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The fundamental problem here is that Apple’s revenues and culture come from selling excellent pay-to-use hardware, and the App Store’s revenues come from sellin
by ggg9990 8y ago
The fundamental problem here is that Apple’s revenues and culture come from selling excellent pay-to-use hardware, and the App Store’s revenues come from selling garbage pay-to-win games. So the advertising in iOS apps looks like the trashy “Crazy Eddie” hucksterism that it is, rather than Apple’s vision of tasteful ads for Porsche and Sonos. There’s a permanent disconnect that will prevent Apple from ever being the premier seller of ads on iOS.
- melling 8y agoApple is trying to get more revenue from services, etc. That can’t continue growing selling more iPhones, at least beyond single digit growth. As much as I like getting a new iPhone every year, I think most of the world isn’t nearly as excited. That’s going to hurt revenues, and the stock at some point.
- simonh 8y agoThe distinct ASP bump since the launch of the X says the new shiny is still selling to the punters just fine. Maybe total sales are flattening off, but there's no sign yet that Apple are having trouble generating interest in premium hardware. That day may come too, but it's been predicted as a near certainty any year now for almost a decade. Those betting against Apple staying on top of their various markets have not fared well over the last 20 years.
- zitterbewegung 8y agoYea the new shiny is still selling but I think apple acknowledges that new shiny phones sales will start to resemble the PC market they disrupted . And Apple doesn’t want to be in that position and is actively trying to disrupt the Smartphone (Apple Watch, AirPods and the HomePod ). Since Apple is a second mover I’m probably going to guess we are going to get a stand-alone mixed reality device soon. Also AirPods will get smarter and Apple watches will connect to more things .
- djajshgsjja 8y agoIf you compare Apple’s PE ratio to the S&P 500 and tech companies in particular, you’ll find that the market is already expecting relatively low growth.
- fauigerzigerk 8y agoAnd it has been expecting that for a long time. 5 years ago Apple's PE was below 12. Since then the stock price has tripled. Now their PE is 18, so the market is expecting Apple to grow a lot faster in the next 5 years than it did in the last 5 years. https://ycharts.com/companies/AAPL/pe_ratio https://ycharts.com/companies/AAPL/pe_ratio We'll see if the market gets it right this time or at least not as horribly wrong as in the past.
- djajshgsjja 8y agoThe PE ratio of the entire stock market has increased by a lot during that period: http://www.multpl.com/table http://www.multpl.com/table You could say that everyone has higher growth expectations, or perhaps capital is just cheaper?
- fauigerzigerk 8y agoCapital has not become cheaper. On the contrary, interest rates are on the way up. But I don't think it's growth expectations that are driving stock prices either. It feels more like investors shudder at the thought of owning any of the alternatives to US blue chips.
- debt 8y agoI think that’s the point. They’re trying to change it by expanding it, bringing in more revenue sources from ads other than the ones you describe.
- tinus_hn 8y agoIt also doesn’t help they want to be the privacy heroes while advertisers want tracking and targeting. It’s quite difficult to compete and they don’t have a unique selling point.
- ggg9990 8y agoTheir unique selling point could always be banning other ad platforms. DOJ isn’t going to do jack shit about it.