back to article Apple share-price-off-a-cliff: Told you that would happen

I was allowed to write this piece because in November I wrote to our glorious editor after a London Quant's Group seminar to say that the price of Apple shares would tank sooner rather than later. As you all know, that’s just what happened - from just shy of $800 to the mid $400s. The reason I don’t make all that much money …

COMMENTS

This topic is closed for new posts.
  1. Steve Davies 3 Silver badge
    Boffin

    Don't blame Apple for the price drop

    Blame those short termist Analysists who gaze into crystal balls and predict a companies earnings for the next quarter.

    From my experience they always go on the high side. So when a company comes in with results less than 1% lower than their predictions the share price tanks.

    Come in 1% over and the share price still drops because the market has already taken the predicted results into consideration.

    There is no fundamental difference between the above and any of those on-line gambing sites that are so heavily advertised on TV these days (but why are they targetting women so much? Are men not as foolish with their money?)

    1. ratfox Silver badge

      Re: Don't blame Apple for the price drop

      Not that it changes the fundamental message of your post, but in this particular case, results have for the overwhelming part of the last ten years been much higher than what the analysts had predicted.

    2. Alfred

      Re: Don't blame Apple for the price drop

      My shares in ARM went up like a house on fire when they came in over their earning prediction.

    3. Ian Yates

      Re: Don't blame Apple for the price drop

      "There is no fundamental difference between the above and any of those on-line gambing sites"

      On an almost related level are the "analysts" who publish annual recommendations on hedge funds. I don't have it in electronic copy, but there was a brilliant article in Private Eye covering the success rate of these hedge fund recommendations in London over the last 5 years and how only one analyst has been able to make suggestions that would have given an investor a positive return.

      1. John Smith 19 Gold badge
        Thumb Up

        Re: Don't blame Apple for the price drop

        "but there was a brilliant article in Private Eye covering the success rate of these hedge fund recommendations in London over the last 5 years and how only one analyst has been able to make suggestions that would have given an investor a positive return"

        Many people don't know Private Eye publishes a city column.

        They should.

    4. Anonymous Coward
      Anonymous Coward

      Re: Don't blame Apple for the price drop

      "from just shy of $800"

      Think the high was actually $702 - not sure that is really 'just shy' ??

      1. TheOtherHobbes

        Re: Don't blame Apple for the price drop

        ""from just shy of $800"

        Think the high was actually $702 - not sure that is really 'just shy' ??"

        That's what happens when you hire quants. (...Spelling that last word very, very carefully.)

        1. Anonymous Coward
          Anonymous Coward

          Re: Don't blame Apple for the price drop

          In recruitment the equivalent is "this candidates current salary is just shy of £50k..." (when in fact it's £40k).

        2. Al Jones

          Re: Don't blame Apple for the price drop

          "from just shy of $800"

          52wk Range: 419.00 - 705.07

          (according to an! extensive! search! that! took! about! 12! seconds!)

        3. Snake

          Re: Don't blame Apple for the price drop

          Ah, yes, the quants. The same fools people who proposed the end of recessions and the great unknown due to their 'stupendous' analytical formulas.

          As you know, those same formulas stated that real estate would always be such a great investment, and keep our economy booming, because no one would ever walk away from their mortgages....

          and that's what you get for listening to "Experts" who play fortune tellers part time.

    5. Anonymous Coward
      Anonymous Coward

      Re: Don't blame Apple for the price drop

      (but why are they targetting women so much? Are men not as foolish with their money?)

      When you say targeting women, do you mean there are attractive women in the adverts? Because I'm pretty sure that's still targeting men.

    6. csumpi
      Stop

      Re: Don't blame Apple for the price drop

      Disagree.

      The reason the stock price is dropping is not because aapl is not making money hand over fist. It's because there's no more innovation*. In the meantime, others have not only caught up, but left aapl in the dust.

      Aapl needs a new wildly successful product to sustain its stock price. They can't keep growing on small upgrades to the iDevices.

      So aapl is largely to blame.

      *aka taking other people's inventions, tweaking them and slapping a designer case around

      1. Field Marshal Von Krakenfart
        FAIL

        Re: Don't blame Apple for the price drop

        The reason the stock price is dropping is not because aapl is not making money hand over fist. It's because there's no more innovation*. In the meantime, others have not only caught up, but left aapl in the dust.

        Certainly crApple have become victims of their own success, for years crApple have innovated, but how far can you constantly create a new product because, as mickeysoft have also found out, there is a threshold above which the incremental improvement in a product line is outweighed by the cost of acquiring the latest shiny thing. The iPhoney was a good logical development of earlier productsinvention, the iPhoney 2 & 3 probably represent significant improvements over the earlier versions, but lest face it, once you have your 8 megapixel pixel camera 64 GB media player internet browser (oh yeah, it makes phone calls as well), where do go from there?

        Large amounts of cash are also a bad thing for a company that develops and improves previous products innovates. Unless you are a cash rich company like Coca-Cola, where innovation consists of bottling london tap water and adding some poisonous chemicals, excessive cash is a liability.

        Cash or cash equivalent securities are a safe commodity, unless you have it on deposit in a Cypriot bank (add French, Spanish and Italian bank to that list), but safe also means low rate of return on investment. Speculators Investors don't like low rates of return.

        An excess of cash over that required for working capital represents unused capital (see above), it should be invested to create even more profit or distributed to shareholders = greed not satisfied, and speculators investors don't like that either.

        Paradoxically, and I can't remember the finical ratios to use (rate of return and some others), too much cash also increases the cost of capital ratio for a company.

        And the is also the psychological effect of too much cash on a company, It increases risk by creating overly confident management.

        Yes, it's crApples fault the share price has dropped, but it will reach a equilibrium point where all these factors will balance out, then crApple will "invent" a new iFad, stock price goes up, market get saturated, excess cash, stock price drops, more bad news because speculators Investors don't like yo-yo stocks unless they are shorting the stock in the market creating more price instability and so the cycle keeps repeating.

      2. Snake

        Re: Don't blame Apple for the price drop

        I personally think that some of this past year's events proves some Apple naysayer's point: that a good deal of Apple's "success" was simply the Cult of Jobs.

        Now that Jobs is gone, big money is frightened that the cult consumers will no longer throw unending piles of money at the firm in an unrequited battle to constantly have the latest gadget. The analysts are scared that people will lose faith in Apple having a unified theme across their marketing systems; the public will back away from the rabid endowment of near-godlike properties towards anything Apple and therefore actually examine possible alternatives at their next purchase phase.

        And competition for the mind of a consumer is bad for business.

        And, quite simply, Apple is helping the doubt right along. Between the failure of Maps, the market shrug of 'excitement' due to a perceived lack of substantial model evolution of the iPhone 4 in light of Samsung's all-out Android attack, the lack of great iPhone lust in China, the eventual and rapidly increasing decline of the iPod market, the sales cannibalism of the iPad Mini (rather than opening a brand new market), etc etc etc - the analysts might have a good point. Apple has stumbled lately, and Big Money listens. Big Money get scared very quickly and runs for the caves at the first signs of trouble (note the well placed cro-magnon reference there

    7. Chet Mannly

      Re: Don't blame Apple for the price drop

      "Blame those short termist Analysists who gaze into crystal balls and predict a companies earnings for the next quarter.

