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The big reason investors are skeptical with Apple is that there is no guarantee they can pull the same revenue without creating a hit product every two years. O

The big reason investors are skeptical with Apple is that there is no guarantee they can pull the same revenue without creating a hit product every two years. Once the revenue starts to shrink, things go downhill very quickly.

gress 13y ago
That's far more true of Google which has produced only one successful product under very different circumstances to the ones they now find themselves. Google is literally unproven.
- wutbrodo 13y ago
  Assuming you're talking about success revenue-wise, Google has created at least three revenue-successful products: Search ads, their display ad network (i.e. display ads on different sites), and YouTube ads (i.e. display ads on their own site). (Note that this is ignoring the myriad smaller ads products they have that aren't as significant/massive revenue-wise). Calling these all "one product" is the same as saying "Apple makes revenue from only one product: sales to consumers". In fact I'd go so far as to say that these revenue streams are far more different from each other than, e.g. iPod/iPhone/iPad sales are from each other.
  - gress 13y ago
    This is a fair perspective, although if Google can only make money from winner-takes-all properties that are monetized by advertising, their options are still severely limited, and they have not demonstrated the ability to do anything else.
Steko 13y ago
The idea that revenue from Apple lines quickly fades after 2 years doesn't seem to square with history. Desktops growing for over a decade, finally fading due to laptop cannibalization. Laptops growing for over a decade, perhaps stable now and fading in the future due to tablet cannibalization. Music player grew for better part of a decade until heavily cannibalized by phone. Phone still growing 7 years after introduction. Tablets still growing 5 years in. But even if you throw their growth away and say they do 0% for next 4 years the market cap doesn't add up.
- boomzilla 13y ago
  I get what you are saying. My point is that even in the same product line, e.g. phones/tablets, there is no guarantee that Apple will be able to sell the same number of iphones/ipads in a few years. Case in point: http://en.wikipedia.org/wiki/BlackBerry_Ltd#Financials http://en.wikipedia.org/wiki/BlackBerry_Ltd#Financials BB was growing like crazy for the whole decade till 2011, consistently ~40% year over year both in revenue/profit AND users. Just a dink in 2012, and kaboom, you know the rest of the story. And note that enterprise email was supposed to be the unbreachable moat for a business.
  - Steko 13y ago
    This objection should presumably apply to many other tech stocks but the entire sector averages a P/E ratio of 20-30.

gress 13y ago

That's far more true of Google which has produced only one successful product under very different circumstances to the ones they now find themselves. Google is literally unproven.

wutbrodo 13y ago
Assuming you're talking about success revenue-wise, Google has created at least three revenue-successful products: Search ads, their display ad network (i.e. display ads on different sites), and YouTube ads (i.e. display ads on their own site). (Note that this is ignoring the myriad smaller ads products they have that aren't as significant/massive revenue-wise). Calling these all "one product" is the same as saying "Apple makes revenue from only one product: sales to consumers". In fact I'd go so far as to say that these revenue streams are far more different from each other than, e.g. iPod/iPhone/iPad sales are from each other.
- gress 13y ago
  This is a fair perspective, although if Google can only make money from winner-takes-all properties that are monetized by advertising, their options are still severely limited, and they have not demonstrated the ability to do anything else.

Steko 13y ago

The idea that revenue from Apple lines quickly fades after 2 years doesn't seem to square with history. Desktops growing for over a decade, finally fading due to laptop cannibalization. Laptops growing for over a decade, perhaps stable now and fading in the future due to tablet cannibalization. Music player grew for better part of a decade until heavily cannibalized by phone. Phone still growing 7 years after introduction. Tablets still growing 5 years in. But even if you throw their growth away and say they do 0% for next 4 years the market cap doesn't add up.

boomzilla 13y ago
I get what you are saying. My point is that even in the same product line, e.g. phones/tablets, there is no guarantee that Apple will be able to sell the same number of iphones/ipads in a few years. Case in point: http://en.wikipedia.org/wiki/BlackBerry_Ltd#Financials http://en.wikipedia.org/wiki/BlackBerry_Ltd#Financials BB was growing like crazy for the whole decade till 2011, consistently ~40% year over year both in revenue/profit AND users. Just a dink in 2012, and kaboom, you know the rest of the story. And note that enterprise email was supposed to be the unbreachable moat for a business.
- Steko 13y ago
  This objection should presumably apply to many other tech stocks but the entire sector averages a P/E ratio of 20-30.