
The Market Wants Apple to Unveil a Time Machine - i386
http://blogs.hbr.org/pallotta/2013/01/the-market-wants-apple-to-unve.html
======
venus
I've just been re-reading _How to get rich_ by Felix Dennis and this quote
springs to mind:

> But a public company exists only to boost its share price, and its share
> price is determined, incredibly enough, by 'analysts' - spotty-faced youths
> who live on another planet where growth-at-any-price is the only deity one
> is encouraged to worship. Medium- or long-term strategies were for wimps and
> amateurs, in their estimation, _This_ quarter's results, _this_ quarter's
> growth, were the only things that mattered to them. It almost seemed, at
> times, as if profit was a dirty word. If we were making 'profits', asked the
> 'analysts', weren't we in danger of 'wasting' money that could have been
> invested to produce more 'growth'?

I thought it ridiculous when AAPL rose above $500, presumably because a mobile
phone company is now the most important thing on earth; I find it equally
ridiculous it's back under it now, for unknown and unknowable and probably
nonsensical reasons. The madness of crowds...

~~~
Camillo
The funny thing is that if you did look at Apple's profits, and the profits
and stock prices of other companies, Apple should cost way _more_ than $500.

~~~
Gustomaximus
You don't value based on a companies profits. You value a company based on
your belief of their future profits.

~~~
jrockway
Or dividends. If Apple paid $100 per share and it cost $1 per share, it would
be a good investment even if you thought the entire company was about to
explode in a giant fireball.

And then there's something in between ;)

~~~
Yhippa
A Daring Fireball would you say?

~~~
jrockway
Only if I were more clever.

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Gigablah
> I think it's more a case of their being dissatisfied with their own lives
> and expecting that Apple's next product will fix everything.

I stopped reading at this point. Does the author even realize how immature
that sounds?

~~~
doktrin
You didn't miss much :

> _The critics that are screaming right now are intellectually lazy. They're
> throwing temper tantrums instead of looking at the big picture. Like two-
> year-olds, they don't really know what they want. And they're not happy when
> they get it, anyway._

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beedogs
> We don't know what Apple has in store for us. Over the past 10 years, it
> reinvented the telephone, music players, the way we consume music, and
> mobile computing itself — actually, with the iPad, Apple invented mobile
> computing.

I'm sorry, but that is an absurd sentence. And that's where I stopped reading.

~~~
benlower
Which means you missed the disclosure buried at the bottom: the author owns
AAPL. Why not lead with that?

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6ren
Apple has a few years of profit from its present product categories. There's
no doubt they can crank out the same rate of technical improvements and great
design. But can they create new product categories? Most companies can't -
they make one, and ride it til it dies. Apple and Steve Jobs were
extraordinary in creating _several_. One other company that did this was Sony
- until its founder retired. It's not a knock against Tim Cook, it's just that
hardly anyone in the world has ever done this more than once (or even once!).
And he's not a wild/crazy guy like Steve Jobs, but the opposite, someone who
can make operations really work.

That said: Apple is perfectly positioned for a Google Glass product. I believe
this is the next form-factor for computers after phones (because you can't
make phones much smaller, and still read the screen, get your fingers on it).
It also needs eyetracking for input. But Google Glass looks terrible - an
Apple version would indeed look like a fashion accessory (e.g. Ray-Bans).
Plus, Apple has manufacturing/technology/design experience in smaller form-
factors (e.g. shuffle/nano).

 _tl;dr_ If Apple can make smartphones fashionable, sunglasses should be easy.

~~~
hcarvalhoalves
Glass is a product that could only have happend at Google: it's geeky, and
they have money to toss on unproven devices. Apple would never release
anything so experimental.

~~~
btown
Which is why they're not releasing such a product until the market has its way
with Glass... every mistake Glass makes, every bug and failure, is something
Apple can avoid doing when and if it finally releases their iEye ;)

~~~
hcarvalhoalves
You're assuming glass, as a product, makes sense in the first place, and that
others will follow. Nobody knows yet, what Google has is a prototype, not a
product. Remember the Segway? It was the future too.

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snowwrestler
I bought more AAPL when the price dropped below $500. Consider:

\- The trailing P/E was 11. 11! For a disruptive technology company! And that
is well trailing since they are just about to announce new earnings.

\- Apple has tremendous cash reserves.

\- The stock pays a dividend.

To me the only explanation for the stock drop that makes sense is technical--
i.e. it is driven by an alignment in high-volume market-timing maneuvers
rather than business fundamentals.

------
akadien
<http://www.apple.com/findouthow/mac/#timemachinebasics>

~~~
cma
Is this for backdating options?

