Apple's warning is a bad omen for Wall Street bulls | Hacker News Reader

Apple's warning is a bad omen for Wall Street bulls

reuters.com

67 pointsspking111 comments

So many comments about product features and dongles, USB-C and certain design elements of Apple notebooks… these are all trivial.

Apple’s growth for the last 10 years has been very heavily weighted towards the iPhone, and now everyone has one… or two or three or their are on their 11th. The market saturated. Everything is an iPhone, even non-iPhones. It wasn’t going to continue forever. It’s why they’ve been creating new products like the Apple TV and Apple Watch. But they haven’t yet found something like the iPhone that literally everyone wants. Maybe they find a universal computing platform, maybe they don’t. But Apple’s future doesn’t rest on adding back the headphone jack or getting rid of the touchbar or so-called “game changing” or “killer” features on existing platforms.

If you want Apple to sell one billion devices again then it’s gotta be some real sci-fi level shit. As pretty as the iPhone was, it’s the software that made it magic and set a new standard for how we interact with machines. That “next thing” is probably voice, but no one even seems close. Siri, Alexa, Google Now, Cortana… it’s BlackBerry, Nokia, Palm, etc.. Give me that Hollywood-level magic where the machine gets it right 99% of the time, goes beyond what I thought possible and responds instantly. Impossible? Maybe. But so was a fully optimized touch-based OS before someone did it.

> That “next thing” is probably voice, but no one even seems close.

Am i the only person who has zero interest in voice control? I got a iPhone 4S very early, the first phone that had Siri installed and i can not remember ever using it. Not even trying it out just for fun.

You could have said that about touch screens before the iPhone too. Even after it came out people remained skeptical. No one wanted to tap on a sheet of glass when it sucked. One day it didn’t suck anymore and everything was different. 10 years and a billion devices later it worked out.

Voice will have the same revolution at some point. You have zero interest in it now because it sucks. When someone makes it not suck so badly you’ll give it another go.

Can you imagine an occupation where you have to give speeches all day?

This is voice control.

I think people massively overstate the future of voice control. I think it will be used for small things “turn on lights” but not for full computing control interface.

I have to mostly agree. There are times, very few, when it's useful, and I can see some more areas where it might have some benefit, but honestly? I don't want the world listening to my searches. I think AR has more potential growth, but repeating the iPhones success is probably going to be from left field and not in an obvious area.

You’re likely not alone, we seldom are, but in my anecdotal point of view most people seem to like it. I personally doubt it’ll be the “next” thing though.

For one it’s already here. It’s not perfect but it works most of the time, and unless someone actually develops true AI, I just see it altering the world any way close to what the smartphone did. It’s a nice way to interface, but it’s not really that great in public.

I like playing with Alexa, which is probably the most feature complete, but lets be real it doesn’t work “most of the time”. It’s garbage. Absolute garbage.

Even basic dictation is maybe 90% accurate at best, which makes it virtually useless.

Not at all - I can't stand voice UI (at the moment). The problem with voice UI as I see it is that until it's perfect, it's horrible. Even if Siri is 80% great, the 20% of the time I have to repeat myself 3, 4, 5 times to get what I want, I've now spent more time than if I'd just using touch UI in the first place. Eventually that gets better, but until then it's too frustrating / slower than just typing.

If you recall, that’s how touch screens used to be. You’d either have to use a stylus or sometimes press multiple times. Even the virtual keyboards on old devices weren’t designed. All the keys were right next to each other, there was no intelligent touch correction/rejection. Pre iPhone was pretty bad.

Aside from that I don't imagine voice will ever be 'dominant' as a UI until we can do so without making sounds.

So much of my day consists of using technology while other people are doing the same thing in my vicinity, and even just that one person in the room with a non-silent device is already annoying, let alone a room full of people talking to themselves.

Subvocalisation or telepathic interfaces should solve that. I think that is actually closer than we think it is.

Voice calls always work and I dumped them in favor of texting as soon as it was an option. I just don't want to use voice outside of special situations.

Try Google Assistant. Most of the studies and tests show it's far more usable than Siri. It still misses things too of course.