      There is no fundamental difference between the above and any of those on-line gambing sites"

      Thanks for reminding me just how irrational people choose to be when it comes to Apple. *Apple* release the earning forecasts, analysts report on whether Apple met their own targets.

      The reason a small shortfall causes a share price drop is because Apple's share price was valued based on constantly exceeding earning targets and being a market leader in terms of revenue. It isn't a market leader in smartphones anymore, and the lead in tablets is rapidly shrinking.

      The unmistakable trend is that Apple move first into a market, getting an early lead, but long term they get overtaken - and the share price is based on long term earnings.

      As the article rightly points out, Apple is also highly dependent on a few products, while its competitors are diversified. Eg If the Sony Z smartphone sales tanked they still sell plenty of movies, TVs, audio equipment, music, playstations etc etc. If iphone 5 sales tanked tomorrow Apple would quickly find itself on life support.

      For that reason alone Apple is a far more risky stock to hold long term than a company that is diversified, so its share price will be more volatile.

      Sorry to ruin your rant about all those nasty analysts wrecking apple with the truth...

      1. Philip Lewis
        FAIL

        Re: Don't blame Apple for the price drop

        "The unmistakable trend is that Apple move first into a market, getting an early lead, but long term they get overtaken - and the share price is based on long term earnings."

        This statement is illogical and therefore incorrect

        You cannot conflate market share (I take "being overtaken" as referring to market share) and earnings to reach any meaningful conclusion.

        FYI, AAPLs earnings are gargantuan.

    8. Colin Ritchie
      Paris Hilton

      Re: Don't blame Apple for the price drop

      I posted this in 2010 when APPL share prices were rocketing:

      -------------------------------------------------------------------------------------------------------------------------------------------------

      "Stock Markets are greedy just like people.

      I'm no financial expert and the only person whose previous actions I regret are my own. Damn! I shoulda put £2000 in APPL shares in 1996 when they were in double digits and the stock wasn't split... twice over.

      Hey hindsight is a wonderful thing, but let us look at what makes this news newsworthy and how it relates to the "real" world we live in, posting on geeky forums.

      Share price is relative to market confidence and previous performance, Wallstreet loves a player who plays to win and looks good in the process.

      As long as Apple keep producing products that trigger lust in the general public and sell their highly sexed image with even higher priced kit as fast as they can develop it, the stock will rise.

      If Steve Jobs goes mad or dies the market will turn on APPL like a wounded bear. Fact.

      If Apple manages to throw all their current tech sex appeal down the toilet in a Vista moment® the same will happen but probably not so savagely.

      For now we can all bask in the knowledge that somebody makes a phone even a moron can look smart using and an operating system even my 64 year old mother isn't intimidated by.... much.

      Why Paris? See the previous sentence. :)"

      ---------------------------------------------------------------------------------------------------------------------------------------------------

      Since then I built myself a Hackintosh for a third of the price of an equivalent Mac Pro and bought a £70 Android smartphone which works just as well as an iPhone for what I need it to do.

      What have Apple done to surprise and delight their customers in the last year? I think the share price changes reflect that well enough.

      Now who's been left looking like a bunch of quants? Rich quants mind.....

  2. John Latham

    Free investment advice from a recruitment consultant

    Good luck with that.

    1. Joe Drunk
      Coffee/keyboard

      Re: Free investment advice from a recruitment consultant

      Thanks for that! Nothing like a good laugh on a dreary Monday.

    2. Shagbag

      Re: Free investment advice from a recruitment consultant

      LOL.

      As pointed out, "the only consistent performance of fund managers is under-performance" So go and pay the 'professionals' to lose it for you, if you want.

      1. John Latham

        Re: Free investment advice from a recruitment consultant

        I wouldn't pay a fund manager either, FWIW.

        On topic: Apple is a massive cash generator. Nobody knows if they can sustain it.

      2. silent_count

        Re: Free investment advice from a recruitment consultant

        Ah but the professionals lose it for you... professionally! It takes years of specialised training to think it's a good idea to flush piles of cash down the toilet, don'cher know.

  3. Dazed and Confused Silver badge

    Big differences between Apple and Oracle

    Apple sells lots of hardware, at very high margins.

    Well we all know what's happening to Oracle's HW line.

    But the big difference is that Apple's customer base love them, whereas Oracle and set about deliberately pissing their entire customer base off.

    1. Anonymous Coward
      Anonymous Coward

      Re: Big differences between Apple and Oracle

      *Loved them

      Get on twitter and you will see that a lot of celebs are starting to hate Apple and are telling the world. The problem that Apple have is that an awful lot of their customer base are image driven. The high take up of the iphone was largely due to the hype by the media and all the celebs gushing about how great it is. If the iphone is no longer the phone to be seen with sales will tank faster than other manufacturers whose sales don't rely on the fickle fashion sector.

      Here is just one example from Nick Frost who has quite a large following:

      https://twitter.com/nickjfrost/status/313983820531646464

      There are many other people not just celebs feeling the same way and if you deluded Apple fans with a detached sense of reality would like to disagree, a quick google will show just how often these anti-Apple feelings are raising their head these days.

      1. Gordon 10 Silver badge
        Mushroom

        Re: Big differences between Apple and Oracle @AC 1344

        Dear God!

        Someone on El Reg thinks Twitter has any significance other that self-masterbatory navel gazing.

        Did you wander here from Wired? Aww Bless. New Shiny thing make it all better soon.

        1. Anonymous Coward
          Anonymous Coward

          Keep up Gordon

          Or you may find the world has moved on while you are still wondering what happened. Twitter does have its uses even if you aren't narcissistic enough to broadcast every little thing you do in the hope someone is vaguely interested.

      2. Anonymous Coward
        Anonymous Coward

        Re: Big differences between Apple and Oracle

        The iPhone user base is far more loyal and less 'fickle' than the Android user base. I see plenty of people looking at the new HTC One instead of the new Galaxy S4 - and why not.

        Some celeb having a bit of a hissy over their iPhone will be just the same about their whatever-next phone - the real tragedy is some people actually care what phone someone else likes / dislikes.

        1. Chet Mannly

          Re: Big differences between Apple and Oracle

          "The iPhone user base is far more loyal and less 'fickle' than the Android user base. I see plenty of people looking at the new HTC One instead of the new Galaxy S4 - and why not."

          You DO realise both of those phones are Android right? Or would you call a fanboi fickle for choosing between an iphone 4S and a 5?

          *slaps forehead*

          1. Anonymous Coward
            Anonymous Coward

            Re: Big differences between Apple and Oracle

            Chet = Moron

            iOS = Operating system

            Andriod = Operating system

            Apple = Manufacturer delivering iOS based handsets

            Samsung = Manufacture delivering Android based handsets

            HTC = Manufacturer delivering Android based handsets

            The fickleness of the a user base would be manifested by the propensity of users to choose a different manufacturer when changing phone.

            The Apple user base (like Nokia was in days of yore) are particularly loyal and satisfied with the brand and the product.

