Apple Corp (Symbol-AAPL)

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Just a Guy
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Re: Apple Corp (Symbol-AAPL)

Post by Just a Guy »

Which "one product" are you referring to?

iPhone?
iPad?
iPod?
Apple Watch?
Macintosh computers?
Software design?
Music distribution?
Tv distribution?
Software distribution?
Retail sales channel?
Hosting company?
Ebook distribution?
Etc.
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Descartes
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Re: Apple Corp (Symbol-AAPL)

Post by Descartes »

Single product = iphone.
The iphone makes up almost 70% of Apple's revenue and I suspect all of us (including you) knew it was around that.
http://www.statista.com/statistics/3822 ... -of-apple/
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Re: Apple Corp (Symbol-AAPL)

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Yes, but any of their other businesses are all highly successful as well, make a ton of money and are doing better than a majority of the companies listed on the stock exchange. It's just, relative to the iPhone, they look small. Heck, I remember days when apple was a 6 billion dollar company total...now that's less than their quarterly profits.

Some of their "failures" are only stand alone billion dollar companies...
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Re: Apple Corp (Symbol-AAPL)

Post by Descartes »

Just to play devil's advocate, have you considered:

1. iPod is dead: obsolete
2. iPad is consistently declining in sales and the overall "pad" market has plateaued through saturation
3. Computers? This is considered a growth market? seriously?
4. iWatch has been a disappointment so far
5. if you take away the growth engine (iPhone) and 2/3 rd's of the revenue (iPhone) what happens to the market valuation?

In my opinion, Apple needs a relentless visionary but, alas, what it has left is an operations manager and a fashion designer.
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Re: Apple Corp (Symbol-AAPL)

Post by AltaRed »

I agree Apple is in a tough spot. They have to rapidly change themselves from an 'assumed' privileged and exclusive company. There are many more cost competitive alternatives out there in both hardware and software. My current iPad will be the last. If I ever buy a new tablet, it will be an Android.

Indeed, while on vacation in Hawaii, I just exchanged my decrepit 7 year old USA based phone in for an Android based LG Leon LTE for a fraction of the cost of an iPhone. Couldn't be happier. Easy to sync all my Google apps across all devices including my old iPad, etc.
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Re: Apple Corp (Symbol-AAPL)

Post by Bylo Selhi »

kcowan wrote:I can only quote Bill Gates...
How about the other side as expressed by Apple CEO Tim Cook and ex-CIA/ex-NSA director Michael Hayden.
Descartes wrote:In my opinion, Apple needs a relentless visionary but, alas, what it has left is an operations manager and a fashion designer.
<sarcasm>Just wait for Apple to grapple with Toyota, VW and Tesla: iCar release date rumours, features and images</sarcasm>
AltaRed wrote:I just exchanged my decrepit 7 year old USA based phone in for an Android based LG Leon LTE for a fraction of the cost of an iPhone. Couldn't be happier. Easy to sync all my Google apps across all devices including my old iPad, etc.
Congratulations on seeing the light ;)
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Re: Apple Corp (Symbol-AAPL)

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Descartes wrote:Just to play devil's advocate, have you considered:

1. iPod is dead: obsolete
2. iPad is consistently declining in sales and the overall "pad" market has plateaued through saturation
3. Computers? This is considered a growth market? seriously?
4. iWatch has been a disappointment so far
5. if you take away the growth engine (iPhone) and 2/3 rd's of the revenue (iPhone) what happens to the market valuation?

In my opinion, Apple needs a relentless visionary but, alas, what it has left is an operations manager and a fashion designer.
1) yet Apple continues to sell millions, just not enough to please people.
2) see #1.
3) Apple is, in fact, one of the few computer companies growing sales, ranked in the top 3 of all manufacturers as well... see #1.
4) number one in sale of smart watches. Starting from no sales less than a year ago...see #1 and compare that to say Fitbit which reported losses and poor sales recently.