I have a slightly different take -- I think that 'next thing' is AR (glasses, contacts, etc.), and I think Apple is as poised as anyone to take advantage of it.

The big revolutions in computing devices have been room full of equipment + punch cards -> desktop w/ big display -> laptop w/ small display -> phone with really small display.

I think the logical next move after isn't ever-bigger phones/phablets/tablets, it's contact lens / glasses device with A/R display.

Contact detects hands with laser, shows you AR on your side. Perfect.

There may never be another "iPhone" or Smartphone market. I am not aware of any other product in human history that has access to near 80% of adults in developed countries, and has a replacement cycle in 2 to 4 years. I don't think AR will be it, I don't want Glasses or even Contacts Lens.

There aren't any more ground breaking things left. I mean even the iPhone concept goes back as far as Newton. What Apple needs is to slowly grows its user base in key market like China and India, while tries to not lose market usage shares in others.

I have always wanted or argued that Apple should roll out its iPhone upgrade programme worldwide. And has payment terms from 24 months and 48 months. By default it should include Apple Care+ and iCloud Backup Storage, and allow its customers to upgrade one year before their programme ends. Further locking them in to the ecosystem. Apple has plenty of cash and the spread out payment would not cause them cash flow problem, which only a few company on the smartphone market could do. Customers could also choose to add Apple Music, Apple TV or Apple Magazine to their Subscription. Using payment through Apple Pay or Apple Cash ( Which is still not rolled out outside US ). And all customer had to do is to choose their Network via eSIM.

There is no reason why Apple Pay can't be the central services to pay everything from electrify bills, water bills, mobile bills etc. And has a non cloud / on devices Financial Planning shown on my phone. Monthly spending etc. They talked about getting rid of Wallet, but 4 years have passed since then and they have nothing to show for. What cant I get rid of my loyalty and rewards cards? ( That is only just happening in Japan, and likely take a lot longer worldwide ). Why I still need ATM cards to get cash? Why aren't Apple actively working with banks to give me an option not to carry it?

7 Years since Steve Jobs passed away. The first four were still OK, up to iPhone 6s. But there has been clearly a lack of progress on many front, all while they were breaking records and earning more profits years after years. For the past three years I gave them benefits of doubt since they were too focused on Apple Park. But 2019 may likely be the last year my patients wears off and think Apple is no longer the Apple it once were. Actually Steve Jobs kind of predicted this:

“they cared about making a lot of money… they got very greedy and instead of following the original trajectory of the original vision which was to make this thing an appliance and get this out there to as many people as possible, they went for profits, and they made outlandish profits for about 4 years, one of the most profitable companies in America for 4 years, and what that cost them was their future, because what they should have been doing was making rational profits…”

Starts at minute 38:00:

https://youtu.be/M6Oxl5dAnR0

I don't image being interested in voice, unless some physical disability would not allow me to interact with the eletronic devices otherwise. Then the advent of voice came in the wrong era when the tracking/ad business models decide about everything and from the fundaments it'll be designed that the user will be unable to block or interfere with the unneeded services. One word and you're hugged to death by advertisers. Second word and you're on the no-fly list. The third word left for second-tier entities for monetization.

Same here. I really have no interest in talking for eight hours to an inanimate object.

Maybe it’s just me, but if I’ve been talking for four hours a day, I can feel it the next day as throat itch.

I am an iphone/MBP user for past few years and currently using iphone 7/MBP 2018. While apple products and quality is superior, i dont see any improvements in iphone XS compared to my current phone.

1. Camera quality is not really that differentiating factor to spend 1200$

2. 99.9% usage doesn’t require higher cpu

If apple continues to play premium game without game changing features, soon it will be staginated

Regarding MBP, they screwed beautiful piece in the latest iteration

If you can’t see improvements between the XS and the 7, I’m very surprised.

However I do agree with the general point. The differences are getting less and less significant, and we buy new devices only when they make a meaningful difference to our lives.

Yet, somehow BMW successfully sells new cars with minor changes every year. Eventually in the premium market it's less about the upgrade vs simply having a new device.

The question is what peoples upgrade cycles will look like. IMO an average around 4 years is probably about right for cellphones.