            It is yet to be seen whether, in the long run, Samsung can generate the same level of loyalty for their products when world+dog can (and do) produce products that are functionally identical due to reliance on a generic operating system. HTC is but one of a great many examples.

            Really, some of you people need to go to business school before pontificating. The level of simple concept confusion demonstrated here at the Reg, is starting to get out of hand.

            1. Anonymous Coward
              Anonymous Coward

              Re: Big differences between Apple and Oracle

              Way to miss the point which was that Apple users are no longer as satisfied as they once were. If a customer is not satisfied then they will not be loyal to that company. It doesn't matter whether they choose to go with Samsung, Nokia, HTC, LG or whoever, what matters is Apple loses those sales and does not have enough of a product range to compensate for the lost sales.

  4. Anonymous Coward
    Anonymous Coward

    "Of course you can get more investment returns by taking on more risk."

    This has been frequently and consistently shown to be incorrect, since ,at least, the 1970s -- by a number of Nobel prize winners at that. Has the author not been keeping up with the times - or is he stuck in the 1950s?

    1. This post has been deleted by a moderator

      1. Anonymous Coward
        Anonymous Coward

        Re: Evidence

        Here's something simple for you shagbag:

        http://en.wikipedia.org/wiki/Low-volatility_anomaly

      2. Anonymous Coward
        Anonymous Coward

        Re: Evidence

        There's also a recent paper available (for free) on the Social Science Research Network (SSRN) that might provide the evidence you crave: "Low Risk Stocks Outperform within All Observable Markets of the World"

    2. Anonymous Coward 101

      "This has been frequently and consistently shown to be incorrect, since ,at least, the 1970s -- by a number of Nobel prize winners at that. Has the author not been keeping up with the times - or is he stuck in the 1950s?"

      That might be true when it comes to stocks and shares, but within companies, that does not follow. Investing a lot of money in R&D for consumer electronics is high risk, but potentially very high reward.

    3. fatchap
      WTF?

      Reading?

      Maybe learn to read?

      The key word is "can", if a 1000:1 outsider comes in and you have all your money on it you will be better off than if you had invested in any low risk investment.

      Of course you may loose everything but that is the definition of high risk

      1. Anonymous Coward
        Anonymous Coward

        Re: Reading?

        " ... if a 1000:1 outsider comes in ..."

        Sound like gambling, not investing.

        1. Steven Roper

          Re: Sound like gambling, not investing.

          And the difference is...?

    4. Mei Lewis

      Have you got a reference for that, written in terms a non-economist can understand?

    5. Chet Mannly

      "This has been frequently and consistently shown to be incorrect, since ,at least, the 1970s -- by a number of Nobel prize winners at that."

      Name one. You are talking complete and utter bullspit

      1. Michael Wojcik Silver badge

        "This has been frequently and consistently shown to be incorrect, since ,at least, the 1970s -- by a number of Nobel prize winners at that."

        Name one. You are talking complete and utter bullspit

        How about the Haugen and Hines "Old Wine in New Bottles" paper?[1] Better returns from low-volatility portfolios; volatility is claimed as a proxy for risk. You may disagree, but "bullspit" is not an argument (as well as being a tragically flabby euphemism).

        [1] Another version of the paper by the same authors can be found at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1783797 (link to PDF). From the abstract: "These papers were the first to document the lack of positive relationship between risk and return in the empirical cross-section of stock market returns." (emphasis mine)

      2. Anonymous Coward
        Anonymous Coward

        Black, Jensen, Scholes. "The Capital Asset Pricing Model: Some Empirical Tests." In Studies in the Theory of Capital Markets, edited by M. C. Jensen. New York: Praeger, 1972.

        Argued that many investors who demand high returns are leverage constrained and choose to increase their expected returns by overallocating to high beta (high risk) stocks.

        Myron Scholes won a Nobel Prize.

  5. Anonymous Coward
    Headmaster

    Market Cap of ARM, $209bn ? WTF !

    It's actually $18.5bn.

    Dominic Connor is a financial head-hunter but hopeless with a calculator.

  6. Jonathan 29

    pathetically dependent?

    I suspect you know that MS is also pathetically dependent on Windows and Office. MS has a greater PE number than Apple, but I know in my mind which has the brighter foreseeable future.

    1. aahjnnot

      Re: pathetically dependent?

      No. Microsoft has much greater diversification than that in the business world, which is where it derives the bulk of its revenues. For most companies, Windows desktops and MS Office are lost in the roundings of their total IT infrastructure costs; that's why desktop Linux hasn't taken off in the business world - the potential savings aren't big enough to justify the effort.

      Part of Apple's problem is that a huge proportion its profits are derived from two products - the iPhone and the iPad. Both are market leaders, and it's hard to grow market share when you're in front. If either product falls out of fashion (how many iPods do you see these days, for example?), or is replaced by a newer model that doesn't find favour with consumers, Apple's profits will take a very sharp tumble.

      1. Dave 126 Silver badge

        Re: pathetically dependent?

        >Part of Apple's problem is that a huge proportion its profits are derived from two products - the iPhone and the iPad. Both are market leaders, and it's hard to grow market share when you're in front. If either product falls out of fashion (how many iPods do you see these days, for example?), or is replaced by a newer model that doesn't find favour with consumers, Apple's profits will take a very sharp tumble.

        Very true. So if I were Apple, I would want to make myself market leader for whatever the next "mp3 / smartphone / tablet" thingie is, and a pile of cash would be bloody helpful in that aim. Cash to both to pay more people to develop it faster, or to buy in a company who has the technology they need (like they did with Fingerworks' multitouch patents and experience).

        Having cash can only help them get preferential treatment in the supply chain, too.

        1. Anonymous Coward
          Anonymous Coward

          Re: pathetically dependent?

          Bullshit they are not market leaders android fones and tablets outsell them by a large margin. Apple are for the easily led.

        2. xperroni

          Re: pathetically dependent?

          So if I were Apple, I would want to make myself market leader for whatever the next "mp3 / smartphone / tablet" thingie is, and a pile of cash would be bloody helpful in that aim.

          You'd think that, however if that were true, why isn't IBM still the unquestioned top business computing company? Why aren't we all using Nokia handsets? Why isn't AOL the face of the web?

          The sad truth is that as soon as a company settles into a market niche and way of doing things, it becomes nearly impossible for it to change – even when its life depends on it. Nokia saw the writing on the wall years beforehand, and yet couldn't get a new act together before it was too late; more recently, HP's thrashing about aimlessly trying to reinvent itself produced a couple amusing headlines and little else.

          Of course Apple did manage to do it once; but I'd posit it had more to do with a flash of genius from Steve Jobs than to any feature of the company as a whole. And I doubt that, even if he was alive today, he'd be able to do it again.

        3. Chet Mannly

          Re: pathetically dependent?

          "iPhone and the iPad. Both are market leaders, and it's hard to grow market share when you're in front"

          What planet are you on? The iphone was overtaken ages ago by the Samsung Galaxy line alone, let alone Android as a whole.

          Its hard to grow market share when your market share is dropping!

      2. danny_0x98

        Re: pathetically dependent?

        Though Microsoft regroups things every now and then, they have business groups which frequently show losses. Apple may derive more of its profits from the best-sellers, but none of its product lines are losing money.