You take any of their competition's stock in these areas and tell me who's stock you'd rather own...then add the fact that they also sell music, software, tv, movies, services...and also the iPhone.

Look how long IBM has hung around, and what have they produced in the past decade?
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Re: Apple Corp (Symbol-AAPL)

Post by AltaRed »

IBM is not the issue. It is those competing with Apple at considerably more competitive prices with more open sourced technology. Even Apple fans will tire of that eventually. Remember Beta vs VHS?
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Re: Apple Corp (Symbol-AAPL)

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I think nearly everyone has passed IBM inn what made them the biggest company...yet, decades later, they are still making money for their shareholders.

You don't have to be the leader to make money.

Will apple be around forever? Who knows, personally my crystal ball is in the shop this week. Will they disappear tomorrow? Not likely.

Just to put it in perspective, Apple could buy the entire Russian stock market for cash. Even if the cashed out, and put all the money in GICs, they'd make more money than most of the stock market...so, in my humble opinion, it's a bit early to scream the sky is falling.

Of course, you can bet on their competition who may be younger and quicker, but they can flame out sooner too (I've already pointed out Fitbit).

As for android, I don't believe in investing in companies who sell at a loss, hoping to make it up in volume. Apple is eating 90% of the profits, anyone banking on android is probably losing money...not a good foundation. But at least they can claim market share (for every client we lose $1000 yeah!!! We'll soon crush Apple).

Btw, they claim most of the profits in every industry, computers, music distribution, software distribution, etc. So, competition is definitely feirce.

I should also point out, I'm not an Apple fanboy, I'm just looking at the numbers and realizing there are few companies that look as good as Apple. Any arguement you use against them looks multiple times worse on nearly every other company listed in the markets.

By almost every metric, except maybe "potential", Apple beats any other company on the market. I don't think "potential" should be the main reason behind investing in any company since that equates to "gambling", not "investing". Of course, that's not "exciting" or trendy...its just the strategy that seems to make me money. Feel free to jump on the latest hype though if you wish but, until something changes, I see no reason to dump apple stocks. Would I buy today? Maybe not.
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Re: Apple Corp (Symbol-AAPL)

Post by nisser »

I'm not sure where you get the notion that android is losing money. Samsung is profitable. I don't think Apple will be able to continue to warrant the premium much longer. Everyone else has caught up.
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Re: Apple Corp (Symbol-AAPL)

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And the Android OS developed by Google since its purchase of Android in 2005 is blowing off the socks in whatever it does. Whatever Apple does, Google does with Android as well. Hence my comparison of Beta vs VHS. Apple needs to take a history lesson.
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Re: Apple Corp (Symbol-AAPL)

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From Q1 last year...

http://uk.businessinsider.com/apple-92- ... ung-2015-7

Q2 last year...

http://www.cnbc.com/2015/02/09/dominant ... ofits.html

Heck, from 2015 in total...

http://www.gsmarena.com/apple_took_home ... -16626.php

Samsung doesn't make money off its phones, it makes money off of chip manufacturing and other things.

Despite a rise in shipments, it's profits on phones was lower...http://fortune.com/2015/10/28/samsung-e ... -earnings/

According to your analysis of Apple, especially considering most of samsung's profits comes from making chips for things like the iPhone, they are a toxic investment...heck, they make most of their profits manufacturing for another (Apple) toxic (in your opinion) stock. Their other divisions barely contribute compared to chips...another one trick pony (with several smaller billion dollar divisions of course).

As I said, when you compare Apple to ANY company it will probably look better, despite your pessimism. If you apply the same pessimism to the other companies, you'll see they are worse.

As for the beta vs. VHS, neither format dominated the market in terms of profits. Plus, when you look at the money to be made (for the software developers), Apple once again dominates in the profits

http://techcrunch.com/2015/10/15/ios-ap ... -to-china/

If you have limited funds as a software developer, where are you going to put your resources?

The beta/VHS debate was won because companies supplied more movies on vhs. The equivalent to developers producing titles for a phone...

