“How many analysts does it take to make a ‘buy’ call on Apple? The answer, at least according to Citigroup, is three,” John Melloy reports for CNBC.
“Three analysts will tag team the world’s largest company with one covering the software side, another tackling the hardware side and yet another person evaluating its semiconductor supply chain, according a note from the firm Monday,” Melloy reports. “‘Citi is taking a unique team approach to Apple coverage,’ states the firm’s bullish note. ‘This reflects Apple’s broad impact to the technology supply chain and allows us to uniquely follow the company from several industry angles.'”
Melloy reports, “Traders questioned the move by the bank with some saying it was just a marketing ploy but not really needed. Others wondered if the move underscores just how unwieldy evaluating — and managing — a company as enormous as Apple has become. ‘Apple’s revenue and cash holdings are bigger than some small countries’,’ said David Greenberg of Greenberg Capital. ‘At this point, no one person could run the entire company, and dividing the company into two to three different ones based on products might be an idea whose time has come.'”
Read more in the full article here.
[Thanks to MacDailyNews Reader “David E.” for the heads up.]
The most ridiculous thing ever. They only have a handful of products!
That’s right. I never heard of a brokerage firm that could not handle a company whose only largeness is the number of zero’s on it’s balance sheet.
I believe Apple can still put all their products on one table.
Probably take up less room then those three analysts.
Haha
This has to be a hoax. If not, run for the hills cuz there’s definitely something rotten in the water supply!
Wow, has there ever been a worse idea… Ever?
A company who promotes that to make the whole widget is what makes products truly great, should break itself up as a solution to a problem that doesn’t even exist? Just as they are finally reaping the rewards of their conviction?
“Wow, has there ever been a worse idea… Ever?”
yes, Windblows.
Sure. 1. Obamacare. Il will stop there….
After all, Obamacare is a copy of Romneycare.
The people have spoken on Obamacare.
Are you saying that a majority of Americans are Stupid?
what? you don’t think that’s possible?
You are going to see a lot of this idea from Wall Street, because the underwriting fees from such a plan (which would entail IPOs for the spun off units) would run into the billions of dollars.
Keep in mind that Wall Street bonuses are down again this year and the people working there have to justify their jobs and find any way possible to create money for themselves. It isn’t important to them if it makes business or financial sense to the shareholders or the companies involved
umm…. yeah. Let’s break up the most focused company on the planet so the divisions no longer talk to each other… because as it is, Apple is posting some pretty shitty numbers compared to say, HP, Dell, MS….
Where the hell do these idiots come from???
starring “THE THREE STOOGES” from Citigroup
Which is why it is oft referred to as shitty bank :)!
http://t0.gstatic.com/images?q=tbn:ANd9GcQhxslXVE_biAlFV-wUdiWmDdlgPHgstMouCBWAeqng6oZ7W62Y
As the number and diversity of products increases maintaining control of resources, communication, and planning becomes difficult. However, Apple seems to have developed the culture and systems needed to do this. All that is needed is having the right people in leadership positions committed to the vision, dedicated to the purpose, and able to inspire others.
the only thing BIG about Apple are its cash holdings, revenues and profits. Are far as product lines and employees, Apple is a medium sized company, some may even classify it as small, relatively speaking. These folks are ‘tards (this is NOT the “r” word, puh-leeeze).
dunno, retarded seems apropos.
Very good point. One that even i, failed to recognize & ponder. Thank you for your insight, candor & humor.
Brilliant idea citi… Utterly idiotic.
Do you know how the analysts cover Amazon? They just go and ask Jeff Bezos how his company is doing. If he says it’s doing fine, they upgrade the target price. They believe him at his word. They never ask him about actual sales numbers, though. That’s a well-kept company secret that only Jeff himself knows. It would probably frighten the average investor to death to hear the actual numbers spoken out loud.
With Apple, they need a dozen analysts going through trashbins, standing outside of retail stores, paying money to component supplier tipsters and going so far as to just making up any sorts of numbers for information they can’t get. I swear, why is it so important to go over Apple’s numbers with a microscope? How does that possibly help shareholders? 50+ pro and independent analysts to cover one company with a handful of products. And the sad thing is, most of them are usually off by a wide margin. They might as well just use the guidance Apple gives them. Apple analysis has become an oxymoron.