        Before we leave leave Microsoft, we note a few things, other than a quarter when they wrote off their silly acquisition, they consistently put cash into the bank; a few good products — for awhile — can pay for products which are aimed at developing a market; and their stock does okay: no crazy jumps up or falls down.

        Apple's P/E ratio, I'm assured, suggests its price is a bargain today, but I am not an investor. Here's the way I look at it. The stock had an amazing ramp up in 2012 and one perception was that taxes would go up in 2013 because the US elected the same people to office late in the year. So people took their profits in the fourth quarter. When there are more sellers than buyers, the price goes down.

        Besides, the notion that stock acquisition is fueled by a wise assessment of the long-term potential formed by careful analysis of a company's products, competitors, and markets is quaint. Nowadays, stocks sell because one algorithm for a pool of funds predicts that price growth will not hit a target at the sell price while another algorithm for another pool predicts the opposite for the same buy price.

      3. Nikolaus Heger

        Re: pathetically dependent?

        MS is on its way out it just takes a while for the glacier to melt.

        Business wise it's surprising that they still lock in so many businesses with the help of the clueless "Microsoft Professional" trained IT staff who don't know any better. I think word is spreading that independent software stacks are both way better and way cheaper than MS offerings.

        The tools I use consulting for smaller businesses are web based and 10 times better than the corporate shitware my corporate clients use. It's only a matter of time until they figure that out and then it's good bye MS. Because at first they'll replace the stack - starting with email and collaboration tools and so on. But once they're all web based they'll suddenly realize they don't need Windows either - they might as well just use Macs, or in some cases even iPads or Chromebooks.

        1. Philip Lewis

          Re: pathetically dependent?

          Interestingly, CVs I receive cluttered with "Microsoft Professional" certifications are on their way to the bottom from now on (actually, since forever). Advanced button pushing is not a qualification for jobs that require abstract thought.

    2. Anonymous Coward
      Anonymous Coward

      Re: pathetically dependent?

      You know it in your heart and your soul because Apple are lovely and shiny and make you feel all glowy and warm inside. You know it because you use your iPhone to remove your Body Thetans twice per day.

      Meanwhile, back in reality, there's a difference between an iPad and a thing you can actually do some fucking work on.

      1. Lallabalalla
        Big Brother

        Re: pathetically dependent?

        Nobody - almost nobody - buys an iPad to do WORK on. It's a toy, a gadget, a contraption, a device, a gimmick, a knicknack.

        You want to do some work? Quit reading The Register and get on with it.

        1. Anonymous Coward
          Anonymous Coward

          Re: pathetically dependent?

          Which means a luxury item and not something that will still sell when you have other priorities.

          Which means the true pathetic dependence here is Apple's - on your credit card.

        2. Nikolaus Heger

          Re: pathetically dependent?

          Not exclusively but I definitely work on my iPad.

          I even did an honest hour of good work on an iPhone recently, waiting for my computer to get fixed. I organized all the Pivotal stories for one of our projects using the Pivotal app for iOS. Pivotal for iOS is much better than the web version too.... e.g. it's better to use on an iPad (not so much iPhone because of the small screen)

        3. Anonymous Coward
          Anonymous Coward

          Re: pathetically dependent?

          BEG PARDON? You won't believe how much work you can get done on a tablet. Smaller, lighter, instant-on... perhaps you don't get work done on it, but I and many creatives do. With the right tools, sketching, editing, building maps, writing theses, updating docs whilst on the road are a real pleasure on them.

          And by the way, that goes for *any* tablet, not just iPad. Nexus 10 and Galaxy Tab are just as good at it.

          1. Greg J Preece

            Re: pathetically dependent?

            BEG PARDON? You won't believe how much work you can get done on a tablet. Smaller, lighter, instant-on... perhaps you don't get work done on it, but I and many creatives do. With the right tools, sketching, editing, building maps, writing theses, updating docs whilst on the road are a real pleasure on them.

            Depends what you're doing, naturally. I know artists that love having a tablet to doodle on. I'm a programmer. For me, tablets aren't particularly useful unless you turn them into a laptop, in which case....might as well carry a laptop.

            And I do! It's a Macbook, too.

            Runs Linux. :-D

        4. Anonymous Coward
          Anonymous Coward

          Re: pathetically dependent?

          Yes, you're paying perfect attention...no Fortune 500 companies are using iPads or iPhones for business applications.

          http://www.apple.com/ipad/business/profiles/

          1. Greg J Preece

            Re: pathetically dependent?

            Yes, you're paying perfect attention...no Fortune 500 companies are using iPads or iPhones for business applications.

            People in business spending money on shiny they don't need was covered in the article, you know. ;-)

      2. Philip Lewis
        FAIL

        Re: pathetically dependent?

        "Meanwhile, back in reality, there's a difference between an iPad and a thing you can actually do some fucking work on."

        Not everyone is a drone .NET (java or whatever) coder. I bet assembly line fitters cannot use them for anything useful either. For many people, work can be accomplished on a tablet very, very effectively compared to the alternatives (pen & paper).

        Broaden your mind and outlook beyond your incredibly tiny space. Oh sorry, you don't have one to broaden, do you?

    3. Chet Mannly

      Re: pathetically dependent?

      "I suspect you know that MS is also pathetically dependent on Windows and Office. MS has a greater PE number than Apple, but I know in my mind which has the brighter foreseeable future."

      Dependent on software that runs on 90%+ of the world's computers, despite everything its competitors including Apple and the DOJ could throw at it.

      MS sells despite the fact everyone hates them, many people buy Apple because they are fashionable, and as we can see by the way Apple is bleeding market share fashions change.

      That's why MS has a higher PE.

  7. Andy Watt
    Thumb Down

    An industry standard cynical outlook

    "As I said earlier, having a nice office helps you attract and retain good staff, but that wears off pretty quickly. The fact is that it makes senior management feel good. Have you ever bought an IBM xServer because Hursley Park has nice sunken gardens?"

    The fact is that the Apple employees I've known were intensely proud of working for Apple. Pride can come from working in a great looking building, and remember that Apple try to "impute" - everything is done for a reason, not just the standard executive bullshit.

    Don't judge how Apple behaves in the same way as Oracle, HP or Dell do, they just don't operate the same way. To suggest it is so is convenient for the purposes of this piece, nothing more.

    1. dogged

      Re: An industry standard cynical outlook

      Don't judge how Apple behaves in the same way as Oracle, HP or Dell do, they just don't operate the same way.

      Indeed. That would be like suggesting that the Church of Scientology acts like the Red Cross.

    2. Naughtyhorse
      Holmes

      Re: An industry standard cynical outlook

      Surely the point of the article was that the behaviour of the company is irrelevant, the price is determined by the markets expectations alone.

  8. Steve Todd

    Another choice for using its cash

    And one that Apple seems to be using quite a lot, is in stabilising its supply chain. It will prepay for some parts, help fund manufacturing capacity for others etc. Much of the cash on the balance sheet is listed at being in short term investments like this.

