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back to article Apple shares take biggest one-day hammering in 4 years

Apple shares took the biggest single-day hit in four years on Wednesday, falling more than 6 percent on NASDAQ to $538.79. The tumble took Apple's market cap down to $506.84bn, well below the dizzy heights of $705.07 billion reached in September this year. Yesterday saw an eye-watering $34.8 billion wiped off the total value of …

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Happy

Simples

I can restore that 34bn for you apple, for a mere 1% fee:

- fit ipad mini with retina

- Make your consumer devices more user serviceable. Cut out the recent trend for gluing shit, for example.

- stop taking the piss with your pricing

- stop suing everyone

Bingo. Job done. Invoice is in the post.

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Re: Simples

Broadly agree but I think taking the piss with the pricing is the main reason the share price got so high in the first place. I wouldn't recommend going downmarket

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JDX
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Re: Simples

If you really think making iDevices more servicable is going to have a big impact, you're really not in the same world as everyone else. It's a very dangerous mistake to assume your experiences transfer to the majority, surely even the most hardened Linux/build-my-own-NAS/compile-my-own-OS person realises the vast majority of people aren't interested in even taking the case off their PC?

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Meh

Re: Simples

I'm sure Apple, which is probably turning into more of a law firm than a tech firm, will be thumbing through the list of top 100 tech companies trying to see who else it can sue to recoop this $34.8 billion loss.

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Re: Simples

Job's done surely.

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Anonymous Coward

Re: Simples

Would BMW really want to compete with Ford on pricing?

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Re: Simples

They should try looking at the p/e ratio - Apple is remarkably good value for a company actually making huge profits. Take out their cash mountain (and yes it is a mountain) and they look a bargain compared to the stratospheric valuations given to companies like Amazon.

They have a huge installed base - even if their market share is slipping (if it really is) the market is growing rapidly so the volumes shipped are increasing. AND all this is before you factor in any new products or services - how about a proper Apple TV, how about a subscription media service... etc.?

Samsung sell you a tablet today and that's it - no onward revenue - Apple sell you a tablet, then they can make money off the media / games etc. you play. I wonder what Apple's profit per iPad is over it's lifetime compared to Samsung - I recon it's 5-10x.

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FAIL

Re: Simples

That would be the BMW which has been doing well since their cut-price 3 series started outselling the Mondeo in Britain, would it?

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Re: Simples

"... even if their market share is slipping (if it really is) ..."

I can tell you that it *really* is. I popped into PCWorld yesterday to pick up a cheap 3d bluray player and noticed that the usually bustling apple section was a ghost town, whereas the usually empty android tablet section was a hive of activity.

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Re: 34.8 B USD loss

Apple hasn't lost a damn thing, the shareholders who bought at the high-point have an unrealized loss (unless they sold, then they really have taken a loss).

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Re: A n o n y m o u s

AAPL's P/E is a respectable 12.4, 'tis true.

Their market share really IS slipping, and not by a little bit. Admittedly, much of this is because GOOG et. al. have been expanding the market so greatly, but then again, you have to ask yourself, why ISN'T AAPL? Marketshare drives developers. AAPL has been massively successful at driving developers to their platform, and using that as a driver for market share, but GOOG has been getting more successful at driving marketshare lately by way of more models and a wider range of prices. Eventually, the larger user base will make Android the preferred app development platform, which will be devastating for APPL. As much as I don't like Steve "flyin' chair" Ballmer, he was right on three things: "Developers, developers, developers."

In addition, I like yields above 5. It's a personal thing, and YMMV, but AAPL's paltry 1.94 just doesn't do it for me.

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WTF?

Re: Simples

It's not a $34bn "loss". This is funny money reduction in Apple's market cap. Is Apple really worth $700bn?

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Re: Simples

"Samsung sell you a tablet today and that's it - no onward revenue"

You mean apart from the Samsung App Store.

Oh and the Reader Hub, the Magazine Hub, Music Service, Video Service which are all bundled with every device.