WRT stock price and valuation, the current pricing generally assumes a much more frequent upgrade cycle, so even if this makes more practical sense, it means that AAPL will lose a lot of value in the transition; their transition to offering more in services is a sign that their hardware innovation has probably reached a relative maximum.

I don't think BMW has nearly doubled their prices over the span of a few years.

I think the idea is that they've just, or are moving towards, 'Luxury' pricing. Not to compare the two companies prices directly.

BMW has solid and reliable market share, but it's small. Toyota also sells new cars with only minor changes every year. And they make four times as much money doing it.

No one questions whether or not Apple will continue to make good premium phones, just if their market capitalization is appropriate for a company that makes only premium phones.

Toyota also makes premium cars. The average selling price of a new vechile in the US is 36,000$ per year which means the market for premium cars is huge.

Now, the question becomes can you sell a premium Android phone? And based on current sales not really. Companies have flagship products, but they don’t sell that many of them because they don’t have significant advantages over far cheaper devices.

> Now, the question becomes can you sell a premium Android phone?

Sorry... why does that become the question? The issue at hand is whether Apple can justify a trillion dollar market cap (now down to about $750B) on its almost-entirely-premium phone sales. Whether it has meaningful competition in the premium phone sector isn't really relevant. Android can be nothing but Huawei junk and AAPL would still be overpriced.

It’s not overpriced because people agree and pay for its fair value.

The question is if enough people “agree and pay for its fair value” to justify the existing market cap. And Apple just told investors, “nope.”

-typed from my iPhone...

> why does that become the question?

If Apple becomes BMW with several other companies eating up significant shares of the premium market then Apples market share drops. However, if Premium Android phones continue to be minor players the Apple can continue to be a dominant player.

Currently Android is actually losing market share in many countries even as Apple raises prices.

And I repeat: Android market share could drop to zero and the existing size of the market for $500+ phones would not be enough to justify AAPL's trillion dollar market cap. Like most tech stocks, Apple's cap had priced in the expectation of growth. But that's what this warning is about: no growth. So the cap is going to shrink to a level that the market feels justifies the sustained revenue (currently $680B, but that's no doubt going to bounce around a lot in the coming weeks).

It's not about who's phones are better.

Apples P/E ratio is 12 to 20 that’s not a growth stock. In the start of 2008 when it hit 40 that was growth territory. But it’s fallen as low as 9 in 2013.

And that’s ignoring the 180 billion or so in assets on a 684.07B market cap. The only way those numbers are rational is if people are expecting sales to tank.

It's not a growth stock now. It was before. Are you missing the part where it's dropped from $1T to $750M over the past three months, and now to $680 given the earnings warning today (which basically validates the earlier motion)? It's literally the subject of discussion...

At 1T it’s still not really a growth stock.

20 P/E is the edge of growth. Consider a utility with steady 5% returns + inflation is often an appealing option for people looking for steady returns. This always depends on what options are available.

Further the entire market is down which changes expectations. The Dow going from 26,800 to 23,300 would mean a drop from 1T down to ~869 billion.

Yep, people think Apple is slightly worse off now. But, Apple has been stuck as a relaticly high volatility value stock for a while. The expectation is lots of profit, but little real growth.

That... what? That's just wrong. Look upthread for your example that started this whole thing. BMW's P/E is less than 6! Toyota's is around 7. Apple is absolutely priced like a growth stock. No, it's not as high as better growth bets are, but it's absolutely not priced by earnings. It just isn't.

Both those car companies are facing serious long term issues. Yes, the numbers today look ok, but expectations are not looking good.

  US MBW market share, is just one indicator.
  2014	2.06%
  2015	1.98%
  2016	1.79%
  2017	1.77%

They are also shrinking in Europe, though this is offset by emerging markets. But, relative to the industry they need a turn around.

TOYOTA: Car decline overshadows light-truck gain https://www.autonews.com/article/20181002/RETAIL01/181009878...

With a slightly down market:

  Dominion Electric is 16.08
  Proctor and gamble is 23.66

Proctor and gamble has some growth but it’s stock is up 50% in the last decade. It’s doubled in the last 20 years which is some growth but not much.

