Manalagi,
What TC has failed to do is addressing that idle $ 137B cash. He should step up stock buy back. Maybe it is the responsibility of Peter Oppenheimer to manage the financial side. And how about that Board of Director? As useless as the penis on a statue.
The market is tired of promises from TC: mind boggling product, the pipeline is loaded, China will be bigger than the US, and excuses like "constraint", "cannot address this issue", no indication of new innovation like NFC, form of payment, agreement with Disney where SJ is the largest stockholder, acquisitions by using that idle cash, 3D printing, etc etc. Yes, TC is not visionary, and only recycle the same product over and over again: iPhone which is being tweaked here and there, and yet, the market demands a bigger and better phone. Samsung is encroaching Apple and it will be too late for Apple to regain its dominance. Lots of things to discuss and I will give my point of view on a couple of them.
First the 137 billion in cash. I thought about 90 billion of that is overseas and many companies with overseas cash are waiting to see if there is some holiday on the tax consequences related to repatriating the money is what my understanding is. So they are left with somewhere around 45-50 billion without tax consequences that they can use for whatever. I like the fact that they have a cushion, even a large one at low interest rates, just in case the economy turns sour and in case a real good deal comes around that they just cannot say no to. A couple of years ago, Apple bought up several billion dollars of memory chips that they knew they were going to use, at least eventually, getting a good deal on the chips as well assuring they had a supply and the fact that people know you have the money to buy can many times get you a better deal. What I don't want them doing is wasting money on an acquisition, like I feel Google did with Motorola, just because they have the money. I would say that Apple has a fairly good history with its acquisitions with most of them bearing fruit(pun intended) for the company without wasting a lot of money.
With regards to your comment on getting NFC. You do remember that Apple bought a security company this past year? Not many people are using NFC right now for varying reasons. I think Apple is working on a solution, maybe with the help of the security company they acquired, to make transactions and the phones more secure. I think they want to get it right rather than be first to market with something. I would rather have that than have a system where my data/information is at risk. And if it requires new hardware that will go into a new phone, it gives another reason for people to upgrade and possibly switch operating systems.
Your comment on mind boggling products. Isn't that in the eye of the beholder? Many people really like the new Mini and would consider it mind boggling. Does a product need to be revolutionary to be mind boggling or can it be something that is evolutionary but a very nice product? The iPhone 5 is a nice, evolutionary product. TC might say that it is mind boggling. Again, it is in the eye of the beholder. What has the competition done that is mind boggling? A bigger screen, is that mind boggling? NFC that nobody uses? Cheaper tablets that people don't seem to use to connect to the internet? Or maybe because we no longer have the Jobs distortion field at work that we don't see things at Apple the same way we used to?
I like the fact that Apple is sticking with trying to do a few things well. But I think the more they have increased their product offerings, the harder it has become for them to do all things well and if I had one big criticism, that would be it. I think the criticism of the issues with the iMac refresh and the delay in the upgrade of the Mac for power users is probably related to being stretched too thin already. I would like Apple to bring all these products upgrade cycles into a more reasonable time period. I think trying to do too much will cause more issues with the base if the things they do don't work, like what happened with the Maps application, whether it was a real issue or not. IMO, MSFT didn't get into trouble with its base because of their old products, it was with their new products like Vista that essentially sucked that caused more problems for them.
I don't think that Apple needs to do what the analysts want. I think Apple needs to do what they feel they need to do. Again, the analysts don't know what is behind the curtain, whether it is sham of a wizard or if there is stuff getting ready to be released that will make everybody envious and get the copy machines warming up at Samsung and Google again. I don't want Cook worrying about the share price. I want him to make sure that the products that are released are up to Apple standards. I want him to get the best price on the semiconductors that Apple uses in its products. The analysts have, at least in part, caused part of the problem with the share price the past couple of months. They have made the expectations for Apple so damn high that it is tough to feasibly get to. I commented a couple of months ago how ridiculous it would be for Apple to sell something short of 50 million phones in the December quarter and be taken to task because it didn't hit that number and I was right. The analysts have made people disappointed with good results for Apple. That is one of the big reasons for the sell off. For Apple to have a PE of around 10 without an adjustment for cash is just silly but only comes from being disappointed. Some of it is also related to our media which talks about disappointing earnings as a headline but really does not give the analysis because that is boring and turns people off.
Now all that being said, I would have liked Apple to have split their stock. Just my opinion but I think that the high share price makes people feel that Apple is expensive and priced to perfection when it really isn't. It would have been something that if they were going to do it, it should have been done when they were going up in price. To do it now, would make it seem more like a measure of desperation which is something that they don't need right now.
In reading some later posts you made, it seems that you still hold some Apple stock. With all that you see wrong at Apple, may I ask why you still own any? When I lose confidence in a company's management, I will generally sell the stock. The past couple of days have been pretty painful and losing money can make people angry and upset so I wonder if all the teeth gnashing with TC is just the pain of losing money/value of a portfolio and blowing off steam or is it really a feeling that he is doing a poor job which really is in the eye of each investor? Or maybe a little of both?
Just my 2 cents here. Reasonable people can disagree. Good luck.
Neal |
