3 Things To Love About Apple Inc.

Here's the crux of the problem in analysing Apple, and I sympathise with anyone trying to do so, it's very difficult.

Three years ago, an iPad was something a pirate might have worn, there didn't even exist a market for this product. Six years ago, there was no iPhone, and not even a smart phone market. Ten years ago, Apple was a laughing stock amongst investors, and Nokia would reign as King for several years to come in the global cell phone market. Four years before that, Apple was The Future of Global Business, like all the other technology companies seemed to be at the time.

I don't envy anyone having to bet what will happen in the technology sector by 2016, 2020 or 2023, knowing how rapidly fortunes and tech trends can change. Unfortunately, all long term investment requires that type of foresight, or at least some reasonable guesses on the future.

As AAPL's price falls, it becomes cheaper and cheaper against what the market is extrapolating into the future. But what future? The difficulty is in making reasonable assumptions about a very fast changing market, albeit with a company that is still enjoying exceptional growth.

I agree Apple might represent a wonderful opportunity over the next 12 months - but it's far less an easy decision than it might appear, not because the stock is falling, but because the future in tech is far less "knowable" than any other field. We should all be thankful that as investors, we don't get paid more to "make the hard decisions", where the ten year outlook is impossible to guess.

Always thought Apple products overpriced. I have superb Android products like the Nexus 4 smartphone and Nexus 7 tablet which are superior in my book. Recent downfall in Apple shares down to ANDROID and will continue. Just my view

I think the issue is one of premium pricing. How long can Apple continue to ride what is basically a wave of "reassurably expensive" marketing, particularly in the face of inevitable belt-tightening among their core market?

It's possible they've painted themselves into a corner re margins. Offering second-best products at a lower price point is a dangerous strategy when you style yourself on quality.

"It just works" is the other plank of the marketing strategy. Ecosystem. Fair enough, up to a point. But in an environment when people are increasingly sourcing replacement parts for old washing machines online to make repairs themselves, I'm not sure of the future of this either. I know quite a few Apple devotees who are proudly "jailbroken" and run their devices are what they ultimately are - UNIX-driven media readers.

Incidentally, Apple seem happy to go to law to defend their legal ownership of the act of poking things to make them do something, but they most certainly are treading a legal tightrope by implying that that they eg invented noise reduction through phase-cancellation - as per one of their latest adverts.

Bring on the competition. Apple's kingdom may be painstakingly styled around benign hippie values, but it is still a kingdom and the barbarians are at the gates.

And a propos Apple TV - they're too late to market and they know it.

re Apple TV and being too late... I remember Apple being laughed at for the multiple delays in launching a phone. There were many established players. Same with the iPod.

why would Apple be late to market?

There is no decent solution available when it comes to TV.

All I want is to find a better, much better, solution than Sky. Expensive, poor quality, and endless commercial breaks. I pay for torture. I cannot wait for Apple to disrupt yet another industry. I am much better off as a consumer of music, books, etc by and I have no problems paying Apple to make it easier for me.

Another thought:

Is your "hoover" a Hoover?

AN - It's surprising, but by normal standards, AAPL wasn't bid up too outrageously relative to the profits the company was making, and the degree of EPS/revenue growth. One of the most interesting parts of seeing Apple's share price decline has been the analysts saying "it's really cheap" all the way down. Maybe more interesting is that as the price has gone down further and further, they're saying it less and less, probably in fear for their jobs.

We've reached a point now though where on an earnings multiple of 10, the long term expectation being factored in is "low/no growth". In reality it's more like "some people expect mega growth, some people expect some growth, some people expect none, some people expect decline, some people think Apple is finished for good". That may play out in the form of continued high growth for four years before the decline sets in.

But the reason we're seeing such extreme opinions is that nobody knows, and nobody can know. That's the problem with technology, and why many investors won't go near it. Worth keeping in mind though that it was hard to hear a bad word about AAPL one year ago - be wary of the people coming out of the woodwork now the price has fallen, the business really hasn't changed.

Amsterdamgroove: Sick of Sky, adverts ,etc. Just a buy a SmartTV or Smart Blueray (Samsung, LG Google TV, etc) then download the free apps for lovefilm, netflix, bbc iplayer, etc. You then have HD TV on demand with no adverts, all the films and TV series you will ever need, great quality pictures, voice/gesture control, quad core processors, etc.

Yes I am sure Apple could maybe make a slightly better eco system for their TV but I'm not convinced they will do a better picture than Samsung, Panasonic, or Sony who have spent decades perfecting the technology (which is pretty much the point of a TV).

The problem with technology stocks, as we saw with Nokia riding high at $36 per share and a short few years later $3 per share, is that when they fall they fall from a great height and they fall quickly.

Strip out everything and Apple is about one thing, the iPhone. Most industry experts agree that it is no longer the best on the market and now consumers are following with Android having a 70%+ market share and iOS 15%+ with Android outselling iOS 2 to 1 at the moment. You make an excellent point on Apple taking Palms market and Palm crashing and burning. I think that's where Apple are now.