“Given the fact one of the first posts I submitted for this blog was titled, ‘Why Apple Is Worth At Least $650,’ I couldn’t help but question a recent article saying Apple won’t hit $700 again. While it’s true my original post was from January of 2012, I figured roughly a year later is as good a time as any to revisit my original conclusion,” Chad Henage writes for The Motley Fool. “In the article called, ‘4 Reasons Why Apple Won’t See $700 Again,’ the author makes four points to show why Apple won’t reach its prior levels.”
• Slowing Growth In Phones: “Growth in phones is slowing as competition increases.” Since the iPhone lineup makes up 56% of Apple’s total revenue, a slowdown could cause the company’s revenue and earnings growth to change dramatically. However, when it comes to the mobile phone market, Apple is actually gaining market share on a global basis.
• Shrinking Margins: The author suggests that Apple’s margins are shrinking because customers are choosing the cheaper iPhone 4 and 4S models over the iPhone 5. In addition, the iPad Mini is cannibalizing sales of the full sized iPad. One of these issues is real, the other is not.
• Apple Is A Blue Chip And That’s A Problem How? I won’t address the article’s third issue, which was the loss of Steve Jobs, because it is what it is. No one can argue Steve Jobs was a brilliant mind, but nothing said about this would be productive… The author seems to assume that a fast growing company can’t pay a dividend or buy back shares. The truth is, Apple is being treated much worse than a blue chip stock.
Read more in the full article here.
Apple is just starting world growth. In a few years it will own the consumer electronics, pc and mobile world markets.
Bet on t.
Certs is a candy mint. No, it’s a breath mint. It’s two, two, two mints in one
Apple really does not fit the build as a growth stock because theses typically do not make much profit. They are exceptional since they obtain high margins whilst establishing a market lead.
Apple growth in the phone market will be in 2 ways. First they will grow in new territories by taking the high end market. Second they will take more of the low end market in established areas as customers abandon androids in favor of low cost iPhones.
Margins may decrease but not detrimentally. As with the iPod apple will reduce costs and lower prices to kill the competition. They have already done that with blackberry and Nokia. Other phone manufacturers will have terrible margins and lose market share. There will always be copy cats but they won’t make money out of it.
All discussions of “market share” are meaningless until we have accurate data for Samsung phones. The “independent analysts” have only duty to their clients, whom they never have to disclose. Journalists should keep asking Samsung the simple question: “If you are really the world’s leading phone maker, why do you not release official sales figures like Apple?” Their continuing reluctance only feeds suspicions that all Samsung-related sales, shipping, and market-share data may have been wildly inflated.
Same issue with the tablet market. The e-book units sales are not documented and they are counted as tablets (that may still be sold at a loss of $80 an e-reader). Look at the market share dates, all are done prior to or during the early days of the iPad mini. The iPad mini market share impact will hit this quarter. Then when the iPad is counted the same as the PC box they are killing off, Apple sells more total computers that then number 1 PC maker HP.
All this crap is being invented and would not have happened if Apple had not upgraded everything prior to Christmas. The iMac was not shipping until the middle of December and the iPad mini was 1 plus weeks until almost February this year.
If the iPad existed back in 1985, it would have been more powerful than any computer in the general market. It would have be clearly cast as the standard for computing. Move up a few years and even in 2003, the iPad would have been a powerhouse. Would it still be a computer? Of course it would. And now that it is replacing millions of PC boxes, it also is obviously a computer. Oh yeah, Steve Balmer doesn’t agree because “It doesn’t have a key board and won’t be attractive to business.”
I’d like to say one thing. On the S. Korean stock market Samsung is doing very well. Overall I think it’s up about 30% for the last 52 weeks. There are a number of divisions and they’re all doing rather well. It is a highly respected company in the news media. It makes money for itself and gives money back to shareholders in the way of share price rise. On Wall Street, Apple is a joke. A buffoon of a company losing out to every other company. Loyal shareholders are considered idiots thanks to Apple’s collapsing share price. There’s a huge difference of perception about these two companies. Samsung is considered a company on the rise. Apple is considered a company headed for the skids. Samsung isn’t bad-mouthed in S.Korea the way Apple is bad-mouthed in the U.S. There’s no talk of Samsung being dead money due to lack of innovation. Samsung is highly respected. Apple is highly disrespected. You’d never know these two companies are similarly matched in overall wealth.
Even if Apple comes up with ‘The Next Big Thing’ they will say that they can’t possibly do it again and the bullshit will start all over again.
Just like they always did…and then the numbers and the products start to speak for themselves…
Excuse me, but what growth stock has a P/E of 10? Just show me one. Include the reserve cash for a P/E of around 7. That actually appears like a stock that has stopped growing 10 years ago. In fact, worse than that, because MS stopped growing that long ago and has a far higher P/E. Wall Street does not define or value Apple as a growth stock, so why call it one. With a rapidly falling P/E, Apple is clearly valued for zero growth. It seems very obvious.
as long as technology and art intersect and excite the vision at apple, there’s no knowing by any analyst what is what or where is where or why is why until the innovators at apple tell them, show them and place it into their hands. until then, they’ll sit on the sidelines like spectators at a soccer match
I see the Fool’s back to its Apple-naysaying ways. (Really really glad I never listened to their “analysis” of Apple in the early 2000s.)
Yawn.