I hadn’t seen that, but an article about it is here. Moving away from Samsung is a no brainer - I worked for a fabless company with a rule about not using competitors’ fabs for our product. Moving product to Intel is out of the question, so if you want 20 nm TSMC makes sense. But why buy one? If I were them, I’d rather buy or build a factory which makes screens. Or design a core to move away from ARM.
Have a cite about them building a fab? For NY, I’d wonder if it would be near the Burlington VT IBM fab, which has quite a few unemployed people around it these days. But it seems silly.
You pretty much said what I came here to say. And if the government changes the tax laws to permit their $147 billion in accrued cash and securities to be invested in the US, then so much the better.
I don’t care for Apple and bought MSFT instead when it was at $24. It’s now over $35, so yay me.
That 64 bit core in the 5S is a custom Apple design (using ARM as the base). It’s not an A15 or A9.
They’ve snatched up a lot of talent in CPU/GPU/SOC design over the last few years and appear to be making good use of it (based on stuff I’ve been reading).
Just the rumors that have been reported, nothing concrete. But I think it’s safe to extrapolate their trajectory based on their previous moves and the rumors, seems like they are heading towards substantial or complete fab ownership.
Apple’s stock price doesn’t really matter, and if investors want to undervalue the company to an extreme point, they can just buy back more of their stock at a discount.
Maybe. But market share has never been their strong suit over time. Except when they essentially invent the market, they are always a niche player in those terms. Apple is about profits. Apple has around 10-15% of the smartphone market, but 50+% of the profits. Market share is of secondary importance.
It’s not like the companies I mentioned are poorly run and in need of immediate, direct Apple management. They could buy any of those companies just to have them in their portfolio. Do you think people at Berkshire Hathaway worry about management dilution when they buy all or part of a company to the point they would dismiss the idea of acquiring big companies?
:dubious: I meant they could could create new software or integrate their software into making billing, the collection of data, and electronic medical records easy to use and uniform. You are right that both companies I mentioned are fairly well run, but the industry is generally pretty inefficient.
I think that was pretty clear when I said they could produce content a la Netflix.
They don’t need a game changer. This is just another situation where you don’t need a homerun when a single will do.
The idea that Apple has a lot of bright people working there that probably have a good idea how to grow the company?
You act as if Microsoft and Intel are not successful companies. Apple has and will fail in the future. That is largely what is not gonna determine their future.
:dubious: I guess the “future” is already here then.
Certainly not impossible, especially if some future administration allows them to bring all their money back to the US without paying as much in taxes.
Nonsense. Market share is far less important that profit share and increasing sales. Apple has never gone after the low end market, and I doubt they will start stepping over dollars to pick up a few pennies selling cheap iphones in Cambodia or somewhere like that.
Why? Does Coke need a new version of Coke every year to keep up sales? Small, incremental improvements coupled with a larger market for their products seems to be more than enough to grow the company. For example, the ipad air is essentially the same product as the ipad, yet it sold very well. But again, if this is just about money, Apple has plenty of ways to grow beyond just selling consumer products. Along those lines, they don’t need to keep introducing big new products anymore than any other company does. You act as if Apple made the first mp3 player or tablet.
It works all the time. I am not sure how you can argue that many/most big tech companies today aren’t what they are due to acquisitions. The only difference is that many tech companies have fewer employees, so fully absorbing them is less problematic.
Do you think Warren Buffet is dividing his time between GEICO, Goldman Sachs, etc. etc.? No, of course not. How much time is Sumner Redstone spending thinking about the LOGO network? You are greatly overstating how complicated some of these things would be.
Which pretty much undercuts your point, no? If they can’t use to to produce the next game changer, then they might be better of buying a profitable company with it.
It is clearly gonna be a growing industry for the foreseeable future. Much of the expected job growth and public sector spending will be in the healthcare field. Either way, Apple has always been less about growth and more about being a visionary company. I see no reason why they would hesitate to disrupt an industry like healthcare if they thought they could do it well.
Jobs wasn’t innovative anyway. He was a salesman, a huckster, a damn good one that could probably sell iRefrigerators to eskimos, but someone else would’ve had to have come up with that iRefrigerator first.
