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I often think that our constant obsession with GROWTH hurts other, potentially worthy goals. If a company doesn't show growth, it is quickly labelled as "in tr

• astrange 4y ago
  If you're not busy growing you're busy dying. Staying stable in a world where everything else changes doesn't sound any easier than growing to me; when you become irrelevant you don't make steady flat profits, you just die.
• refurb 4y ago
  It's not people demanding growth, it's the companies claiming they are growing and the expectation that sets. Nothing wrong with a steady state company. There are plenty of them. But that has implications that companies need to live with.
• donavanm 4y ago
  Ignoring the “how publicly traded companies equities function” aspect. What would be the medium to longer term outcome of Apple “making better products?” In an open market I would assume that better products drive new users and/or increased revenue. The way Id measure that is probably something like units sold, ASP, LCV, etc which should all feed back to top or bottom line. And if revenue or profit is increasing id call that … growth? So it seems a bit tautological. UNLESS you mean to measure better products some way besides revenue, units sold etc. And then Im really interested in what that quantification would be, and why it would lead to different outcomes.
• deleted 4y ago
  [deleted]
• brtkdotse 4y ago
  There’s another aspect to this and that’s the iPhone is Done. Finished. Completed. I recently switched from a 4 years old X to and iPhone 13 Mini and to be perfectly honest I can’t experience any difference, it’s basically the exact same phone in a smaller form factor. Hadn’t it been for the size of the X being an issue, I probably could’ve stayed on it for 4 more years. Great from a consumer (and environmental!) standpoint, not so great from a quarterly report standpoint.
• jmrm 4y ago
  This was one of the top reasons IIRC that made Jonathan Ive left the company. Before Tim Cook was the leader of the company, they were not only technically innovative, but innovative in a more global and universal way.
• 88840-8855 4y ago
  if I'm an investor, then i want that the company is making me more tomorrow than today. I cannot eat customer satisfaction. that's how it works.
  • Invictus0 4y ago
    You can eat fat dividends though. I haven't heard any decline in the share buyback program.
  • Someone 4y ago
    Not necessarily. A share that keeps it value and reliably pays out steady dividends just above interest rates still is an attractive investment for some Apple also doesn’t need that many investors at the moment, so why should it care much about what investors want?
    • Yujf 4y ago
      Because investors own apple, so apple has to do what investors want. Or more specifically the CEO has to do what investors want otherwise they fire him and find someone else who will do what they want
      • threeseed 4y ago
        > Or more specifically the CEO has to do what investors want otherwise they fire him The board is the one that has the power to fire the CEO not shareholders. And yes shareholders are involved in deciding the composition of the board. But unless there is some egregious governance issue or a complete breakdown in financials no one is going anywhere.
      • Someone 4y ago
        Replacing the head honcho doesn’t guarantee that share prices will start growing rapidly. It’s quite possible that no CEO in the world can accomplish that. Also, as I said, share prices don’t need to go up to make investors happy. for example, the typical pension fund is perfectly happy with an investment that will never win them the jackpot, but also is extremely unlikely to lose them everything, and very likely will regularly pay dividends. So, a majority of Apple’s shareholders may be perfectly happy with the status quo.
• Hemospectrum 4y ago
  The pressure to grow stems from the massive amount of wealth that can be harvested from growth. The only way to curtail that is with economic policies that punish investors for getting too rich too quick, but almost all such proposals are instantly dead in the water as soon as anybody speaks their names.
  • sschueller 4y ago
    +90% tax on capital gains and taxes on loans taken out against capital. Only limited exemptions for retirement funds etc.
    • pverghese 4y ago
      All those billions would move out of the US into other countries where the tax regime is more favorable.
      • snarfy 4y ago
        Those companies are in the US for more reasons than favorable taxes. Try moving a company to China and see how it goes.