People need to keep opinions and emotions out of investing and look at the math and numbers. I get that some people don't like Apple, or the iPhone, or whatever...few people actually liked Microsoft products in the 80's and 90's it doesn't change the fact that they were the dominate company of the time...same as Apple today.

Microsoft, like many companies in the tech industry, dominated the market despite producing mediocre software. The best product rarely dominates in the tech industry. So, the arguement that android is better doesn't really mean much. As well, one could argue that iOS is more homogeneous than the fractured android market with 70% of its market on the same version vs andriods many flavours and issues with updating the OS because each version needs to be customized to some extent.

Anyway, as with Microsoft, things can change, but that's not right now...and even if it was, Microsoft is still a big company today, 20 years from its dominant days...
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Re: Apple Corp (Symbol-AAPL)

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One more thing, if some startup has come out with a smart watch and, within 1 year had gone from nothing to industry leader with sales in the millions and 30+% margins, this board would have people salivating at the mouth trying to jump on the bandwagon.

But since those same sales pale compared to the sales of the iPhone, and frankly what product could ever hope to compare to those numbers, people are jumping up and down screaming "product failure" and "Apple is doomed" once again.

P.s. He Apple Watch sold more units than the first iPod did. When the iPod first came out, I thought it was overpriced and stupid, it wasn't until the third edition (iPod touch) that I became interested...remember products need to evolve. How many people think the iPod was a failure for Apple in its day?
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Re: Apple Corp (Symbol-AAPL)

Post by kcowan »

nisser wrote:Samsung is profitable. I don't think Apple will be able to continue to warrant the premium much longer. Everyone else has caught up.
Debunked above. I don't know where you get these crazy ideas.
AltaRed wrote:Hence my comparison of Beta vs VHS. Apple needs to take a history lesson.
I find it interesting that you claim the Android product will win out because it is superior, whereas technologists claimed that Sony's Beta was superior. But it did not win.

I know that at the time I wondered why Sony did not embrace VHS. But the parallel breaks down because Apple is the VHS because of content. As long as they stay ahead in function, they will remain profitable. And they have a lot of runway because of their substantial head start.

And they focus on profit rather than placements which makes them a valuable holding. They could tank Samsung by changing component suppliers if it would improve their profit.
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Re: Apple Corp (Symbol-AAPL)

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I really don't have an interest in pressing a point that someone doesn't want to acknowledge
..but in case I simply didn't say it clearly enough, I am talking about growth and relative revenue when I say ipod, ipad, mac computers, and iwatch are dead, dying or disappointing so far. Apple has only one product that is the growth engine and revenue provider that keeps its market valuation where it is.

Regarding iwatch and the relative importance of iphone versus these other product lines:
Buried in its annual report filed with the Securities and Exchange Commission, Apple noted that the Apple Watch accounted for “more than 100 percent” of the annual growth of net sales in its "Other Products" reporting category. During that period, Apple saw revenue in the segment grow over 20 percent, from $8.38 billion to $10.06 billion, which means the Apple Watch could have pulled in at least $1.7 billion in revenue, according to VentureBeat.

That number may actually be higher considering that Apple Watch sales “more than offset the decline of iPod and accessories sales,” in the period between April and June, said Apple CFO Luca Maestri during a July investor call. In any case, it’s still a drop in the bucket compared to the $155 billion in revenue the iPhone has driven in 2015, up 52 percent from last year.

When it comes to unit sales, Apple hasn’t said how many watches it sold to date and analysts guess that number may lie somewhere around 3.8 million for the three months ended Sept. 26.
http://www.ibtimes.com/apple-watch-sale ... 15-2162403

Regarding iwatch perceived as a disappointment so far, here are a few examples that support the argument:

Apple Watch is a FLOP: Sales of the gadget have fallen by 90% since April

Apple Watch Sales Numbers Are Bad News For Suppliers
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Re: Apple Corp (Symbol-AAPL)

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Your conclusion on my argument is wrong Keith. Android is not necessarily better, but it is more inclusive (aka VHS) versus exclusive (aka Beta). Apple is not studying history very well. That said, Apple is at least accepting apps from others and that will keep them in the game.

