What he and the Gruber peice he references (did he seriously say Gruber isn't an Apple Cheerleader?!) fail to mention is trend.
The trend is your friend, one of the first things anyone who's suffered a trader learns. It's not a case of how high or low something is, but where it is going to be relative to it's current place.
Press and Markets get this (the former to a lesser extent true) but the fear is that Apple have had their Halcyon days. Originally Apple didn't need to worry about such issues as apps, they had the first phone device with a web browser that people really spoke about liking. Heck they didn't even have GPS dispite most feature phones in the UK having it with maps.
A lot of analyists are asking, rightly so, why is Apple able to keep making such money, now the market is cramped. Want a better camera, buy the 920, want a better screen? Buy the HTC, want a larger phone, buy the S4, want a smaller phone buy the. Hell I don't even know, but you get where I'm going with this.
The brand of the iPhone people fear to be falling. In the old days of Windows 3.1 domination, the software took months to years to write. Most of them now adays have little if anything more than weeks of platform specific code. The alternate marketplace is huge, due to the size of the global market place. Hell a friend was just telling me how he thinks he'll make a profit porting to the new blackberry, despite it having very low uptake here in London.
These notions lend people to conclude that what is currently happening with Apple might not be sustainable. Gruber has been consistently wrong the last few months (in fact he is always as he predicts little but Apple growth) with regards to the decrease in share price and failure to develop new market share.
tldr; It might not be Apple vs Google. But neither are expanding their userbase rapidily, without encrouging on the other.
It is the ecosystem that Apple sells, not the hardware. People buy Apple because they know the handset will be supported for a specific period of time, that every developer wants to sell on iOS and works hard to be there, and that they can walk into an Apple store and get support any day they want.
For the hacker, most of these things are irrelevant, but for Joe-Schmo who wants to put minimal effort forward when managing their digital life, the iPhone is the pinnacle of abstraction.
Apple makes money because they sell the promise of a long, comfortable relationship and they fulfill it time and again. Even with Samsung, will I be able to update my s4 beyond Jellybean? The answer is a firm "maybe", but I know 100% that my iPhone will get updates for years.
That's why Apple makes money, because they sell peace of mind.
Exactly. When I was 20 I'd happily spend my weekend building PCs or compiling Linux kernels. In general, my time/money ratio was skewed heavily towards time.
Now I'm in my 30s and have a demanding career it's very much the other way. Spare time is rare and incredibly precious.
Actually if you look at the market share figures, they're both expanding their market share without having to really go for each other due to the growth in smartphone usage (that is them picking up users from feature phones or new phone users) and those migrating away from BlackBerry, Windows Mobile and so on (between Samsung and Apple they're currently squeezing everyone else out of the market).
As things stand globally both are growing share of market, revenue, activations and total installed user base.
In terms of trend however there are a few interesting things happening. Over the past couple of months Android actually dropped overall US market share for the first time since if started taking off. In absolute terms it still grew, but less than the market as a whole.
The market got bearish on Apple sometime last year. What's really interesting though is it was about the same time that, in the US at least, the iPhone started growing faster than Android, a trend that has not only continued since then but has actually been increasing: http://twitter.yfrog.com/oe7etlp
The TL;DR version: Most investment funds, run by the same organisations who employ / fund / listen to these analysts, under perform the market. While what they say is interesting, the fact they don't get something might not be that big a deal.
I'm not going to say he isn't pro-Apple, but he does at least attempt to find the nuance in the story. I was merely saying I don't dismiss him out of hand as some do.
Regarding the trend, I concur and I somewhat covered the excellence of most of the handsets now in the market certainly means a much more competitive marketplace.
I don't necessarily think Apple have stopped growing (their last quarter would seem to refute that[1]) but it wouldn't be a surprise if they are peaking.
>These notions lend people to conclude that what is currently happening with Apple might not be sustainable. Gruber has been consistently wrong the last few months (in fact he is always as he predicts little but Apple growth) with regards to the decrease in share price and failure to develop new market share.
Apple wasn't priced as a growth stock, though. If a non-tech company had their kind of growth, the P/E of the stock would be well above 50. Apple, at their highest profit growth, had a P/E of 18. That's basically a normal P/E.
