Apple shares in decline

Zyzzyva

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Ridiculous reading this thread and seeing one reasonable answer dismissed in favour of one that lays the "blame" elsewhere. Markets are driven just as much by perceptions and sentiment as they are by fact.

I am sensing far more negative sentiment towards Apple online. Personally I am also reading of a few Apple loyalists who are making a switch to other phones. We suddenly have other tablets being considered by many, not just iPads. Then you read news of another smartphone outselling Apple. This affects the buying decision of some. These things affect shareholder sentiment.

My comments in this thread aren't here to discredit what others are saying, because BeVonk! is right, i'm just adding some extra detail to the discussion. As BeVonk! pointed out, it's a combination of things.

What you are seeing at the moment, because of uncertainty in the market, is capital moving from risky assets to safer assets. Apple, by nature, being so dependant on the next product cycle is seen as a risky investment because everyone realises a real stinker on the next product cycle would heavily affect the stock price in the short term. So money is always very twitchy, with everyone watching to spot the next dip before it happens so they can get out and then back in at a lower price. If anything, it just makes it a great stock to trade because you get actual movement. Movement is where money is made. As soon as it's obvious the stock has bottomed out you will see big money buying it up again because the fundamentals are still very strong. In the same way that Apple's small product offering creates nervousness because of the importance of the next iteration, it's small size also gives them a huge advantage because they can respond quickly to mistakes.

I'm really happy there is some pressure on them now(some deserved, some plain old schadenfreude) because it'll force them to include a bit more bang in each product release. The big picture problem Apple execs always have to think about is what they going to release over the next 5 years. It's about finding the perfect balance between including enough innovation to excite people and not too much that they run out of improvements they can actually implement. Samsung are going to face a similar problem within the next 3 product cycles, because they can't play the screen size card again and android is becoming feature complete. Once all their phones have 1080P displays what then? People are going to start to feel their phones are good enough causing them to not upgrade as often.

The bet Apple made in not changing the look of the iphone for 3 generations was perhaps a bit of a mistake, and came across as not trying hard enough considering the competition from Samsung. Apple needs to do two things to get back the gloss they seems to be losing: they need to give the iphone a new look, and they need to revamp IOS because it has been getting a bit stale lately. Just those two thing will send sales through the roof. It would also help to offer a range of screen sizes.

If you look at the rest of their product offering - it's steller. The Imac, Macbook Pro, Macbook Air, and Macbook Pro Retina are all class leading.

Another positive change people don't really consider is Apple's decision to move OSX to a yearly release cycle. That could be an advantage over Microsoft because it'll allow them to shift quicker.

So ja, people are going to make a lot of money when Apple's stock bottoms out.
 
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cerebus

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Ridiculous reading this thread and seeing one reasonable answer dismissed in favour of one that lays the "blame" elsewhere. Markets are driven just as much by perceptions and sentiment as they are by fact.

I am sensing far more negative sentiment towards Apple online. Personally I am also reading of a few Apple loyalists who are making a switch to other phones. We suddenly have other tablets being considered by many, not just iPads. Then you read news of another smartphone outselling Apple. This affects the buying decision of some. These things affect shareholder sentiment.

I don't think BeVonk is incorrect at all. There is a huge amount of sentiment flying around related to Apple and market perception of analysts and Wall Street and it's undoubtedly had a material impact on their share valuations. I gave a link above about one trader who had publicly listed 10 reasons why Apple stock was going to start depreciating, then after it depreciated went and picked it up again at a $200 discount. Whether Apple profits are actually going to start declining is another question entirely; and the tax situation in the US having an entirely depressing effect on stocks in general is one very tangible reason for the current situation.

Apple's profits haven't declined or even slowed down materially at any point in the last 10 years, except if you look at a very granular quarter-by-quarter level where iPhone 4s sales slow because iPhone5 is imminent; or iPhone5 sales can't meet market demand, as a couple of examples. So the speculation is all around factors why Apple is ABOUT TO start losing ground, which is nothing but speculation.
 

BeVonk!

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^ good post ^

Agree. Very well put Zyzzyva.

In my mind a number of risk alarms are sounding for Apple:

1) iPhone 5. Mix of brilliant and not-so-brilliant. Mixed reviews. Most expected another flawless masterpiece ... not fair as Apple is not perfect, but under Job's watchful eye people became used to expect perfection. The iPhone 5 is a first "crack" to appear. The market sees this crack ... it cannot be hidden.

2) The success of the Galaxy S3 cannot be denied anymore. It is did better than anyone (me included) would ever have expected. To the market is says: Apple now has REAL competition (not more false promises of another "iPhone Killer", but real competition). The days of just assuming Apple's iPhone WILL be the best could be over (this is exactly why Stuff Magazine got it so wrong on Day 1 ... assumed the same would again happen, and it did not ... shock&horror: S3 above iPhone 5 on their list).