No onward revenue indeed *slaps forehead*

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Anonymous Coward

Re: Simples

" the BMW which has been doing well since their cut-price 3 series started outselling the Mondeo in Britain, would it?"

Are we sure it wouldn't be the BMW that bought the Mini factories and now sells Minis, because it needed an even lower-end model in its range than its toy 3 series models?

And then introduced the 1 series too?

No, it wouldn't be any of them would it :)

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Anonymous Coward

Re: A n o n y m o u s

". Eventually, the larger user base will make Android the preferred app development platform, which will be devastating for APPL."

The problem is that Android is already 70% of smartphones worldwide yet that hasnt changed the development pattern or profits for developers. iOS is still king. It hasnt changed the web usage either with the vast majority of web usage still done on iOs devices.

Android would need near 100% domination to make it worth a devs world to develop only Android and thats NEVER going to happen with both MS and Apple having billions in the bank to make sure of that.

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Re: Simples

I took the case off my PC once, now the world is inflicted with 'Fluffor, the Beast from Beyond the Heat Sink' - if only HP had concreted the case shut when I bought it we wouldn't be where we are today......

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Anonymous Coward

Re: Simples

Probably not, but then neither Ford nor BMW's are throwaway technology so it's not a valid comparison.

Perhaps the best comparison would be between Crystal and Cava. Both are essentially the same thing, fizzy alcohol, one is bought by people trying to impress while the other is bought by the average Joe that just wants a fizzy alcohol that they think tastes nice.

You can blather all you want but at the end of the day there are only two salient points. Does it get you drunk and do you like the taste. The latter of course is completely subjective and any claims otherwise just make an issue of your conditioning.

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Re: Simples

The better comparison for that would be Google, who are now making money off of 75% of smartphone users (and rising) from the media and applications/games, without having to do much at all when it comes to making and selling hardware (even the Google branded devices are manufactured by other companies). They've also done very little advertising for Android, compared to the vast amounts for iphones/ipads.

Google also already have Google TV (which has had a slow start, but now seems to be being picked up by the TV manufacturers, particularly in the US now).

"Huge installed userbase" - so does just about any multinational company.

Plus who cares anyway. From a consumer point of view, I care little about which company makes more money - that just means they're the ones pocketing more of my money as profit, rather than functionality for me.

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Re: A n o n y m o u s

"that hasnt changed the development pattern or profits for developers. iOS is still king."

Because there's plenty more for free on Android, which I'd say is a better thing. But remember it's not all about profit - many apps are free, because they're given away by companies for their websites, or to advertise a product or service. There the key thing is market share (or it ought to be - unfortunately a lot of ppl think that iphone is the largest platform, but eventually the truth will catch up).

"It hasnt changed the web usage either with the vast majority of web usage still done on iOs devices."

Citation needed. There are various tracking sites making various claims, though I've seen plenty that show Android on top, as well as ones showing other platforms like Nokia above iphone. There was only a short period a few years ago where iphone was top, but the other platforms quickly overtook.

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Anonymous Coward

Re: Simples

"Perhaps the best comparison would be between Crystal (sic) and Cava. Both are essentially the same thing, fizzy alcohol, one is bought by people trying to impress while the other is bought by the average Joe that just wants a fizzy alcohol that they think tastes nice."

Cristal is the brand name of a Champagne produced by Louis Roederer.

Cava is a Spanish sparkling wine mostly from Catalonia (fyi: Spain)

So, you spelled the name of one of the premier products of one of the most famous Champagne Houses (I spared you the French there) incorrectly, and followed by comparing it with a generic wine classification from a different country or origin. Yep, it is clear to me which of these two drinks you might prefer, and exactly why.

You are correct in that Champagne (incl. Cristal, but you chose Cristal because it's probably the only premier product you can name but I will include the classification as a whole here) and Cava are consumed by people who want something that "tastes nice". I suspect that this is true of every recreational beverage!