Is Apple's growth going to slow? Sure, that's inevitable. But Apple wasn't priced to grow to begin with.
I don't want to run in to a discussion on economic theory, but P/E has to be taken with a pinch of salt when looking at large firms.
Risk is the important thing for investors, P/E is normally a measure of value vs Growth expectation, but the Price will always be waited by the risk.
No matter how you cut it, people expected something from Apple with the stock valuation of last year. People are worried there is a trend of Apple loosing its ground, even loosing its after sales prodcuts things like music for example for Spotify.
I'm not suggesting that everyone assumed explosive growth, and $1400 a share by 2014, just that share prices are based on future expectation, not present state.
People (well the market) obviously that to be something more than they do now.
When it comes to growth, it depends on how you look at it, as much as I've said trend, the question is which trend measure. That is to say, which derivative of the underlying performance indicator. Whilst they are still growing, the rate of growth has slowed, this is at a time everyone is jumping up and down to sell more to the BRICs, most importantly China. A Vietnamese friend of mine has a really bloody good Andriod device, I forget the brand name, good specs, good construction (argably more robust than iPhone 4 lets put glass with glass) and it cost penuts, about $100 including sales taxes.
So this is why I'd say, it depends on the idea of a high end device. There are plenty of bloody good phones at 4" and below, but many suffer from cameras that are poor, not expandable memory etc.
In fact I'd dare as far to say as someone who doesn't want a good camera, can't go wrong with the Nokia 620 at £140, sim free, no contract in the UK.
However Nokia should be aware bottom pickers get sticky fingers as they say.
What I do think has changed, from a UK mobile phone buyers perspective is market differentiation. In 2008 there was huge competition in the £100-200 range, but not much above. Each firm had a 'flagship' but little effort really went it to it, they didn't expect to sell many. the iPhone 1, which I stand by saying was a turd with a web-browser (buggy, short battery, no games, and ultimately no GPS - as a Londoner cardinal sin) came in at £1200 tco minimum. This was a massive game changer. If you had the cash, or didn't because it was on credit via a contract, there was nothing else near it. It's not just a choice between a Lambo and Ford, its a Lambo or a bicycle.
Within about 2 years the others jumped to arrange themselves, and here 5 years on samsung has shown you can have a diverse range, something that can max out each persons budget, but still sell something to the person that only has £100.
Apple isn't doing that fast enough, the iPad mini is a good example of them adapting to the competition, but sitting in with a one offering, at one price point, which doesn't have: The Best Camera or The Best Games or The Best Web Browser or The Best Design, isn't going to work. Sure some people are bought in, trapped on the ecosystem, but people fear that they are loosing product share to competitors. This year will be a tell. I think its unlikely Apple will be 450 come year end, much more likely 600, if they crack this mid end or 350 if they don't. imho.
The trend is your friend, one of the first things anyone who's suffered a trader learns. It's not a case of how high or low something is, but where it is going to be relative to it's current place.
Press and Markets get this (the former to a lesser extent true) but the fear is that Apple have had their Halcyon days. Originally Apple didn't need to worry about such issues as apps, they had the first phone device with a web browser that people really spoke about liking. Heck they didn't even have GPS dispite most feature phones in the UK having it with maps.
A lot of analyists are asking, rightly so, why is Apple able to keep making such money, now the market is cramped. Want a better camera, buy the 920, want a better screen? Buy the HTC, want a larger phone, buy the S4, want a smaller phone buy the. Hell I don't even know, but you get where I'm going with this.
The brand of the iPhone people fear to be falling. In the old days of Windows 3.1 domination, the software took months to years to write. Most of them now adays have little if anything more than weeks of platform specific code. The alternate marketplace is huge, due to the size of the global market place. Hell a friend was just telling me how he thinks he'll make a profit porting to the new blackberry, despite it having very low uptake here in London.
These notions lend people to conclude that what is currently happening with Apple might not be sustainable. Gruber has been consistently wrong the last few months (in fact he is always as he predicts little but Apple growth) with regards to the decrease in share price and failure to develop new market share.
tldr; It might not be Apple vs Google. But neither are expanding their userbase rapidily, without encrouging on the other.