“Over the past half decade or so, Apple’s capital spending has utterly skyrocketed,” Evan Niu writes for The Motley Fool. “We’re talking about unprecedented levels of investment by the Mac maker, predominantly in manufacturing process equipment, product tooling, and other infrastructure required to make products.”
“After releasing earnings on Tuesday, the company has now filed its 10-K annual report with the SEC,” Niu writes. “Here’s what Apple says in the filing about how much it expects to spend on capital expenditures in fiscal 2016.”
The Company’s capital expenditures were $11.2 billion during 2015. The Company anticipates utilizing approximately $15.0 billion for capital expenditures during 2016, which includes product tooling and manufacturing process equipment; data centers; corporate facilities and infrastructure, including information systems hardware, software and enhancements; and retail store facilities. — Apple Inc.
“That’s an unreal figure for a company that makes consumer electronics,” Niu writes. “Apple is committed to ongoing advances in manufacturing technologies that push the envelope. This often differentiates Apple’s products and allows the iPhone maker to go where the vast majority of rivals can’t follow — because they simply can’t afford to.”
I don’t think the so-called investors care about capex. They’ve already got it into their heads that iPhone sales have limited sales growth and that’s all they’re focused on. No one seems to believe Apple can come up with a product equal to the iPhone in terms of revenue. That might be true and I certainly can’t think of anything. Investors will only see capex being used to improve the iPhone and nothing else. Everyone says Apple is the iPhone company and nothing more. More than capex I believe Apple needs to broaden its business but I don’t think hardware alone is the answer. Believing Apple is doomed can only be a perception and it’s not easy to change perception as long as the business remains the same.
The iPhone upgrade program was supposed to change investor’s thinking, but apparently it didn’t. That will only bring back repeat customers and not growth. It shouldn’t matter at this point because every quarter Apple rakes in a pile of profits and reserve cash even if growth is zero. Apple investors must be extremely greedy if they expect double digit growth every quarter. It’s simply unrealistic to think that.
Pay all but 20% of the profits per quarter to shareholders. Who would not want Apple’s stock if they did that. Remember apple owns shares. So they will still have plenty of cash. They should stop paying for money, buying money, to pay shareholders. That is the craziest, nuttiest way to pay what you owe. Hey, friend, I make 350,000 dollars a year, I owe another friend 200 dollars, loan me 200 so I can pay them, and I’ll give you a dollar a month for the next 220 months.
… and you figure that how? Jobs had much less money to work with and the products during his time were “insanely great”. Too bad you equate great ideas with great sums of money. It seems to me, the mother of invention was not money but desire. “Stay hungry”, and the way to do that is to remove that cushion. I argue that this cushion should be paid to stockholders. I think your thoughts maybe closer to those of tim cook then those of steve jobs. Or, perhaps you’re a banker and just like the way bread is being buttered. 😉
You might be one of the AAPL share holders who expect that your paltry sum that you paid for it makes you entitled to a luxurious living off AAPL for the rest of your life. Do you believe in Apple and its story? If so, relax and watch the magic happen. If you don’t believe in the Apple story, GET OUT OF THE STOCK!
What movie are you watching? What is with you guys? The stockholders own the company. This is not about making great products to make consumers feel good, that’s the marketing, and I’m glad you feel good, you spent enough to do so. This is about making a great product so that people will buy the product, keeping margins high, and selling you the next product cause you feel so good about the other thing you bought.
If you owned 200,000 shares and every quarter apple paid you 2.00 a share, or whatever 80% of the profits for that quarter, oh, I forget, you don’t care about those guys working at apple that have shares. Perhaps I can remind you, the employees that are thanked after all those big shows to intro a product, for working so hard to make a product you want to buy, own shares how about spreading the magic to them through their shares.
TAKE THE MAGIC DIRT OUT OF YOU EYES, and think past giving away money that’s not yours.
Maybe you are among the 1%’ers and just don’t want the worker bees to accumulate any real wealth. Or, perhaps you like a low apple share price. (Hard to get old dogs to learn new tricks, that’s why nobody hires the 50 and above crowd, and most companies try to show the 40 somethings the door)
Apple is in business to make money. mac, pc, tablets, ipads, iphone, chips, software, but not the same marketing. I tell you it’s magic over and over and over and over, you give me lots of money cause it’s magic. The coffee is ready. If I were a shareholder, a part owner of the company, yes I would want the money! I can find thing to do with my own money, even though you sound like you would have a hard time finding something to do with yours. But, wait, you could just be a nice person and want others to have your share of the profits, if you are a shareholder.
