Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Apple is going to have a tough year

businessinsider.com

Post reply on HN
Print view View original

11–20 of 38 posts

Re: Apple is going to have a tough year

#11

Post by forrestthewoods »

Aloha wrote: post #5

am I the only one who considers the markets obsession of endless growth as absurd? Both sides in the smart phone market have been growing thru beating down the weaker competitors then just by market growth, the smart phone market in developed countries is largely reaching saturation - where is the place to grow now? I work in a market where volume matters little - margin is the key - my division for example produces…

If I were an investor in your company and I got a healthy dividend from that gross margin then that'd be great. But public stocks largely don't pay significant dividend and are valued off of growth. Growth expectations which are already factored into the price, whatever it may be.

Re: Apple is going to have a tough year

#12

Post by DGAP »

Two points:

One, it's pretty absurd to say that the IPhone is the "best" smartphone on the market. It did a lot well as far as marketing and design, but the rest of the market has caught up and now surpassed Apple.

Two, it's well documented that Apple can't even execute on their strengths anymore. They've made a series of poor design choices, and they've been largely unable to create new markets with items like the Apple Watch.

Bubble or not, the economy as a whole is certainly up. There is plenty of room for it to go crashing down, and with it things like emerging markets and discretionary income to be spent on iphones. Despite the surprisingly reasonable P/E, I'm bearish on Apple on a timeframe of more than a year or two.

Re: Apple is going to have a tough year

#13

Post by UnoriginalGuy »

I'm no Apple fan or user, but these reasons are vapid:

- iPhone in the "negative" which sounds, well, negative but actually means that GROWTH has stopped. However it remains one of the most profitable smartphones with a giant market share, so shareholders may wish to change their medium term valuations, but frankly any valuation which ignores market saturation isn't worth considering anyway.

- Apple Watch isn't a hit... Alright, but Apple Watch 1.0 was NEVER going to be a hit. A lot of people skip the first gen because they look at history (iPhone 1, iPad 1, etc) and with a smartwatch in particular there's a lot of reason to think the technology can move forward (12 hours battery life?!). Apple Watch 2 is due out this year, and while I have no idea if that will be a hit, it COULD be.

- "Apple's software and services — Apple Music, Maps, Health, Photos — are just OK." Maps, Health, and Photos were never profit makers. Everything I've read about Apple Music has been quite positive and they've already grabbed a large amount of market for being a relatively new player. Why is the article bundling profitable business avenues with unprofitable freebies? Why is it just "ok?"

I agree with the article that 2015 was a boring year for Apple, but I think they're jumping to a lot of conclusions about 2016, and if half the rumours about the next iPhone turn out to be true then it could be popular. With the 2016 Apple Watch, it needs at minimum to have better battery life, maybe round, maybe new functionality/sensors.

This entire article only exists because the market has a fetish for growth. Even if Apple becomes completely stagnant, it is stagnant for a HUGELY successful company that competes in multiple sectors. And it isn't like they're getting eaten by things like inflation (prices have risen) or actual decline (in real terms or not), so I think rumours of Apple's demise or even having a bad 2016 are greatly exaggerated.

PS - And don't get me started on how massively successful Apple has been with vertical integration as a growth vector.

Re: Apple is going to have a tough year

#14

Post by wvenable »

The iPhone 6S is truly an amazing piece of hardware; there is so much internal enhancement over the iPhone 6. Yet Apple hardly hyped it in that way. I got my wife a 6S for Christmas and what convinced me was what I know about it that didn't come from Apple.

Re: Apple is going to have a tough year

#15

Post by UnoriginalGuy »

enos_feedler wrote: post #10

apple stock will hit a high of $144.42 USD per share this year. You heard it here first. EDIT add "this year"

A 40% increase over today's closing price? And a 10% increase over Apple's highest on record? There's no market reason to believe that.

Even if I had insider information that Apple had a "game changing" product or device, I still think $144.42 is unlikely, and there are no rumours to suggest that.

Re: Apple is going to have a tough year

#16

Post by BinaryIdiot »

Aloha wrote: post #5

am I the only one who considers the markets obsession of endless growth as absurd? Both sides in the smart phone market have been growing thru beating down the weaker competitors then just by market growth, the smart phone market in developed countries is largely reaching saturation - where is the place to grow now? I work in a market where volume matters little - margin is the key - my division for example produces…

> am I the only one who considers the markets obsession of endless growth as absurd?

Likely not however we're only talking stock price here and the only thing that matters in investing in stocks in finding your way back to a return which typically happens when stock prices go up and you can sell higher or you get a dividend. Since Apple doesn't do the latter it has to do the former which means requires constantly growing the company.

So while in logic the endless growth is a bit absurd in the stock market it's either that or dividends (and even dividends may not keep it raising; all depends on how they're structured).

Re: Apple is going to have a tough year

#17

Post by BinaryIdiot »

mrmondo wrote: post #9

I've heard this almost every year, and almost every year it turns out to be an incorrect assumption and as Aloha pointed out here - what is the obsession with growth? Growth does not equal stability.

> what is the obsession with growth

Growth means return on investment. You gotta go in the public markets if you want to make a good return. That or dividends or a company being sold (which is obviously not going to happen to Apple).

Re: Apple is going to have a tough year

#18

Post by rasputhin »

'Smart, rational people in the media, like Nilay Patel of The Verge' ahh yeah.. Ok

Apple is going to be fine.. They carry very little /no debt and make the best phone in the world that magically becomes obsolete in 14 months..

I can't imagine a better business to be in and dominate.

Re: Apple is going to have a tough year

#19

Post by jedmeyers »

wvenable wrote: post #14

The iPhone 6S is truly an amazing piece of hardware; there is so much internal enhancement over the iPhone 6. Yet Apple hardly hyped it in that way. I got my wife a 6S for Christmas and what convinced me was what I know about it that didn't come from Apple .

The majority of iPhone users have no desire nor ability to understand the engineering genius that went into the internal design, and that is fine. And that is why Apple don't usually advertise those things when they present the new features. "It has a really awesome SoC" won't really cut it for most people.

Re: Apple is going to have a tough year

#20

Post by 0xCMP »

UnoriginalGuy wrote: post #15
enos_feedler wrote: post #10

apple stock will hit a high of $144.42 USD per share this year. You heard it here first. EDIT add "this year"

A 40% increase over today's closing price? And a 10% increase over Apple's highest on record? There's no market reason to believe that. Even if I had insider information that Apple had a "game changing" product or device, I still think $144.42 is unlikely, and there are no rumours to suggest that.

I have no reasons to believe I know anything about the markets/apple/stocks/investing, but who would have thought the market would actually value essentially iPhones more than oil (and this was before this whole oil-supply-crisis we're in)? If sales turn out to be growth (which, as other commenters have pointed out it probably will since it's doom/gloom every year and every time) then the market will rejoice and probably drive it up to that height. Some big-investors thought it'd get to $250(!) a share. I think they were full-of-it, but the market responds in strange ways and 144 isn't too far from their height to reach if there isn't a major economic event that changes things in the meantime.
Post reply on HN