My first generation iPad now has more non-Apple apps on it than Apple products. For example, Skype vs FaceTime which I have never used. Chrome rather than Safari. Google apps such as Gmail, Maps, Earth, Photos, etc. I don't use iCloud but I do use Dropbox, OneDrive and Google Drive. All these latter things allow me to be seamless across my devices.

I am not saying Apple is going away but they are no longer the market sensation/dominance they once were and I don't think they will regain it.
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Re: Apple Corp (Symbol-AAPL)

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AltaRed wrote:That said, Apple is at least accepting apps from others and that will keep them in the game.
The App Store was an Apple initiative. Google copied it. Android is a commodity OS and no one has made any money on it, ever.

Apple may be past its prime but that is because smartphones have run the gamut of the market. I am anticipating that it will become valued like other stocks. It has never been rewarded for its PEG. If it was I would be worried.
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Re: Apple Corp (Symbol-AAPL)

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I often wonder if people actually read the postings, or just assume they know what I write because, if they did, they would have read...

1) by any metric other than "potential" Apple beats every other company. Investing in potential is called "gambling".

2) apple's "flop" is the category leader, makes over a billion in profits and, if it were a breakout company, it would have people dying to invest. Sure, relative to the iPhone, EVERY other product would look like a flop.

3) apple's cash pile is 1/3 of its valuation, forget patents, real estate and other assets.

4) Apple makes 30 cents on every software app sold on its store.

As for Samsung and its phones...

http://www.ft.com/fastft/2016/01/28/sam ... 9-in-2015/

The Apple Watch "flop" potentially generates more profit than any of samsung's divisions.
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Re: Apple Corp (Symbol-AAPL)

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I was talking to a 50+ year old co-worker in my building who gets a company paid, brand new, latest Samsung super phone for work and I remarked that he was using his iPhone during his break. He said that he can't stand the Android OS as he felt it did not provide as smooth of an experience as iOS on iPhone. He said his entire family uses iPhone and Apple products as it works much better in a friendly user experience for them.

I know, anecdotal, but it does give me interesting bits of insight to think about.

I generally agree with the view that iOS provides a superior user experience for *most, average* people. While Android can do everything iOS can do and more, I find *most, average* people could care less and herd towards the *relatively* smoother user experience Apple provides. I find *most, average* people also take far more pleasure from the aesthetics of Apple products that I've never encountered them to take in an Android product.

I think when looking at this issue of Apple's relevance in society, we need to remove our personal biases and preferences on gadgets and gizmos to see things clearly.

Basically, if you're investing in Apple, you are betting that the iPhone will continue to generate torrents of cash flow for years and years to come. You are betting that, while the iPhone won't grow as much as it has in the past, it will sustain its current level of sales with moderate growth going forward. If you're investing in Apple today, you better have faith in the power of the iPhone!
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Re: Apple Corp (Symbol-AAPL)

Post by Insomniac »

Somewhere along the line, everyone will have a Smartphone, sales will fall off and Apple will stop growing. Maybe we are already there? Heck, I just bought one and I think I must be one of the last of the holdouts. (I choose a BLU Android phone)

http://www.gartner.com/newsroom/id/3115517
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Re: Apple Corp (Symbol-AAPL)

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Just a Guy wrote:I often wonder if people actually read the postings, or just assume they know what I write because, if they did, they would have read...

1) by any metric other than "potential" Apple beats every other company. Investing in potential is called "gambling".

2) apple's "flop" is the category leader, makes over a billion in profits and, if it were a breakout company, it would have people dying to invest. Sure, relative to the iPhone, EVERY other product would look like a flop.

3) apple's cash pile is 1/3 of its valuation, forget patents, real estate and other assets.

4) Apple makes 30 cents on every software app sold on its store.

