Working at a small shop now, and seeing this same behavior, it's a little frightening. In our case, and from my perspective coming from a couple of startups more recently, and large enterprises prior to that: terrifyingly frustrating for a number of reasons.

I'm in a great spot to make suggestions from my accumulated past, but the team and management seem terrified to make the jump and have nestled themselves nicely in the niche of "let's just do what's easy for now" while still telling themselves they want to grow grow grow, but I don't think management is quite aware of what this growth is going to mean internally for our ability to solve problems with the toolsets we have (both for support and project management).

Every morning we have a company wide meeting where capturing more market share is a recurring theme. And immediately after that meeting yesterday in a developers only meeting, an inordinately large amount of time was spent on discussing how we can introduce new features yet still accommodate those of our customers who don't have internet access.

Because, as you know, if you want to capture more market share with software in 2016, you want to focus on people who don't have internet.

We finally put Internet access in all of the warehouses and told the truckers they had to end their night at the warehouse and log their hours there. Several drivers quit because it was too much of a burden to drive that far every day. But then we finally got to upgrade the software to support showing customers where the trucks were at and how long it would take to get to their locations.

It would be awesome if technological progress was more evenly distributed across the population.

I understand that any good company wants to provide quality service to all of their existing customers, but dedicating resources and devising workarounds for that small percentage of disconnected customers (to the detriment of the thousands of others) while our mission statement is to "capture market share" seems counter intuitive to me.

Or...they are unwilling to allow the company to eat losses to pretend to invest in the long term, but are in reality on their way to failure (for example). Let's not act like companies, in general, have this figured out and know what's best. Lots of them fail.

If you want long term growth, you're free to invest that way. But don't impose your preferences on others, or assume their method is wrong. The only way speculators, or anyone, can buy shares is by someone else deciding to sell, uncoerced.

Not sure I understand. How do you grow revenue unless you're producing something that someone wants, presumably because it solves a problem and makes the world better?

If I were a company I'd pay a lot of money to find other ways to grow!

For example, if my ISP charges my $10 more a month, they aren't necessarily solving any problems, but it's still growth for them.

Much more of a risk than bumping the iPhone specs.

Not only that, if there is no growth in the next few quarters Apple will be considered to be in "bad shape" which is insane when you consider the size of the company and its revenues.

This is not complicated. You buy with the expectations of future profits X. If the stocks fails to meet those expectations, you reallocate your capital by selling to someone else who is happy with <X.

There is nothing nefarious about it. Nobody is a failure. The system isn't broken. This is the free market.

How is the long-term R&D of Apple affected by a bunch of shareholders exchanging ownership with new shareholders?

there isn't anything wrong with Apple's stock selling off violently, as much as there was anything wrong with people bidding the shares up so high under the idea of selling it to someone else at a higher price.

there are plenty of companies that are content with steady or even cyclical growth/earnings. in many other countries were local stock markets are not popular venues for speculation and capital formation, it is quite respected to have steady earnings without a drive to quarterly growth.

that being said, many places that are low growth envy the high growth areas, especially how it has been achieved in the US markets.

The stock price doesn't just reflect the amount of money the company has. The stock price reflects the "fully loaded" expected value of that stock. That means it prices in ALL expectations.

If the company you buy performs exactly as expected, then you don't actually make any money because you paid the price that reflected those expectations, so whatever dividends the company issues will only compensate you for the premium you paid. So the stock has to outperform expectations before it's worth buying.

The "expected value" of the company actually discounts dividends and the like, because the value of money in the future is less than the value of money today.

There's an amusing side point to this, which is that a perpetual annuity actually has a finite value [1].

[1] https://en.wikipedia.org/wiki/Perpetuity

Suppose you buy a perpetuity, granting $X every year. After 100 years, you'll have 100 times $X more dollars, but you will be worth exactly the same as you were worth before the perpetuity. (This assumes that the market correctly prices the perpetuity so that the expected value of purchasing it is $0).

EDIT:

I'm not talking about "profit" because it's not really a super useful concept here. Having a larger quantity of dollar bills after a period of time does not mean that I've got more value. Trivially, if I have $100 in 1950, and $101 in 2016, I have made a "profit" of $1 but lost a substantial amount in real terms.

I should cite sources and use correct terminology.

Wikipedia provides the following [0]

> The dividend discount model (DDM) is a method of valuing a company's stock price based on the theory that its stock is worth the sum of all of its future dividend payments, discounted back to their present value.[1] In other words, it is used to value stocks based on the net present value of the future dividends.

[0] https://en.wikipedia.org/wiki/Dividend_discount_model

It's a nice Econ lecture but markets do not actually behave by a manner of collective estimate of dfcf. I would say it's more accurately described as a random walk with an upward inflationary bias.

The stock will cost a fair market-clearing price for its expected return, risk-adjusted. But often a stock, or a perpetuity, is a good purchase for one or other market participant - no different from a loaf of bread bought at a fair market-clearing price.

One can say that this "risk premium" actually reflects the expectation that things don't go as well as expected. But the fact is that in the aggregate and in the long term equity investors are still doing "better than expected" and there is no agreement on why it is so (this has been called the "equity premium puzzle").

I believe you would agree with me that a company could exceed expectations while at the same time not growing (by giving out a bigger dividend, or buying up its own shares with its profits).

But that's not really what you're doing when you invest in an S&P index fund, right?

Down voters: valuation = income / ( discount rate - growth rate )

What is Apple's next move once it saturates the market?

Or, more generally, what is the next move once you've saturated a market?

There's plenty of more options available in both the short (<5yrs) and long term (>5yrs). They've previously had consumer product lines that included cameras, game consoles, laser printers, TVs, etc.. They could revisit those markets again, or push into business markets.