        • Foobar8568 4y ago
          Try moving to Luxembourg, Ireland, Switzerland, the dozen of small islands with special states from UK, US, and some other countries, Singapore... Plenty of choices and its already the case. Look at Cargill legal structure (e.g. search Cargill International Luxembourg for a good laugh)
          • sschueller 4y ago
            The US can impose this on other countries easily. You don't comply you don't get to touch the USD, no bank can survive without it (at least right now). The OECD recently even got Switzerland to agree on the global minimum tax. Sure you can still go to Russia or China but these companies really want to take that risk?
• no_wizard 4y ago
  This is what dividends and other similar instruments (e.g. stock buybacks) are is suppose to help massage. IE growth is not 10% its 5%, but we are issuing x additional dividends per share or we're buying back x amount of stock and such. At least, in theory functional market capitalism. In practice, I agree with you, even when a company is treating investors well via dividends they still get hammered on "slow" growth. Lets be clear here though, Apple is not contracting in their size, they're simply just not growing at the same gangbuster rates they have been for over a decade. Can't last forever
  • vanilla_nut 4y ago
    Interestingly, Apple has such an enormous cash hoard (tens of billions, iirc?) that they could one day announce that they will no longer prioritize growth since it doesn’t make sense at their size… and merely dedicate to a reasonable dividend instead. Bam, suddenly their stock price soars even more, finance folks hail the move, and other companies rush to mimic it (to lesser success).
  • bequanna 4y ago
    Dividends are subject to double taxation and typically avoided. In lieu of dividends, you now see more stock repurchase plans.
    • no_wizard 4y ago
      Same idea though. Edited for clarification.
• epistasis 4y ago
  I disagree 100% on this. Growth is what happens when there is technological change. In certain circles there's this idea that technological growth requires more damage to people and the environment, but that's exactly wrong, and the past decades have shown it to be a competent fallacious assumption. We need dramatic, massive growth of new technologies to supplant the damaging ones. Confusingly, some people refer to this as "degrowth", but that's why growth/degrowth is a barren framework for analyzing the world. Because growth is not one thing, it's a high-dimensional direction of many many different attributes.
  • mc32 4y ago
    What’s growth to a subway/underground railway company, or even, a cargo rail company?
    • seibelj 4y ago
      It's not about growth, it's about productivity. All tech innovations increase productivity. Growth to a railway is better logistics so things are directed more accurately, more energy efficiency, more efficient use of labor, etc. They can also increase their sales, but I think your comment was implying those are stagnant industries. All technology is ultimately making improved outcomes at lower cost. That is what technological advancement is.
      • Larrikin 4y ago
        You made up a railway logistics company instead of addressing the point about a commuter subway. There is no need for growth in a subway unless they are adding lines or stations. If there is constant growth outside of that then it's just hurting consumers.
        • selectodude 4y ago
          Until the growth of population slows down, a commuter subway that isn't iterating and improving capacity will get worse too. Just look at New York pre-covid. The subway was literally and figuratively collapsing under the growth in passengers.
• outworlder 4y ago
  > If a company doesn't show growth, it is quickly labelled as "in trouble" or "dead". Why? Because of the stock market. Current prices today reflect growth expectations. That's why people are paying so much for Tesla shares – they are trying to get a 'bargain' today, assuming the company will grow to immense numbers in the future. If that doesn't work, share prices will implode and be adjusted to reflect things like revenue and inventory. They will be valued just like the bakery next door. Private companies also have an expectation of growth but, until they start issuing shares, the expectation is nowhere near as high. Of course, no company can keep growing forever. At some point reality catches up and they will either slow down growth significantly, or they just crash under their own weight.
• jollybean 4y ago
  It boils down to opportunity cost, established in the cost of capital. Apple is valued at $1T and all the nice things that come along with that (huge salaries) only if they deliver growth. It's 100% fine to not have growth, but then they have to get a different set of investors (or buy themselves out) etc. where those expectations are different. With 0% growth their equity price is near 0. Which is again, fine, if those are the terms being made. But it means less money for speculation, investment, R&D, expansion etc.. Every investor is allocating capital based on the opportunities in front of them. If some other team can consistently do better, well, money will follow that. To a great extent - we want this. Usually corporate growth means 'surplus' for the rest of the economy and especially consumers. For every $1 in APPL profits, probably they have created more than that in surpluses. In other words: our lives are materially improving, specifically by more than we are giving apple as consumers. Hopefully. These economics don't always work well, esp. when there are monopolies or for where economics work differently, like healthcare. (FYI capitalism and certain fundamental realities exist in Healthcare, just that the context is different). It remains to be seen if Apple will find other ways to grow, my bet is they are not out of tricks just yet.
