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i don't get this. their machines are too costly. the old insane greatness has become watered down with a focus on global logistics. and what about the supply ch

i don't get this. their machines are too costly. the old insane greatness has become watered down with a focus on global logistics. and what about the supply chain issues with China? what does Apple have on the horizon -- data services? an emphasis on the privacy protecting ecosystem? where is the new vision?

username223 8y ago
I don't see Apple achieving hyper-growth and becoming a $10 trillion company, but they have a solid business selling high-end hardware to people willing to pay for it with money instead of data. What does Oracle have on the horizon? Legacy enterprise support and lawsuits about Java?
- mandeepj 8y ago
  > What does Oracle have on the horizon? They could become a good force in the cloud after netsuite purchase. https://cloud.oracle.com/home https://cloud.oracle.com/home
  - ddebernardy 8y ago
    They could keep trying, I suppose. FWIW they've been in the cloud business since the 2000s. They and IBM were some of the few who were in that business early, and even then their respective reputations preceded them. (This was before XEN, widespread adoption of virtualization, and a slew of other DC techs that democratized using the cloud.) I would imagine they both got enough fortune-whatever companies onboard to earn good money, but neither are market leaders today. Just spitballing, but I'd assume their cloud customers are all companies who buy other stuff from them.
    - amacbride 8y ago
      Exactly. With the hostile takeover of PeopleSoft, Oracle bought themselves a number of huge customers who are disinclined to change ERP systems on anything other than decade-long timelines. It has evolved and is now cloud...ish, so they can certainly talk themselves into being perceived as a “leader.” (Even though they’re not really cloud-native in the way that Workday, Salesforce, or others are.)
- askafriend 8y ago
  If Apple strengthens their foothold in Health and Health related services/integrations, their marketcap will multiply from where it is now.
  - TheOtherHobbes 8y ago
    I honestly can't see Apple making this work. Health is a diverse, messy, market. Apple's schtick has always been making devices that make computing magical, and health would be a huge shift away from that. IMO the market is really looking for a a powerful all-in-one diagnostic health appliance - something like the analyser Theranos was pitching for, but which actually works, and is more comprehensive. De-industrialising health and making the personal equivalent of a diagnostic lab that could keep track of key markers, watch nutrition, exercise, and supplements, and transfer information to doctors - AI or human - would be a major breakthrough. But the technology for that doesn't exist yet. And even it becomes available it may not be affordable or portable. And because bodily fluids are involved it conflicts with the Apple image of clean minimalism. That leaves health as set of tentative fragmented tools and services which provide reassurance here and there - like the fall notification in Watch - but are a long way short of a comprehensive service. The fitness market is a more obvious choice. But if you look at Apple's record, it's not inspiring. Fitbit is a strong competitor, because Watch hasn't lived up to its potential - possibly because Apple can't decide if Watch should be a fashion statement or a personal fitness device. It doesn't really make sense to consumers to try to sell it as both. Behind all of that, I just can't see the current management team having the skill or imagination to make it happen. I think health is going to remain a side interest - a nice add-on, but not a huge new core market that Apple can expand into.
JaleDarvis 8y ago
Healthcare services using the watch. I was a doubter but the fitness rings schtick combined with a weight lifting app has me sold on it. Streaming content? The consolidated news app is interesting as well, but probably not a huge revenue stream.
- macintux 8y ago
  It will be interesting to see more and more insurance companies offering discounted/free Apple Watches. Fitness + accurate monitoring of heart activity + whatever's coming next makes for a powerful combination.
  - dogma1138 8y ago
    It’s pretty common in the U.K. where health insurance packages offer Apple Watch / Fitness trackers and gym memberships for them it’s a no brainer if even 1 out of 50 insurers would alter their lifestyle it would more than pay for itself.
johnwheeler 8y ago
Well, they make machines that are very costly and they focus on global logistics. They've also got a huge supply chain in China. You don't need a 'new vision' to make bucketloads of cash for your investors.
- hermitdev 8y ago
  Apple doesnt make phones or computers that are much more costly (from a hardware perspective) than any other brand. What they have is higher margins per unit due to branding and brand loyalty.
  - valuearb 8y ago
    No they have higher margins due to custom hardware and software added value.
bradleyjg 8y ago
At their PE ratio they don't need to have a bright shiny future of limitless growth. They just need to not be Nokia. AMZN on the other hand ...
B1FF_PSUVM 8y ago