Really they could do anything.

My idealized mathematical self thought, naturally, the exponential growth curve, because it expresses what happens when y-dot equals alpha y.

But I asked a passing Caltech astrophysicist, who (not surprisingly) gave a better reply. The curve that flattens out and goes down, he said, because exponential growth is impossible to sustain. Physical limits on some aspect of the system must intervene and impose a new law.

Just because Apple didn't become the first trillion dollar public company by marketcap (lets assume that chinese bank ipo for a brief second didn't count), doesn't mean that it would have broken a physical limit on the system.

There was a time not long ago when 100 billion companies didn't exist

and there was a time when private venture capital didn't value new businesses at 1 billion dollars

although I don't see the fundamentals to support such large companies, apple, or another company, isn't breaking anything if it does achieve the ability to grow larger

The higher valuations of private companies IMO has little to do with quantitative easing. Despite any bubble talk, very little funding actually goes into these private companies. The S&P 500 returns nearly 1 trillion a year to shareholders via dividends, VCs put like 50 billion into these high growth startups.

Low interest rates from quantitative easing might contribute greatly, but I wouldn't say the inflation targets have much to do with it.

Higher valuations come partly from businesses having more cash because they are not spending money expanding, and because the low interest rates encourage companies to borrow money to buy back stock, which increases EPS and dividends, which increases share prices. Of course, there has been some legitimate growth over the past years, too.

[1] http://www.usinflationcalculator.com/inflation/current-infla...

It additionally devalues the dollar, which leads to assets to be worth bigger numbers. QE has been mainly flowing to investors and the financial sector, and ts been staying there, hence not translating to consumer price inflation.

So yes QE is responsible and QE caused inflation and inflation is also responsible. This inflation is confined to investment assets.

(for reference, the S&P 500 calculation was around 170 in 1985, compared to 2,098 today in 2016)

Time-delayed negative feedback produces a peak and a crash.

It's not readily accessible, and there seems to be no street-view coverage there. The photos listed nearby on google maps have a location that is far enough off to be useless.

Given that people have already been writing those articles for a couple years, i'm sure a drop in their revenue and missed estimates won't make them stop.

Not to mention that all the other companies (Microsoft, Amazon, Google, Facebook) have much worse ups and downs (and are also 1/3 or less the revenue and much much less the profits of Apple, Amazon comically less) but you never see "X is doomed" for them...

AAPL YOY (year over year, not quarter) : iphone down 18% ipad down 19.5% mac down 9% revs down 13.5% eps down 18.5%

Just to put this into perspective:

> quarterly net income of $10.5 billion

"which is about a 12% decline in year-over-year quarterly revenue. It’s officially Apple’s first quarterly decline since 2003."

I doubt that many people base their purchasing decisions on this though.

Also thats not true. Most important parts of Android are open source, for whatever thats worth. Its the parts that communicate with Googles cloud that are closed as well as Google's branded suite of apps.

Besides, where have you seen OSS services? It doesn't even make sense.

Also the argument that Android isn't actually OSS argument is dumb. If it was closed source how have other companies forked it and successfully released their own variants? It doesn't make sense.

Google restrict OEMs from forking, is certainly shitty. But its also a smart business tactic and I hope Google gets more restrictive around letting OEMs use their flavor of Android. Since it leads to a more cohesive experience surrounding Android.

This is my first iPhone as at previous occasions I always used Android (nexus) devices and I found the fact I don't need to tweak it, a positive thing. That and the fact that at it is longer supported than some Android flagship devices.

Ten years ago I had the time (and needs) to tweak my phone, nowedays I just want a good (out of the box) smartphone with long support.

Apple's strength isn't in coming up with NEW things, I would say quite the opposite as they're usually very late into any given market. Apple's strength is coming up with products that are better than the ones that came before, in their Apple-y way.

"Innovating" is a business buzz word. Its not meaningless, but I think that its meaning is far from inventing/creating.

The blackberry was the ultimate pager, but didn't have a functional web browser. The Windows device was pretty much awful, and PalmOS was waiting for euthanasia.

Innovating isn't just about inventing new technology wholesale. It's also about packaging that technology in a way that makes it useful and desirable.

But Apple still has a lot of resources and capabilities it can deploy to make something a sucsess, like any other big company, so maybe that's what we should except from the current Apple - altough considering the circumstances - this can be very lucrative.

Apples customers barely complained on slow iPhones, and even less at their pricing level, where many knew apple margin is 40%. "Normal" company cannot withstand such high margins because of competition. Jobs achieved opposite where many people just said "oh screw it - it will cost me plenty, but I really want it!"

As of the lack of growth, I agree with you. It doesn't mean they are in serious troubles, just like a light caught doesn't mean you have a throat cancer. But the truth is that their products lost plenty with Job's departure.

Apple growth barely been done due to progress, but rather because of evolution! First mass-scale touch device, first mass-storage music device (I know, there been Palm and others; but ask 10 people - who ever heard of Palm?). Those were steps of evolution. Before you couldn't type with a finger. Before you couldn't store 160GB of your music in your pocket. Etc etc.

Now Apple is all about growth. There is no more evolution! There is faster CPU, if you really needed it. There is lighter phone, if you really needed it. There is faster GPU, if you really needed it. There is more fancy front-facing camera.... BUT none of those things are evolution; its just a progress. And that won't catapult Apple sales into previous levels. It simply can't.

Would we see the same "disappointing" sales numbers had Jobs still be here? Most likely not. By now we would steer the "i" devices with our eyeballs, and mind control that really works and is friendly to a customer would be just around the corner...

As of today under current management... it's funny, but my i device doesn't even have an FM radio built-in.