  9. Anonymous Coward
    Anonymous Coward

    I work for a large consultancy company whose share price has doubled recently due to Wall Street "liking what we're doing". None of the changes I have seen, as a technician on the ground level, could remotely justify a doubling in the company's intrinsic value.

    1. Anonymous Coward
      Anonymous Coward

      Pump then dump.

  10. Don Jefe
    Meh

    Cash Problem

    There are many reasons why having a cash pile is a bad idea but there becomes a point when even the most capatilistic countries won't let you grow out anymore. Take Google for example; because they make tons of money they've got to do something with it but every time they branch out into non core fields everyone gets bent out of shape. They know the pitfalls of sitting on too much money but get in trouble for trying to spend it...

    I decided years ago that small specialty companies can put stupid amounts of money in your pocket & the company coffers but you get to fly under the radar of regulators and the whiny folk who hate it when anyone/company does are distracted by hating on Big Firm (x).

    1. DragonLord

      Re: Cash Problem

      Google only get in trouble for it because they leverage their existing monopoly to promote their products. Microsoft learnt that lesson with internet explorer vs netscape and hasn't made the same mistake since.

  11. Mike Pellatt
    Thumb Up

    Big plush offices

    A sine qua non for an SME (especially in the tech world) going bust is having recently moved into large, plush, expensive offices.

    So whilst some of this article is questionable, I'm with Dominic on this one.

    1. Solmyr ibn Wali Barad

      Re: Big plush offices

      Had a city tour once. During some financial crisis.

      "And this is the centre of our city. Every big building you see here - their cost was exactly one bank per building".

    2. graeme leggett Silver badge

      Re: Big plush offices

      I believe that another outward sign is when they get rid of the fish tank in reception and biscuits in meetings in a bid to stave off bankruptcy

    3. Philip Lewis
      Facepalm

      Re: Big plush offices

      Are you suggesting Apple might go broke?

      just asking.

  12. Mage Silver badge
    Headmaster

    The point of Shares

    Shouldn't be to speculate in buying and selling the shares, but invest in the company and get a dividend from the profit related to your share of ownership.

    Apple don't pay dividends, nor issue new share capital so the only point of buying Apple shares is to speculate. They might as well be Tulip bulbs.

    Apple are also hurting the the US economy as their iShinies suck cash out of circulation to feed their Dragon Hoard and off shore suppliers.

    They are obnoxious. They spend more on lawyers, patents and market image than R&D or innovation. Jonathan Ives has even admitted the design styles are copied from Braun/Dieter Rams. The last worthwhile things they did was investing in ARM (for Newton) and Ditching OS9 for BSD based OS X.

    It's all smoke and mirrors marketing and egotism.

    1. danny_0x98

      Re: The point of Shares

      Apple does pay a dividend.

      iShinies and dragon hoard? I apologize for wasting every one's time. For a moment there I was taking you seriously.

      1. Oninoshiko
        Boffin

        Re: The point of Shares

        danny does have a point, Apple does pay a dividend.

        *looks it up*

        Seems to be 2.65 USD/share-quarter, which given the current price, means a yield of 2.28%. If dividends are how you intend to make money, there are definitely better options the Apple stock (at least at the moment).

    2. Anonymous Coward
      Anonymous Coward

      Re: The point of Shares ... [is to] invest in the company

      With one exception, this is not at all true.

      The exception is buying the shares, when the are issued, from the company itself. If you do that, the company has your cash, you are an investor. For the rest of the lifetime of those shares, the purchase price goes to the seller, which is nothing whatsoever to do with the company named on them.

      1. Mage Silver badge

        Re: The point of Shares ... [is to] invest in the company

        Which is why now it's broken and the "markets" are parasites.

    3. John Smith 19 Gold badge
      Joke

      Re: The point of Shares

      "They are obnoxious. They spend more on lawyers, patents and market image than R&D or innovation. Jonathan Ives has even admitted the design styles are copied from Braun/Dieter Rams. The last worthwhile things they did was investing in ARM (for Newton) and Ditching OS9 for BSD based OS X."

      Behold the iEadon.

  13. Anonymous Coward
    Anonymous Coward

    You could act for the good of the firm by saying “we don’t need more cash”.

    Too right, as someone who's staring at a "reduction in force" I just had to order $1.5 Million in equipment that's just going to sit around gathering dust because of the "if we don't spend it well get a cut in next years budget" approach to capital expenditure

  14. Anonymous Coward
    Anonymous Coward

    ...TOLD YOU THAT WOULD HAPPEN

    No, you didn't. All shares tank 'sooner or later', a valid prediction has to have a date of tanking as well as the extent of the tanking. Otherwise, even I can confidently predict that Apple shares will rise sooner or later. You heard it here first...

  15. David Kelly 2

    $705 is just shy of $800?

    Maybe $775 would be just shy of $800 but $705 is not close.

    1. Anonymous Coward
      Anonymous Coward

      Re: $705 is just shy of $800?

      I'd go so far as suggesting anything over $790 would be 'just shy' of $800 but $702 is a lot shy.

  16. Anonymous Coward
    Anonymous Coward

    Yes, the shares lost significant value...

    But does it matter ? Or does it matter at this time ?

    Share price is only significant in a specific case : if you -as a company - need dosh to either keep your company afloat or wish to attract capital for product developement : in both cases if you wish to bring new funds into the company. it does not matter if a share bought foor 700$ by a private investor is now being sold for 400$. This money was not in the company's coffers to start with, and is not returning to roost now.

    As far as I can determine Apple is still sitting on a very large pile of filthy lurce : they are able to fullfill their business commitments AND have sufficient funds to develop products with which they can increase their value once more.

    This does not have any bearing on the fact that these new products will be succesful : we will have to see what they come up with. A number of investors may be very unhappy at this point, but to Apple themselves it does not matter an iota. They'll only start worrying if they have to go looking for money outside the company.

  17. Simon Rockman

    It's going to get a lot worse for Apple

    The attribution of the phrase "Be nice to people on the way up, you may need them on the way down" may be in doubt, but it's value is not. Apple has not been nice to its customers on the way up.

    And by customers I don't mean consumers. Consumers are the people who buy phones singly. Customers are those who buy in bulk, the retailers, wholesalers and principally the mobile phone operators.

    If there was a theme at Mobile World Congress it was how much the operators hate Apple (and Google in the merging markets), how the operators feel that the Over The Top players have stolen their lunch money.

    Ever since AT&T's Ralph de la Vega sat down with Steve Jobs and did a deal which gave the iPhone a clear run at the market the mobile industry has been pouring money into the pockets of Apple and the industry has had enough.

    Their solution - Firefox - is not a good one but that won't stop the operators from doing whatever they can to move consumers onto something which isn't Apple, even if it has to be Google, and I see a rosy future for Windowsphone.

    When I worked for Motorola, and we were making rubbish phones - a decade ago - there was some sympathy and support from our customers because we'd made money for them in the past. They still ranged our products and maintained a good business relationship with us.

    Apple will get no such favours. The operators are itching to drop iPhones from their portfolios and at the first hint of consumers moving to the next new shiny thing they will.

    Galaxy S4 anyone?

    In the meantime expect lots of new marginal new products from Apple - the first sign of trying too hard will be when they start doing lots of fruity colours.

