Apple has some major issues at hand, including but not limited to, declining quarterly earnings (yoy), cannibalization of products, rapidly increasing product and pricing competition, declining profit margins, etc.
Also, as I said before, Apple needs to continue bringing new products to market. Not just updated products. The reason is because once people own a product, they don't necessarily upgrade to the next release of the product. They may wait a couple/few cycles before they upgrade because what they have is either good enough, the cost isn't justified, or they're in a renewal cycle which prevents them from doing so without incurring fees/surcharges.
New products, not just updates to existing, is essential to growing the business. It appears that Apple may be losing its way in regards to product innovation.
My feeling is that AAPL, the stock, is going to have a tough road ahead and may only tread water at best for the forseeable future.
No one upgrades every product cycle anymore. Many buyers are still first time buyers which is reason for optimism since my people who buy one product buy multiple products. I agree they've got challenges, but the reality is they havent even attempted to address the lower price market so right now Samsung is winning a fight against RIMM and NOKIA...
Anyhow they have record number of people using the iOS platform which will continue to improve ancillary revenue from apps, iTunes and advertising. Innovation may come in the form of software instead of a new product, but you are right, they need something either this year or early next to get people excited about it. Absent that a China Mobil deal would probably work for a year.
So your feeling is essentially Apple's guidance? That's bold.
Nosmo, this was quite the prescient call, considering when you first made it. What are the first clues that you look for when a stock is transitioning from growth to value? Is it merely an initial, unexpected drop in price, or a combination of things? What, for example, will be the clues to you when GOOG and AMZN also make this inevitable transition?
Hi merenkov... just dropped in for a moment and saw your post. I made a note to myself of your question and will try to get back to you this weekend. Busy weekend ahead, but will do my best.
All the best to you.
I reluctantly came to the same conclusion the past couple of weeks. The earnings call was the final nail in the coffin for me, it's like current management just has no clue as to how they can pump up the stock price. Although I'm mad at myself for not selling sooner, I'd held since 2006 ($60/share), so I console myself with my overall return (it always sucks to leave money on the table, though). Investors who held Microsoft, Dell, CIsco, Intel, back in the day all had to go through this transition. It's difficult to know (and accept) when this transition is actually happening, perhaps one of the most difficult things for a stock investor to understand.
Why don't you actually spend the time reading the earnings call transcript? Maybe then you will find out why Apples mgmt is still very bullish on its current/future products in global markets that are no where near their full potential nor penetration.