Today, Andy Hargreaves said that Apple needs another $100 billion product just to drive growth. It’s as though China iPhone and iPad sales aren’t going to help Apple’s revenue at all. Yet, somehow, Google has managed to get by with just one search engine all these years but Apple has come up against a wall with the share price below $600. There never appears to be any calm seas ahead for Apple. Just constant storm clouds on the horizon.
That’s the REAL Bozo Explosion…
I’d go with 2, one to cover the numbers incl competition. The other to cover the “end to end solutions” vs competition, that AAPL sells.
Is this when people try to justify their employment by sitting around with nothing better to do then to think up asinine suggestions juxtapose to their employed worth?
Oh, no!!! Not the AT&T scenario from the 1980s all over again!? Didn’t we all learn a lesson from that first huge mistake years ago?
Apple has done spin-offs before. FileMaker is still limping along, but General Magic didn’t make it.
After all, this “vertical integration” thing is just jargon, right?
It’s always funny when some one can’t do something so they assume no one else in the world can do it either. Citigroup and/or this blogger can’t figure out it so NO ONE can possibly do it. lol
How monumentally stupid idea! How do these analysts keep their work? This is goes beyond that you start to teach your father to fuck.
I seem to be at odds with most of the comments, here, but I think what they’re doing makes sense. You’re right about only a handful of products, but those products are having an incredible impact, and the vast resources needed to design, manufacture, distribute, sell and support those products are a gargantuan undertaking. And when just ONE of those products starts getting talked about in terms of the economic impact on the US, then that company probably deserves a little more attention, and a team to adequately analyze segments and piece it all together.
Just think about supply chain. Guess who-sung is a big supplier. Where’s that going to go from where it is now? What about manufacturing concentration, both in terms of companies doing the manufacturing and the concentration of manufacturing facilities across product lines.
Apple is NOT the company it was when we all started buying AAPL in the early to mid-80’s, when just about any one of us with any financial education could do a decent analysis of the company in a couple of weeks for a mid-term project.
Really, it is the banks that need breaking up. The pretty much destroyed the economy by being too big and failing. Even if Apple fails, which is unlikely, it won’t bring down the economy.
Apple complex?
While I can understand Mr Greenberg may have another agenda which is not in the best interest of the company and it’s long term shareholders I still can’t understand why he feel this deep desire to state it publicly and make a fool of himself.
Apple is the schoolbook example of un-complexity and thats whats driven it’s success.
Strategies, corporate structure, executive management, internal operating procedures, cash management are the most un-complex I have ever seen in any global company, and I have worked in and worked for quite a few of them.
Focus all development and all kinds of development exclusively on customer experience and life-time value of customer.
Cohesive offering, don’t diverge to diverse.
Mimimize pace of external design alterations to keep consistent style and minimize manufacturing start-up overhead.
Only do products and services that makes a difference for the customer.
Kill legacy frequently.
–
Develop new product or version, source components, start manufacturing, present it and launch sales & distribution (partly through own e-shop and retail chain).
Repeat above a couple of times per year for a very finite number of product categories (4?) with a very finite number of products each (1-4?).
Each product with a very finite number of variations each (color, memory size etc).
And with significant synergies and economies of scale between product categories and between products.
Scale up manufacturing by cloning factories.
Scale up distribution by signing up new telco operators, retail channels and own retail channel.
When economies of scale permit or competition dictates, secure (corner) control over development of, and manufacturing capacity for, strategic components.
When economies of scale permit, launch new versions more frequently (new iPhone after 100million produced of current version, new iPad after 40-60million produced etc). Which leads to 6month re-vamps instead of yearly re-vamps without prohibitive start-up overhead costs.
This is the schoolbook example of how a company should be un-complex.
The opposite is all other pc, phone and consumer electronics companies.
There are companies at 5% of Apples revenue that are much more complex.
Mr Greenbergs proposal sounds like “Apple need to change their strategies because the strategies are too successful”
The referenced article proves beyond any shadow of a doubt that analysts are paid far too much.
Do they honestly believe that Cook is running the whole company by himself?
Ridiculous.
Only takes one person to analyze Microsloth products. Just copy and paste “FAIL” after each category.
It makes no sence to break up Apple. It makes infinitely more sence to break up the big banks.