Google is the only threat.
Asian companies are incapable of innovation, no matter what they say. All they can do is copy what Apple does and make it better and cheaper. That’s all they got.
I guess you don’t remember Sony.
Sony? Yeah, I forgot that they invented the Ipod and the Ipad. Oh they didnt. Oops. The walkman isn’t the same as what apple has created. My walkman got used in the car when I didn’t want to listen to my parents music. Not that useful. Apple devices power everything I do.
Sony has two problems, 1) it’s a giant bumbling conglomerate and 2) It’s Asian. Those are two whopping double whammy’s against innovation.
Apple might be turning into one such bumbling conglomerate (everything that’s happened since Job’s death points in this direction).
Sony was the Apple of yesterday, a multinational consumer electronics giant founded and built by a charismatic CEO whose products had worldwide popularity. In many ways Apple was inspired by Sony.
http://www.osnews.com/story/23902/John_Sculley_Steve_Jobs_Wanted_to_Be_Sony/
Yeah, I’m well aware of the comparison - I used to work for Apple in college as the campus rep - so you can call me a fan boy of Apple.
Innovation is not just about the idea, as I said in other posts, lots of Asians have great ideas, they are not racially inferior to white people; that is not what I mean. What I mean is that the environment of Asia is not condusive to innovation. Japan might have been the exception to this rule, but it has some unique characteristics that I will expound upon.
Sony is a japanese company that essentially grew out of the ashes of world war II, at a time when Japan was effectively run by Americans. With millions of US soldiers stationed there these guys came home and started doing business between the two nations. They weren’t the only success story in this regard. The whole japanese automobile industry really arrived internationally at that same time with help from abroad to market their cars to Americans. Secondly, I don’t know that much about Japan, but I know that it is a series of islands disconnected from mainland Asia and very different from every other country in the region. For the most part, that period is over. Japan has been in a slump for 20 years and betamax, sony-ericcsson, mini-discs, and whatever else they have come up with has been unable to catch on in the United States.
The thing is, even though Japanese cars are better than American cars (and I’ll wager European cars too), their brands are just not cool. There is nothing cool to the Western consumer about Asian brands. Asians are well aware of this. This is why the Hondas and the Toyota’s of the world needed to invent “Lexus” “Infinity” and “Acura,” names decidedly Latin and Greek sounding in their roots, to effectively confuse the American consumer into thinking they were buying a European car. (disclosure: I’ve only ever own subaru’s and toyotas)
My current phone is a samsung. I bought it because it was a decent cheap knockoff of an iphone running Android (a US OS). Not because of its brand. Without Android, I would never have bought the phone.
This is why, in India, giving your company a foreign sounding name is almost a cliché. Even Asians don’t find Asian brands cool.
am i missing something?
sony invented modern gaming consoles as we know it.
edit-how did your post appear before mine?
it wasn’t there when i posted.
Which one? Are you talking about playstation? That’s the only one I am aware of unless you are gonna tell me that Atari, Commodore, Nintendo or something like that is actually Sony. Playstation wasn’t really innovative, just like a japenese car, really well put together.
Japan is certainly the most innovative country in Asia, but it’s also separated from the rest of the continent by a pretty large sea and as I said was under American administration during its great big innovative period. It’s like calling The UK part of Europe. The Uk has more in common with the US than it does with Europe (At least that was certainly the case until recently) Japan has more in common with the US than it does with China and the rest of Asia.
your post wasn’t there when i said that.
i was talking about playstation and i disagree.just like apple took a mobile phone and raised the bar completely sony took atari and all that junk and raised it completely.I remember it blowing nintendo 64 out of the water.
yes japan and korea are pretty innovative and indians and chinese not yet.there is a lot of growth potential still for making knock-offs of western innovations with a little twist.
for example-flipkart took amazon’s concept added cash on delivery and broke ol shopping inertia here
apple is far too expensive for the indian market since it isn’t subsidized.samsung’s cheaper phones with same specs have filled that gap and micromax an indian company now has a phone with the same specs as S3 for rs 10k. S3 is 34k.
before you say it’s just a cheap phone and the touch will be shit blah blah,it really isn’t. iv’e seen it used it and it’s a quality peace.
once this market saturates then we might see innovation
Yep, I like my samsung phone. I think anything running Android will be pretty decent though which is why I like Google and not samsung. I think their margins will always be small. Apple got it right by marrying hardware and software. No other company can do that as well.