3) Maps fiasco led to a senior manager getting fired. That is a strong statement from Apple. The market hears: "We failed meeting our own standards".

4) The iPad 4 release so shortly after the iPad 3 was a huge blunder. People are now confused as the ads still say "The New iPad" wen it is not so anymore ... the is a "New new iPad". Apple should have held onto the iPad 3 longer and included changes in the next 12 month cycle "normal" release. The marker hears: "Desperation. Not well thought-out plan. Apple shooting own distributors in the foot". In some things you have to stay predictable. If I bought the iPad 3 I would be very unhappy with Apple right now. The market sees this.

5) Real innovation? Where? Apple fans will provide long lists (thinner this, bigger that, more refinement, etc). The market instead asks: "Where is the next big thing we got used to under Jobs?". The market starts to wonder if we will see as much disruptive innovation (not evolution) now that Jobs is gone.

6) Litigation gone mad. UK court instructions disrespected ... circus. Market hears: "Nobody in real control with enough authority to keep childish reactions at bay". Stay professional at all times and leave stupid games for others. Never disrespect a court ... judges worldwide never appreciates this no matter where it happened ... and this may work against Apple in future.

Just a few examples.
 

BeVonk!

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Another example: iPad Mini. Awesome device. I want one, serious. Can't wait for it to get here. BUT ... Apple (Jobs) first said it was a bad idea to bring out a smaller iPad ... then saw others do it with great success ... and followed with their own iteration. A fantastic little device, but it came as a reaction, not as a first as the market got used to. Yes, unfair toward Apple. They cannot always be ahead of everything ... and for sure not perfect ... but that is exactly why I believe the value must settle lower at a more realistic level because Apple is not perfect and will not always be able to lead or be the first with everything. What I believe.
 

cerebus

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But all of those things have ALWAYS happened with Apple. They've always released some subpar products along with brilliant ones. They've had how many launches where the product turned out to be flawed initially? The original iPhone was lacking so many features of its competitors. The original iPad was chunky and slow and didn't even have a camera. Remember antennagate? How many times people predicted Apple's downfall because of Steve Jobs's arrogance? Only now it's Apple's downfall because of Steve Jobs's absence. They've never been a perfect company; it's always products that divide opinion sharply; since the iPod days when people started on the iSheep mantra; till the iPhone5 and the purple haze.

And sorry BeVonk if I tend to disagree with you on Apple subjects; if you don't like being disagreed with then you should rather stick to an Android forum and I promise not to troll it picking fights with fanboys.
 

BeVonk!

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And sorry BeVonk if I tend to disagree with you on Apple subjects; if you don't like being disagreed with then you should rather stick to an Android forum and I promise not to troll it picking fights with fanboys.

Cerebus, it is not about "don't like being disagreed with". I easily handle disagreements, and I can handle them well enough in Apple threads too. Why should I stick to an Android forum? My thoughts on Apple is shared by many and I am the voice here that state those opinions. You obviously don't appreciate Apple criticism (that has become VERY clear) and you don't like me hanging around Apple related threads (that's also clear). I wonder if those "don't like being disagreed with" shoes don't fit you better?

I've been accused of being an Apple hater because I state things as I see them despite owning more Apple stuff than most here. I've been very frank about Samsung products as well (search and you will find those threads/posts). I don't make idols of companies or their products. I call a spade a spade. That is obviously not appreciated by everyone. Tough. I will be here and I will write my opinions and I don't give a damn whether you or anyone else appreciate them or not. I've been called an idiot, "gone off the deep end", etc, etc. Cool. Can handle that. Doesn't make my opinion any less valid.
 

Zyzzyva

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But all of those things have ALWAYS happened with Apple. They've always released some subpar products along with brilliant ones. They've had how many launches where the product turned out to be flawed initially? The original iPhone was lacking so many features of its competitors. The original iPad was chunky and slow and didn't even have a camera. Remember antennagate? How many times people predicted Apple's downfall because of Steve Jobs's arrogance? Only now it's Apple's downfall because of Steve Jobs's absence. They've never been a perfect company; it's always products that divide opinion sharply; since the iPod days when people started on the iSheep mantra; till the iPhone5 and the purple haze.

And sorry BeVonk if I tend to disagree with you on Apple subjects; if you don't like being disagreed with then you should rather stick to an Android forum and I promise not to troll it picking fights with fanboys.

I don't think Apple are going down at all tbh, so in that sense i think people are reading a lot of the Apple stuff incorrectly, but the fact that it's fashionable to read stuff incorrectly is adding somewhat to the argument that it was a good time to pull out with the intend of getting in lower. Before the Obama induced sell-off Apple stock was seeing a bit of a drop because of all the negative sentiment floating around(mostly BS, but it exists). At that point many were getting in lower thinking it was just a pullback (i know because i made a little cash on a minor bounce), but once the Obama factor happened stocks tanked which turned the pullback into a major sell-off.