The average price doesn't really tell us anything. I got that the luxury car share is less than 6% when googling quickly. If the luxury phone market is only 6 percent and Apple doesn't even have all of that it wouldn't look good for them. Though one caveat is I have no idea what I'm talking about here. https://www.google.com/search?ei=V5ctXKnYNY3aswXP-72AAw&q=ca...

Premium is not nessisarily luxury.

Anyway, the average tells you a lot. To simify, if the cars sold for 20k, 20k, 20k, 20k ... with one selling for X million. The that X million car eats up 16/36 = 44.5% of the value. Further, if the margin is low on 20k cars and high on X million dollar cars then it’s more profitable to just sell the one car.

You can play with these numbers, but generally the median is well below the average. So, by revenue 50+% of the market is for 40+k vechile which a premium product. At least compared to a 16k Yaris which gets you from A to B just fine.

None of the top 10 best selling cars in the US [1] are what I would call “premium”. Do you really see a $36k Toyota Camry as being above average?

I’m not saying the price isn’t insane, but there’s a big gap between that and a mid-range 7 series for $96k.

1: https://focus2move.com/usa-best-selling-cars/

Volume is not nessisarily profitable.

Sell 10 million cars for 20k with 5% margins or 2 million cars for 40k with 10% margins. Do the math the second makes you more money even selling 1/5 the cars.

Also, you might look down on a 36k car, but it’s several steps up from a 16k Yaris which would get you from A to B.

I never said it was more profitable, I was disputing your argument that a $36k car is "premium", which means your analogy comparing Toyota to Apple was poor at best.

I also did not look down on a $36k car - if you read my comment I actually did quite the opposite - but my opinion isn't at all relevant, since we're talking about the majority of buyers (in this case in the US) when it comes to buying expensive "premium" products like cars and phones.

Premium is a marketing strategy. A base Toyota Camry is 22k and that’s the price point you’re buying dependability / utility. The marketing changes as you move up the price point even before you hit the ultra premium price points. An easy way to look at this is Advertising as a percentage of total sales. If you spend 10% on advertising you could instead lower the price by ~10%. Dawn dish soap does not spend millions on advertising because it feels good, they are well past the point of people being aware of their product.

https://en.m.wikipedia.org/wiki/Premium_pricing

Ex: ‘It does not just raise the bar, it is the bar’.

Believe it's still the most reliable model of vehicle that exists in the West.

I don't think people buy a new BMW every few years.

No, they lease them. That's actually pretty close to what Apple wants to do as well (Tim even noted it in his CNBC sit down).

Problem is Apple has based its strategy and forecasts around 1-2 year upgrade cycles rather than 4.

BMW doesn't raise the price of their cars every year, let alone at the pace of 30%. Should that happen to BMW, I guess the consumers will happily take their business somewhere else. It is impressive enough that Apple can keep doing this for this long and only until now we see a substantial backfire of its action.

And those car manufacturers don't have a margin that as lucrative as Apple's, which is 38% in the letter.

Apple have also alienated a lot of people by not supporting an open physical standard for headphones. The day I can use the same headphone jack (3.5mm or USB-C) on my laptop and iPhone is the day I upgrade from an iPhone 6s.

Plus, the carriers are encouraging SIM-only sales and for people to finance their own phones. So the 24-month upgrade cycle has been somewhat broken there.

Anyone that doesnt adopt innovation ends up holding onto archaic technology. The same people judged for the removal of CD drives. It’s usually always a minority voice and it doesn’t have much value in the overall trend of technology and market adoption.

The technology is exactly the same. They just eliminated a standard connector from their design and now require you to supply your own DAC; either as a dongle or integrated into the headphones.

It is in fact not exactly the same. Because the innovation allows slimmer, lighter design and pushes society to adopt wireless which is ultimately inevitable.

This trope is like 2016 (or whenever the hell it was) either way it’s old and it’s dumb. Buy a dongle, attach it to your headphones and leave it or get air pods. That is what the market is doing. I mean I’m not thrilled with lack of a headphone jack but the overall market for iPhones doesn’t really care.

Its not old and dumb - Apple introduced USB-C in the iPad Pro. I won't buy a new iPhone until it supports it as well.