As to the healthcare industry … the electronic health record industry is much further developed and integrated than you think. The big gorilla there is EPIC. The system works fairly well and is currently more seriously rolling out “Care Everywhere” where records can be shared between all systems that are on EPIC that are signing up. Healthcare organizations have invested heavily in these systems both in dollars and in time.
The company is privately held and over three years ago was valued at $2.7 billion … by now I suspect it would cost quite a bit more to purchase. But if they were going to try to enter healthcare buying it (and incrementally improving the interface) would be the way to go. I don’t see it.
I applaud a marketing strategy based on premium products, but the products really need to be premium. Right now, the iPhone is a not a better phone than a good Android or Windows phone. That’s one reason that their market share has already shrunk. They have a big installed base and momentum on their side, but that won’t prevent further erosion if people decide they’re not willing to spend more for the same value.
That’s an investment company. There are CEOs at the individual companies. It’s not really relevant to the points at hand. Sure Apple could go invest in a bunch of companies. But really, if it doesn’t want to or can’t invest in its own products, it should pay out a dividend and let its shareholders invest in the companies they want to invest in. That’s another argument against conglomeration: unless there is real synergy, it makes more sense for the constituent parts to be separate investments.
Microsoft is not seen as particularly successful these days, and Steve Balmer basically just got fired. See my links above about their big online failures.
Thank you, that was educational. I’m all for companies being private. I think IPOs are generally a ripoff. I’m not a fan of how the stock market works in general, FWIW.
I’m sure Apple would be insulted to be compared to Coca-Cola. Might as well compare them to your local power utility.
If you want to say it’s OK for Apple not to innovate and come up with big exciting products on a regular basis, then you are saying it’s OK for Apple to become like just your average big clunky company like Coke. And the whole point of my OP is that Apple is in danger of becoming that!
An acquisition to acquire tech, etc., is different than running Ticketmaster as a separate business.
I think this is special pleading that Apple has some sort of unique genius that they could apply anywhere. I don’t buy that.
If anything Google seems like a better match for the needs of the healthcare industry … mining the data to help manage populations is more and more key.
I have a problem with these “Apple is just” or “Apple does”-type arguments. They are only as good as the last time they did that. Some will say Jobs “was just” this or “was able to do” that, and now Apple “cannot just” or “isn’t just.” My OP was against this thinking for the same reason. Jobs himself was only as good as the last big thing he’d done. He wasn’t a magic man, Apple isn’t a magic company.
Throughout this thread, one thing confounding the debate is that we are not arguing about the same things. This is partially my fault; I should have made the terms of the debate more rock-solid in the OP.
The reason why the years are important is that Apple can’t sustain the same growth rate without blockbuster products. It has already failed to sustain that growth rate. Moreover, Apple has become “about” those blockbuster products.
Sure, you can argue that Apple will remain successful on some other terms, such as having a ton of cash or still having high revenue, or whatever. But it will in fact be in situation that’s difficult in many ways (not sheer survival), such as culturally going from the grand upswing to relatively mediocrity.
Not maintaining the same growth rate != in trouble.
Of course past performance does not guarantee future results. Maybe Apple won’t have a killer execution into another new space that drives new performance and maybe they will suffer from commodization of their now limited product space. Those are the risks. But so far each time those have been predicted they have not occurred.
There is space between “grand upswing” and “mediocrity.”
And piss off the investors who bought at the top. They lost tons of market value. But the important thing is that the market is not very confident about their future. Or was way too confident before.
Market dominance comes with margins and profits, which come from inventing a market. If Apple is no longer cool, if the new phones have no new features, the price can’t hold. BTW, I bought a Galaxy S4 today - it was the same price as an iPhone 5S (with the same amount of memory.)
I may be wrong, but Berkshire Hathaway invests but does not actively manage. And they sell. Are you proposing that Apple become a holding company? Do you have any evidence they would be good at that? As mentioned, during the 70s companies like ITT bought up all sorts of companies, and the strategy was a long term failure. Yeah, you can ignore the company until it starts to fail, and then it takes lots of attention. Fail in this case means not produce the desired return.
And what advantage does Apple have versus all the companies in this market already? Writing these big information systems is nothing like writing an operating system. Patient data privacy is considered very important, Apple knows nothing about this.