Perhaps the same can be said about Louis Vuitton handbags, and does not stop MHLV, or whatstheirletters, from making money hand over fist.
MrScruff 8y ago
When you say the machines are too costly, who are you implying that's bad for? Presumably not investors?
- HillaryBriss 8y ago
  it's bad if a company wants to expand its customer base while potential new customers are instead buying cheaper products from competitors
  - MrScruff 8y ago
    It's also bad if you drop your ASP to the point it hits profits though.
semi-extrinsic 8y ago
At this point it's not crazy to think of people holding AAPL equally for the dividend as for expected future share price growth. It paid out dividend at 1.67% of the share price last year. That's $700+ million in dividend for Mr. Buffett, not too shabby.
thesausageking 8y ago
Apple has a lot of potential to expand into health care tech and digital therapeutics, which is a huge, growing market. They have a great brand, expertise in making consumer hardware and software, and they're one of the few large tech companies that's able to take privacy seriously.
- atomical 8y ago
  You mean consumer health care tech? From what I can see that is all about marketing and has very little to do with science. I see it more as a fad.
  - solarkraft 8y ago
    Don't they still have a bunch of unused potential in activity tracking?
  - Spooky23 8y ago
    No way. There’s a huge market for medical monitoring that is dominated by big dumb players. Your insurance pays like $3k to wear a heart monitor for a day or two.
    - adrianN 8y ago
      The problem with that huge market is not that it's somehow hard to make monitoring devices, but it's hard to get them through the bureaucratic process of being legal to use for medical purposes. Doing that is quite an orthogonal skillset to engineering.
      - Spooky23 8y ago
        A company with billions in cash can learn quickly.
  - intopieces 8y ago
    Americans are getting older. Apple released a new Apple Watch with fall detection and it was 100% of the reason 3 of my coworkers purchased one for aging parents. Health is a privacy sensitive industry and Apple is the only company that has been selling privacy as a core feature. This is squarely within Apple’s target and they will bet big on it.
Spooky23 8y ago
They print money and own many segments of smartphone that really matter. They can cruise for a decade doing nothing.
- fauigerzigerk 8y ago
  I don't think you can ever say that about any consumer electronics company. All of them are always one replacement cycle away from potential disaster. Apple has enormous margins to defend. If they cruise for a decade their margins will approach the average margins of the industry because people will no longer pay extra for the brand.
  - ck425 8y ago
    Outside of China they're not paying for the brand. They're paying for the iOS eco system and that's still a valuable moat. It remains to be seen if a super app such as WeChat will emerge in other markets but until/unless it does Apple have a pretty strong moat.
    - fauigerzigerk 8y ago
      I don't believe that this huge difference in margins is purely down to pragmatic considerations anywhere in the world.
ksec 8y ago
TL;DR - Apple is extremely healthy, with many rooms for growth or sustain its current profits / revenue. 1. Still Growing number of iPhone users, 900M as of the end of 2018. I made a prediction in 2015 / 2016 that Apple could reach the unthinkable ( At the time ) 1B iPhone user by 2020, looks like they are well on course to do that. There will be roughly ~3.5B Smartphone users world wide in 2020. Even if Apple does't grow its user base anymore. Selling to its 1B Customer, which are also the higher spending group, would still be a lucrative business that not many other company could match. 2. Health - When it comes to Health, people don't want to spend money on a brand that that cant trust. So even if company X has an exact replica of Apple Watch with exact software and function, people would still trust Apple and spend 50% or more on it. Also worth mentioning the group of people who cares about health are also likely the one who are passed mid life and has higher deposable income. And health insurance company loves these Data. I am actually surprised at how affordable Apple priced the Apple Watch S4, they could have jack up the price in US purely on the ECG function. ( I have heard many stories about parents want to buy the Apple Watch *immediately8 after reading or watching the Apple Keynote, I am also surpassed how many non-tech people actually do watch the keynote live ) 3. Services - It is a growing segment but honestly, even if Apple Attract 100M Apple Music + Apple TV Subs at $20 combined, that is only $6B per quarter, roughly 10 - 15% increase of their current revenue. It is not a huge percentage, but it is hard for Apple to grow when it is so big. I think the future is Apple offering 24+ Months of Financing ( leaving the 24 months for Carrier ) , like 36 / 48 months for iPhone, charged to their Apple Credit Card, Operated and Backed by Goldman Sachs. Bundles along with other high margin product like AppleCare+. This could potentially be the next revenue and profits growth. 4. The Mac and iPad still have yet to show their full potential. There is no reason why Apple could not gain a 200M+ Mac User base. And iPad / iPad Pro still needs to battle out the Education and Pro Segment.