So, sure let the magic happen, like, if I owned shares, let the money magically fill up my pockets. That’s the kind of magic investors in any business wants to see.
Just keep puffing those stinky funny looking cigarettes, it’s legal in CO. The magic is about to begin again. puff, puff
Wow, you are a bitter dick.
It absolutely is about making consumers feel good. Making consumers feel good protects profit margins. I buy an iPhone because I feel good about the brand. I don’t buy an Android because it scares me.
Leave the Apple employees out of your rant. They get exceptional stock options.
Also, maybe you shouldn’t rely on just one company to fund your retirement.
Apple has never been about the shareholders. It’s been about the user. I, for one, hope it stays that way.
Apple is beholden to its shareholders as Apple is a PUBLIC LISTED COMPANY.
if Apple did NOT sell shares at the start it would be different but they made the decision so they are responsible to the shareholders FIRST.
as shown in item ONE on the Apple’s Board of Directors Corporate Guidance Guidelines.
(You guys can FLAME me but it don’t change it)
—-
APPLE CORPORATE GOVERNANCE GUIDELINES
I. The Role of the Board of Directors
The Board oversees the Chief Executive Officer (the “CEO”) and other senior management in the competent and ethical operation of the Corporation on a day-to-day basis and assures that the long- term interests of the shareholders are being served. ”
——–
The Debate of course is how BEST Apple can serve shareholders interest. Jobs idea is that they should focus on the products and he famously said the ‘bottom line will take care of itself’ (i.e satisfy the shareholders). Then again under jobs the AVERAGE stock gain in his second tenure was about 40% a year. Now the last year or two the stock has stuck while expenses have soared.
Again, Apple has never been about the shareholders. Steve Jobs didn’t care and neither does Tim Cook. Steve never did anything specifically to increase the stock price and Tim has done very little. Steve was more about putting a dent in the universe than increase the stock price.
If you invest in Apple, then sit down and enjoy a very bumpy ride. If you trade Apple stock, then you don’t care, you’ve already made your money thousands of trades ago.
“Tim has done very little. ” (for the shareholder)
you ARE NOT SERIOUS?
Tim Cook has spent over 140 Billion in stock buybacks for not counting billions more in dividends.
TC has said stock buybacks are for the shareholders (although it hasn’t worked really).
remember Beats cost 3 billion bucks and people thought that was expensive. wrap your brains around that 140 billion figure.
you guys are so clueless, it’s unbelievable….
I’m OK with Apple spending money for R&D and expansion.
BUT….
perhaps they could have spent some bucks on:
1) making the INSTRUCTIONAL VIDEOS for Apple Music at the START and not at the end of the initial free period? Now forever Apple Music is tarred with ‘difficult to use’ . Skimping (or forgetting) stuff like that is nuts for a MAJOR NEW INITIATIVE. Millions of bucks producing Apple Music (3 billion if count buying beats) and they didn’t make instructions?
2) on a PR statement at the launch of Apple Watch April 24 date to clarify consumers and press confusion. What was Apr 24 all about when online came in before and no items were on sale physically on that date? Actually a PR statement is near FREE as they already have PR staff sitting around .
Apple seems to skimp on advertising and PR and Marketing in general (see above) spending one dollar to every 12 to 20 Samsung dollars (depending on the year) Microsoft spent HALF Apple’s ENTIRE worldwide Ad budget (for iPhones, tablets , Macs , stores, software etc) just on the USA Surface tablet NFL tie up,
.. Apple skimps on marketing ESPECIALLY for…
3) MAC ADS
What is the Mac marking budget? Near Zero?
Like I’ve been pounding for years Macs have been a bright spot on earnings yet Apple refuses to advertise them (no serious Mac campaign since Mac/PC guy ages ago — 66 different ads over four years — the few anemic ads like Macbook ‘stickies’ that run for a few days don’t really count as a campaign).
C’mon 15 billion bucks on expansion and they don’t have money for Mac Ads? Not even print or web ads?
