Still, the company hasn't released an innovative hardware product since 2008. That's a long time for them. If Apple can't innovate anymore, regardless of whether they have continued financial success, are they still really Apple?
But to your point, since 2008:
- Mac revenue has grown
- iPad was introduced and by itself its revenue and more than likely profit is something that any company would kill for.
- the Apple Watch was introduced and all indications it’s bigger than the iPod ever was.
Regardless of whether you agree they haven't been innovating, my question stands: if they stop innovating, but remain financially successful, will they still be Apple?
Besides, people are spending less screen time on televisions every year and more on portable devices.
Google - the only thing they are doing profitability is selling ads.
Just look at Apple’s revenue split (second graph). How do you think that compares to Google?
https://sixcolors.com/post/2019/07/apple-third-quarter-2019-...
A “successful” product is one that you can sell for more than it costs to make. Anyone can sell dollar bills for 0.95 cents.
Amazon? Yes AWS is definitely successful and innovative, but the other half of Amazon?
IIRC, based on their latest report it's the other 30% (by revenue). Amazon is basically a cloud computing provider with a web store.
But let's say it is. Going back to my original question (which I've been roundly downvoted for having the temerity to even ask): if Apple stopped innovating, would they still be the same company we love? Would fans still be so emotionally invested that they reflexively attack anyone who publicly criticizes the company, however obliquely?
In fact Apple Watch’s revenue is projected to surpass that of the entire Swiss watch industry this year.
Even if it doesn’t “kill” the existing category, I’ll say they did a fantastic job carving out the smartwatch category.
Watch, even if it ends up eating the whole current market, but not creating new one, is a failure by Apple standards. Unless Apple is going to branch out and become company like Samsung, that makes everything from watches, to nuclear power plants. Apple success story was never about big portfolio of products - they were always about few products, but extremely focused and creating whole new markets for them.
They can still be very successful company without that. But not necessarily as one of the world most valuable companies.
It was so obvious that Apple should be entering the smart phone market with a combination iPod + phone that people were already coining the name iPhone 3 years before it was introduced.
What market are you seeing with the clear growth trajectories that the cell phone had by 2002 that Apple should enter within the next 5 years?
they should provide a cloud on which you can use Metal compute
Successful: No. If you define success as “profitable”.
The only time Apple sold inexpensive electronics that I can remember were the iPod Shuffles and they were more expensive than other low end MP3 products.
The AppleTV was a decently early set top box and those didn’t change the world. It wasn’t until Roku and Amazon started selling them at basically break even or maybe a slight loss for $50 that those took off.
Which supports my argument about lackluster innovation. I can say people won't pay $1200 bucks for a laptop with specs they could get for $800, either, but I'd be wrong because they do.
You might argue the AppleTV was innovative at the time it was released, but there were already very successful game consoles that had much the same functionality plus the games. Even if you count it as an innovation, it was announced in 2007.
Innovative products are not always successful. Now, if AppleTV had incorporated Alexa-level voice control technology back in 2013, that probably would've been innovative and successful.
I'm wandering off-topic, but I keep imagining an alternative universe where Apple bought Nintendo and released an amazing Nintendo-AppleTV with fantastic voice control, leading to a game ecosystem today where you can seamlessly go from console-to-phone-to-watch playing the same game, with friends.
The iPhone was a Mac derivative and computer accessory that required iTunes to even work but became the most successful product in all of human history. You could call it just a ‘mac in your pocket’ but it would still be the most successful products
The watch is on a similar trajectory.
There was nothing an iPhone could do that a Mac couldn’t do better, except for fit in your pocket.
If your bar for "innovative" is seriously that incredibly high, prepare to be disappointed..
- Send and receive phone calls and messages
- Navigate using turn by turn directions
- Use Siri
- listen to synced music playlists with bluetooth headphones
- track activity and heart rate
- look at pictures
This is not that different from an iPhone prior to iOS 5, when you needed a computer to set up and update an iPhone.
Is the Apple Watch innovative? I would argue yes, it’s an incredible piece of technology. Will it be as successful as the iPhone? I would guess, probably not.
I assume they want the watch to become a standalone platform (or at least, similarly to the ipod, a companion device to either an iphone or android phone), ultimately replacing your need for a phone at all.
