the 1 year chart looks interesting
AAPL just reported $80B in OCF…damn that’s a lot of commodities sold!
Did you read the article about how that’s not even close to the real number? Nearly all of that is offshore. If Apple wanted to repatriate their cash, after paying taxes they’d have about $0.70/share. Not so sexy put that way.
Operating cash flow , you’re referring to B/S cash ($200B of cash and investments for AAPL). All tech companies have the offshore problem.
I know. I was just pointing out that people get excited about Apple’s war chest, but they’ll never be able to use much of it.
Man, I’m like a “called it” machine these days. 
It will be interesting to see where this stock goes over the coming years. The logic seems to be “but it’s so big, it can’t possibly get bigger, because this has never happened before”. But it can get bigger, and it almost certainly will. The math on deeper iPhone penetration around the planet alone, allows for massive revenue increases. There is still no substitute for iPhone even after a decade, and margins are still high, so everyone has been proven wrong here, and will continue to be proven wrong (risk in it being their main product is overstated).
At the start of the year there was fantastic revenue, but people thought it was a one-off, now AAPL have proven it can continue and that this is the new revenue level going forward. Now it’s “but revenue can’t grow further from here”, and yet it will grow. So at some point it needs to break this $130 ceiling even if the 13X P/E valuation holds…
A side note, I liked that on the earnings call Cook pointed out “I think there’s a misunderstanding (about the Chinese economy), particularly in the Western world, which contributes to the confusion”. This whole August freak-out really illustrates that.
^still holding through the holydays?
This trade hasn’t worked well for me in the short-term (I bought more at 110). Very long holding period, the production cut recently really shook them up. Anyone have any thoughts?
Not touching this while China is going crazy as I have my hands full with FCX, but my ears are perked up a bit with the price at these levels. May have to poke around and see what I think for a medium term investment. Long term I am not too bullish on Apple but the price slide is pretty drastic.
me, “Mr. AAPL is will see its end one day”, bought some AAPL today. there are much worse valued tech stocks at this point.
Very interested to see what Apple releases in the next few years. There is talk of the Apple Car and they would really need to knock the lights out with that to be innovative. They are ramping up R&D spending but in an industry where the consumer is fickle and your brand has to be fashionable increased R&D spending doesn’t always translate into increased revenue.
I have seen too many articles stating that Apples massive R&D is going to be a huge driver of growth but I haven’t seen any releases in the past few years that would make me believe anything other than that it is desperately throwing money trying to find a new cash cow. Still at these levels the valuation seems pretty good.
The low PE is the scary part in my opinion… Right now the consensus estimate is that Apple earns about $10/share next year… if that gets revised down to $9 or $8… the stock could easily trade down to $80 at 10x.
The market for iphones is stable but its unlikely there is a big growth push with that product… There is a an organic growth component from age demographics… Kids that are growing up will liikely get there first iphone around at 12-13 as more senior citizens die off and new retieers are stuck in the eco system. You have to assume that everyone with an iphone will eventually buy another one. Maybe not the new 6s or 7 but their current device will need to be replaced (broken screen/lost/stollen). Personally i hate the OS but the average idiot with an iphone will never switch to Android. I dont think a product that my grandparents uses can be cool or edgy. the margins need to go down at some point. the technological leap in screen resolution/ processor speed/ battery life is likely to plateu. it will be harder for Apple to justify a $700 price point when going forward… with the US dollar streght it will be difficult for some Indian or developing market consumer to afford these luxury devices.
with that said… this is a simple value stock at this point… growth is gone… dividend yield is already above S&P and they can grow it 10-20% per year for the foreseable future. GOOGL/FB/MSFT are better growth (tech/consumer) stocks in my opinon.
AAPL sells refurbs (phones that ppl turn in for upgrades) in 3rd world countries so they dont cost $700
Just going to reiterate this as the products increasingly become a commodity and revenues and margins fall on stable quantities at lower prices.
Why do you think there will be lower prices? More likely situation, being Apple is that P stays flat while Q contracts. AAPL’s business model is pretty capital light, margins should not be hit significantly, unless there is a shift in product mix from phones to desktops/laptops (which could happen).
AAPL investors aren’t in it for the growth, nor do they expect high market share. It’s about catering to the higher end of the market, maybe that market will shrink as the replacement cycle lengthens, but AAPL will not damage its brand equity to capture market share.
Because for the past decade their business model has priced as a premium item. As quantity and market share flatten out or face pressure because of commoditization, they will begin to have to compete on price. Similarly, with a large installed base, their new products which have increasingly offered less and less in terms of technological advances will have to compete against older models. Without major leaps forward in technology price will also become an issue. Factor in the current cell provider shift away from subsidized pricing and prices will face growing headwinds. Those margins are destined to compress given the current trajectory.
There is no such thing as commoditization in high quality durable consumer products. There will always be a high end for people who want high quality products, so Apple will never compete on price and will forgo market share if need be. There will always be major leaps in technology as these electronics get more and more powerful. As for carriers moving away from subsidized plans, carriers want iPhone users as they’re the most profitable userbase, and will be incentivized to subsidize to get that userbase.
It’s likely margins will shrink some as iPhone sales slow due to slowing upgrade cycles, but it’s not because of competing on price.
I’ve heard that song before, this time is different I guess. It’s an electronic, plain and simple. Look at every other evolution in technology over the past 50 years and what happened to the market leading premium brands. What flavor’s the koolaid?
High quality durable consumer products, like tv’s? What are those margins like these days? How long did Blackberry’s reign last? What’s different about Apple? Tim Cook?
If you honestly believe that Apple makes commodity products, then there is no point in this discussion. I don’t think there is anything more that I can say. You will never understand.