Since it seems like the season of anecdotes, I will also chime in.

I thought iPhone 7 was good enough until I tried the iPhone XS. It is far superior in every way over iPhone 7, and I am very happy I made the purchase.

The webpages load before I say blink, the screen is big, and I am enjoying reading books on it now. Other than that the camera is excellent and better everyway over my old iphone. I am not making this stuff up.

I upgraded from an iPhone 7 to an iPhone XS and FaceID and the faster processing speeds have been huge improvements for me too.

I find myself frustrated now when I am using a mobile device that doesn't respond as quickly and efficiently as my iPhone XS. The speed at which apps open/websites load, and the accompanying battery life... huge fan. My iPhone 7 would last until about 7 PM before it needed another charge, my XS lasts all day + night and I find myself using it more than I did my 7.

It’s still a replacement phone vs an upgrade phone. When you need to replace, get the latest, otherwise no urgency to upgrade.

I also went from 7 to X and it was a massive upgrade. The speed alone, but the screen is where I really noticed it.

I'm the opposite. I love all of the new hardware.

1. I went from the 6S -> XS

2. 2015 MBP -> 2018 MBP. The only annoyance was the touch bar in Chrome.

3. Apple Watch Series 0 -> Apple Watch 4 LTE. I can track my surf sessions and take texts/calls in the water.

The only reason I'd seriously consider upgrading is if they fixed the typing speed. The input latency on iPhone has just _horrible_, and I know after another iOS update it'll be just as bad.

I taught myself to touch type at about ~80WPM with my thumbs, and how I have this bad of habit of typing a full google search query, and just staring my phone for 90seconds until all the text magically fills in and my phone shakes with haptic feed back that should've occurred nearly 2 minutes ago.

It is such a cheap experience I had to turn haptic feedback off because its not even remotely synced to touch inputs.

If you think Apple products are quality, especially on the mbp, is superior, you need to try a high-end pc. Don't compare a $3k mbp to a $1k PC.

The reality is that phone cycles are becoming longer since the price of the devices keeps going up.

The iPhone 6 basic model was $649 USD at launch. The iPhone X basic model was $999 USD at launch. The most recent Pixel starts at $799 USD the basic model.

I'm still bullish on Apple because their ecosystem strategy is pretty smart and you can see that reflected in their small customer churn. Basically, lower demand today means potential higher demand later. However, this is a golden opportunity for Google to come and disrupt the cycle entirely with a killer product and generate the Apple fan base churn that nobody has been able to pull.

I just don't see what technology could produce that. Perhaps Soli (https://atap.google.com/soli/), which got an FCC approval today.

Environmentally, I think this is a good thing. Given Apple's longer software support for its hardware, you can pay more for an iPhone now but hold on to it longer, reducing e-waste.

Agreed. Not we just need the batteries to keep up with this.

Google needs a real iMessage/Facetime competitor and then they can start chipping away at Apple's network-effects. But Google has no consistent messaging strategy and is placating the carriers with RCS.

Wonder who Google ATAP stole that technology from...

https://news.ycombinator.com/item?id=18566929

> The reality is that phone cycles are becoming longer since the price of the devices keeps going up.

Unfortunately phone batteries are not designed for a 4 year (or even 3 year cycle) and battery replacement for modern phones is still rather expensive.

I know it doesn't apply to most HN readers, but iPhone pricing has really gotten out of reach to most of the world. Doesn't seem surprising that sales have begun to stagnate.

I don’t know. In the US, the cheapest brand new iPhone (7) is $449. I think it’s just more that Apple has heavily expanded their offering upmarket.

There is a problem with perception, though. For $449 you get a phone that, by Apple's own marketing, is 4 generations behind. Subjectively it's a much less appealing product but still almost $500.

iPhone 7 is only two generations behind and a very capable device. I use one and it probably has at least another 2 years of good life left.

Actually, reading your comment made me realize that perhaps one thing that is making people less likely to upgrade is that there are now so many versions and models that it's not readily visible how "old" your phone is, so there is less status-climbing pressure to upgrade.