    Simon

    1. Kristian Walsh Silver badge

      Re: It's going to get a lot worse for Apple

      It's starting already. T-Mobile US is finally ranging the iPhone, but at the same time has dropped ALL handset subsidies - you want an iOS phone, you pay Apple's inflated retail price, or pay a higher monthly tariff (rental + credit repayment for the handset). This is novel for the US, where typically you pay the same monthly regardless of phone, and all phones are subsidised down to the same low price.

      Exposing the US customer to the real cost of their phone exposes Apple's biggest weakness in the market: value for money. Yes, an iPhone is better value to a customer than, say, a Galaxy S3 if both are $150 (and the monthly tariff is the same), but when you remove the unequal subsidies, and the Samsung is $350 to the Apple's $650, you really need to be a fan of the brand to buy the iPhone.

      Under this model, The operators will still get the high-spending iPhone customers, but those customers won't change their iPhone for the next model every time their contract expires; now that they have to pay the full price, there's no incentive for them to do so. That's bad news for Apple: they need that operator-subsidised handset churn.

      Verizon and AT&T are holding back for now, but they do want to move to the same model as TMobile, and the markets know it.

      I think this is the major reason why Apple's shares have tanked. Nothing to do with Maps, or a mediocre iPhone 5. Just simple business: their biggest money tap (the US operators) is in serious danger of being turned off.

  18. LPF
    Paris Hilton

    with a 150 Billion in reserves , apple can afford to do lots of bet the company stuff . Whats annoying the likes of you , is that the idiots that would like to have all that money to spend on coke and booze, while trying to sell all western companies to the chinese can tget their grubby mitts on it.

    The apple share price is decided by whats people think its worth, Apple however makes money faster than the US can print it, when they start making losses come and talk about it!

    Paris just for the hell of it !

  19. This post has been deleted by a moderator

  20. Anonymous Coward
    Anonymous Coward

    How to predict share prices.

    Look at the products.

    Shit products, consumers will eventually work it out, and stop buying.

    It's happened to Nokia, it's happening to Apple.

    1. This post has been deleted by a moderator

      1. Richard 12 Silver badge

        Re: How to predict share prices.

        Actually, Nokia were already sinking when Elop took over. And yes, looking back it was probably because they were the market leader that they spent so much of their energy infighting instead of producing quality goods.

        He merely threw almost everyone overboard, manning the pumps or not, ripped down the sails and then set fire to the powder store.

        If he's lucky, the powder is wet. Otherwise...

      2. Turtle

        @Eadon: Re: How to predict share prices.

        "Nokia were doing fine until MS (sorry, Elop) took over, plundered it of patents and turned it into a windows phone factory."

        You've got your own "reality distortion field" and as usual, it's working overtime.

  21. Tim Worstal

    One addition

    Einhorn is right in that Apple should pay out huge whacks of that money in dividends.

    However, much of that cash pile is currently held offshore and would have to pay 35% US corporate income tax and then the recipients of the divvies would pay 15% income tax on it again.

    Given the tax situation it's not actually quite so clear that Apple should hand it all out. Even though the reasons given above mean that they should.......

  22. ecofeco Silver badge
    Windows

    Moot

    Wake me when I can afford to dabble in the Wall St Casino.

  23. Aldous
    Meh

    Overhyped bubbles normally burst

    The Apple price rode so high because of the near religious fever around Jobs and the iPhone/Pad. When Jobs died Apple stuff was already moving from "must sell kidney to own" to "its a nice shiney maybe i will get the next one"

    The stock price was rocketing before then as everyone could not shut up about how wonderful Apple were at every single thing (not just on their products, from the way most IT people i met spoke, you would think every single piece of technology from the 60's to today was created by apple). Now after all those years of hype the stock (and people's expectations) are adjusting back down to a more sensible level.

    See also: Every single dotcom company between 1998-2001. Some died, some survived and the ones that did had their stock price stay much lower then the bubble high

    1. Anonymous Coward
      Anonymous Coward

      Re: Overhyped bubbles normally burst

      What people ignore is the sales are still doing very well - iPad sales were up around 50% from the year before - in a global recession by a single company with 2 main models (Mini and 10" versions). 50% up compared to the previous 12 months.

      Plus look around - whenever I see someone using an iPad (and they are making their way into work and education) it's almost always an iPad. I know people who have Android tablets - most bought them as they were cheaper and many have never bought an app or any music whereas all the people I know with iPads actually buy media, apps and 'use' their devices much more fully.

  24. Anonymous Coward
    Anonymous Coward

    Apple are generating a huge amount of cash and have a very low PE ratio - compare it to Google, Amazon (haha) and Microsoft - they have cash reserves worth around 1/3 of the company's market cap making them an even better investment.

    If I had 10k to invest today into Apple or Samsung it would definitely go AAPL - Samsung will face much more competition from the likes of HTC, Huawei, Motorola, ZTE etc. than Apple.

    Plus everyone assumes AAPL do not have new products in the wings - they make some fantastic products that people are willing to pay for - Macbook Air, Macbook Pro Retina, iMacs, iPads, iPhones and have a huge and loyal installed base.

    1. John Smith 19 Gold badge
      Happy

      "compare it to Google, Amazon (haha) and Microsoft -"

      Wot, no Facebook?

    2. Anonymous Coward
      Anonymous Coward

      ... products

      "they make some fantastic products that people are willing to pay for - Macbook Air, Macbook Pro Retina, iMacs, iPads, iPhones and have a huge and loyal installed base."

      20+ quarters of uninterrupted growth in laptop sales, or some such statistic. And the Tablets while cannibalizing it a bit, did not really slow things down as much as the pundits thought.

      The idea that Apple is a one trick pony is broken, no matter how many anal-ists announce it

  25. Britt Johnston

    bet the company?

    "Apple is thus going to be forced into more “bet the company” launches. It can easily survive an iWatch failure, but to deliver high percentage growth it will need to bet a high percentage of the firm. "

    The art of portfolio management is to have a number of projects of differing size and risk. This helps avoid the military dilemma of repeatedly betting on all-out-wins, until your army gets hammered.

    Even then, given Apple's size, it may not be possible to find one project big enough to force them to bet the whole company's fortunes.

    1. Anonymous Coward
      Anonymous Coward

      Re: bet the company?

      iWatch, Apple TV, subscription media services, new iPhone models (a mini or maxi?) and new iPads. From what I can see the Galaxy S4 launch was a bit of a damp squib as guess what every new phone now is basically the one before with a few new features.

      1. Anonymous Coward
        Anonymous Coward

        Re: bet the company?

        "every new phone now is basically the same one with a few new features".

        Couldn't agree more. I spent an hour or two at the weekend, considering changing my phone. I've an iPhone 4 at present, bought more or less at launch (perhaps a month or two afterwards). I looked at an iPhone 5 and also at 4 or 5 high end Droids and even a BlackBerry Z10.

        Innovations I just don't need:

        - Voice control of any flavour

        - pocket busting screen

        - Eye control/hover

        I came home empty handed because, frankly, nothing I saw had enough extra going for them than my existing handset to justify the price. So what would I upgrade for? Sorry to be boring but longer standard battery life *from a single battery* and improved radio performance. Sadly they don't seem to be even on the list of "innovations".

