Stuart Goldenberg
Posted on 01/27/2016 9:43:32 PM PST by Swordmaker
Let's get this out of the way first: Despite what you may have heard, the iPhone is not dying. Neither, by extension, is Apple.
It's true that in an earnings report on Tuesday, after weeks of speculation by Wall Street that iPhone sales would finally hit a peak, Apple confirmed the news: IPhone sales grew at their lowest-ever rate in the last quarter. And the company projected total sales of as much as $53 billion in the current quarter that ends in March, which would be a decline of 8.6 percent from last year and Apple's first revenue drop in more than a decade.
But if Apple is now hitting a plateau, it's important to remember that it's one of the loftiest plateaus in the history of business. The $18.4 billion profit that Apple reported on Tuesday is the most ever earned by any company in a single quarter.
It's necessary to start with these caveats because people have a tendency to react strongly, almost apoplectically, to any suggestion of weakness on Apple's part. Like pickles, cilantro and Ted Cruz, Apple inspires extreme opinion. The doubters are now ascendant. Apple's share price has fallen more than 11 percent over the last year, in stark contrast to gains by the other four American tech giants. . .
Apple's iPhone business is now so huge it sounds almost fantastical -- Apple books more revenue from the iPhone (about $154 billion in its last fiscal year) than Amazon, Facebook, Google, Microsoft, Hewlett-Packard or IBM generate from all of their operations. Two-thirds of the world's countries have gross domestic products smaller than annual sales of the iPhone.
(Excerpt) Read more at nytimes.com ...
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Yeah, if only it were true.
The Titanic was the largest ship ever... for a total of 119 hours.
It’s not the size of the company. It’s how it weathers the icebergs. Investors are no fools when they witness any corporation with no binoculars in the crow’s nest, a sleeping captain, and an undersized rudder.
And HMS Apple just turned in the BEST quarter in business history against a massive economic head wind and you say that. You are truly delusional.
Apple, Inc, the company, just turned in a record breaking quarter for ALL BUSINESSES in history. AAPL the stock has little relationship to what Apple, Inc. is doing.
Won't be back till its under 70
Apple R&D, property investments reach all-time highs in Q1Wednesday, January 27, 2016, 03:00 pm PT (06:00 pm)In detailed earnings results for the first fiscal quarter of 2016, Apple said it spent more than $2.4 billion on research and development operations, while gross property and related expenditures grew to $51.3 billion.
Artist rendering of Apple's R&D facility in Yokohama, Japan.
According to a regulatory filing issued to the U.S. Securities and Exchange Commission on Wednesday, Apple's R&D expenses grew to $2.4 billion in the quarter ending in December. The sum equates to 3 percent of the company's total net sales for the period, roughly in line with previous quarterly outlays.
Apple attributes continued sector growth to increased employment and related expenses like share-based compensation and material costs. With $1.9 billion spent in December 2014, year-over-year change comes out to 27 percent, below the curve set by full-year expense growth. Total R&D expenses for fiscal 2015 came in at $8.1 billion, up 34 percent from $6 billion in 2014, which itself grew 35 percent from $4.5 billion 2013.
During Tuesday's earnings conference call, CEO Tim Cook said Apple has no intention of scaling back capital commitments to new product research. The company has traditionally held R&D expenses to 3 percent of quarterly sales.
"We're continuing to invest without pause," Cook said during the call's Q&A session. "We have some great things in the pipeline and we very much believe strongly in investing through downturns such as the one that everyone's going through."
Related to R&D, land and building investments grew by almost $775 million since September. By comparison, growth was at $885 million for during the three-month period ending in June 2015 and $444 million in the period prior. Overall land and buildings expenses reached $7.7 billion in the first quarter of 2016, contributing to $22.3 billion in total net property, plants and equipment resources.
Apple is widely rumored to be conducting research into an electric vehicle dubbed "Project Titan," an ambitious undertaking expected to eat up both R&D money and property. Last year AppleInsider learned Apple was using a secret facility in Sunnyvale, Calif., as its base of operations, but the company is thought to be looking at other leased properties as Titan's team expands. Earlier this week, sources told AppleInsider that Titan was in flux as executives attempt to refocus the initiative, potentially leading to the departure of former project lead Steve Zadensky.
