On, August 2, Apple became the World’s First Trillion-Dollar Company at $207.05 per share. Hooray!
On October 3, Apple had a peak market cap of about $1.138 trillion.
Today, Apple’s market cap is about $675 billion. That’s a record market cap loss of $463 billion in three short months.
Expect more stories similar to this, but this may be hard to top. Amazon has a chance but it needs a big disaster soon.
Mike “Mish” Shedlock
I am not a great fan of Apple but I always keep tab on their business. Btw, I really like your media and I like the way you highlight the news. Recently, I have found one more good website – https://self-starters.com/ which covers career issues.
What say ye about the jobs report Mish ?
What a nice red waterfall. Along the way it will hit a rock, like today. Plenty of gaps to go chase lower, the water will take the easiest path. All Fangs deserve their teeth kicked in.
Part of the problem is they’ve lost the App Store advantage they had. Instead of mainstream applications being developed on Xcode and ported over to Android (or only apps on iOS), we’re starting to see generic apps written for both platforms. This is like the bad old 1980s era commercial software, where a company would have to port code over to multiple systems. It was pretty easy to figure out by the way the software took advantage of the various features of a specific system what the core code was written for. So if a program was written by a team who’s primary platform was Apple ][, the port never took advantage of sprites on the Commodore 64 or Player-missile graphics on the Atari. And if the team was well versed in SID chip audio, that knowledge almost never ported over to Atari.
I’m seeing the same thing in the App Store with regards to mainstream (highly marketed) software, and especially new hardware. I picked up a bluetooth enabled blood pressure cuff recently, which specifically stated in the description that it would work with iOS and Health Kit, but only after I was prompted to create an account on their cloud service that was a generic front end for all their other health related products. The only reason that would be needed at all is because there’s no Android equivalent of Health Kit.
Once iOS becomes the second fiddle in developers’ minds it’s game over. I’ll hold on as long as I can, and continue to seek out and support truly native apps, but I feel Apple might be headed down that path they found themselves in the 1990s, where they had a few niches, maybe some innovation, but no way to get the attention of developers.
And lower the d*** prices!
Another big problem is that Apple continues to court Hollywood for content. They sign up some already established talent for a new project, overpaying (which is usually what happens to Silicon Valley companies in Hollywood), and put out lackluster content that doesn’t look any different than anything else.
Why not build a YouTube competitor (or buy/integrate Vimeo), but with deep ties to Apple’s ecosystem? They have all the production tools already, but when it comes to presenting to the world you have to send it to YouTube, Facebook or Vimeo. Include license-free music, a production services network, or even expand key Apple Store locations to include studio space? Nope, just pay Oprah to produce more pablum that we can get from countless other sources.
Nothing innovative from Apple in years, other than increasingly higher-priced gadgets with excessively overpriced flash storage memory. Who could have imagined that customers would rather pay $20 for a 128Gb storage upgrade instead of $100? The Apple ecosystem looks more like carefully crafted wealth extraction, rather than innovative tech.
As long as revenues keep growing the market can be forgiving – Amazon will have a day of reckoning
Our family is an apple customer. We have iPhones, iPads, Apple watches and Apple TVs. While the devices are arguably commodities it is the integration of these devices with apple services that keeps us staying as customers. We subscribe to their music service and cloud storage service using family sharing plans and we purchase or rent streaming media such as TV shows and movies via iTunes. So for us we pay for and value the overall ecosystem that includes the devices themselves. I believe this is a strategic differentiation for Apple and needs to be considered when evaluating their competitive position in the market. As for what an appropriate market cap is for the company I have no idea 🙂
Even in the darkest days of the Mac, when it was literally several times less performant than a similarly priced Intel PC, some people were willing to pay a bit extra for the implied integration of a simpler ecosystem. Unless one of the big Android vendors manages to recreate something similar on that side, it would take some major mismanagement on Apple’s behalf to throw that advantage away.
Most people, most of the time, will likely prefer the better narrowly calculated price/”performance” ratio of Android and it’s ecosystem, but in a market of billions of people, even a smaller share can be a pretty lucrative place to be. For both Apple and its customers.
Apple is losing market share in China because iOS is becoming irrelevant. WeChat has become an ecosystem by itself (messaging, payment, etc) and people spend most of their time in WeChat. WSJ wrote about it 18 months ago.
Hate to say it, but you and your family are suckers. Fell for all the marketing BS. You can get similar android devices that integrate just as well for much less.
Reminds me of my neighbors who brag about all the great features their new iphone has and I show them the same thing on my older android phone.
Sounds like you’re one of those people who knows the price of everything and the value of nothing.
The reason your Android hardware is so cheap is not because they’re being nice. It’s because the primary way they make money is capturing and selling your data.
Every phone call you make, including keywords in the conversation, is captured and archived including time and number called.
Every email and IM is captured and archived fully. So is every text message.
All your app data, username and passwords, are captured.
Every location you’re at, including times and length of stay, is captured.
All your personal financial information — bank balances, account numbers, purchase history — Google has all that too.
All those anonymous browsing sessions you thought were hidden? Chrome is capturing those and adding them to your profile. Google knows what porn you like as well as your penchant for political trolling.
