“‘Apple has peaked under the leadership of CEO Tim Cook,’ Gillis said in his research report,” Seitz reports. “‘When we ask ourselves ‘Do we see Apple gaining or losing its next $100 billion of value?’, the answer is losing,’ Gillis said. ‘We would rather be too early on this call than too late.'”
“‘With the unfolding dynamic that is the maturation of the smartphone market, Apple has had ample time and resources to build new revenue streams and categories, and the only new category that been delivered by current management in their five years is the watch that still begs for a raison d’etre,’ Gillis said,” Seitz reports. ” Apple has over $200 billion in overseas cash, which is ‘languishing on its balance sheet.’ It could have used that cash to buy ARM Holdings, which SoftBank just acquired for $32 billion. ‘Apple acquiring ARM could make so much sense,’ Gillis said. ‘It’s a high-margin business with future growth, plus there is a national security interest benefit. It positions Apple for the growing IoT (Internet of Things) market. So disappointing! Perhaps management was focused on how to remove headphone jacks.'”
Read more in the full article here.
MacDailyNews Take: Bad analysis. If Apple had purchased ARM, they’d quickly be ARM’s only customer and the rest of the world would quickly work to move on to an independent architecture. They would not settle under Apple’s considerable thumb. Therefore, ARM’s value as a business would cease to exist and there would be no “future growth” for an Apple-owned ARM. A competent analyst would see this clearly.
Additionally, the number of so-called analysts like Gillis who do not understand the value of the Apple Watch is appalling. All you have to do it wear one for a week. We suggest Gillis do so.
The childish and rather clueless jab over “headphone jacks” reveals an underlying bias that colors and greatly weakens the rest of Gillis’ so-called analysis.
We’ve i’Caled Gillis’ commentary for future use.
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