        1. Anonymous Coward
          Anonymous Coward

          Re: bet the company?

          The '5' does have a better antenna / reception and battery life than the 4...

          Also just because YOU don't need a feature does not mean others may not - I'm not a fan of big screens on 'phones' but use voice control quite a bit.

    2. Dominic Connor, Quant Headhunter

      Re: bet the company?

      You're right that it may not be possible to find a *good* investment big enough, but the point I'm pushing is that *some* investment can always be found and that the perceived need to find the big new thing may mess with Apple big time.

      The fact is that to make a big difference to a business, the proportion of it you have to bet is about the same.

      That can lead Apple to over bet. Rather than gamble 250 million on the iWatch (or whatever) having more cash means it is tempting to go heavier on the marketing spend and past the point that is optimal. going to 350 million.

      If it's sluggish, then having more cash leads you to throwing good money after bad, or trying to change the market because it is "wrong".

      Recall that Sony occupied a similar niche to Apple, having lots of up market electronics that sold well. But even though it pretty much invented video recorders, its market share was dismal even though its technology was better, people wanted VHS not Betamax.

      So Sony bought some big film studios and music companies which sucked money and management time.

      Even if the new project fails

      1. Malcolm Weir Silver badge

        Re: bet the company?

        Dear Dominic,

        Sony didn't invent the Video recorder, Ampex did. Of course, Ampex then marketed stuff _with_ Sony, with the result that you're probably going "Amp-who?". Naturally, Ampex *also* shot itself in the foot several times, but possibly not as often as, say, HP did!

        1. Kristian Walsh Silver badge

          Re: bet the company?

          Ampex and Sony collaborated on professional VTR equipment, but it was Sony that launched the first successful *consumer* recorder.

          It's Sony's consumer electronics business that provides the closest parallel to Apple's current business model.

  26. Anonymous Coward
    Anonymous Coward

    I remember a company with lots of cash

    I remember a company with a huge cash pile, used to be the darling of "the markets" year after year, fingers in various diversified markets.

    Then one year something happened and the shares went from £12 to 2p in the space of a few months.

    And shortly after that they were gone.

    What was the name?

    GEC

    Obviously it couldn't happen to Apple, or even MS.

    1. Alan Firminger

      Re: I remember a company with lots of cash

      But before the share price crashed ( Lord ) Weinstock was gone.

  27. Alan Denman

    Stealth mode operation spells long term success

    Apple are doing it exactly right.

    They are buying up strategic enterprises with one proviso, that being Apple stays mostly below the radar .

    The strategy is so far so good. There is simply no point in them spending big if that means they become a big monopoly instead of the worlds biggest cash earner.

    1. Anonymous Coward
      Anonymous Coward

      Re: Stealth mode operation spells long term success

      Apple are showing a lot of restraint and that's good - the easy option would just be to spend all that cash on massive acquisitions that probably be at a bad price. Instead use the cash to fund their supply chain, increase the dividend a bit etc. Cash is king and it puts them in a very strong position if the right opportunities did come along.

  28. amanfromMars 1 Silver badge

    The future belongs to those/that which makes greater beta use of expensive toys and glitzy trinkets

    Methinks if certain users of Apple products were responsible for ....... Speak to nations with anything systemically disruptive and/or catastrophically destructive to status quo governance admin systems, developed and successfully stealthily tested underground/privately, with advisories that instructions sets are already deeply embedded and primed for remote virtual detonation with anonymous lead activation ... a proprietary failsafe, non attributable launch configuration ...... and earlier estimates and notions of seven seven figured and eight eight figured sums floated for works and beta tests carried out are justifiably replaced by nine nine figured sums which deliver one billions to spend as a billionaire should in further prime development of such programs and protocols as successfully target and deliver 0day exploits to nations for ..... well, universal defence and global attack weapons are but two immediately available uses which would spring to both the more primitive and the more sophisticated mind, methinks. ...... would Apple have no worries about losing wealth and value and those certain users would have great fun in spending absolute fortunes with lots of free giveaways to whoever helped them. Andrew Carnegie got it just right when he said ..... “The man who dies rich, dies disgraced.”

    And yes, it would be true to say that all of that is currently active and live and proposed and nested on a number of round tables with a need to know of such as can be done nowadays with disruptive constructive technology with alternative virtual methodologies which target hearts and minds and money pits and ponzi fiat currency scams.

    1. Toothpick
      WTF?

      Re: The future belongs to those/that which makes greater beta use of expensive toys and glitzy ..

      What the hell are you talking about?

      1. Anonymous Coward
        Anonymous Coward

        Re: The future belongs to those/that which makes greater beta use of expensive toys and glitzy ..

        Just ignore them. It's better all round. No upvotes, no downvotes. No response at all.

      2. Knochen Brittle
        Facepalm

        @ Toothpick

        AMFM communicates on knead to know basis only, and you evidently do not.

        1. foo_bar_baz
          Alien

          Re: @ Toothpick

          AMFM operates on a knee'd to now bases. That belong to US. If you don't see it you aren't looking closely enough, or too close.

    2. Philip Lewis
      Facepalm

      Re: The future belongs to those/that which makes greater beta use of expensive toys and glitzy ...

      see icon

  29. Nanners
    Pint

    Aaaaaand...

    Time to invest again.

  30. beemergeek
    WTF?

    Brit Corporate Innovation

    Sorry, I couldn't make it through the article. The premise just too far off for me:

    The Brits are famous for having the most backwards IT environments on the planet, and this fellow is using his experience in those environments to say that Apple (one of the most innovative companies on the planet) will fail?

    I don't believe this fellow has a relevant reference point to Apple's culture, nor it's capacity to innovate.

    1. Nanners
      Gimp

      Re: Brit Corporate Innovation

      Well, if you bought in at 600 a share, come on people. You deserve to lose your money. It was too high and every one knew it. You also have to understand that in the US market there is this thing called profit taking that happens every Friday, and at the end of quarterly reports. It's a good time to buy some shares if you don't let it go too high on you. The real problem with apple is they need a new visionary leader. They still make the best consumer products on the planet and have been set up very well to succeed, but they no longer have an overall direction with out a new visionary. They need a leader. Until then they are sort of floundering around dabbling and rehashing. They need a new vision.

  31. Knochen Brittle
    Thumb Up

    Finally someone succinctly explains the conundrum ...

    ... of rampaging institutional stupidity in the Pentagon since 1945:

    "The inevitable fact is that giving you more and more money compels you to make worse decisions and this is the important bit. No matter how good you are at deciding, more money makes your decisions dumber."

  32. Cliff

    The price crashed

    We all knew it would, we all knew the $700 price was bonkers.

    When I dared say this at the time, I got 17 downvotes for it. I guess that's 17 people who wish they'd thought longer and harder before losing three-sevenths of their savings ;-)

  33. Anonymous Coward
    Anonymous Coward

    If you could predict share prices you'd be making millions trading on the stock market.

    Often it is easy to predict when something is going to go down or just sell as soon as it does go down. It is trying to predict when it is going back up again that is the hard part, try to do that okay?