When mainland Asia becomes the innovator I’ll be very impressed. It could happen. Just hasn’t yet really.
on another note apple really should make a better effort at entering eastern markets.
it should have been a walkover but they’re throwing it away. maybe the mini is aimed at this.
Just to clear up a misconception, Nintendo is a Japanese company… so is Sega (did anyone here not have a Genesis/Megadrive at some point?).
Anyway, as I mentioned earlier, I believe the biggest risk to Apple is competition in the existing smart phone market, not innovative smart phone designs from competitors. As the smart phone market matures, HTC, Samsung, LG, Motorola, will be producing Android phones at $100 cost. Apple will not be able to charge $500 for iPhones without significant improvements. So, they will be forced to lower their prices as well.
It might not matter if Asian countries are innovative or not. Apple currently enjoys an “early innovator” advantage in the mobile device market, and this has resulted in spectacular earnings. Unless Apple continues to produce new hit products, this advantage will erode - and so will their earnings.
I originally posted this in Jul 2012 after the earnings miss:
“My sell thesis on AAPL stands. The inflection point for their business model was the iPhone because they were about to drive margins to ridiculous levels due to AT&T and now other phone companies’ subsidies on new phones and upgrades. With the Android, the cache of the iPhone is eroding just enough that phone companies no longer feel the need to maintain the same level of subsidies. iPhone margins are going to come down, or market share is going to drop rapidly. Either way, earnings are going to be challenged relative to estimates, although I’ll have to see how the SS reacts to this miss.”
http://www.analystforum.com/forums/investments/91310551?page=2
If you need to know why earnings misses matter, it is because they often carry meaningful info, much more info than an earnings beat. This is particularly true for stocks with high growth.
I think AAPL fundamentals continue to decline. Like Tikka said, they really haven’t come out with anything new since the iPhone and it was the iPhone that drove their growth. iPad is great, but iPhone was the game changer. I mean, really an iPad is piggy backing off of iPhone technology in many respects.
The argument for AAPL is what it has been for years: high growth with cheap valuation. There are two concerns with this thesis. Growth is slowing. But, more importantly, AAPL trades very differently than other growth stocks. I suspect the reason is that once a company attains a very high market cap and composes such a large weight in the relevant indices valuation starts to work differently. I have no study to back this up and I wish somebody would do one, but it seems to me that the market discounts a huge market capitalization stock’s P/E simply because investors feel that they have too much exposure to that one company.
If I’m running a growth portfolio and I’m not a benchmark hugger, then I really wouldn’t care if AAPL is 7% the index and overweight it at 10% of my portfolio. That is too much risk in one stock. I would weight it around 5% if I was very bullish on AAPL. And I’m not. So, I think that it is appropriate to look at AAPL valuation relative to its own history, and it would probably be useful to standardize for size at some point.
This is just it though. Our parents and the people who don’t care will buy the iphone and use it until it dies, maybe in five years. The nerds and young kids are the ones who insist on having the latest and greatest and newest features, which apple isn’t offering anymore. My nephews in high school will do anything to get a new android every year. My dad’s still using his iphone 3.
It’s hard to get a new phone every year (regardless of brand) because most people aren’t eligible for an upgrade from their wireless provider every 12 months. I know a couple guys that buy a new iPhone every year, but most wait until they can get the rebate. I’m not paying $700 when I can wait until the next model and pay $200.
Was just watching some AAPL commentary on CNBC by Seema Mody. Anyone else here a buyer on Seema? I’d definitely go long on that.
Sell.
I’m also long Christina Park from Channel 5 Fox. She’s the one on the left.
This reversal in the Market is NOT going to help AAPL in the last two hours of the day. Oh no.
AAPL sub $450 after hours… tomorrow could be capitulation, or just plain ugly…
told ya so!
-moremoney