One reason the stock is so undervalued (PE half of Google’s) is that big invests think Apple is a ‘one product iPhone company’ so although Mac sales are good, MORE sales would be better.
Also More mac sales = more developers = more software.
ETC.
I like Tim Cook but he’s an OPERATIONS guy (Jobs was the MARKETING genius for Apple) and TC likes spending on OPERATIONS but is skinflint on Marketing spend. (Jobs had one New Mac ad a every month!)
before people one star me, look carefully at my points above, don’t you think there are are some STRANGE GAPS in their budgeting especially when they are talking 15 billion ….
people one starring me, maybe you can write and explain WHY I’m wrong ?
People should stop REFLEXIVELY condemning people for criticize Apple , sometimes you know (like not building big phones) it’s justified.
seriously point out one thing I’m off base, you think its RIGHT for Apple to make the Apple Music Instructional Videos (the Guided Tour) at the END of the start period or not at the FRONT? really?
Yeah, your criticism of Apple’s PR and advertising isn’t really relevant to the discussion of stock price. Plus, why do they need more Mac ads, with competition like Windows, why spend money on advertising?
Again, the criticism of the Apple Music Guided tour isn’t relevant at all to the stock price.
WTF?
“Yeah, your criticism of Apple’s PR and advertising isn’t really relevant to the discussion of stock price.”
‘discussion of the stock price’ ??????
— DUDE DID YOU NOTICE I’m own my OWN THREAD which I started on not that above ((KAPLANMIKE’S)) which people are arguing about the stock ?
the ARTICLE of this page which I’m commenting on is not specific to the stock and neither is my post!
my ONLY comment related to stock is that here is that if Apple sold more Macs as would probably happen if they advertised it would be good for the stock as big investors keep harping that they don’t like to invest in Apple as it;s one product iPhone company , selling more macs will help.
I ALSO mentioned that selling more macs = more developers = more software (which is good for consumers)
perhaps you should pay attention BEFORE HAMMERING PEOPLE?
dude you are so consumed (seeing your posts above) about evil shareholders you are cross eyed….
Reinvesting in R&D is the smartest thing a company can do, and always has.
@kaplanmike:
Not true anymore. If it was about the users, why is Apple releasing buggy shit all the time which happened so rarely under Jobs. Also, their software is becoming bloated and non-intuitive and crappy (see iTunes, iOS Music, etc). And some big bugs are still around in iOS9 – with no fix in sight.
If Apple cared more about the user, they wouldn’t release buggy shit.
I learned computing on the first Mac that I bought in 1984 and I have been in love with every new Apple product. But of late things are not going well for Apple. IOS 9 and El Capitan are the worst software upgrades in every sense of the term. My iPhone 6plus on IOS 8 ran much better than my new 6s plus that uses IOS 9. I had a hell of time transferring apps from one to the other because everything was going into “waiting” mode. It took me more than a fortnight to get everything working again. The upgraded Mac software with revamped Safari is full of bugs. Safari causes screen freezes all the time. About iCloud less said the better. Apple should invest money, lots of money, in getting its ecosystem software in order. New software innovations like Apple Music and News have failed most expectations. Cook is managing money. But who is managing innovation?
I agree. Mac is now aping Windows in terms of UI ethos. Why? Bring back Forrester on iOS and make the phones lovable again. My iPhone still works and it’s effortless to use, but the sparkle, the sheen, the lovability is gone.
Well Apple currently has a market Cap of $672 billion thats the largest of any company on this planet!! The share price is not really going to go much higher its reaching its max ceiling amount top price maybe $140 or $150. The days of making massive gains are over from thr start of $20 price over 10 years ago.
Apple is slowly going to buy back its share will be making a healthy profit each year, but dont expect a huge increase in share price
“Among the arguments why Apple shares cannot outperform the market or its peers has been the oft repeated law of large numbers; the claim that Apple is too big to meaningfully grow and that its market cap, at nearly $680 billion, is so big that there aren’t enough investment dollars to move the needle. But last night the market unwittingly provided an irrefutable counter argument by taking the combined market caps of Google, Amazon and Microsoft to nearly $1.2 trillion. The market seems to have no trouble adding $70 billion to these three companies, whose combined profits are a fraction of Apple’s, but won’t allow the same for a single company”
It would be interesting to compare the market cap of Standard Oil, Bell Telephone, or US Steel at their heights and see if they had the same limitations, once adjusted for inflation. Point being: they wouldn’t.