Here's more proof:
San Jose council approves agreement for Apple campus in North San Jose
By Ramona Giwargisr
01/26/2016 08:11:07 PMSAN JOSE -- City leaders Tuesday unanimously approved an updated development agreement that clears the way for Apple to begin building its 86-acre campus in North San Jose, a massive undertaking that could bring more than 16,000 jobs to the community.
"Welcome to San Jose," said Councilwoman Magdalena Carrasco. "What can I do to convince you to open a store in Alum Rock?"
The future Apple campus is located on the north side of U.S. 101 near the Highway 87 interchange and stretches along Charcot Avenue to North First Street. With the exception of some existing office complexes, it is a highly-visible piece of land that has been vacant for years.
Roughly 16,000 to 20,000 Apple employees could work at the North San Jose campus if it is fully developed.
(This is an excerpt, read the rest at the San Jose Mercury News.)
You will have a long wait. The $216 Billion in cash represents over $37 of the stock price. That means that the rest of Apple is worth literally NOTHING if it reaches $70, because subtracting $37 from $70, means the net price would be $33 per share. It won't happen. The P/E would be ridiculously low. The big boy mutuals, banks, hedge funds, and banks will have bought in well before you'd get a chance. Apple is still a money creating machine.
Can you post the annual report of your own company, so that we can see if you're qualified to make such statements?
People on the Hindenburg all had smiles on their faces too...until the blimp caught fire.
If the news is so “wonderful”, why do their stocks continue to plummet? Why do they keep using the old playbook of buying their stock back? Apparently all these investors, many of whom have been doing this for decades, aren’t fooled. No ship is immune to icebergs. Just ask Nokia, HTC, IBM, and HP.
The thrill is gone. Correction is nigh, and Apple’s on the downslope. Get used to it. Get prepared for it. Accept it.
No annual report needed. Investors have spoken.
Buying stock back is a means of returning equity to stockholders in two ways. Those who wish to sell may do so, and those who don't see their stock increase in ability to earn dividends by not being divided so many ways. Their share of the company goes up. If they cannot see that, they are stupid. Apple is smart in bringing equity back into the company. You don't have a clue. AAPL is being manipulated by the traders and they don't know how to treat Apple the company.
I see. You’re saying investors are stupid. How nice. Well, investment companies in this game have been in the business well before you were born. You’re showing blind faith in a company, but failing to see the signs. As for record-winning quarters, let’s take a look at some recent landmarks, shall we?:
HTC
Record High 4Q2010
Annual Low Low 4Q2011
Total Drop 51%
Result: Near bankruptcy
Nokia
Record High 1Q2000
Annual Low 1Q2001
Total Drop 72%
Result: Total loss of market share
HP
Record High 1Q2000
Annual Low 2Q2001
Total Drop 88%
Result: Total loss of market share
Micron
Record High Q42014
Annual Low Q42015
Total Drop 66%
Result: Total loss of market share
We could go on and on. All these companies were at the top of their segment at one brief point in time. A good article explaining why Apple will continue to slump and how it pertains to these patterns can be read here:
In addition, Samsung is pulling away from Apple yet again. If Apple can’t gain some market share in China, their problems are going to be a whole heck of a lot worse than investor confidence.
The reason that those companies you've listed failed is that Apple killed them with superior products. Apple just concluded an epic quarter.
Samsung is pulling away from Apple yet again.
Samsung is wasting stock holders' money in court fighting losing battles, defending itself for stealing Apple's intellectual property.
Again, please provide the documentation to show where your business decisions have propelled your own company, in comparison to the failures you're claiming at Apple.
Or, maybe, just STFU and don't buy the stock?
HTC and Nokia failed because they could not respond competitively to the iPhone.
Your list of data about irrelevant companies is nonsense. Meaningless strawman Red herring obfuscation.
Apple is not HTC, Nokia, HP, nor Micron. To assume so is to make an ass out of you, and you make the same mistake that all other ANAL-CYSTS make, that Apple is just another hardware company selling commodity hardware at the lowest price in competition with other hardware companies also selling hardware at the lowest price. It's not.