  34. Herby Silver badge

    So we wait...

    Until the price goes back to $777 a share. Then we yell

    JACKPOT. Life goes on...

    Bummer I didn't sell then...

    1. Toothpick
      Meh

      Re: So we wait...

      Until the price goes back to $777 a share. Then we yell

      JACKPOT. Life goes on...

      Bummer I didn't sell then...

      --------------------------------------------------

      Sell now - you may end up with 3 lemons.

  35. Alan Firminger

    Brilliant critique of big business capitalism

    My observation is Tesco. Customers get a good deal, shareholders can't complain, The Board of Directors get their millions and farmers commit suicide at the rate of one a week.

    All the company problems we see is from a small group of people in control who maximize their take at the expense of whoever they can screw.

    The question is often asked at shareholders meeting "Why are you paying shareholders a dividend when our company made a loss?" And the chairman's answer is "To secure future investment." In other words we are a Ponzi scheme.

    When someone earns 100k and possesses 10M, why do they want any more ? I don't know Bernie Ecclestone so I can't ask him. I have a suspicion but if any reader is in that class I would appreciate an answer.

    1. Anonymous Coward
      Anonymous Coward

      Re: Brilliant critique of big business capitalism

      Because of who I used to work with, I've met four 'on the ST Rich List' billionaires.

      What the extra £990+ million gets you is very very nice houses in London, Paris, New York, Switzerland, India and anywhere else you want to be, not just a very nice one somewhere. You can arrange things so that paying tax is optional.

      If you call presidents and prime ministers, you will get through to them, and politicians in all those countries (perhaps not Switzerland, but I suspect I am being foolish) will do you all sorts of favours.

      And when some of your dodgier dealings come out, "you can take it on the chin, call a cab, and begin to recover on your fourteen-carat yacht, what?"

      Only one of them was a nice person, and he'd made his money ages ago by taking risks, not taking a cut of a ruling family's corruption (two of them) or hoovering up state subsidies (the other one).

      1. Alan Firminger

        Re: Brilliant critique of big business capitalism

        Thank you AC. But I cannot see why any of the options you describe are of benefit.

        If I had 10M I could have a yacht moored in Greece and pop out there at weekends. We only get one life so why does anyone want to waste time giving the prime minister an earful ?

        I suspect the reason is that it is a game and men get addicted to it. It could be played with a Monopoly board but these people do it with our money.

    2. Anonymous Coward
      Anonymous Coward

      Re: Brilliant critique of big business capitalism

      I am in that class of people and I do not think that I am unique. I an worth 10M and earn a great deal more than 100K (£) p.a., yet I still go to work every day earning more money (and paying more tax than most people earn).

      Why, you ask?

      Because if I stop now, I will not be able to fund my current lifestyle for the rest of my life and have enough in reserve for disasters, family etc. Satisfied?

      You need to use bigger numbers.

      Bernie E. Why should he stop earning money? It's a no brainer - he loves what he does (screwing all and sundry). Why do the Stones tour? Because they are musicians and they like performing. There are a gazillion reasons for wanting more money - it's hard to have too much, and sometimes the money comes along as a result of doing something one enjoys - i.e. it's a byproduct not the purpose. Widen your horizon a bit.

      1. Alan Firminger

        Re: Brilliant critique of big business capitalism

        I don't question work, work is terrific fun.

        I don't question influence because of position.

        But the second AC post I find false because AC has security now.

  36. Anonymous Coward
    Anonymous Coward

    Dividend

    In case anyone is searching for a sane comment

  37. Turtle

    Beer.

    "You can put all your options into an ordered list with paying the power bill at the top and buying me beer at the bottom. "

    I enjoy your articles tremendously and while buying you a beer would not be at the very top of my list of options, it would be near the top all the same.

  38. Anonymous Coward
    Anonymous Coward

    Thanks Dominic

    Very nice read with something to take away too! I waste money when I have it. Shit. I better not buy that 80 inch telly and find something better to invest in. Besides, I've never owned a telly.

  39. stefn
    FAIL

    Another pathetic punditi.

  40. Local G
    Devil

    If Apple had done a ten for one stock split...

    then a $70 stock went down to $40.

    Happens all the time. Big deal..

  41. Danny 14 Silver badge
    Childcatcher

    they should just release a crap product, tank the stock, buy it back and the swap the crap for the secretly developed good product to the people who bought it. company will soar again and no shareholders to worry about.

    it if goes wrong im sure the board all have enough money to cry into.

  42. sleepy

    As Charlie Munger says, if you can't cope with 50% falls in the market price, you probably don't deserve to own shares in a business.

    The combined market cap of the world's carriers is far greater than Apple's, and they apparently hate Apple. Yet Apple is able to milk 50% of its profits from the carriers, because Apple delivers subscribers who pay more, and who switch carrier less. How are the carriers going to put Apple out of the picture when they have to make 3 year volume commitments to get iPhone, and bleed subscribers when they don't have iPhone. Apple changed the mobile customer experience by leveraging government-forced carrier competition, and Google et al walked in through the open door behind Apple. Apple had already forced the music business to get out of the way. And that's what the cash pile is for. There is no industry in the world that Apple cannot extract groundbreaking change and cooperation from, because Apple has the cash to set up as a formidable competitor if they don't get cooperation. Two industries that must be in the firing line next are TV content distribution, and retail banking services. TV is a tough one because the product is not fungible.

    The idea that Apple is a gadget company that got lucky is supremely naive. They are an engineering company, and they engineer whole industries and markets. The gadgets, software and cloud services are the result of their success, not the cause of it, and that's why it's never going to matter if Apple's products lack geek appeal.

    1. Anonymous Coward
      Anonymous Coward

      Never say no

      " There is no industry in the world that Apple cannot extract groundbreaking change and cooperation from,"

      iKalashnikov launch 2014 Q3

  43. TechGeezer

    Haven't we been here before...?

    Seen this happen to Nokia. Slows down decision making and brings inbuilt financial inefficiencies. Being the richest does not necessarily meen being the best and vice versa.

  44. deadlockvictim Silver badge

    Investment in the mac

    I realise that Apple is moving away from the Mac and it's a pity.

    I'd like to see them investing some of their pile of riches into greatly expanding their mac user base.

    They could reduce the cost of the MacPros and make them seriously competitive in price with standard high-end PCs.

    They could buy EA and have all their games released first for the mac. They could produce a serious games-oriented Mac.

    They could buy Ireland.

    They could strive so that from, say, 2014 on, everybody's first computer would be a Mac. The iPad should point the way to get Mac Minis into every bedroom and livingroom. Make it $300 and offer MS Office for almost nothing. Offer greatly subsidised MacBooks to students and schoolkids.

    In other words, make them an offer they can't refuse.

    Maybe it will cost $20-30 billion, but if it also ups Apple's marketshare of computers (rather than tablets, smartphones and the like) used to 20-30%, it will have been money well spent. Of course, Apple won't be able to keep this up for too long, but the hope would be that the seeds once planted, will take root and remain.

    Alas all of this runs contrary to Apple's modus operandi, but it doesn't sensible to me.

This topic is closed for new posts.

Biting the hand that feeds IT © 1998–2019