I don’t like the idea of paying $1K for a phone, but when compared with the prospect of having my entire life captured for all time and resold to governments and marketers, I’ll pay $1K every time.
There are privacy violation revelations upcoming about Android and Google products that make the worst excesses of Facebook seem tame. About all you’ll be able to do when they come forth is say “at least I paid less for my device.”
You’re the bigger sucker, dude.
And for some reason you dont think Apple is doing the exact same thing?? You are living a delusion…
This is the typical diversionary tactic used to try and minimize the problem in Googleland.
No, Apple is not doing the same thing. Read the terms of service and user agreements that come with your software sometime. (Most skip it and use lazy rationales like “Apple is doing the same thing.”)
All the info is in there. Apple doesn’t sell your data, nor does it store it for resale, nor does it share it, nor does it collect anywhere near the same amount.
Whereas Google does, explicitly. They state so in the usage agreement that you agreed to without reading.
I agree with TheMole that it is delusional to think that you can have online privacy. FB messages were supposed to be private, no? LOL.
For all the volatility, the Nasdaq is exactly where it was 12 months ago.
This decline is greatly exaggerated. No one complained on the way up.
More like 16 months ago (6,495 on 9/1/17) looking at the chart. Down about 9% in the last 12 months.
Tim cook is no Steve Jobs. He should be shown the door.
The backdoor ? He’s seen it.
To be replaced by …?
Cook is not incompetent, but does lack imagination. The latest Mac Mini has the base graphics only, but intel makes a NUC with Iris Plus graphics. Back in 2014 I switched from a Mini to a Brix Pro due to a real i5 cpu (4 cores) and Iris Pro instead of intel base graphics. Even with buying windows the brix was cheaper.
If we ever lose our internet connection, Amazon loses a ton. My wife buys a ton-O-crap on that site.
Amazon’s P/E ratio is still at a staggering 84.
And that is after a 25% recent beatdown…
Permabears who in the last few years looked solely on P/E ratio to conclude that stock market is expensive should be loving Apple now. Apple’s P/E is 11. That is ridiculously low!
Or, is the new Permabear agenda that Apple is not enough of a “story stock’ at the moment (in other words, Apple is competing in commoditized market and does not have interesting products coming out)? Like Apple is the opposite of Tesla?
P.S. At the moment I am short AAPL, but may consider going long if it keeps falling.
The “E” in Apple’s P/E ratio is about to get schlonged.
P/E ratios for low growth commodity companies can be well below 11.
Microsoft had lower P/E during Ballmer years. Apple can lose another $300b under Cook. We shall see.
MSFT was good investment in those low P/E days (2011-2015).
True. But it now has a new CEO. Apple may need a new leader if its stock languishes.
P/E doesnt apply at both ends of a tech company’s birth and death. What we are witnessing is the death of apple. It will take a while but they will be forced to cut prices in an attempt to get people to buy new phones. The initial product innovator in any segment eventually dies first bc of competition and commoditazation.
Apple does have the same benefit they had in their “dark years” of being shellacked by Microsoft: They only have one real competitor. In this case, for phones, Google’s Android.
And Google is doubling, tripling…. down on highly speculative “AI” plays. None of which will likely ever work the way people so dearly want to believe, and all of which will grow ever more rapacious in their need for individualized contextual data to provide any illusion of being all that useful.
I’m not entirely convinced the aging, well connected and increasingly out of touch executive suite at Apple even sees the potential problem of that, beyond it’s effectiveness as a shallow marketing slogan. But some people do care. And are willing to pay a higher price for products with fewer features, if those additional features require massive access to individualized data by the service provider. So absent anyone else willing, and able to serve that niche, Apple at a minimum has a future. But they do need to embrace it wholeheartedly, rather than getting stuck in a rut trying to play second fiddle to Google with higher priced devices that only look “more exclusive.”
It all depends on what you think will happen to Apple. Will they be able to retain their high market share in the US/Japan/Great Britain? If so, they can continue to earn at the current levels, and a PE of 11 is a good bargain. Will they see their market share in those countries trend from the current 40% share to the 10% they have elsewhere in the world? If so, their profits will turn into losses, and they are no bargain.
I have no position because I have no strong opinion. I tend to think it’s likely that the software vendor that sells to every hardware vendor that wants to buy (Google) will win out in the long run, but it could go differently with phones than it did with PCs because Apple started with a much, much larger market share.
IBM had complete and utter dominance of the PC sector. Then in 1987 they came out with the PS/2 line. Proved to be a complete and utter failure as the costs were dramatically higher and it was quite the pain to work with at the time. It was a proprietary platform as well. Open standards have historically emerged the winners in computing.
Apple is just like every tech company, They have fast revenue and earnings growth. The stock soars. Companies make competing products for much less and their segment becomes much less profitable. Then the stock tanks and remains relatively flat for decades. Reminds me of Cisco and other darlings from the late 90s.
Apple is overpriced and getting driven out of overseas markets by cheap Android hardware, but the privacy advantages of their ecosystem will be a big deal as people continue to learn of just how pervasive Google’s abuses are.