Apple’s earnings crater — for now

“After years of consistently exceeding expectations, Apple has stumbled badly during its 2016 fiscal year,” Adam Levine-Weinberg writes for The Motley Fool. “Apple is under pressure on all fronts: the smartphone market is maturing, tablet and PC sales remain weak, and the strong dollar is crimping revenue abroad… However, the company’s longer-term prospects still seem much better than Mr. Market would have you think.”

“In contrast to analysts’ modest expectations for the iPhone 7, analysts are starting to predict a bigger, bolder upgrade for the following year,” Levine-Weinberg writes. “Longer-term, Apple could incorporate virtual reality technology into the iPhone. Longer-lasting batteries are another key improvement that many iPhone users are hoping for.

“In short, Apple should be able to come up with enough improvements to keep most iPhone users upgrading every 2-3 years (or annually, for the most rabid fans) for many years to come,” Levine-Weinberg writes. “This represents a massive recurring revenue stream that will grow as the iPhone user base expands. That’s reason enough for Apple investors to stick around — or even double down.”

Read more in the full article here.

MacDailyNews Take: Boy, we’d have loved to see AAPL touch the $80s. Mr. Market the over-reactor is losing his touch.

8 Comments

  1. Apple Predictions:

    1) Develop iPad Pro with full OSX (mouse, etc)
    2) Develop MBP with detachable/convertible touch screen (see IDC report)
    3) Ditch iPad 9.7″ with iOS and concentrate on iPad Pro, iPad Pro 9.7″ and iPad mini in addition to iPhone (reduces product confusion)
    4) Auto wireless charging for all devices as soon as you enter work/home. (so long as this does not cause cancer 🙂
    5) expand cloud business, Apple TV.

  2. As someone else pointed out:

    “…with $10.5 billion in profit, Apple earned more in the quarter than Alphabet ($4.2B), Facebook ($1.5B), and Microsoft ($3.8B) combined. That’s what happens after an almost unfathomable streak of over 50 consecutive quarters of year-over-year growth — you reach an altitude at which even an indisputably very bad quarter still leaves you with enormous, industry-leading profits.”
    And don’t even get me started on Amazon’s profit to stock-price ratio.

  3. Apple is still a massive entity with huge profits.

    I know Wall Street wants growth , growth and more growth but that is not realistic.

    As long as Apple remains focused on insanely great products and does not start living for the stock price they should be fine.

    1. I wish that I could agree with you, but I can’t. I do not believe that Apple’s current leadership is wholly committed to making insanely great products more than than are building their personal financial portfolios.

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