Again, you are trying to predict the future and you just don’t know what will happen. Continue to make yourself look foolish or jump for joy when if your wild guess is correct, but you are wasting your time either way.
Yes, keep warm, and glow in the dark.
Fade away and radiate…
Hmmm, Blondie reference?
Fix. iCloud. Please!!!
Let all the doomsayer financial analysts read this. Maybe they’d start to understand why Apple is so different from any other company on the planet.
I don’t think the so-called investors care about capex. They’ve already got it into their heads that iPhone sales have limited sales growth and that’s all they’re focused on. No one seems to believe Apple can come up with a product equal to the iPhone in terms of revenue. That might be true and I certainly can’t think of anything. Investors will only see capex being used to improve the iPhone and nothing else. Everyone says Apple is the iPhone company and nothing more. More than capex I believe Apple needs to broaden its business but I don’t think hardware alone is the answer. Believing Apple is doomed can only be a perception and it’s not easy to change perception as long as the business remains the same.
The iPhone upgrade program was supposed to change investor’s thinking, but apparently it didn’t. That will only bring back repeat customers and not growth. It shouldn’t matter at this point because every quarter Apple rakes in a pile of profits and reserve cash even if growth is zero. Apple investors must be extremely greedy if they expect double digit growth every quarter. It’s simply unrealistic to think that.
… and that spending needs to stop.
Pay all but 20% of the profits per quarter to shareholders. Who would not want Apple’s stock if they did that. Remember apple owns shares. So they will still have plenty of cash. They should stop paying for money, buying money, to pay shareholders. That is the craziest, nuttiest way to pay what you owe. Hey, friend, I make 350,000 dollars a year, I owe another friend 200 dollars, loan me 200 so I can pay them, and I’ll give you a dollar a month for the next 220 months.
Wipe out the tax penalty for repatriation of profits. Problem solved.
Thank all the gods that be that your thinking is not the thinking of Mr. Jobs or Mr. Cook. That thinking does NOT lead to ‘insanely great products’!
… and you figure that how? Jobs had much less money to work with and the products during his time were “insanely great”. Too bad you equate great ideas with great sums of money. It seems to me, the mother of invention was not money but desire. “Stay hungry”, and the way to do that is to remove that cushion. I argue that this cushion should be paid to stockholders. I think your thoughts maybe closer to those of tim cook then those of steve jobs. Or, perhaps you’re a banker and just like the way bread is being buttered. 😉
You might be one of the AAPL share holders who expect that your paltry sum that you paid for it makes you entitled to a luxurious living off AAPL for the rest of your life. Do you believe in Apple and its story? If so, relax and watch the magic happen. If you don’t believe in the Apple story, GET OUT OF THE STOCK!
What movie are you watching? What is with you guys? The stockholders own the company. This is not about making great products to make consumers feel good, that’s the marketing, and I’m glad you feel good, you spent enough to do so. This is about making a great product so that people will buy the product, keeping margins high, and selling you the next product cause you feel so good about the other thing you bought.
If you owned 200,000 shares and every quarter apple paid you 2.00 a share, or whatever 80% of the profits for that quarter, oh, I forget, you don’t care about those guys working at apple that have shares. Perhaps I can remind you, the employees that are thanked after all those big shows to intro a product, for working so hard to make a product you want to buy, own shares how about spreading the magic to them through their shares.
TAKE THE MAGIC DIRT OUT OF YOU EYES, and think past giving away money that’s not yours.
Maybe you are among the 1%’ers and just don’t want the worker bees to accumulate any real wealth. Or, perhaps you like a low apple share price. (Hard to get old dogs to learn new tricks, that’s why nobody hires the 50 and above crowd, and most companies try to show the 40 somethings the door)
Apple is in business to make money. mac, pc, tablets, ipads, iphone, chips, software, but not the same marketing. I tell you it’s magic over and over and over and over, you give me lots of money cause it’s magic. The coffee is ready. If I were a shareholder, a part owner of the company, yes I would want the money! I can find thing to do with my own money, even though you sound like you would have a hard time finding something to do with yours. But, wait, you could just be a nice person and want others to have your share of the profits, if you are a shareholder.
