“As we head into the end of 2017, it’s pretty safe to say that Apple’s fate — barring any major issue with its phones — is now in the hands of its consumers,” Matthew Lynley writes for TechCrunch.
“With the iPhone X now in stores (well, sort of — if you catch them at the right time), Apple has now laid down its hand and waits to see where consumer demand lands,” Lynley writes. “Its bid to unlock a higher-tier consumer could indeed end up creating a ton of value for the company… Apple this year has increasingly looked like it’s on a real pathway to becoming a $1 trillion company, and now the holiday quarter is going to show if it’ll be able to pull that off.”
“If Apple is going to hit $1 trillion, it’s going to have to have a portfolio of products that allow it to incrementally increase the total market it can attack. This is typically referred to as TAM (total addressable market), and for a while it looked like Apple may have hit the upper bound of that as the iPhone hit a saturation point with consumers,” Lynley writes. “So Apple has made a big bet to increase that possibility to ratchet up that least upper bound: seeing if people will pay more for its products. And that meant coming out with a phone that costs nearly $1,200 in the United States.”
Read more in the full article here.
MacDailyNews Take: As has been the case for years with Apple, iPhone ASP is the key to real growth.
With iPhone X, so far, so good.
SEE ALSO:
iPhone X drives Apple’s ‘best ever’ year for smartphone sales – December 1, 2017
Crap article.
Apple’s/AAPL’s Investor Sentiment Multiplier (aka PE) is driven by the market’s estimates of growth. It is not based on what the Company has done, but on what the Company will do.
The market (driven by WS) has undervalued Apple/AAPL since Steve Jobs’ return. WS’s memory of Apple’s 1997 near death experience remain fresh in its collective mind, even though it has been 20 years since those gloomy days, AND Apple bears little to no resemblance to the Apple of 1997.
WS’s understanding of Apple. and technology in general, is based on the belief that everything eventually becomes commoditized, that differentiation is based on one of two things: first to market (which is short lived) and price (that eventually declines).
Apple confounds the limited group think of WS because it is rarely the first to market and is priced higher (and getting higher still) than competing products, yet commands significant marketshare and nearly all the profits where it competes. WS does not value “easier to use”, “it just works” and the subtleties of “quality” as these differentiators cannot be quantified in income statements or balance sheets, yet the consumer technology products most favored by WS analysts are made by Apple.
Nor does WS value Apple’s continually upgraded proprietary technologies (hardware and softwares) that leads commoditized hardware and software by about 3 years (two technological lifetimes).
Conjecturing about consumer acceptance of Apple’s products and achievement of a $1 Trillion market cap is the ultimate in click bait/fake news.
Instead, because of Apple’s market cap, WS sits around waiting for what they believe will be Apple’s ultimate implosion, caused by purveyors of commoditized hardware/software.
It happened with the PC industry, where once there were dozens of Wintel manufacturers led by IBM, Compaq, Gateway, Dell, Toshiba, ASUS and HP, there is now Lenovo, Dell and HP, followed distantly by Asus, Apple and Acer and a group called “Other”. WS expects the same to happen with smartphones, tablets, smart watches and streaming services despite the fact that Apple product user bases continue to grow while commanding industry leading pricing and profits.
any “anal”yst looking at AAPL who doesn’t take EGG trajectories (+-BUN) into account, is falling into the same WS trap enumerated by the OP. as any “anal”yst worth their salt knows, BACN, SAMN, and PLUM coefficients ALL impact EGG.
Nope .. Apple has tried to both increase the highend pricepoint and lower the low end price point.
Thats the beauty of This seasons pricepoint spread .. its much wider and offers many more increnents in between than ever before.
And according to rumors there is a new 250$ ipad on its way in early 2018…. and a new SE… and then the home pod…
add on top the exploding services revenue.
At the end it’s always in the hands of the consumer… after all Apple sells products to the consumer.
And at no time before has Apple ever tried to target a wider demographics of consumers than with this years lineup .
.com bubble anyone all stocks are in a bubble. This is going to end very badly. But this time it will make 2008 seem small!!!
http://www.zerohedge.com/news/2017-12-01/uks-highest-profile-portfolio-manager-so-many-lights-flashing-red-im-losing-count
Dan21 is right how can a company trade at 20 times its profits, this is exactly what happened when the .com bubble burst. Stocks suck as Uber, Facebook, Twitter, Tesla etc are overvalued this is bad news