username223 8y ago

I don't see Apple achieving hyper-growth and becoming a $10 trillion company, but they have a solid business selling high-end hardware to people willing to pay for it with money instead of data. What does Oracle have on the horizon? Legacy enterprise support and lawsuits about Java?

mandeepj 8y ago
> What does Oracle have on the horizon? They could become a good force in the cloud after netsuite purchase. https://cloud.oracle.com/home https://cloud.oracle.com/home
- ddebernardy 8y ago
  They could keep trying, I suppose. FWIW they've been in the cloud business since the 2000s. They and IBM were some of the few who were in that business early, and even then their respective reputations preceded them. (This was before XEN, widespread adoption of virtualization, and a slew of other DC techs that democratized using the cloud.) I would imagine they both got enough fortune-whatever companies onboard to earn good money, but neither are market leaders today. Just spitballing, but I'd assume their cloud customers are all companies who buy other stuff from them.
  - amacbride 8y ago
    Exactly. With the hostile takeover of PeopleSoft, Oracle bought themselves a number of huge customers who are disinclined to change ERP systems on anything other than decade-long timelines. It has evolved and is now cloud...ish, so they can certainly talk themselves into being perceived as a “leader.” (Even though they’re not really cloud-native in the way that Workday, Salesforce, or others are.)
askafriend 8y ago
If Apple strengthens their foothold in Health and Health related services/integrations, their marketcap will multiply from where it is now.
- TheOtherHobbes 8y ago
  I honestly can't see Apple making this work. Health is a diverse, messy, market. Apple's schtick has always been making devices that make computing magical, and health would be a huge shift away from that. IMO the market is really looking for a a powerful all-in-one diagnostic health appliance - something like the analyser Theranos was pitching for, but which actually works, and is more comprehensive. De-industrialising health and making the personal equivalent of a diagnostic lab that could keep track of key markers, watch nutrition, exercise, and supplements, and transfer information to doctors - AI or human - would be a major breakthrough. But the technology for that doesn't exist yet. And even it becomes available it may not be affordable or portable. And because bodily fluids are involved it conflicts with the Apple image of clean minimalism. That leaves health as set of tentative fragmented tools and services which provide reassurance here and there - like the fall notification in Watch - but are a long way short of a comprehensive service. The fitness market is a more obvious choice. But if you look at Apple's record, it's not inspiring. Fitbit is a strong competitor, because Watch hasn't lived up to its potential - possibly because Apple can't decide if Watch should be a fashion statement or a personal fitness device. It doesn't really make sense to consumers to try to sell it as both. Behind all of that, I just can't see the current management team having the skill or imagination to make it happen. I think health is going to remain a side interest - a nice add-on, but not a huge new core market that Apple can expand into.

JaleDarvis 8y ago

Healthcare services using the watch. I was a doubter but the fitness rings schtick combined with a weight lifting app has me sold on it. Streaming content? The consolidated news app is interesting as well, but probably not a huge revenue stream.

macintux 8y ago
It will be interesting to see more and more insurance companies offering discounted/free Apple Watches. Fitness + accurate monitoring of heart activity + whatever's coming next makes for a powerful combination.
- dogma1138 8y ago
  It’s pretty common in the U.K. where health insurance packages offer Apple Watch / Fitness trackers and gym memberships for them it’s a no brainer if even 1 out of 50 insurers would alter their lifestyle it would more than pay for itself.

johnwheeler 8y ago

Well, they make machines that are very costly and they focus on global logistics. They've also got a huge supply chain in China. You don't need a 'new vision' to make bucketloads of cash for your investors.

hermitdev 8y ago
Apple doesnt make phones or computers that are much more costly (from a hardware perspective) than any other brand. What they have is higher margins per unit due to branding and brand loyalty.
- valuearb 8y ago
  No they have higher margins due to custom hardware and software added value.

bradleyjg 8y ago

At their PE ratio they don't need to have a bright shiny future of limitless growth. They just need to not be Nokia. AMZN on the other hand ...

B1FF_PSUVM 8y ago

Perhaps the same can be said about Louis Vuitton handbags, and does not stop MHLV, or whatstheirletters, from making money hand over fist.

MrScruff 8y ago

When you say the machines are too costly, who are you implying that's bad for? Presumably not investors?