The market is expecting them to hit home runs. Singles don’t product the kind of margins expected of them. Netflix gets lasting benefit from people signing up for their service to see these shows - and staying signed up. That is partially responsible for their massive stock price increase. What good does it do for Apple? How many people are going to buy an iPhone for $500 to see a TV series?
My friend who started working for Apple has suddenly grown silent, but I haven’t heard that they have anything like the Google policy of a few hours a week to work on your own projects. They seem quite top down. And, speaking as an engineer, most engineers have no clue about how to grow companies. Jobs did, the Woz didn’t.
Computerworld, which used to strike me as a Microsoft does no wrong mag, now is filled with columns about what a mess it is and how Ballmer should have left sooner. They have their cash cows, but everything else has been a disaster, and even their cash cows are in trouble - like Windows 8 helping to depress new PC sales. Intel for the first time ever has been selling fab capacity. They are strong in a shrinking market, but ARM has beaten them in the growing markets.
To me, this is like complaining that your kid failed to maintain his growth rate once he reached age 18. What a loser.
While businesses are not people, they do have life cycles. For example, everyone is fond of saying that small businesses create jobs, but it’s actually only about 4% of small businesses that create jobs and they create them at a huge rate… right up until they become a big company and they plateau.
Not only that, businesses also exist in a world with finite resources. At a certain size, it’s not even practical to hope for a growth rate that’s much higher than the average economic growth… Just think about it this way: if Apple could double every year, it would displace every company and every government and be 100% of the world economy in a little less than 10 years. So when they slow down to 10% growth, that’s not “in trouble.” That’s actually pretty damn impressive.
Actually, for a company that is to a great extent about style it does. Apple is becoming ordinary, a supplier of commodities. Coke. Sure, they have plenty of cash now, but if the cool kids don’t want Apple products then the uncool kids won’t, either, and that pile of money stops getting bigger and Apple might as well become a bank for all the good it does them.
As for the pipeline, the lack of rumors should scare investors. Silicon Valley has always lived and died on rumors, and Apple was never very good at keeping things on the QT–remember that iPhone prototype some worker left in a bar a few years back? Then it happened again? Without a healthy rumor mill big investors will shy away from Apple because they hate not knowing what’s coming next.
We agree on all this. We are just interpreting the situation in a different way.
You are saying that Apple is no longer about growth, and that’s one of the main points of my OP–BUT, that is not a truism “out there,” and a lot of people want to believe otherwise.
I think Apple does still want to be the cool growing company with the cool blockbuster products. So if you were to show your thesis above to their PR person, I think you’d get a strong argument back (and you have from other people in this thread).
1, I’m not sure, my phone never feels too slow. 2, When I picked up the iPhone 5, it felt too light, as though it would just be crushed in my pocket. The Nokia Lumia 900 is relatively a heavy phone, but its weight has never bothered me at all. 3, Is cool, good new feature.
I would definitely consider going back to the iPhone in the future, but right now the OS just sucks. And I thought that even before the recent neon update. The Windows Phone interface has earned high marks from tech bloggers, etc. It is super neat and clean and is nicely customizable. You swipe and get an alphabetical list of all your aps.
Bing gets a lot of flak, but Bing baked in with Nokia maps and geo system means that I can find the local Starbucks or whatever super easily. I search on Starbucks, Bing tells me the closest one, and then pressing on the link brings up a map with the Starbucks and a green dot showing my relative position. The Bing search also has a Shazam-like music search baked in.
I was sick of the Apple Calendar app for various reasons. Windows Phone will easily synch with Google Calendar–it receives the info through the air, you don’t even have to plug it into your computer or anything. That is just a much better experience than having to do the iTunes synch.
In fact, all my updates are done via WiFi, and I never have to synch with any program.
The screen is bigger than iPhone–that is one of the main reasons I didn’t go for the iPhone 5: I didn’t like the screen dimensions. I think that’s why a lot of people have chosen the Galaxy too, and for good reasons. There is a limit to how big a smartphone can get before it becomes a tablet, but I think the iPhone is too skinny.
For me, though, the biggest dealbreaker is iOS with its sea of candy-coated icons. I just do not react well visually to that.
