No, Apple is not dead, just logic

“While Apple stock has been plummeting the chorus line has been growing louder — Apple is dead,” Capital Market Laboratories writes for Seeking Alpha. “There’s one thing though, Apple is not dead, and even more bizarre, the calls of its death are in fact, literally, illogical.”

“The argument goes that if iPhone unit sales growth slows, or even worse, shrinks, then the Services business too will shrink, since those users are mostly iPhone owners,” CML writes. “Apple’s unit sales growth is slowing because people are upgrading their phones much less often. So, let’s say Apple sells 200 million iPhone phones this year, perhaps next year it sells just 170 million — that would be shrinkage, right? No, not right. That would be shrinkage in growth. If Apple sells 170 million iPhones next year, irrespective of how many the company sold last year, that is 170 million more phones.”

“That is, some will be Apple users upgrading to newer phones, and some, obviously, will be Android switchers,” CML writes. “Wall Street has gotten its underwear turned around and drawn an equivalency between slowing growth and losing users. That is not the case… It’s a good reminder that when the bear market arrives, logic tends to depart. Let’s not be those people.”

Read more in the full article here.

MacDailyNews Take: Calm heads and clear thinkers can profit from illgical fools consumed by fear.

Be fearful when others are greedy and greedy when others are fearful. ― Warren Buffett

21 Comments

  1. With all the customer frustration and dissatisfaction from Apple’s base, the ONLY saving grace Apple has is their high sales and profits. It makes sense that if the only good thing about the company seems to be faltering, that people would react quickly to that.

    1. I’d like to see some actual numbers on dissatisfied Apple customers. Apple is still opening new stores and I haven’t heard of their customer base shrinking. Most of the people I know who use Apple products are still satisfied as most of them are not whining tech-heads who review dozens of similar products. Dissatisfied tech-heads are not Apple’s main customers. Most Apple product users are not daily complainers and many don’t even go back as far as when Steve Jobs ran the company.

      Apple doesn’t build computers the way I would like them to be built, but I’ll still continue to buy them rather than buy a Windows computer because an Apple computer will fit 95% of my daily needs and run trouble-free for years. (I’m only basing this on past experience as I haven’t bought an Apple computer in the last five years.)

      There are a lot of idiot investors in the stock market who worry about every little thing and still make the wrong choices. No true investor should be buying a stock one day and then selling it the next day unless they bought it on margin. Dumping stock on unsubstantiated rumors is just foolish. Believing anonymous sources is even worse.

      1. Exactly it comes from people who like the sound of their own voice and mistake themselves as representative of opinion. Most Apple buyers do not come on MDN or anywhere else venting their spleen on such matters. Most are very happy users. Doesn’t mean that apple shouldn’t get off sitting on their hands but rants about outrage by users is just delusional usually by those who want to think it rather than any evidence to support their prejudices. All products reach a plateau at some stage and you need to be nimble enough to manoeuvre around that. If you want to attack Apple that last might be a better front to do so not that maturing iPhone sales means unhappy customers. If so one presumes that Samsung has an awful lot of unhappy customers too. Only those coming from a small base and usually selling at cheap prices (i.e. Chinese) are seeing rapid sales increases.

      2. Anecdotally, my local Apple Store used to be packed, such that you basically had problems physically getting into the store.

        These days, its a breeze, because foot traffic is maybe 10% of what it used to be.

        The big change I’ve seen in myself & others is that we’re no longer fawning over Everything Apple and using our influence to advocate for our family/friends to buy Apple.

        Of course, since its been 5 years since even the “Trash Can” Mac Pro came out…

        In any event, CML is forgetting two things.

        First, the Stock Market is forward-looking & hates risk. That’s why the old saying “Past Performance is no guarantee of future results”, and as such, is still very much focused on the prospects of a 25% tariff on China which will nail Apple.

        Second, it isn’t just unit sales, but also the “churn” of those who leave iOS. As others in this field learned the VERY hard way, when your customers move on to the “Next Big Thing”, your company’s prosperity turns very quickly. Just ask RIM, Palm, Nokia, …

        Case in point: NOK plummeted when people realized that the Next Big Thing was the iPhone: their stock dropped by 50% within a year, and continued to even further. While they did stabilize and avoid death, even today’s stock value is still but a shadow of its past: 5.6 versus its pre-iPhone peak of 39.3 means that it is down by 85% … before inflation.

    2. Tau Mix, do you work for Samsung? Apple has one of the most if not the most satisfied customer base on the planet. This article misses the point completely. There is no evidence that Apple’s iPhone sales are falling. Actually, to the contrary, all it shows is that people are still buying iPhones despite Tarriff induced price hikes. Apple had a 40% increase over last year’s fourth quarter and their price plummeted because they are joining the rest of the industry and will no longer report individual iPhone sales numbers. Since then the bullshit has been flying, helped along by cheats and morons like you.

