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Comment by cm2187 | Hacker News Reader

I'd say the bias is the other way. Apple is a one trick pony that is only growing through raising prices, in a market where their value added vs competition is becoming very thin. Not convinced their margins are sustainable in the long term.

Amazon on the other hand, between cloud and online retail, not only still has room to grow, and is building a moat around their business through the sheer scale of their infrastructure (logistics + datacenters).

Both are fairly pro-cyclical though (retail & luxury products). If anyone thinks the peak of the cycle is close...

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>I'd say the bias is the other way. Apple is a one trick pony that is only growing through raising prices

For a company that started from computers, moved to media players, added music stores, added smartphones, added app stores, added tablets, add cloud services, added watches, and managed even the smallest of those categories (e.g. watches) to be the size of a Fortune 500 company (4-6 billion) and growing, it's rich calling it an "one trick pony".

Sadly, that man is dead. The accountant they have running things now is very good at making money, but not very good at creating new products. They are already selling $999 phones, it's hard to see how he can squeeze any more money out of the iPhone.

I think it’s why they are attacking the entire vertical for where that 999 goes

https://www.eetimes.com/document.asp?doc_id=1333633

They can charge 1100 for the phone. Their revenues went up not because they are selling more phones, but Average Selling Price went up. If people are willing to pay 1k why not 1.1 or 1.2. At some point people will stop, but you can find the price point that maximizes profit.

The higher Apple prices things, the more viable their competitors become.

You would think. But it seems like when Apple raises prices, especially on the iPhone, it just gives the competitors permission to do the same thing.

Actually that has never been the case.

Among other things, people buy Apple so that they won't be seen buying something more viable.

So exactly what in the foreseeable future is going to be more impactful than the cellphone (not necessarily the iPhone)? What other product is owned by close to 2/3rds of the worlds population and growing? (https://www.statista.com/statistics/274774/forecast-of-mobil...)

What other consumer electronics company is doing anything innovative?

It has nothing to do with apple being better or worse than other consumer electronics company.

It instead has everything to do with the fact that high end consumer electronics is only so big of a market, and is one that Apple has almost entirely tapped out.

Apple won the market, overwhelmingly so. But they can't win twice as hard, when they've won already as much as they can.

I agree and this is already priced in as well as the expectation of dividends They are trading at a much lower multiple than the other tech companies.

Many investors expect augmented reality to eventually have as much impact as smartphones. That may not be realistic, but the current Apple valuation is at least partly based on the expectation that it will eventually become an AR market leader.

Does anyone expect 2/3rds of the world to be using AR/VR?

Perhaps so, if someone can figure out how to integrate a high quality AR display into something that looks like a regular pair of eyeglasses / sunglasses. But the technical challenges are huge and I expect that will take decades.

>They are already selling $999 phones, it's hard to see how he can squeeze any more money out of the iPhone.

Several ways. They're actively looking into health sensor integration, with third party (and their own) devices, medical records, and with the Apple Watch as a continuous sensor. That's a huge market, even more lucrative than smartphones.

Second, they're better poised than anybody in this IoT thing, with their home automation platform.

Third, they are entering the living room, starting with the speakers, tv, etc. When they get serious with this (especially since they also combine it with their home automation) they'll have another nice market to tap.

Fourth, they've long since licensed Car Play, and they also have their own autonomous car project under continuous development. Whether in partnership with a car company or on their own, they can do quite well with e.g. their own electric city car.

Fifth, they also work heavily (and have made acquisitions etc) in AR / VR technology. If they put out some device, it wont be a prototype for enthusiasts like the one's we've seen, it will sell like crazy.

I invite you to look at their product breakdown. What justifies the 1 trillon valuation is iphone sales

https://www.apple.com/newsroom/pdfs/Q2_FY18_Data_Summary.pdf

Even services is a derivative of iphone sales, no one is using them on non apple hardware.

> Even services is a derivative of iphone sales,

Which is sort of a Catch 22 for them. If they invested in actually making the services good and cross-platform, people would probably pay to use them on non-Apple hardware. On the other hand they use services specifically to drive sales of Apple gear. But I don't actually no anyone who says, "I got an iPhone because iCloud is amazing!". Their internet services are basically table stakes.

iCloud, no. But iMessage? There are many people who stay with iPhones because of it.

Who are these people? Everybody I know uses 3rd party messaging apps.

I know many people that have iphones so they can use iMessage. Doesn't mean they don't use other apps, but imessage is pretty common around my parts and a distinct reason some people don't buy android phones.

I don't actually no anyone who says, "I got an iPhone because iCloud is amazing!"

There is precedent, though.

iTunes on Windows brought a lot of revenue in to the iTunes store, and convinced a number of people to try the iPhone.

I'm not sure it's a good time for Apple to expand its other offerings cross-platform, though. Its services are good, but perhaps not everything they should be. And supporting a small ecosystem of machines is a lot different than trying to support the eighty brazillion variations of Windows and Android machines.

> Even services is a derivative of iphone sales, no one is using them on non apple hardware.

Not true. In fact, you can do a whole lot with iTunes on Windows. Another fun fact - the decision to launch iTunes on Windows was a major turning point in Apple's growth.

Have you used iTunes on windows lately? It is properly unusable.

I think the point is that the revenue from Apple services used from non-Apple devices is so small as to be irrelevant.

> the decision to launch iTunes on Windows was a major turning point in Apple's growth.

How much of this is because iTunes is any good (not very much) and more because it uncoupled a good, affordable product (the iPod) from an expensive product that didn't justify its price tag to most people (the Mac)

I don't think they're a one trick pony, but much of what you listed are accessories dependent on their ecosystem, not ponies in and of themselves.

>but much of what you listed are accessories dependent on their ecosystem

It seems to me like colouring this with negative connotations is a bit obtuse; vertical integration is a strength, not a weakness

Apple has been selling products that costs more than its competitors for well over 40 years.

It also probably makes a larger profit on Macs than Amazon does in total.

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