Your distinction however is arbitrary and in fact wrong. If one labelled "Manuel's Cava" as Cristal it would sell vanishingly close zero bottles because it would taste like Cava and not Champagne. People drink what they like, limited only by what they can afford. Very few people drink anything they don't like because it happens to be expensive. This is an idea that envious poor people have to make them feel better about being poor.

Millions and millions of perfectly ordinary people like Champagne because it "tastes nice" and they drink it regularly (check out the production volume from Champagne). Cristal is one of many fine examples, and one with a curious history as it happens.

The best wine is the one you like the best. The rest is training, perception and physiology. Like walking, it takes practice to learn about, understand and appreciate wine. There is no requirement to do so and most people don't make the effort.

Anyway, keep on drinking your 7-11 Cava in ignorant bliss, and enjoy every drop!

I'll take a rain-check on it if you don't mind.

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Stop

Re: Simples

Serious non-troll question for people who do not live in the US:

I live part of the time in Denmark. There isn't, and to my knowledge never has been, ANY direct advertising for Apple products here in denmark on TV at all. The advertising evident is always from dealers or carriers (for iPhones) and it is in the printed media and billboards etc.

Is denmark the only country spared Apple's TV advertising?

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Whoodathunkdit??

Apple is a great company on an amazing streak. Their products don't suit me but I respect their approach and success. I don't love their marketing hype and their bullying tactics. Whilst Apple is obviously worth a large pile of money I felt that it was significantly overvalued.

They seem to have hit the end of a road of products (the procession from ipod to iphone to ipad all seemed very sensible) and are trying to find the next big thing to keep the ecosystem going. The risk is if they don't they lose their edge and can't justify their margins. The market seems to be responding to this lack of a clear future, it's been a while (in apple terms) since the last genuinely distinct product was released. Retina displays were a great idea, the new ipad mini isn't really a new distinct product but rather just a smaller variant.

It will be interesting to see where they do go next.

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Gimp

Re: Whoodathunkdit??

Apple are "great" in the sense of "very large" but a lot of people hate them for various reasons. In the UK there's a big awareness of tax-dodging now, though this won't affect their share price and probably won't affect sales either. But the reality is that they are rampant price-gougers and -skimmers who charge top dollar for products that are made as cheaply as possible: in other words, a completely normal multinational. Their marketing - particularly retail - is pretty slick, up there with other high-fashion brands.

They *were* on an amazing streak and that's been over for a year now. But as you say they've hit the end of the road: Not only has nothing new come out, they have degraded their existing lines in various ways : no optical drive on a so-called all-in-one iMac for example. Maps for another.

Personally I'd like to see them leverage their current inventory by getting into bed with some proper partner developers who match their style. Let's posit the idea of a super-clean looking CK wristwatch with built-in bluetooth iPod mini touchscreen and iPhone controller - not the clunky Sony idea but something really smart that would give Tag and Breitling a run for their money in the fashion stakes. OK maybe not CK but you get the idea. But Apple are too proud. It'll never happen.

It's very hard to come up with "what next". The genius of Apple's catalogue is that nobody knew they wanted these things - iPad, iPod touch et al - until they saw one. Then they became overnight must-haves. I don't think I've got the wild imagination required to think of "what next" (apart from my old email hat idea - but that's old tech now).

How about you lot. Apart from the usual "I'd like to see Apple drop off the face of the earth" trolls, what next for Apple?

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JDX
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Re: Whoodathunkdit??

>>a lot of people hate them for various reasons

"a lot" is not true*. The Register and other nerdy sites are wildly unrepresentative of the world/market as a whole - the world likes iPad and Windows, for whatever reasons. You might say "a lot of open source supporters hate Apple" but I doubt you could even say "a lot of IT people hate Apple" because iPad is a super-hit even among developers.

*speaking in % terms. If every single Reg reader hates Apple that's essentially 0% of the world.

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Re: Whoodathunkdit??

