

Apple Sales Gain Slowest Since ’09 as Competition Climbs - tshtf
http://www.bloomberg.com/news/2013-01-23/apple-s-holiday-sales-miss-predictions.html

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Osmium
I have no knowledge of the financial world, so maybe someone can help me with
this and what it means... Apple is now a $50b/quarter company, with a $480b
(edit: now $430b) market cap and $140b in cash. Surely this means that, within
a few years, Apple will have enough cash to buy itself? This seems like a
dangerous situation for a company to be in.

For whatever reasons, there seems to be little confidence in Apple lately, but
it can't be denied that they're still making substantial growth quarter over
quarter. Is this current situation not unsustainable?

Edit: thanks everyone for the explanations, it's very much appreciated

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aqme28
Fast forward a few years to a hypothetical future where Apple is the _exact_
same company but with $500b in cash.

All other things being equal, their stock will be more valuable (and hence
market cap higher) because each share also controls a share of all that cash.
If they have more cash than market cap, something is wrong. Either you should
buy Apple, or they have a lot of debt.

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bjacokes
True -- although in that hypothetical situation, there'd be a lot of pressure
to raise the dividend. Investors don't want to have money in such a cash-heavy
company, because it's like investing in a mutual fund that takes half your
money and sticks it under a mattress. Even if they do good things with the
other half of your money (like Apple does) you're halving your potential
return right off the bat. Cash in the bank is useful when you need liquidity
(unprofitable, danger of recession, potential acquisitions, etc) but $500B is
still too high for any of those needs.

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KaoruAoiShiho
If anyone's confused by the stock price, it's simple. Profits are flat since
this time last year. This time last year the stock was around $420 and that's
where the stock is heading today.

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millstone
Google's profits were nearly flat since this time last year, yet they're up
25%.

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arcticfox
Over the past year, Apple has shown (slight) vulnerability, whereas Google has
looked like an even more formidable competitor moving forward

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_Simon
What is this assumption based on?

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mmanfrin
It also recorded its largest quarterly revenue.

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angersock
We've seen this before, we'll see this again.

Apple may do better in tablets than Samsung, or Microsoft, or LG, or Toshiba,
or whoever. Apple may do better in phones than Nokia. Apple may do better in
laptops than Dell or Asus.

Sadly, that isn't enough--with sufficiently tight margins, they need to do
better than !Apple (better than all competitors, not any competitor), and in
the long run, that's not going to happen. They're going to get pushed out by
more competitors in hardware, and honestly I don't think their software play
is good enough to save them.

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cageface
I agree. Unless their software engineering improves pronto they are in
trouble. Hardware in this market is headed for commodification.

It's still their game to lose but they really need to nail a lot of things in
iOS 7 and so far I don't see any sign of the kind of leadership that would
require.

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alwaysinshade
> so far I don't see any sign of the kind of leadership that would require.

As of 29 October 2012 - Eddy Cue in charge of maps/cloud services, Craig
Federighi in charge of iOS/OSX, Jony Ive in charge of human interface and
hardware design. It'll be interesting to see how iOS 7 pans out, because these
guys are very good at what they do.

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cageface
Ive is a brilliant hardware designer but software UX is a whole different
ballgame and his ability there is currently a big question mark. Cue and
Federighi were both on board when a number of architecturally questionable
APIs were added (Storyboards, AutoLayout), so they're a bit of an unknown too.
That's why there's so much riding on iOS 7.

Contrast this to Google which has a strong, stable team in place that's been
doing superb work for the last few Android releases and you can see why people
are a little gun shy about APPL right now.