As for Samsung and its phones...

http://www.ft.com/fastft/2016/01/28/sam ... 9-in-2015/

The Apple Watch "flop" potentially generates more profit than any of samsung's divisions.
I think you should step back and realize how passionate and emotional you are getting just discussing this stock; You're probably not making sound investing decisions. I don't own either stock nor do I care to own either.
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Re: Apple Corp (Symbol-AAPL)

Post by SkaSka »

Some folks are visual so I'll drop some graphs I made when I last did a case study on AAPL.

These are all based on 10 years of data pulled from Morningstar and the Apple 10-Ks.

Shares Outstanding, Free Cash Flow Per Share, EPS
Apple SO FCF EPS Graph.JPG
*For the bear case, this could be a sign of a classic value trap (if the iPhone gravy train runs out and there is nothing to replace it)

Year-over-Year Growth in Revenue, Net Income, Operating Income, EPS
Apple YoY Growth.JPG
Apple Revenue by Region
Apple R by Region Graph.JPG
*China wasn't broken out as its own region until 2011
Last edited by SkaSka on 01 Mar 2016 00:10, edited 1 time in total.
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Re: Apple Corp (Symbol-AAPL)

Post by SkaSka »

Cont'd.

Units Sold by Product
Apple Units Sold by Product Graph.JPG
Revenue by Product
Apple Revenue by Product Graph.JPG
6 Year Revenue by Product Piecharts
Apple Revenue by Product 6 Year Graph.JPG
Apple, in a very general way, reminds me of Gilead Sciences: companies with hit products that rake in a lot of money, but with worries attached on where they go next when their hit products run their course.

Like I said, with Apple, you need to have faith in the iPhone being a cash cow for years to come for it to make any sense as an investment.
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Re: Apple Corp (Symbol-AAPL)

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nisser wrote:I think you should step back and realize how passionate and emotional you are getting just discussing this stock; You're probably not making sound investing decisions. I don't own either stock nor do I care to own either.
Frankly, I don't care much about Apple. What gets me upset is when people use arguements like "I don't use Apple products, so the company is doomed" or "I found some click-bait headline that supports my opinion".

It's not research, it's not good for investing, it's not good for new investors who are trying to learn how to invest.

People need to know how to read financials and do some basic math. Do I personally believe Apple will continue to grow as it has been? Not at all, and I never say that. You'll also note, I don't suggest people buy in at these prices but that's a far cry from Apple is in trouble. Apple will be a solid company for years to come.

People who spout off unsubstantiated opinions are generally bad for investors. It's always interesting to see how great their suggestions for a different stock actually compares when you actually look at the numbers...like the Samsung comparison, or maybe we should look at Google (who recently surpassed Apple as the world's most valuable company)...like their revenues could support that title...of course they've got android...
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Re: Apple Corp (Symbol-AAPL)

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nisser wrote:
Just a Guy wrote:As for Samsung and its phones...

http://www.ft.com/fastft/2016/01/28/sam ... 9-in-2015/

The Apple Watch "flop" potentially generates more profit than any of samsung's divisions.
I think you should step back and realize how passionate and emotional you are getting just discussing this stock; You're probably not making sound investing decisions. I don't own either stock nor do I care to own either.
I think it is funny that Just a Guy gets accused of being passionate and emotional, when he is the only one quoting facts:
Newsclip by [b]Just a Guy[/b] wrote:Samsung Electronics warned that its profits could fall again this year, as it announced a 19 per cent fall in net profit for 2015.
The drop was largely driven by a 31 per cent operating profit decline for its IT & Mobile division – dominated by the mobile phone business...
Amid the problems in smartphones, Samsung has been shored up by a stronger performance from its semiconductor business: it is the world’s leading producer of memory chips in terms of both technology and sales, and its logic chip division was boosted by a contract to produce processors for Apple’s latest iPhone.
Here is their latest attempt to shore up this segment:
Samsung's newest enterprise initiatives
For the fun of it...Keith
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