Great in the sense of managing to acquire a mountain of gold, enough to make a dragon weep. Their products aren't perfect (and you are entirely right on the nobody knew they wanted them part) but they sell plenty of them, they outplayed many other phone companies. How many phone models does Apple sell. One (in 3? different sizes) and they also sell 'last years' model. Now go look at how many models HTC or Samsung sell?

I wouldn't buy an iphone but I can respect that Apple have made a LOT of money. Yes their margins are huge but if people didn't want to pay it they wouldn't be able to charge it.

They are absolute twats over their lawsuits and tax stratergy but I'd have expected nothing else from them. The whole our phone are made with fairy jizz markting is sickening but it seems to work.

As for whats next, if they could get content maybe they could make a big dent in the emerging 4k tv market?

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Re: Whoodathunkdit??

Well, there's also the guy that threw the other guy out of an interview because he had an iPhone. Don't forget him.

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Re: Whoodathunkdit??

"they outplayed many other phone companies" - I think they outplayed them all, actually! " One (in 3? different sizes) "... That's a good thing, right? Fragmentation, etc.

Agreed about the twats thing though it gives us something to rant about. And there may after all be method in that madness. - *may*.

I'd like a TV done by them - but I doubt I could afford it (read - I'm not spending that on a telly! I'm the kind of cheapskate that won't pay a SKY sub while there's freeview). B&O customers only need apply methinks.

And yes, when I say "a lot of people hate Apple" - that is - a lot of people on this forum. And some tree-huggers of course. And a few people in China. Hardly anyone in fact. But my point is that their reputation is not quite as shiny as their products, and tarnishing more as time goes by. I'd sure hate to work for them!

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Anonymous Coward

Re: Whoodathunkdit??

Apple have a big advantage, customer service. They have shops, you can get things replaced and repaired.

They're usually fair about problems too, they do get a lot of false claims, people who have dropped phones, washed them etc.

For some people paying a premium for a nice looking product and decent customer service is worthwhile. It's a huge gamble buying anything from Google based device makers. Generally the customer service is average to poor. Google themselves are pretty terrible, their email responses are canned and the quality of the messages on-par with an email phisher at times.

That said, I'm not really sure their good times will last for much longer the product is already suffering under Cookie. The premium isn't justified any more, sloppy behind the times product with a premium which doesn't seem to translate into durability or build quality. Much happier with my Nokia 920.

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Anonymous Coward

Re: Whoodathunkdit??

@JDX

'A lot' IS true. The comment didn't say 'the majority', or 'a large percentage', just 'a lot'. I'm not defending the comment that accompanied it but the statement is true - a lot of people hate them for various reasons. In the same way that I know a lot of people who like war gaming (global percentage probably 0%), my house is built from a lot of bricks (percentage compared to all the bricks in the world...0%), and a lot of people were murdered in the 9/11 terror attacks (global percentage 0%).

For what it's worth, I have a different experience of apple love within IT (and yes, I work in IT) - practically nobody I know in IT (especially developers) use iPads (for work anyway). Some do use the proper apple products though, just not the toy end of the apple range.

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Re: Whoodathunkdit??

Let's not get ahead of ourselves. Their valuation went from "outrageously over-valued based on a good layer of hype over teh top of the fundamentals" to "humungously valuable based on extremely strong sales of a number of extremely high-quality devices".

Apple are a victim of their own success in generating ever-increasing profits, and of the general capitalist-market flaw that something is wrong if profits aren't continually increasing. If Apple's profits were stable and never increased at all for the next 20 years it would still be a fabulously successful company, but it's share price would take a beating.

Fickle, Wall Street??

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Anonymous Coward

Re: Whoodathunkdit??

"They *were* on an amazing streak and that's been over for a year now."

Meanwhile back in reality Apple's financial 2012 had record revenues and profits for each quarter and made $41.66b profit compared to $25.92b in 2011.

How much would they have made if the amazing streak had continued?

(numbers from http://investor.apple.com/results.cfm)

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Anonymous Coward

Re: Meanwhile back in reality

Current figures don't count for much, what happens when it's time for the next great Apple product and they fumble it because the company without Steve just isn't selling the dream any more?

