“An analyst bumped his price target by 10% on Wednesday, and he barely even mentioned the iPhone,” Alex Eule reports for Barron’s.
“Apple has been talking up its services business recently, but RBC Capital Markets says the opportunity from things like the App Store, iTunes, Apple Care, and iCloud are still under appreciated by investors,” Eule reports. “Services could be a $50 billion business by Apple’s 2020 fiscal year, RBC analyst Amit Daryanani wrote in a note to clients Monday night.”
Eule reports, “‘We see potential for upside to Apple’s current valuation if the company were to continue to increase its mix of higher margin, less cyclical services revenue over time,’ Daryanani wrote.”
Read more in the full article here.
MacDailyNews Note: AAPL today cracked $140.
$142.86 per share equals $1000 per share pre-split (2014’s 7:1 split).
The Mac still makes more money than services. Imagine how healthy it would be if Apple invested in updated Macs.
Desktop computers are just so YESTERDAY silly.
Well this is what a powerful computer looks like these days.
Now you’re talkin’. Reminds me of a very nice Puget Systems tower I saw at Siggraph that had 3-4 Nvidia cards. That might well be our future kemo sabe.
Actually, it is pathetic that “services” generate more profit than “devices”. This reversal of fortune is, in reality, a sad commentary of how Apple has lost its way with Tim Cook. It is as though Cook is completely clueless in developing new devices and is wholly dependent on hucksterism.
The article doesn’t say that services are generating more profit. It just says that services are growing. “At a nice clip.” It also makes the mistake of saying it isn’t about the iPhone. It most certainly is. If the iPhone were not growing, neither would services be.
Turning to more serious matters, something really new just happened: After 13 years of uninterrupted growth, Apple’s numbers declined compared to the same quarter a year ago:
Revenue: $50.6 billion (–13%).
Net profit: $10.5 billion (– 22.5%).
iPhone: 51.2 million units (–16%).
iPad: 10.3 million units (– 19%).
Mac: 4 million units (–12%).
Services: $5.99 billion (+ 20%) ⬅︎.
Please read the response I posted Wednesday. Take your time. You need to understand these data. Once you have grasped their meaning, please, share your thoughts. In face, all Apple fanboys are invited.
get over it
Why should I?
Wow, great news!. This mean from now on, Apple’s investors don’t have to hear the naysayers bashing, Apple is one trick pony anymore which depends so much on the iPhone. 🙂
I’m guessing that depends on how much of that service revenue is dependent on the iPhone.
It may be but it’s not necessarily a good a thing.
The main reason is the build quality of Apple’s products has gone from great to don’t forget your Apple Care.
I’t used to be I wouldn’t think of getting Apple Care, now can’t purchase an Apple product without it.
So the iPhone is saturated in most of the developed world, Mac sales are flat over the last year (not quarter), Apple Music still has converted only a small percentage of the 800 million + iTunes accounts, digital downloads are in decline, iPod sales continue to decline, iPad sales are in decline, Chromebook and Windows 10 are both ahead of Apple in education, Apple still sucks at services, the Apple TV lags Roku with 4K TV, Eddie Cue still has no TV service, Apple is abandoning computer accessories like WiFi Routers and Monitors and the Apple Watch has yet to make a significant impact.
Given all of this, exactly what justification is there for an escalating Apple Share price? Will Gizmo Bar MacBook Sort of Pros save the day? Are they going to become world beaters in streaming video overnight? Are millenials going to all of a sudden develop a burning desire for Apple’s rental music? I can buy streaming packages from AT&T, Hulu (Comcast/Disney/Fox), Comcast, Dish (Sling), Google (You Tube) but not from Eddie Cue and the Geniuses over at Beats that, like Hillary Clinton, are supposed to be the smartest people in the room. Netflix is now moving into Movie production at scale- bypassing the Studios and Theater Chains with direct distribution on Netflix having already done so with TV. Meanwhile Clueless Eddie is talking about a single me-too show that is a thinly veiled copy of any number of other shows
Amazon is kicking Apple’s ass in books, is growing a music biz, is growing Amazon Prime Video, has beaten Apple badly on the connected home, delivers online groceries the same day in a growing number of cities (Amazon Fresh) and has long since passed Wal-Mart in retail sales. They are rapidly scaling in-house distribution and one-click is still the best in the biz. Oh and they are automating their fulfillment centers to cut headcount and are now moving into brick and mortar stores where they control the checkout without an overpriced watch. They also are the benchmark in web services- Apple happens to be a good customer of AWS. Bezos company is doing all this and his side gig is building rockets and rocket motors for resale to the Aerospace industry.
Meanwhile Cook is raising money for Hillary, marching in Pride, meeting with Trump and promising things are in the pipeline.
I am an Apple investor, but also own shares in Amazon. I can see clearly what Bezos is doing and can see his long term vision continues to play out- remember when Wall Street bitched about him re-investing in the biz instead of paying dividends for years on end. I do not see Apple leading in anything, especially disruptive technologies and integration of those technologies into existing market spaces. I see an also-ran trading on rep earned in years past by people long gone from the masthead. Elvis left the building in Cupertino a long time ago.
Elon Musk has merged Solar City with Tesla and is marching his company forward in technologies, product and infrastructure. His other company is going to the Moon next year and is preparing to take NASA astronauts to the Space Station. The Falcon Heavy and Dragon Capsule are on track for manned space flight and heavy lift.
What is so damn frustrating about Apple is that they have more money now and more high skill talent than at any time Steve a Jobs was there and yet they have little of consequence to show for it. It would be like having the most expensive roster in the Pros and not even making the playoffs.
In most private enterprise you get a performance review on a regular basis. You either move up or you get passed by and eventually moved out. Apple used to punch well above their weight, but now they are like some fat old has been trading on what happened back in the day. Someone in Cupertino needs to teach the elephant to tapdance and I am not sure Tim even knows the steps.
Back in the Army they used to say lead, follow or get the hell out of the way. Tim Cook is not paid to follow and surely not to sit on his arse.
There are a number of disruptive technologies developing and they are already causing huge shifts in business. Name one that Apple has a demonstrable lead in. You cannot because they are not.
That is why I stopped buying Apple Stock long ago. When they give me a good reason to see different, I will open my wallet. I can get dividends from any number of utility companies.
Much to think about here.
Eh… most apple services are dependent on hardware market share. Except for things like iTunes sales on windows etc. , losing iPhone etc sales might mean dropping services revenue. Also one big revenue component in services revenue are Apple Care warranty sales.
And the services SUCK