HillaryBriss 8y ago
it's bad if a company wants to expand its customer base while potential new customers are instead buying cheaper products from competitors
- MrScruff 8y ago
  It's also bad if you drop your ASP to the point it hits profits though.

semi-extrinsic 8y ago

At this point it's not crazy to think of people holding AAPL equally for the dividend as for expected future share price growth. It paid out dividend at 1.67% of the share price last year. That's $700+ million in dividend for Mr. Buffett, not too shabby.

thesausageking 8y ago

Apple has a lot of potential to expand into health care tech and digital therapeutics, which is a huge, growing market. They have a great brand, expertise in making consumer hardware and software, and they're one of the few large tech companies that's able to take privacy seriously.

atomical 8y ago
You mean consumer health care tech? From what I can see that is all about marketing and has very little to do with science. I see it more as a fad.
- solarkraft 8y ago
  Don't they still have a bunch of unused potential in activity tracking?
- Spooky23 8y ago
  No way. There’s a huge market for medical monitoring that is dominated by big dumb players. Your insurance pays like $3k to wear a heart monitor for a day or two.
  - adrianN 8y ago
    The problem with that huge market is not that it's somehow hard to make monitoring devices, but it's hard to get them through the bureaucratic process of being legal to use for medical purposes. Doing that is quite an orthogonal skillset to engineering.
    - Spooky23 8y ago
      A company with billions in cash can learn quickly.
- intopieces 8y ago
  Americans are getting older. Apple released a new Apple Watch with fall detection and it was 100% of the reason 3 of my coworkers purchased one for aging parents. Health is a privacy sensitive industry and Apple is the only company that has been selling privacy as a core feature. This is squarely within Apple’s target and they will bet big on it.

Spooky23 8y ago

They print money and own many segments of smartphone that really matter. They can cruise for a decade doing nothing.

fauigerzigerk 8y ago
I don't think you can ever say that about any consumer electronics company. All of them are always one replacement cycle away from potential disaster. Apple has enormous margins to defend. If they cruise for a decade their margins will approach the average margins of the industry because people will no longer pay extra for the brand.
- ck425 8y ago
  Outside of China they're not paying for the brand. They're paying for the iOS eco system and that's still a valuable moat. It remains to be seen if a super app such as WeChat will emerge in other markets but until/unless it does Apple have a pretty strong moat.
  - fauigerzigerk 8y ago
    I don't believe that this huge difference in margins is purely down to pragmatic considerations anywhere in the world.

ksec 8y ago

TL;DR - Apple is extremely healthy, with many rooms for growth or sustain its current profits / revenue. 1. Still Growing number of iPhone users, 900M as of the end of 2018. I made a prediction in 2015 / 2016 that Apple could reach the unthinkable ( At the time ) 1B iPhone user by 2020, looks like they are well on course to do that. There will be roughly ~3.5B Smartphone users world wide in 2020. Even if Apple does't grow its user base anymore. Selling to its 1B Customer, which are also the higher spending group, would still be a lucrative business that not many other company could match. 2. Health - When it comes to Health, people don't want to spend money on a brand that that cant trust. So even if company X has an exact replica of Apple Watch with exact software and function, people would still trust Apple and spend 50% or more on it. Also worth mentioning the group of people who cares about health are also likely the one who are passed mid life and has higher deposable income. And health insurance company loves these Data. I am actually surprised at how affordable Apple priced the Apple Watch S4, they could have jack up the price in US purely on the ECG function. ( I have heard many stories about parents want to buy the Apple Watch *immediately8 after reading or watching the Apple Keynote, I am also surpassed how many non-tech people actually do watch the keynote live ) 3. Services - It is a growing segment but honestly, even if Apple Attract 100M Apple Music + Apple TV Subs at $20 combined, that is only $6B per quarter, roughly 10 - 15% increase of their current revenue. It is not a huge percentage, but it is hard for Apple to grow when it is so big. I think the future is Apple offering 24+ Months of Financing ( leaving the 24 months for Carrier ) , like 36 / 48 months for iPhone, charged to their Apple Credit Card, Operated and Backed by Goldman Sachs. Bundles along with other high margin product like AppleCare+. This could potentially be the next revenue and profits growth. 4. The Mac and iPad still have yet to show their full potential. There is no reason why Apple could not gain a 200M+ Mac User base. And iPad / iPad Pro still needs to battle out the Education and Pro Segment.