Apple and Samsung are going to rule the market for the next couple of years - thats not changing. Apple has always seen big stock price moves in both directions and a short term drop isn't a big deal really.
 
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Zyzzyva

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Another example: iPad Mini. Awesome device. I want one, serious. Can't wait for it to get here. BUT ... Apple (Jobs) first said it was a bad idea to bring out a smaller iPad ... then saw others do it with great success ... and followed with their own iteration. A fantastic little device, but it came as a reaction, not as a first as the market got used to. Yes, unfair toward Apple. They cannot always be ahead of everything ... and for sure not perfect ... but that is exactly why I believe the value must settle lower at a more realistic level because Apple is not perfect and will not always be able to lead or be the first with everything. What I believe.

Jobs was famous for throwing people off the sent by saying something was a bad idea before actually doing it. But yeah, with all the negative sentiment at the moment - it's becoming cool to not like apple - it will probably settle lower than $700 for some time. We will have to wait and see. Remember, for years Apple stock was severely undervalued because of the fear that Apple would fail without Jobs. Those with a keen eye can see that isn't actually the case(similar nitpicks existed before but were interpreted differently because of jobs aura), but until some time has passed and the record proves Apple can still execute without Jobs it's very likely Apple could stay under 700 for some time.
 

cerebus

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Cerebus, it is not about "don't like being disagreed with". I easily handle disagreements, and I can handle them well enough in Apple threads too. Why should I stick to an Android forum? My thoughts on Apple is shared by many and I am the voice here that state those opinions. You obviously don't appreciate Apple criticism (that has become VERY clear) and you don't like me hanging around Apple related threads (that's also clear). I wonder if those "don't like being disagreed with" shoes don't fit you better?

I've been accused of being an Apple hater because I state things as I see them despite owning more Apple stuff than most here. I've been very frank about Samsung products as well (search and you will find those threads/posts). I don't make idols of companies or their products. I call a spade a spade. That is obviously not appreciated by everyone. Tough. I will be here and I will write my opinions and I don't give a damn whether you or anyone else appreciate them or not. I've been called an idiot, "gone off the deep end", etc, etc. Cool. Can handle that. Doesn't make my opinion any less valid.

I appreciate Apple criticism very much. Talk to me about what a colossal dungheap iTunes has become. Or the underlying UI workflow problems of iOS. Or the drifting away from the (autocratic) centralization and vision that Jobs provided during his tenure. I've got plenty of ammunition against Apple. Don't mistake my disagreement with your general views for wholehearted devotion to Apple.

I only made that comment because of the post you made...which got subsequently deleted. I'm quite happy to have you on board as a counterpoint. Else I'd probably drift out of the Apple forums altogether; I just like debating stuff. But don't expect quiescent agreement from me; I just say what I feel.
 
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clasqm

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Before we start, it looks like a lot of South Africans own AAPL shares? Oh, you don't! Then why are we talking about this? Does your iPhone mysteriously stop working when AAPL goes under $700? :) shares go down. They go up again.

That said, some interesting points raised

In my mind a number of risk alarms are sounding for Apple:

1) iPhone 5. Mix of brilliant and not-so-brilliant. Mixed reviews. Most expected another flawless masterpiece ... not fair as Apple is not perfect, but under Job's watchful eye people became used to expect perfection. The iPhone 5 is a first "crack" to appear. The market sees this crack ... it cannot be hidden.
Either we read different reviews or there is a conceptual problem here. The only flaw in the iPhone5 is that Apple can't make them fast enough to meet demand. iOS6, OTOH, has a LOT of issues. But iOS6 runs on iphones 3GS and up and iPads 2 and up.

2) The success of the Galaxy S3 cannot be denied anymore. It is did better than anyone (me included) would ever have expected. To the market is says: Apple now has REAL competition (not more false promises of another "iPhone Killer", but real competition). The days of just assuming Apple's iPhone WILL be the best could be over (this is exactly why Stuff Magazine got it so wrong on Day 1 ... assumed the same would again happen, and it did not ... shock&horror: S3 above iPhone 5 on their list).
Yes, I'll grant you it has done well. I hope it and its successors continue to do well. In fact, I hope Nokia Lumias catch on better than they have so far. Apple could use a bit of competition to stop them from getting lazy.

3) Maps fiasco led to a senior manager getting fired. That is a strong statement from Apple. The market hears: "We failed meeting our own standards".
You think it would be better if they'd kept him on? Then you might be asking "what do you have to do to get fired at Apple?"