So, sure let the magic happen, like, if I owned shares, let the money magically fill up my pockets. That’s the kind of magic investors in any business wants to see.
Just keep puffing those stinky funny looking cigarettes, it’s legal in CO. The magic is about to begin again. puff, puff
Wow, you are a bitter dick.
It absolutely is about making consumers feel good. Making consumers feel good protects profit margins. I buy an iPhone because I feel good about the brand. I don’t buy an Android because it scares me.
Leave the Apple employees out of your rant. They get exceptional stock options.
Also, maybe you shouldn’t rely on just one company to fund your retirement.
Apple has never been about the shareholders. It’s been about the user. I, for one, hope it stays that way.
Apple is beholden to its shareholders as Apple is a PUBLIC LISTED COMPANY.
if Apple did NOT sell shares at the start it would be different but they made the decision so they are responsible to the shareholders FIRST.
as shown in item ONE on the Apple’s Board of Directors Corporate Guidance Guidelines.
(You guys can FLAME me but it don’t change it)
—-
APPLE CORPORATE GOVERNANCE GUIDELINES
I. The Role of the Board of Directors
The Board oversees the Chief Executive Officer (the “CEO”) and other senior management in the competent and ethical operation of the Corporation on a day-to-day basis and assures that the long- term interests of the shareholders are being served. ”
——–
The Debate of course is how BEST Apple can serve shareholders interest. Jobs idea is that they should focus on the products and he famously said the ‘bottom line will take care of itself’ (i.e satisfy the shareholders). Then again under jobs the AVERAGE stock gain in his second tenure was about 40% a year. Now the last year or two the stock has stuck while expenses have soared.
Again, Apple has never been about the shareholders. Steve Jobs didn’t care and neither does Tim Cook. Steve never did anything specifically to increase the stock price and Tim has done very little. Steve was more about putting a dent in the universe than increase the stock price.
If you invest in Apple, then sit down and enjoy a very bumpy ride. If you trade Apple stock, then you don’t care, you’ve already made your money thousands of trades ago.
“Tim has done very little. ” (for the shareholder)
you ARE NOT SERIOUS?
Tim Cook has spent over 140 Billion in stock buybacks for not counting billions more in dividends.
TC has said stock buybacks are for the shareholders (although it hasn’t worked really).
remember Beats cost 3 billion bucks and people thought that was expensive. wrap your brains around that 140 billion figure.
you guys are so clueless, it’s unbelievable….
I’m OK with Apple spending money for R&D and expansion.
BUT….
perhaps they could have spent some bucks on:
1) making the INSTRUCTIONAL VIDEOS for Apple Music at the START and not at the end of the initial free period? Now forever Apple Music is tarred with ‘difficult to use’ . Skimping (or forgetting) stuff like that is nuts for a MAJOR NEW INITIATIVE. Millions of bucks producing Apple Music (3 billion if count buying beats) and they didn’t make instructions?
2) on a PR statement at the launch of Apple Watch April 24 date to clarify consumers and press confusion. What was Apr 24 all about when online came in before and no items were on sale physically on that date? Actually a PR statement is near FREE as they already have PR staff sitting around .
Apple seems to skimp on advertising and PR and Marketing in general (see above) spending one dollar to every 12 to 20 Samsung dollars (depending on the year) Microsoft spent HALF Apple’s ENTIRE worldwide Ad budget (for iPhones, tablets , Macs , stores, software etc) just on the USA Surface tablet NFL tie up,
.. Apple skimps on marketing ESPECIALLY for…
3) MAC ADS
What is the Mac marking budget? Near Zero?
Like I’ve been pounding for years Macs have been a bright spot on earnings yet Apple refuses to advertise them (no serious Mac campaign since Mac/PC guy ages ago — 66 different ads over four years — the few anemic ads like Macbook ‘stickies’ that run for a few days don’t really count as a campaign).
C’mon 15 billion bucks on expansion and they don’t have money for Mac Ads? Not even print or web ads?
One reason the stock is so undervalued (PE half of Google’s) is that big invests think Apple is a ‘one product iPhone company’ so although Mac sales are good, MORE sales would be better.
Also More mac sales = more developers = more software.
ETC.