I mean, when I read your comment, I couldn't remember how old the iPhone 7 actually was - I had to Google it. The iPhone XR, XS Max, XS, X, 8 Plus, 8, 7 Plus and 7 were all released in a span of just over 2 years. With so many different models, I think there is probably less social pressure to upgrade because it's no longer like "OMG, why do you have the 3-year old iPhone?!" when no one can remember when all the jumble of versions came out anyway.

You may have a point there

After the 7 is the iPhone 8 and the iPhone X. And now there is the iPhone XR and iPhone XS. So there are quite a few "better" phones above the 7.

My wife still has has 6S and it's more the capable. But if you were going to buy and "new" iPhone today the perception is that the 7 is actually quite "old".

The other commenter makes a great point about the sheer number of phones released in a short time span.

Current generation Android's like the OnePlus 6t cost the same as an iPhone 7 in India. Apple may be ahead in some areas, but getting a device 3-4 years newer for the same price is a big deal.

iPhone 7 came out two years ago.

Phones have hit what PCs hit 10 years ago — there just isn’t any real need to upgrade them anymore. 5 year old phones do the basic phone functions great (texting / selfies / Candy Crush) so the market will have to shrink.

And I think particularly worrisome for Apple is the parts that are potentially innovating rapidly are data-driven AI and ML where Google is better (think Google Assistant vs. Siri and the Pixel's low-light camera features).

While i could easily afford the latest Phone, i can simply no longer justify the price to myself any longer. I was a big iPhone user ever since the iPhone 4 came out, but last month i got my very first Android. A Xiaomi A2 for $200, that is roughly $600 less than the XR.

Needless to say the latest iPhones (8, XR, XS) outperform this device in every aspect, but the Xiaomi A2 really is top bang for the buck. As for the other money saved, thats $600 more for my kids education fund.

It seems most discussion on HN centers around full retail price of new phones. Don’t most people finance them through their plans? I see AT&T offering an IPhone XS for $36 a month with a 30 month contract. How is that unaffordable?

Actually, again, unlike in the US, most people in the world don't do that and have to pay the full price at the time of buying the phone.

Perhaps they should finance it some other way. I assume credit cards or lines of credit are available in the rest of the world? Many people managed to buy desktop computers when they cost $2000. I don’t consider the utility of a portable computer/GPS/video player/camera/communicator to be unaffordable at $40 a month.

Yes, of course, installment (EMI) payments are available, but then that's the case for anything (doesn't make that an easy buy). In my part of the world fathers still save for a long time to buy their kids a computer so that they can advance in their studies etc.. But a computer (now mostly laptops) is a necessity, and works for many more years than a phone - especially an iPhone which is mostly still considered a luxury.

So we are talking about the economics of non-western countries?

Presently, I use my phone about 8 times as much as my laptop. Maybe 16 times as much.

Yes, I do realize that we use our phones much more than laptops. But again, everything that the iPhone does a cheaper phone does too, may be crappily, but that's all they can afford and it works for their needs. You can't solve every problem with financing because eventually you have to pay that.

This is somewhat invalidated by the sales of older iPhones.

I bought a $40 Kyocera one time. I suffered through a terrible camera, lousy software, slow everything, surely insecure software, lack of updates, and more. Later I realized I could have bought an iPhone 4s for $50 and been much, much better off. Currently I use an iPhone 6 that I purchased with no contract for $180.

I suppose you could buy older Android phones too, but I think they stop getting updates sooner than iPhones. I've been impressed with how long Apple supports their old hardware.

Those same folks also do the math of 36*30 and decide that $1000+ is too much to commit to. It is not necessarily a problem of affordability as in, not having $1000 in the bank.

It is a valid point that it does not really do anything at that a phone half the cost doesn’t.

My problem with the price is that I don’t want to drop or lose something that costs $1400.

This may be interesting to people. AAPL currently has a 3.38% share in the S&P 500 (VOO, SPY, etc) and a cool 9.72% share in the tech heavy NASDAQ 100 index (QQQ). Should be quite a volatile morning for QQQ.

