becoming highly commoditised. They need to open up new markets quickly or see that share price collapse.

Apple's share price has already collapsed to well below that of companies that already operate in commoditized markets. That's my point.
 
2012-12-10 04:24:39 PM

Moopy Mac: Pretty spot on, just missing a comment defending their purchase of some item made by Bose.


$6 million home speaker system
 
2012-12-10 06:15:23 PM
Asset values falling right now isn't particularly hard to understand.

Bush passed a "temporary" tax cut that included a reduction in the rate paid for gains on investments going from a rate over 40% down to only 15%. Those tax cuts were supposed to expire in 2010, but Obama renewed them

Now they are due to expire again. Let's say you made a killing on an investment. Would you like to cash out now and owe a 15% Capital Gains tax or wait a few weeks and owe over 40%?
 
2012-12-10 07:15:00 PM
... because Apple stock was a bubble, maybe?
 
2012-12-10 09:20:15 PM
Apple's stock was really overvalued. It used to be that it would go up every time they had a new product out, and then slowly drop back down. That dropping back down part stopped happening a while back.
 
2012-12-10 09:24:45 PM
Wah.
 
2012-12-11 12:28:26 AM
At a P/E of 12 and a mountain of cash on hand AAPL looks cheap. While a div/yield of roughly 2% isn't great I don't think people buy AAPL for the div/yield. Last low was 525 on Nov 15th. Looks like they are testing that support. I know I'll be watching over the next couple of days to see if it's time to buy.

/caveat: the fiscal cliff/debt ceiling negotiations could do who knows what to the market over the next month
//don't buy/sell according to some yob on the internet. Do your own homework
 
2012-12-11 07:49:04 AM

Justin Bieber's Acne Medication: Exactly my point. These are companies operating in mature markets, and nobody expects much new out of them. Yet Apple is being priced like it should substantially underperform them.


Well, Apple might underperform them.

Look at PC sales. Everyone is talking about "tablet revolution" but the reality is that everyone has a PC that does what they want it to do. They aren't replacing them because of upgrades. Phones are going to be the same. This isn't even an Apple point, this is for everyone. Sure, the Galaxy S3 is better than my Nexus S, but better enough for me to pay extra to buy it?

Even if I lost or broke my phone, I wouldn't buy the latest tech. I'd get a Nexus 4, because right now, 4G just ain't much of a thing in the UK and won't be for 2 years. Apple simply won't be able to charge the sort of margins it once could because people will switch to Android phones instead.

And tablets will be the same problem. The margins are going to shrink on them.

The success of Jobs at Apple in his 2nd go was finding new areas for them to go into. iPod, iTunes Music Store, iPhone, iPad, OSX. And because they were on the cutting edge, they could make very good margins. That's what Tim Cook has to replicate. Not just selling lots of iPhones because smartphones are becoming a low margin business. If he doesn't you won't just see Apple's revenue fail to grow, but to slide.
 
2012-12-11 09:54:42 AM

BullBearMS: Asset values falling right now isn't particularly hard to understand.

Bush passed a "temporary" tax cut that included a reduction in the rate paid for gains on investments going from a rate over 40% down to only 15%. Those tax cuts were supposed to expire in 2010, but Obama renewed them

Now they are due to expire again. Let's say you made a killing on an investment. Would you like to cash out now and owe a 15% Capital Gains tax or wait a few weeks and owe over 40%?


40%? Do you mean 20% (plus a possible 3.8% Medicare Tax if your taxable income is > $250K)?
 
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