~~~
Cookingboy
I see what you did there :)

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douglasisshiny
I really don't care about Apple, Jobs or Cook, but this is a horrible point
(regarding Jobs track as CEO): "Volatile stock: In 2008, under Jobs, the stock
price dropped by more than 50%."

Uhh... I wonder if that had anything to do with the financial crisis....

~~~
Steko
"this is a horrible point "

I think his point was that they are all horrible points. He's using the ones
for Jobs as a proof by absurdity that the ones for Cook should be ignored.

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krichman
I'd like them to travel back to OS X 10.6 and branch an alternate history from
there.

I think they'll do well for the next few years because they are directing
effort towards making computers and devices for people that don't know how to
use computers. Apple's devices are attractive and are more intuitive/simple to
use for many people (for example, most of my family prefers OS X to Windows).
Unfortunately I believe their implementation comes at the expense of user
experience for power users.

It seems wise to go long on AAPL for now, but I shan't be purchasing more of
their devices personally.

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mazumdar
I could resonate well with the Title of the article because I share the same
sentiment - that with every apple announcement, people expect something that
will blow their minds off. The article went on to do a comparison of
revolutionary product-release timelines, failures, and stock volatility under
Jobs and Cook followed by the market not being happy with Apple and so on, but
I was hoping it would highlight the core reason behind the disruption of the
iphone/ipad and why Apple is unlikely to meet the market's expectations.

Now, this is only an opinion, but I strongly feel that the core behind the
disruptions were the technologies (or combination thereof) we know as
capacitative touch-screen, multi-touch, accelerometer, and gyroscope (i'm sure
i missed something). In fact, I should further point out that it is not merely
the use of such technologies but rather the perfection of these technologies
that allowed Apple to use them and create a user experience that would amaze
the world, followed by developers using the perfected technologies to create
even more delightful experiences.

Now, going back to the Title of the article that caught my eye in the fist
place, while it is realistic for people to expect enhancements of hardware,
new design, new software, etc. from Apple, it is unrealistic to expect Apple
to release revolutionary products every year, simply because the core
technologies don't follow a 1-year introduction cycle. This is something the
market just doesn't understand.

I do believe that there are new core technologies in Apple's pipeline which
are waiting to mature into perfection, but for now, we have to be content with
Apple maximizing user experience with what they have.

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anakha
According to the author, Apple invented mobile computing with the iPad. Wonder
what label he gives to people using laptops on the road etc.?

~~~
orionblastar
The article claims Apple reinvented the telephone, ignoring the 1994 IBM Simon
smartphone and every smartphone since before the iPhone came out. BlackBerry,
PalmOS/WebOS, Windows CE, Linux, Symbios, etc. None of them exist apparently
and Apple invented the smartphone, and everyone else ripped them off.

~~~
rimantas
So article claims Apple _re_ invented the telephone, but you treat that as a
claim that Apple invented telephone. Compare the mobile world prior to iPhone
and iPad and after and say that these devices changed nothing with a straigth
face.

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sgdesign
Maybe I'm over-simplifying things, but it seems to me that it's obvious that
Apple is doing very well, and there's no money in stating the obvious.

So "experts" are simply embracing the whole "Apple is doing bad" meme out of
contrarianism, just to have something to say.

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bobbles
All I know is.. if the Apple TV had an app store I'd have one connected to
every TV in my house and my families houses (Plex!)

~~~
MatthewPhillips
If they wanted an App Store it would already have one. They don't want iTunes
competitors on the Apple TV.

~~~
bobbles
You know what, you're right. AND I just realised that now Plex is able to
AirPlay from an iOS device to an Apple TV. I think my problem is actually
already solved...

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sideproject
Of course no one knows what would happen, but personally, I'd LOVE to see how
STUBBORN Tim Cook is.

I wish he stubbornly sticks to his course - whatever that maybe - and get all
of his sub-ordinates to stubbornly stick to their courses and despite all the
noise external parties are making about whether they are doing well or not,
come out with another kick-ass products.

It's always satisfying to silence your critics by being stubborn and and then
proven right.

------
Steko
tldr: "Disclosure: I am long AAPL."

~~~
Bud
Everyone with a mind is long AAPL right now. It's been bid down 20% lately for
no apparent reason, iPhone sales were great and that's not figured in yet, Mac
sales are strong and about to get stronger and that's not fully figured in
yet, there are a lot of money managers with big $ riding on AAPL staying low
til its earnings report, and if the P/E gets any smaller it'll be countable on
one hand.