  • kgwgk 4y ago
    > With 0% growth their equity price is near 0. Oh. My. God.
    • jollybean 4y ago
      Yes, that's how it works. How much would you pay for something that has X% (where X > 0) risk, and 0% growth? You would likely pay $0. Because you can put your money in a 'risk free' investment, like a bank account, and get a minimum return. There is the 'enterprise value' which would include assets (i.e. maybe Apple has $20T in cash in which case, obviously their stock is worth whatever their assets are worth, but at some risk-premium discount). Most companies have some assets but usually not a ton relative to their value. Of course, 'risk free rate' may be negative (not common, but could happen), and so 'losing money' on a stock that doesn't grow would be better than keeping it under your mattress or in the bank, but we're not there yet. But otherwise, a company that doesn't grow is fairly worthless to most investors other than for some other strategic logic, because they usually have other, better places to put their money.
• jshzglr 4y ago
  Go find me a 'best in class' product that has sustained that position without growth.
  • mcphage 4y ago
    Bugatti?
    • deleted 4y ago
      [deleted]
    • Tsiklon 4y ago
      Bugatti can only exist in it's current position because it is the halo marque of the Volkswagen group, it is almost certainly a company that loses money given the extremely limited market to which they target and the amount of investment and development that goes into their products. I think it's reasonable to think that the various bankruptcies of the prior companies which bore the name are emblematic of it being unable to exist by itself. EDIT: I've just realised that VW spun off Bugatti - my comment is no longer valid.
    • jshzglr 4y ago
      Bugatti sells less than 100 vehicles per year.
      • mcphage 4y ago
        That sure sounds like a “best in class” company without growth to me!
        • jshzglr 4y ago
          That's all a growth-less company can be. A simple niche, with a very specific audience that knows exactly what they want. It's the exception that makes the point. You can't apply that to a company like Apple.
          • 4y ago
• sandbags 4y ago
  “Growth without purpose is the ideology of the cancer cell” is one of my favourite quotes by the exceptionally quotable Edward Abbey. And I tend to agree with you that we would be better off if companies could define “enough” and maybe disband at that point rather than stagnating. The thing lurking in my mind that maybe makes this a pipe dream is the Red Queen hypothesis.
• unethical_ban 4y ago
  I agree with your comment but I think it is out of place here. I skimmed the article and it doesn't seem to suggest apple is in trouble, or that it is dead, it is merely commenting on why certain revenue figures are lower year over year. In fact, it seems explicitly to convey that the sky is not falling.
• sys_64738 4y ago
  > If a company doesn't show growth, it is quickly labelled as "in trouble" or "dead". Why? Why can't we have an Apple that is the size it is now, but concentrates on making better products? The company is owned by shareholders who want growth or a massive dividend. If AAPL can't grow then return profits to shareholders through stock buybacks or increased dividends. > I run my own business and growth is not my #1 goal. If you own your own business then do what you think is right for you. As an AAPL shareholder all I want is increased value in my shares.
  • jetpks 4y ago
    You and the gp are both 100% right. That is the incentive structure and it is malignant.
  • musicale 4y ago
    > As an AAPL shareholder all I want is increased value in my shares. “If you want me to do things only for ROI reasons, you should get out of this stock.” -Tim Cook
• tablespoon 4y ago
  > ...Why can't we have an Apple that is the size it is now, but concentrates on making better products? > If you look at the last 10 years of Apple products, it is clear that many decisions were made to favor growth (e.g. revenue) over customer satisfaction. Their products are often made worse and delight us less, because someone decided that growth is more important. The shareholders care about making money and little else: they don't care about releasing better products. If worse products will make them more money, the shareholders will demand the company make its products worse, and they'll get their way.