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Apple will have a hard time keeping up the growth rate considering market saturation. This is was documented today in a weakening supply chain. The only sector they can go into that will continue to support such growth is medical as I have previously written about. A phone is a commodity product and can only be taken so far. Apple has to find a new frontier to conquer. Medical and a vastly expanded ecosystem are their only hope of keeping the financial train on the rails. They have access to an ecosystem, processing power, communications and mems to make medical really happen and become a growth driver. All they need to do is either partner with medical companies or buy them, they can do both.
I think Alphabet is showing low profits not because they don't make lots of money, but because they invest a lot of it in r&d , unlike Apple - which generally means Google has more growth potential - so comparing by profit alone isn't that representative.
ippsi, It will be very interesting to see how Alphabets (taken from Alpha and Bets) will do. Alphabet is more about bets and Apple is more deliberate in business styles. Both could be right, just different approaches.
As of September 2, 2015, Apple has US$21.12 billion cash and cash equivalents on hand. So they are at a critical junction about how to utilize so much cash to better serve shareholders, employee, and customers and position themselves well for the next 5 to 10 years. Steve Jobs once called Warren Buffett to ask his opinion about how to handle the ever growing cash reserve Apple was facing.
Mr. Buffett told Jobs that he has four options: "stocks buybacks, dividends, acquisitions, or "sitting with it."".
If you follow Mr. Buffett's business practice, you probably will know that sitting on cash and do nothing is not the option he likes and he only did that in some very unusual circumstance (like right after 2008 financial market crash).
But guess what, Mr. Jobs later decided to do nothing and told people that Mr. Buffett agreed with him!
Hist78: when buffet says "acquisitions" he means acquiring companies for financial purposes ,not strategic ones. And we do know that Apple has an invested arm shrouded in secrecy. So they could be definitely acquiring companies.
Apple reported quarterly earnings and revenue on Tuesday that beat analyst expectations, and its cash hoard is bigger than ever. The company revealed that its cash pile once again topped $200 billion, hitting $205.7 billion for the fiscal fourth quarter, up from 1.33 percent from last quarter.
To this number you need to add $20 bn of short term marketable securities and $164bn of long term marketable securities. Total $205bn. They also have $55bn of long term debt, monies they have presumably borrowed in US to avoid tax effects of repatriation. The net cash pile is $150bn.
These numbers can be found in their 10-K returns. I like to look at the cash flow statements. They generated $81bn from operations in fiscal 2015.
To this number you need to add $20 bn of short term marketable securities and $164bn of long term marketable securities. Total $205bn. They also have $55bn of long term debt, monies they have presumably borrowed in US to avoid tax effects of repatriation. The net cash pile is $150bn.
These numbers can be found in their 10-K returns. I like to look at the cash flow statements. They generated $81bn from operations in fiscal 2015.
Yes, Apples does have a lot more cash and other security at their disposal. So what are they going to do with it?
IMHO, they need to invest a lot more into their future business. For example, iCar.
I don't know about you, after years of driving, I haven't found a car that I truly love and proud to tell friends and family. Yet cars are expensive, dealers are expensive, the quality is bad, the features are limited and expensive, the car manufacturers are stupid, stubborn, slow, and sneaky (VW).
If you think a smartphone is expensive, then do you recognize that many families are throwing one to two smartphone equivalent of money into their car payments every month? On the other hand we only use our cars one to two hours every day.
A new electrical smart car from Apple or Google will change how we value and use our cars. It will redefine how much we should pay for a car and how cars related to our daily life and culture. The automobile market is much bigger and requires a lot up front investment. Google and Apple have the capital and attitude to make it possible.
I don't understand , why us , as consumers (who actually need to pay that profit) are happy for Apple having so much profit, especially since they give relatively little back(either investing in basic research which they do very little even versus other companies, or doing something like Google - investing in very valuable future tech) ?
I don't understand , why us , as consumers (who actually need to pay that profit) are happy for Apple having so much profit, especially since they give relatively little back(either investing in basic research which they do very little even versus other companies, or doing something like Google - investing in very valuable future tech) ?
Yes, I totally agree. Is it because Apple very focus on what they can do best and what the maximum profit they can earn? In a way this is good for investors in the short term. But on the other hand they need to be very careful about this. Do you remember once upon a time there were companies called Wang Laboratories, Digital Equipment, BlackBerry (Research In Motion), and Nokia? They all had good products and earn handsome profit at one time. But many young kids will have no idea what you are talking about if you mention Wang Laboratories or DEC (Digital Equipment) to them.