AAPL will close up at least 20% higher on March 15 than last night's close.

~~~
corresation
I'm sorry, but the whole "it's all a conspiracy to keep Apple down" line is
ridiculous: The market is highly adversarial, and if anyone were "keeping it
down" artificially, they would have their lunch eaten by those looking for
value.

As one of the most held equities, AAPL isn't an easy asset to game.

Apple has _enormous_ , historic profit levels, and are sitting at an
incredible altitude. If you really can't see the risk factors there -- why
people might be skeptical -- especially given some broad shifts in the market
(where competitors have largely kept up and are forcing Apple to iterate much
more quickly, and to start to introduce products that compete against
themselves, both of which threaten Apple's unprecedented profit margins), you
aren't looking at the market rationally. Assuming that anything is a sure
thing is just ridiculous.

~~~
Firehed
The arguments I've heard may be difficult to pull off, but they do make sense.
One cited a lot of _deep_ in the money call options expire soon, and the folks
that wrote those options have a lot to lose if the stock is high when they
expire in a few days. With today's sloppy reporting and Apple being an
especially juicy target for rumor-mongering, trying to deflate AAPL in the
time just before the payout both makes sense and is probably easier than you
imagine.

You say that people aren't looking at the market rationally, but look at the
volatility in AAPL just this week. It's decidedly not normal for a stock with
a price that high to see 4% fluctuations day-to-day unless there's real news.
Everything out there has been asinine rumors.

As for having their lunch eaten by those looking for value... I bought call
options yesterday on the wacky price dip; they were up over 200% today.
Granted I only bought one option on the bet that a lot of this activity has
been based on attempts to drive down the stock price on rumor alone so it's
not like I made a whole lot (about $180 in profit), but people with much more
money to throw around than myself taking a similar bet made stupid amounts of
money in the last 36 hours or so.

I'll also point out here is that Apple has all of the _profits_ in the
industry, even if it doesn't have the marketshare. It's been true of the Mac
for years, and is increasingly true of the cell phone market as Samsung eats
into marketshare. Guess what? I care about profit, not marketshare, which is
why I'm long AAPL.

~~~
cageface
_I'll also point out here is that Apple has all of the profits in the
industry, even if it doesn't have the marketshare. It's been true of the Mac
for years, and is increasingly true of the cell phone market as Samsung eats
into marketshare. Guess what? I care about profit, not marketshare, which is
why I'm long AAPL._

That is no longer true. Samsung had a great 2012 and seems poised to have an
even better with the S4 and the Note 2. Apple is still making a shitload of
money but _none_ of the market trends are in their favor right now.

What's more, the rise of the "phablet" and the explosion of mobile form
factors means iOS development is about to get a lot harder. Developers used to
pixel-perfect layouts are going to have to shift to a completely different
mindset and the tools Apple provides for handling dynamic layouts are _far_
more difficult to use than those of the competition.

~~~
rimantas

      > That is no longer true. 
    

So show your numbers.

    
    
      > What's more, the rise of the "phablet" and the explosion of mobile
      > form factors means iOS development is about to get a lot harder.
    

How exactly? Do you know something we don't? So far we have three resolutions
to care about, iPhone, iPhone 5 and iPad. Next step for iPad will be retina
iPad mini which changes nothing. How Samsung of Google releasing some weird
form factor will make my life as an iOS developer harder? And btw, there is
autolayout if you missed it.

~~~
cageface
Two seconds of Googling:
[http://www.engadget.com/2012/07/26/samsungs-q2-2012-earnings...](http://www.engadget.com/2012/07/26/samsungs-q2-2012-earnings-
record-profit/)

Apple can't keep playing this doubling/halving game forever. They already
strained things with the iPhone 5 form factor enough that I'm still seeing
tons of apps that haven't been updated and if they want to compete with things
like the Note 2 then they're really going to have to break the mold. All those
beautiful IB designs are going to go out the window.

And no, I didn't miss AutoLayout but it's got to be one of the worst Apple
APIs in a long time. The textual shorthand is cryptic enough to impress a Perl
programmer.

~~~
parasubvert
The Note 2 isn't exactly setting the world on fire - yes, it's doing well at 5
million pre-Christmas, but it is way behind the sell rate of S3s.

Thus I don't think Apple is going to be shifting form factors for phablets,
the iPad Mini is basically their concession to a middle road form factor (and
by most accounts is selling very well).

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mmanfrin
The irony in using the fact that Steve Jobs had a $247mil loss as a sign for
hope, then later down stating that Amazon had the _exact same_ $247mil loss --
as a sign that it has nothing on AAPL.

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cdalonzo
Time Machine, Time Capsule... Same thing <http://www.apple.com/timecapsule/>

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Yaa101
Nah, they had their party, we just want them to go away :-)