4) The iPad 4 release so shortly after the iPad 3 was a huge blunder. People are now confused as the ads still say "The New iPad" wen it is not so anymore ... the is a "New new iPad". Apple should have held onto the iPad 3 longer and included changes in the next 12 month cycle "normal" release. The marker hears: "Desperation. Not well thought-out plan. Apple shooting own distributors in the foot". In some things you have to stay predictable. If I bought the iPad 3 I would be very unhappy with Apple right now. The market sees this.
If they hadn't done it now, they would have had to do it next year. The March release of new iPads was a mistake that lost them massive Christmas sales. Take the pain now, reap benefits in the future.

5) Real innovation? Where? Apple fans will provide long lists (thinner this, bigger that, more refinement, etc). The market instead asks: "Where is the next big thing we got used to under Jobs?". The market starts to wonder if we will see as much disruptive innovation (not evolution) now that Jobs is gone.
How many next big things did Jobs actually create during his entire career at Apple?
Apple II
Mackintosh
iPod
iPhone
iPad
That's it. Roughly one category-breaking item every five years, everything else is refinement. I'm not belittling the man, in fact it is a stupendous achievement. Most of us would give 10 years of our lives to have created just ONE of those things. So really, this expectation that Apple will come out with the next Big Thing year after year is just ... childish. I know, I know, the market is not rational about these things.

6) Litigation gone mad. UK court instructions disrespected ... circus. Market hears: "Nobody in real control with enough authority to keep childish reactions at bay". Stay professional at all times and leave stupid games for others. Never disrespect a court ... judges worldwide never appreciates this no matter where it happened ... and this may work against Apple in future.
Can't argue with you on that one.
 

HBee

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A lot of nice theories being bandied here. Apple are poised for their worst December ever, and I doubt very much they have anything to pull out of the hat to halt it.
 

cerebus

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A lot of nice theories being bandied here. Apple are poised for their worst December ever, and I doubt very much they have anything to pull out of the hat to halt it.

Ok let's see what happens when they announce their next quarterly results. From where I sit they're fairly well positioned with new products across nearly the entirety of their line and a fair selection of brand new products, but at least we're dealing with tangibles here and not just more FUD.
 

icyrus

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Ok let's see what happens when they announce their next quarterly results. From where I sit they're fairly well positioned with new products across nearly the entirety of their line and a fair selection of brand new products, but at least we're dealing with tangibles here and not just more FUD.

Don't waist your time with HBee, his brain stops functioning as soon as Apple are mentioned.
 

cerebus

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Don't waist your time with HBee, his brain stops functioning as soon as Apple are mentioned.

It would be nice to have something to hold him to, but as soon as they announce positive next quarterly results he'll just go off on a rant about iSheep.
 

BeVonk!

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I only made that comment because of the post you made...which got subsequently deleted.

I immediately deleted that post after posting it. The post was too aggressive (did not correctly reflect my motive/intention).
 

sand_man

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NASDAQ performance indicators:

aapl sept 19th $702
current $527

down 25%

google inc sept 19th $718
current $647

down 10%

Amazon sept 19th $261
current $225

down 14%

microsoft sept 19th $31.46
current $26.52

down 16%

Indicates a general market related malaise.

Not going to over analize the cause or reasons for Apple's declining share price.
 

Maverick Jester

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Again, that's totally meaningless. Can you explain a bit more?

Well, because of their high product standards and ability to always bring something fresh to the table, perhaps investors became disillusioned with Wozniak's approach over the past year or so? (Just my view, not really too clued up on the stock market and what it reacts to).

But I did like the article you posted- makes sense in this cut throat world.
 

cerebus

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Well, because of their high product standards and ability to always bring something fresh to the table, perhaps investors became disillusioned with Wozniak's approach over the past year or so? (Just my view, not really too clued up on the stock market and what it reacts to).

But I did like the article you posted- makes sense in this cut throat world.

You mean that they've been expecting radical new products from Apple on a regular basis and now they aren't seeing it, they're cooling down? It's certainly a possibility, in fact it's probably quite true.

What I'd say is that I'm not sure Apple HAS another big thing; perhaps there is not one in sight for another 5 years until miniaturization or some new control paradigm opens up a new device form - perhaps these touchscreen windows that Microsoft loves showing off in demos. I think the iPad is the realization of their vision of what technology should be, and what's left for them is to refine and improve that form factor. Can we say the tablet market has consummated, peaked? I don't think it's even begun to crawl yet. Look at what apps like Paper are doing to bring natural colour mixing pallets to the touchscreen.

Apple's strategy is to take a single idea and enlarge it, or miniaturize it organically; until they fill every niche of form where you could conceivably fit an Apple device. That's already been accomplished. iPad Mini is a refinement of the basic iPad concept for singlehanded use. Upwards from iPad you've outgrown tablet size; so the Macbook Air 11" starts to take over that space. And below the iPhone you've got the lower limit of any possible device, the iPod Shuffle.
 
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