          1. The Mac is the one with Final Cut and needs full SSD speeds unhampered by conversion to USB. I mention the playstation because of how simple it would be to put the same thing on a Mac. Tell me how a Mac doesn’t need high speed storage like a videogame does.

          2. If you are using any current Mac model except a basic MacBook, the ports support Thunderbolt 3 speeds up to 40 Gbps. They do not convert that to USB, although they do support USB 3.1 speeds up to 10 Gbps. The PlayStation 4 uses a SATA II interface with a maximum transfer speed of 300 MB/s = 2.4 Gbps. Tell me how a Mac doesn’t have high speed storage like a video game does.

            1. Because the adaptor to USE a thunderbolt port costs more then the SSD I want to plug in! I know there is fast SATA inside my mac, but Apple makes me pay hundreds of dollars to get LESS speed then if I could use what is locked up inside my mac.

            2. Oh BTW, Thunderbolt is dead. Do a search for Thunderbolt 3 products and everything that shows up is actually USB-C, or old Thunderbolt 2 products still selling at list price.

    3. “With all the customer frustration and dissatisfaction from Apple’s base, the ONLY saving grace Apple has is their high sales and profits.“

      Well stated and exactly where Apple is today. The “dissatisfaction” numbers have grown under Cook like I have never seen before following Apple from day one and my first purchase in 1983. Yes, the only way Cook keeps his job is high profits. The board and investors don’t give a damn about anything Apple does and only wake up when profits slow which is why we have to put up a decline in Apple quality (bent iPads), taking away ports and charging more, etc., etc., etc…

  2. NVDA has fallen in value even more than AAPL, but no one is declaring NVidia as dead. Knee-jerk reactions like that are only focused on Apple because certain groups don’t like the company. Just because Apple’s stock price has fallen 30% or so, I doubt if revenue, profits or product sales have fallen 30%. It doesn’t make any sense to me if iPhone sales are down 5%, Apple’s value falls 30%. That’s a bogus equation. Let’s face it. Big investors are just a cowardly bunch who are always on the verge of panic. Why else would the market go up 1000 points one day then fall 500 points the next day? That’s just stupidity or fear. What’s going to change that much in one day?

    I’ll bet Apple’s internal financial books look pretty much the same today as they looked two months ago, give or take a couple of percents. Only on Wall Street can $300B of value disappear into nothingness in a couple of months.

  3. AAPL set a record quarter by 40% and beat the crap out of Wall Street analysts. Now the same analysts are feeding their computer triggered trading modules with the bullshit narrative of falling iPhone sales, without one shred of evidence. They will be beaten again this quarter. Another record in revenue will be set and they will still drive the stock price down, because someone will decide they aren’t selling enough iPhones, still without any evidence. People who believe in the double witching hour and other dumb investment superstitions will determine what happens. A few months will go by. Someone will notice that AAPL is still killing it and the prices will slingshot up again. This happens every few years. This is the first moron article that starts the Apple Death Knell and it deserves to be printed on the paper I use in the smallest room in my house. Currently it is in front of me. Soon it will be behind me.

    1. “the bullshit narrative of falling iPhone sales, without one shred of evidence.”

      How do you know it is a BS narrative, hmmm? Where is your evidence?

      Maybe sales are falling or rising. Only Apple knows because they recently decided to HIDE unit sales numbers from everyone from now on. ?…“the bullshit narrative of falling iPhone sales, without one shred of evidence.”

      How do you know it is a BS narrative, hmmm? Where is your evidence?

      Maybe sales are falling or rising. Only Apple knows because they recently decided to HIDE unit sales numbers from everyone from now on. Capisce?…

      1. “Hide”? No, just reverting to the norm in the industry, after being the ONLY company that discloses unit numbers of anything.

        What Apple wants to hide, probably, is the ASP. It goes up and up, and everyone bad mouths Apple for that. “Everyone” (people of all sorts from everywhere) use an iPhone (not just wealthy, ‘premium’ users), or at least aspire to have one, because of the proven value with reliability, upgrades, and longevity, etc. Yet Apple gets negative publicity for an increasing ASP and for not mass-producing cheap models.

        Apple is still making most of the profits in the industry. They just don’t want to give competitors too many clues about mix of products that would contribute to analysis of ASP from unit numbers.

        Analysts should really clamour for numbers from MS (Surface, etc.), Google (Pixel, etc), Samsung (break-out units of flagship S- and Note models); and Amazon — Bezos is always saying “best sales ever”, “millions”, etc. and everyone laps it up.

  4. “So, let’s say Apple sells 200 million iPhone phones this year, perhaps next year it sells just 170 million — that would be shrinkage, right? No, not right. That would be shrinkage in growth. If Apple sells 170 million iPhones next year, irrespective of how many the company sold last year, that is 170 million more phones.”

    So that logic says that if Apple sells only 1 million iPhones next year, that is still 1 million more phones. Just a shrinkage in growth.
    Yeah, right.

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