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Comment by dasht | Hacker News Reader

Hehe.

You know the old saying "always darkest just before the storm"?

How's about: "always highest revenue just before the bubble bursts"?

Huge numbers of consumer leaders or consumer suckers have, in the past few years, bought lots of this line of products. Either a large number of them and non-buyers agree "Well, that was worth it" or, the opposite.

Place your bet.

(I'm not saying "droid wins" or "MSFT wins". I'm saying "the category of products is suspect for sustained growth ... Apple is just accelerating the rate at which we find out.")

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To be honest, each time Apple has a record quarter (which has been quite often lately) folks doubt that they will sustain that growth, but they’re almost always proven wrong.

Where is Apple slowing? In Macs, which see only modest increases year over year, and iPods, which are in decline. But both of those categories are not losing to competitors — they are being cannibalized by Apple itself, who is busy selling incredible numbers of iPhones and iPads.

If you’re wondering whether Apple’s customers are happy, Apple just earned the highest-ever score in the American Customer Satisfaction Index, in large part due to the iPad: http://digitaldaily.allthingsd.com/20100921/ipad-boosts-appl...

I'm not sure I would characterize the Mac growth as "modest" for the past several years they gave been growing several times faster than the industry average.

Several times faster during a major recession. Go chew on that for a minute.

Indeed, “modest” is very much an understatement to describe Mac sales :)

Everything is relative, and in the greater market context, Macs are strong. But among Apple’s products, the iPhone brings revenue equal to Macs, and arguably greater potential greater, with the iPad not far behind — likely catching up to Macs by 2012. [1]

[1] http://aaplmodel.blogspot.com/2010/09/ipad-to-exceed-mac-rev...

I don't think it is so much Apple, per se, that is nearing the bubble burst as the broad category of mobile gadgets. The "was it worth it" question applies to the category more than the particular company.

Right now I see a lot of these mobile gizmos being sold as status markers and fun toys. Sure, for some they are valued tools but mostly: status marker and/or toy. A status marker branding for a mass produced, mass market item is inherently self-limiting (status markers have to be unusually expensive and scarce to last). A fun toy branding for a product that is fundamentally expensive to obtain and operate month to month is on a collision course with economic reality -- especially when it's a product that breaks easily, is easily stolen, and, anyway, needs to be replaced every few years.

I'm not claiming I can "time markets". Apple may very well have several more great quarter or, if the stars align, might tank after two. I am saying a sharp downturn seems to me to be inevitable and not too far out.

"always highest revenue just before the bubble bursts"?

Isn't this a bit like asking why a lost item is always in the last place you look for it?

Of course revenues are highest before a decline starts. The decline has to start from somewhere; some event has to happen to turn your fortunes from positive to negative. Your revenue has to be climbing upwards for anyone to label it a "bubble". Mediocre companies that implode don't warrant the "bubble" label.

This is just misinterpreting a turn of language.

What would be the consequences of the “bubble bursting”?

I’m asking because there is really no way you can respond to a statement like that. What is your specific prediction? Will Apple be bankrupt in the short or long term? Will their iPhone sales decrease? Will they plateau? Will they grow slower than the Smartphone market? Are you only talking about the iPhone or maybe all iOS devices? Maybe the Mac, too?

in all fairness the OP might be referring to Microsoft as an example.

Proclamations predicting the imminent decline of Apple got old many years ago.

Anecdotally, Apple has a lot of repeat customers. I know lots of people that have purchased Iphone, iphone 3g, 3gs, 4g, ipad, macbook pro (often one work and one personal.) Once you get into the apple ecosystem, things are nice. interoperability is another issue altogether (and dont get me started on the old apple tvs)

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