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Re: Whoodathunkdit??

Sorry, but the "world" does not like Apple. Some parts of the world do. In Spain Apple's market share is less than 5%. In India it's less than 1%.

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Paris Hilton

Re: Whoodathunkdit??

WTF!!! Do you really, honestlly think any of the moron Apple haters here at The Register even care what the reality of Apple is? No, I didn't think so. Your post is an elegant troll.

For those of us that have worked on the street, the stupidity tech nerds display on forums such as these is heartwarming. You see, the last idiot hasn't been born, and on the street, that can be converted in the readies.

I don't see Apple disappearing any time soon, and neither does anyone with a brain. Any company showing those numbers is more or less impervious to trivial market movements. They are not impervious to all sorts of other events though. Cook might do an Elop and destroy the company (I doubt it though), or Windows Phone might be a massive hit (I don't think so, though I am not anti WinPhone 8 in any way).

Reality check. Apples profit's are not determined by the financial markets.

Paris: Like Jonus Cord before her and Apple now ...

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Stop

Re: Whoodathunkdit??

@JDX

The Computer Nerd/Tech/Geek can be thought off as market multipliers when it comes to electronics/software. Their opinions shape the market.

When my non-geek family and friends look to buy a phone they come to me and ask for advice, when I was in HMV recently people cottoned on to the fact I knew about tablets people started pestering me for advice.

If you go back through places like the register/slashdot/etc... you will see in 2004 - 2007 a lot of people were talking about how good Apple Macbooks were, Apple were very well thought of within the community and promoted by us to the general public.

Around 2009 we started seeing anti-Apple feeling and now the majority of forums seem to be filled with Apple hate. You can start seeing that attitude amongst the general public, I suspect by the middle of the decade most people won't like Apple or buy Apple.

I don't think this effect is specific to the technology industries either (see fashion, cars, films, books, etc..)

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Re: Whoodathunkdit??

I agree, though just to note:

"The genius of Apple's catalogue is that nobody knew they wanted these things - iPad, iPod touch et al - until they saw one. Then they became overnight must-haves."

The "genius" is indeed marketing - and note this was not overnight, but there was vast amounts of free media hype for months before the products were even announced, let alone released.

Nor are their products overnight must haves, but grow just like any other product line. Just look at the iphone platform compared to other smartphone sales since 2007 - it wasn't until iphone 4 that sales were really anywhere near mainstream. In the early years they were behind even Windows Mobile. Or the original ipod only worked with Macs, and was a flop, only growing with later generations.

But I do agree that they are in a corner, now that the "computer" market is saturated with a continual range from small handheld to large full desktop, with everything in between, and no more gaps. Their mp3 player products will face increasing competition from smartphones and tablets (especially now that they changed connector messes up all the free unfair advantage they get from those making speakers and stereo systems in cars, by only working with ipods/iphones).

Of course there are other markets to enter - TVs, consoles, washing machines, and no doubt they'll get loads of media hype for any new product there, even though other companies have been doing the same thing just as well for years.

High quality fashion brands don't need to stick their logos everywhere (let alone make them light up) - people know what they are from the design itself, and if you don't know, you're not considered the target market (or so the argument goes - personally I find the whole "designer" thing a bit nonsense). But what they do is more like Adidas, with logos everywhere. No doubt the buyers think it makes them look cool, but that doesn't mean anyone else cares. If someone has, e.g., an Armani suit, you know (or don't know) because of the suit - not because there's "Armani" written in light up letters across the back. Similarly with watches - indeed, it's the cheap ones that put a logo there.

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Re: Whoodathunkdit??

"the world likes iPad and Windows, for whatever reasons"

The former isn't anywhere near the same scale as the latter. True, most people don't hate them, but most people don't care either, and are using Android and Windows.

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Re: Whoodathunkdit??

I'm not sure why having fewer choice of models is relevant in anyway. It's a different way of working.

I wouldn't favour or praise a company for having higher profit margins either - that's higher prices, without the higher quality.