I like Tim Cook but he’s an OPERATIONS guy (Jobs was the MARKETING genius for Apple) and TC likes spending on OPERATIONS but is skinflint on Marketing spend. (Jobs had one New Mac ad a every month!)
before people one star me, look carefully at my points above, don’t you think there are are some STRANGE GAPS in their budgeting especially when they are talking 15 billion ….
people one starring me, maybe you can write and explain WHY I’m wrong ?
People should stop REFLEXIVELY condemning people for criticize Apple , sometimes you know (like not building big phones) it’s justified.
seriously point out one thing I’m off base, you think its RIGHT for Apple to make the Apple Music Instructional Videos (the Guided Tour) at the END of the start period or not at the FRONT? really?
Yeah, your criticism of Apple’s PR and advertising isn’t really relevant to the discussion of stock price. Plus, why do they need more Mac ads, with competition like Windows, why spend money on advertising?
Again, the criticism of the Apple Music Guided tour isn’t relevant at all to the stock price.
WTF?
“Yeah, your criticism of Apple’s PR and advertising isn’t really relevant to the discussion of stock price.”
‘discussion of the stock price’ ??????
— DUDE DID YOU NOTICE I’m own my OWN THREAD which I started on not that above ((KAPLANMIKE’S)) which people are arguing about the stock ?
the ARTICLE of this page which I’m commenting on is not specific to the stock and neither is my post!
my ONLY comment related to stock is that here is that if Apple sold more Macs as would probably happen if they advertised it would be good for the stock as big investors keep harping that they don’t like to invest in Apple as it;s one product iPhone company , selling more macs will help.
I ALSO mentioned that selling more macs = more developers = more software (which is good for consumers)
perhaps you should pay attention BEFORE HAMMERING PEOPLE?
dude you are so consumed (seeing your posts above) about evil shareholders you are cross eyed….
Reinvesting in R&D is the smartest thing a company can do, and always has.
@kaplanmike:
Not true anymore. If it was about the users, why is Apple releasing buggy shit all the time which happened so rarely under Jobs. Also, their software is becoming bloated and non-intuitive and crappy (see iTunes, iOS Music, etc). And some big bugs are still around in iOS9 – with no fix in sight.
If Apple cared more about the user, they wouldn’t release buggy shit.
I learned computing on the first Mac that I bought in 1984 and I have been in love with every new Apple product. But of late things are not going well for Apple. IOS 9 and El Capitan are the worst software upgrades in every sense of the term. My iPhone 6plus on IOS 8 ran much better than my new 6s plus that uses IOS 9. I had a hell of time transferring apps from one to the other because everything was going into “waiting” mode. It took me more than a fortnight to get everything working again. The upgraded Mac software with revamped Safari is full of bugs. Safari causes screen freezes all the time. About iCloud less said the better. Apple should invest money, lots of money, in getting its ecosystem software in order. New software innovations like Apple Music and News have failed most expectations. Cook is managing money. But who is managing innovation?
I agree. Mac is now aping Windows in terms of UI ethos. Why? Bring back Forrester on iOS and make the phones lovable again. My iPhone still works and it’s effortless to use, but the sparkle, the sheen, the lovability is gone.
Well Apple currently has a market Cap of $672 billion thats the largest of any company on this planet!! The share price is not really going to go much higher its reaching its max ceiling amount top price maybe $140 or $150. The days of making massive gains are over from thr start of $20 price over 10 years ago.
Apple is slowly going to buy back its share will be making a healthy profit each year, but dont expect a huge increase in share price
this article was on MDN the other day:
“Among the arguments why Apple shares cannot outperform the market or its peers has been the oft repeated law of large numbers; the claim that Apple is too big to meaningfully grow and that its market cap, at nearly $680 billion, is so big that there aren’t enough investment dollars to move the needle. But last night the market unwittingly provided an irrefutable counter argument by taking the combined market caps of Google, Amazon and Microsoft to nearly $1.2 trillion. The market seems to have no trouble adding $70 billion to these three companies, whose combined profits are a fraction of Apple’s, but won’t allow the same for a single company”
It would be interesting to compare the market cap of Standard Oil, Bell Telephone, or US Steel at their heights and see if they had the same limitations, once adjusted for inflation. Point being: they wouldn’t.
Again, you are trying to predict the future and you just don’t know what will happen. Continue to make yourself look foolish or jump for joy when if your wild guess is correct, but you are wasting your time either way.