Comment by mrb | Hacker News Reader

Comment by mrb | Hacker News Reader

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Which pretty much shows that the market value of a company is not based on what they sell today, but on the expectation of what they will sell tomorrow.

Does Apple do research in biotech (Alphabet's Calico)? Are they developing drones delivering wireless internet to the world (Google's Skybender)? Do they have an investment arm (Google Ventures)? Did they start an ISP (Google Fiber)?

People see Alphabet's increasing outreach that almost seems ludicrous. Then they compare this with Apple who seems to have been doing iPhones and iPads for 6-10 years, and doesn't seem to be interested in anything else (though this is slowly changing with Apple apparently getting into home automation and self-driving vehicles). It doesn't matter if it is true or not. This is what people perceive. This is what makes them value Google more than Apple. For all we know smartphones and tablets could be disrupted by another technology (the same way PCs were disrupted by phones and tablets) and Apple may not be ready for this next tech disruption, while Google is placing bets in many other markets.

Apple's brand trades a lot on having extremely well finished products with very polished experiences. If they started experimenting left and right like Google does, they would lose that brand image, which is arguably their most valuable asset (even above and beyond the technology itself). If Google releases Glass and it flops, it hardly affects their image ('well, yes, it's cool technology, that's what Google does, but I don't think people want it for now...'), if Apple does the same it would be thousands of articles about how Apple is losing its touch and can't possible survive without Steve Job's genius.

Maybe the only way around that is taking a page out of Alphabet's playbook and making a parent company with "riskier" subsidiaries with their own non-Apple brand?

>Apple's brand trades a lot on having extremely well finished products with very polished experiences

I don't fully agree with this. Did you have the first version of the iPhone? No copy and paste? WTF.

Antenna signal dropping because "you're holding it wrong!"? WTF.

The only thing you can hold to the apple brand without any criticism is the industrial design of the packaging and look of their products has been consistent and un-matched.

There are plenty of UX issues that have arisen that take away from the polished experience.

Sure I like their products, but im not deluded to think that they are beyond reproach.

You're making the mistake of thinking other people evaluate products the same way you do.

How many people do you really think tested the copy and paste functionality on the original iPhone before making their purchasing decision?

I think almost no one.

I think you're on the right track.

The way I remember it: the product was still overwhelmingly better than everything else. Missing copy&paste was an "oh well" compared to owning an iPhone in 2007.

And it's not like they didn't get around to adding it. Apple does admit mistakes. They made their phones bigger too, finally.

They have well polished experiences compared to the competition. I don't think anyone would claim they (or anyone else) are perfect.

Apple's brand is about the perception of perfection, not perfection.

Instead they release a "me too" watch, a "me too" music service, a "me too" laughable pro tablet. They are losing their touch. No need to say it... it is obvious.

Except they already do.

https://beta.apple.com/

Apple's P/E was quite low even at the height of the iPhone growth. The expectation for what Apple will sell tomorrow is nothing, because they'll be out of business, and it's been that way for a long time.

Meanwhile, since Google was founded, Apple went from the Mac company to the iPod company to the iPhone company. Apple has a proven ability to reinvent itself, with more agility and success than Google or really any other tech company. But this has never been reflected in the market. The perception you mention is based on who the companies are, not what they do.

Apple could announce all of those products tomorrow, and the needle wouldn't move. Apple is doomed because Apple, and Google is the market's darling because Google.

By all accounts, Jobs came back and reinvented Apple authoritarian-style.

I don't think it's proven that Apple can reinvent itself from within. Which is not to say that they'll never have another hit product.

"Apple has a proven ability to reinvent itself"

Apple does, or Steve Jobs did? I don't think Cook is anywhere near Jobs. Meanwhile, Larry Page is not only still alive, but is positioning his company so that he still has creative power and final say.

As much as I love Apple, I'm not as optimistic of their future without Jobs.

The market was not optimistic of Apple's future even when Jobs was at the helm.

It's interesting that the market is valuing Apple's ability to innovate in the absence of Steve Jobs at ~zero. Apple trades like a value stock right now; Wall Street assumes that they're a cash cow that is just going to be milked, and unlikely to have any future major hits.

If you (correctly) disagree with this assessment, there may be money to be made here. If you agree with it, well, I understand why Apple wouldn't look very appealing.

I agree with you, but I think it's a bit bold to call "correct" or "incorrect" about future events.

The parenthetical is just there to make it clear that this only works out in your favor if events prove you correct in disagreeing with Wall Street.

> Which pretty much shows that the market value of a company is not based on what they sell today, but on the expectation of what they will sell tomorrow.

Just looking at the "Apple vs. Alphabet Market Capitalization Over Time" chart, this story appears to be as much about Apple falling as it is about Alphabet rising. And in that case I see what Apple is selling today.

iPods are obviously on the way out. iPads have been losing to cheaper tablets for a while now. Macs have been neglected to the point you can't even get one with a Skylake CPU. And now, the last week's news that iPhone sales are in decline. It seems Apple's fall is all about what they are (not) selling today.

Google has search monopoly Apple has nothing comparable. The rest of google projects are mostly there for google to claim that they are Tech company competing in many markets as opposed to a Search company.

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