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Paris Hilton

Re: Whoodathunkdit??

Marketing 101:

No amount of advertising and promotion will enable a product to achieve more than momentary success. Long term success requires a good product.

I disagree with your implication that Apple is somehow being squeezed in any of their markets. Indications are that they are very, very good at retaining customers (high customer satisfaction levels and repeat purchase levels) so the while it is true that device convergence is stressing the iPod range, Apple is perfectly situated to fill this gap. The MacAir is fabulously successful (I have had one since the week they were released) because it is a solution that the market simply could not offer. Everyone and their dog is now trying to emulate that success with me2 products of varying quality. The Samsung Series 9 is a great little machine for example, but it is clearly an attempt to compete with the MacAir and is rather late to the game.

Everyone else is playing catchup, and while that is the case, Apple are in good shape.

As for the continual "there is nothing left for Apple they are doomed" and the rest of the inevitable swill that follows, well, that is an indication of lack of imagination of the writer - in this case you Mark.

Paris: Because she is provably imaginative!

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Sheen off the Apple?

There is really only one direction for their share price at the moment and that is down. They aren't releasing 'new' products - just minor tweaks to things they already make. In order to carry on growing, they'd need to release something groundbreaking again.

I've been waiting for this to happen to be honest, as I knew it was coming.

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Meh

Re: Sheen off the Apple?

But they are selling a lot of those products. Who *is* innovating? Samsung throw out a bunch of phones with whatever tech is available at the time, disregarding any idea of standards (wireless charging, NFC, for example).

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Joke

Re: Sheen off the Apple?

It's nothing new. Sheen's been off his apple for a while now.

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JDX
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Re: Sheen off the Apple?

Hmm. People have been saying Apple are about to gown downhill since before the iPad. You're going to claim credit because eventually your assertion a share price couldn't continue to rise at a crazy level forever came true? That'd be like claiming you were right about Windows being about to disappear when it stops being made in 2060.

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Joke

Re: Sheen off the Apple?

Hey don't diss Sheen. Anyone with the ability to smoke as much rock as he has and not die is WINNING

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Anonymous Coward

Re: Sheen off the Apple?

You should be an ANALyst with such insight.

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Stop

The venomous Leach at it again

Start with some news and then throw in a couple of unrelated "facts" (one of them is unprovable and almost certainly untrue - the iPad mini is still hard to get hold of, so it's unlikely to be selling badly, plus no quarter end results have yet included it).

Why Apple's stock fell is likewise hard to determine. It's quite possible that its being engineered by some trading firm or other in an attempt to pick it up cheap before the quarter ends financials, but then the Leach couldn't possibly accept that.

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Anonymous Coward

Re: The venomous Leach at it again

"the iPad mini is still hard to get hold of, so it's unlikely to be selling badly"

only true so long as the "hard to get hold of" is due to high demand and not lack of stock in the local market

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Anonymous Coward

Re: The venomous Leach at it again

VHS recorders are hard to get hold of too - obviously because they are selling so well.

:-)

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Coat

Re: The venomous Leach at it again

There were a few hanging off DVD recorders in Comet at the weekend - £275 (and that was with the clearance discount).

Wait... Comet... Oh yeah.

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Anonymous Coward

Re: The venomous Leach at it again

Exactly - something they are selling every single one they can make is not selling well - really. Try going into actual stores - in John Lewis people were 2 deep trying to have a go with the iPads - the Samsungs were marked as 'reduced to clear' - clear enough for me. Try the Apple online store - they can no longer guarantee to supply one pre-Xmas (as of a few days ago). If they could make more they would sell more.

Practically every family I know either wants an iPad, has ordered an iPad or already has one - many have 2+ or will have on 25th December when Santa does his rounds. Schools from primary up are starting to use iPads - the pre-school my son is at said the kids are more used to touch / pinch than using a mouse and that's 3-4 year olds. Few years on and primary schools are rolling them out.

Sales poor - me thinks not.

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