I would like to believe it's built-in to a certain extent thanks to the past few months, which includes the warning iPhone sales numbers weren't going to be reported with earnings. Let's say it dives further, since it just went below the 52 week low. Aapl might lose 40-50% of it's all-time high value which seems petty odd. What do I know, though. I've only started following them during the bull run where no one could do wrong. Aapl had increasingly record sales and the stock repeatedly stalled, probably due to fears of what just occurred.

AAPL dove 7.55% in after hours once the news hit, so a large gap down is very likely. Some skepticism was definitely baked in, but this is a very unusual move (no pre quarter warnings since 2002!).

All big tech joined in the selling as well so something like QQQ is going to be hit a lot harder than the S&P (QQQ down over 2% in AH).

Another thing is that yesterday made a triple top on ESH19 at ~2520 on the daily timeframe after all the pension buying last week of dec, so the recent run on equity indices were already facing some pretty stiff resistance.

Yes, the large gap down is a given, since 7.5% was already in after-hours. I guess I was thinking more long-term overall dive than daily. The markets have been pretty volatile for the past month or so. It's odd but a one day 500+ Dow drop isn't really unusual at this point.

I hope they don’t do anything drastic, like roll back their admirable focus on making iOS work astoundingly well on older phones, potentially delaying the need for people to upgrade. But I doubt that was a key factor in the lackluster holiday sales.

Hopefully not. The long usable lifespan is one of the reason resale values are so high, which helps many justify the high price of a new phone.

I just don’t get how an already highly profitable, premium device maker raking in billions of dollars a year makes people nervous by not making as money billions as expected. It’s a simplistic view I know but come on.

Really, Apple will hit an innovation wall at some point and decline as a company. Even Bezos has said as much about Amazon.

you seem to fundamentally misunderstand the market. The worry isn't that apple as a company is going to cease to make a profit. The issue is that given the new information on how apple is performing, people would like convert their shares into cash given what they can get versus what they expect to receive in the future by retaining those shares.

Is your argument that in a rational market apple reporting worse than expected performance should have no affect on the value of the company?

It's one thing to pinpoint why the specific information being released is inconsequential, or to argue that the magnitude of the market's reaction is disproportionate or moving the stock in the wrong direction, but your argument seems to be simply raise the question. You're essentially responding to information that says maybe apple isn't as great of a company as we all thought it was yesterday by saying "apple is a great company."

I'm not really sure why this has anything to do with "Wall Street". Just because something changes for one company doesn't mean it's a trend. Apple is in trouble because they pushed their prices beyond where even the ardent fans will buy it without thinking.

This big thing though is the amount of free advertising they're getting as the darlings of the media has dropped drastically. This is a huge part of how they got to the point they are now. It used to be that a new model launch was front page news ... that's no longer the case, and the biggest Apple stories seem to be their mistakes.

I think people don't really get how much that free media coverage has helped their sales. For a few years "tech" stories meant Apple stories.

You didn't need a warning from Apple. Has anything good ever come from a trade war?

I think they have one trick left to play in the short term — I wouldn't be shocked if many people would upgrade their iPhones (who otherwise wouldn't do so) if they released a USB-C version.

20% loss on AAPL is in order. However crowd’s sentiment is quite pessimistic.

No bull market ended with crowd being pessimistic.

IMHO smart money are gaming news outlets to score few upcoming wins at the expense of average investor

AAPL is down 30.3% in the last 3 months (before tomorrow's plunge!). The market sniffed this one out a while ago.

I agree. This will be another manipulation cycle. It happens with AAPL every January, except this time Tim used the opportunity to slam the current President’s trade policy.

Smart money is already out because the market is in a downturn and people are in denial. Smart money buys in when weak hands sell at the worst moments. More down before up.

The market has to e saturated

Apple has stopped innovating, it's as simple as that...

This has been said every year since I was born.

And the company went bankrupt (if it wasn't bailed out by MS).

That's completely mistaken, as Apple innovates in silicon, which is invisible in itself but drives things like incredible battery life, smooth scrolling, etc.

I meant innovating to create new product lines and compelling reasons for buyers to upgrade. I didn't mean technical innovation, rather the marketing genius that enabled Steve Jobs to launch exciting new products that people would stand in line all night to buy the day they became available.

Airpods? Apple Watch?

relatively small markets, more gadgets than core products like the iphone

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