Not a single one of those companies had a world's record quarter for ALL businesses in the world. What makes you think those businesses are at all comparable?
Samsung just gave guidance that is far worse than AAPL's. . . and its market share in China is dropping fast. . . and In Samsung's last calendar quarter of 2015, the quarter equivalent to the one Apple just reported with a modest 1.7% quarterly Year over revenue Year gain, Samsung reported a huge 40% Year over revenue Year DROP!
At the same time, according to Strategy Analytics, Samsung grew their market share by 6%:
Samsung widens worldwide smartphone unit share lead --Thursday, January 28, 2016 · 2:02 pm
How can that be? Samsung grows their world wide market share but posts a huge revenue DROP???
First of all, the phones they are reporting as selling are NOT all smartphones selling for large prices. In fact, in the Apple v. Samsung lawsuit Judge Lucy Koh ordered Samsung to reveal their product mix of phones they ship. Under protest, Samsung complaining the data was a company secret, finally revealed under discovery that they shipped ~30% Android smartphones, ~40% Android feature phones, and another ~30% basic Android phones with minimal capabilities (dumb phones). That means that only ~30% of the Android phones that are historically attributed to Samsung Smartphones shipped are actually "smartphones." But all these reporting agencies ASSUME that since Samsung makes the phone, and that it is labelled an Android phone, it just has to be SMART, so they count them as "smartphones." But, it turns out that, they aren't, only 30% were actually true "smartphones." The rest were lesser, cheaper phones, a large percentage were even the cheapest phones made for parts of the world where smartphones can't even be supported for lack of internet infrastructure. Oops. These phones were STILL BEING COUNTED AS SMARTPHONES by IDC, GARTNER, STRATEGY ANALYTICS, CALALYS, and every other reporting company that counts "smartphones!"
The reporting companies do that for EVERY company making Android phones. In the category called "Others," the vast majority of the makers do not even attempt to compete with the major makers of smartphones, and only make feature phones or dumb phones. Ergo, the Android market is primarily NOT smartphones, but rather large numbers of lesser ability phones for parts of the world where smartphones do not really work as we are accustomed to them working.
Samsung started experiencing sales difficulties in the last calendar quarter of 2014 in the smartphone sales. In that quarter, Samsung announced they were REVISING their product mix, and uncharacteristically, they even announced the percentage of smartphones they were now going to be making instead, 19%, and concentrating more on the lower, better selling feature phones and even lower basic phones for the rest of the world.
In the following quarters, Samsung's leading position China in Smartphones was lost to Apple and Xiaomi, with Apple for a time reaching 24% (It's now dropped to 19% of the smartphone market in China but a lower percentage of the overall phone market), and Xiaomi and other Chinese makers such as Huawei also grabbed a large portion of Samsung's feature phone share in China. But Samsung increased its sales of the lower, cheaper market. . . but that did not improve its bottom line.
Ergo, lots more cheaper phones, but way lower revenues dropping 40% over 2015 and a huge loss in the upper level smartphone market.
The major take away is don't believe those huge numbers of "Android Smartphones" being reported as shipped on those comparison of numbers of phones sold (shipped) lists. Only something under 30% of those huge Android numbers shipped are actually smartphones. The rest are anything BUT smart. The only company reported on those lists that sells 100% smartphones is Apple.
As for your posted linked article, the article's main point seems to be this:
"What really spooked investors was [Apple CEO Tim Cook's] negative comments around what he's seen so far around greater China -- specifically Hong Kong -- because China is so key to the Apple growth story," says Daniel Ives, managing director at FBR Capital Markets. "At this point Apple is not being valued like a growth company. It's being valued as a mature company."
I heard the entire Financial Conference Call. . . and I heard nothing from CEO Tim Cook and what he saw ". . . so far around greater China -- specifically Hong Kong" except that Apple's iPhone sales actually INCREASED during the quarter by 19% when everyone else was claiming they were decreasing. Where were these negative comments"
The bullet points of Cook's comments on China and India were essentially:
I keep waiting for the Annual Report from UYM where we can see the billions in shareholder value that he’s created, and the awesome competition-killing products which will demonstrate why Tim Cook is such an idiot.
But all I get is crickets...
Oh! I thought you knew. UYM makes crickets!
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