That last statement of mine sounds absurd to me, but then again who would have predicted 10 years ago that many people would have a smart phone but no laptop nor desktop?
The Apple Watch does not need an iPhone to function.
You could also point to AirPods. They sold a lot of them because a lot of people had iPhones
AirPods work with any Bluetooth device, not just iPhones.
They then spent $17 BILLION on share buybacks in the last quarter.
It's not a tech company anymore it's just a financial engineering scheme for large shareholders. If you're a shareholder, good for you!
Do you think there is any downside to just transferring wealth to the (already rich) shareholders over and over and over again? Seems to be their top priority nowadays.
I can spend a trillion dollars and hire a million engineers but that won’t build me a time machine or a perpetual motion device.
But, the thing is they don’t need to be good at something. Giant companies regularly expend into new areas. Employ the right people, make some investments, and suddenly they are competitive.
I am not saying Apple should diversify like this. However, it is an option.
On top of that, Apple already announced the subscription Apple Arcade service and their games will run on iPhones, iPads, AppleTVs and Macs.
Between Microsoft and Sony, they sold a little over 100 million of the current generation consoles during their entire existence (https://www.cinemablend.com/games/2417541/ea-reveals-how-man...) - many of them at a loss. Apple sells 50-70 million iOS devices every quarter.
Heck Apple will probably sell more Watches (at a profit) than that during its first 5 years.
People are already spending more time on mobile devices than consoles.
As far as cameras, the standalone camera market has been declining for years because of the smart phone. There is only so much you can do with cameras in phones because of both physics and the cost has to be low enough to make the entire phone affordable. I’m sure no one at Apple is thinking about releasing the Apple QuickTake 2.
Further, as I have listed areas they could be investing in but are not that you have had zero objections to. I think it's clear they have less focus on R&D than was possible.
Microsoft made $10 billion in revenue last year on the XBox - they don’t mention profit (https://www.geekwire.com/2018/microsofts-record-setting-10b-...). Microsoft still probably hasn’t recouped their losses in the Xbox division and the console market isn’t expected to grow.
Apple made about 24 billion on the Mac during the previous four quarters (https://sixcolors.com/post/2019/07/apple-third-quarter-2019-...). You know Apple doesn’t sell a single Mac where they don’t make a healthy profit. The Mac is nowhere near their best performing segment.
1) increase the share price (as you mentioned) 2) signal to investors that the company is bullish on it's future (they wouldn't buyback shares if they thought the shares would be lower in the future) 3) Give the company the option to sell the shares in the future in case the extra capital can be used for a prudent use.
It's really mystifying why people are so against share buybacks while no one talks about dividends. They share a lot of similarity, but buybacks provide more options and greater tax efficiency so they should be preferred over dividends in most cases.
> Do you think there is any downside to just transferring wealth to the (already rich) shareholders over and over and over again? Seems to be their top priority nowadays.
That's not what's really going on (see above). Also, I would hazard to guess that most people who have exposure to the stock market have direct market exposure to Apple. Moreover, about half of households have direct (non-pension) exposure to the stock market. So I don't think your claim about it only benefiting the "already rich" shareholders hold much water. Hell, I would bet that 90% of HN users have direct exposure to equity markets.
Also, I bet you do as well.
AOC presents a good argument against Buy Backs from Big Pharma which incentives CEO's who's compensation is tied to stock price, which as a result she attributes as the cause of rising costs of health insurance:
https://twitter.com/AOC/status/1154794058272972801
Although Big Pharma doesn't operate in a natural economy where products are priced at optimal demand / supply for max Revenue. Instead their cost is hidden from the end-user, absorbed by insurance companies and amortized across all plan holders with rising cost of health insurance.
In the long-term Buy Backs shouldn't increase a companies value as it's just trading one Asset for another, i.e. it's cash reserves for shares in their own stock, they'd choose to do this if they've maxed out their R&D budget (very healthy at $14B) and if they believe their share price is undervalued, which at a 17 P/E is significantly lower than all other FANG stocks.
They could try and follow in AMZN's footsteps and try to expand into all areas outside of their core competency, but it's not their style which is to do a few things and do them well. IMO it's due to protecting and not wanting to dilute the high appeal of their Brand and Products.
The result of which they've ended up with an excessive amount of capital and no effective place to invest it, although IMO they should've invested a lot more in content like Netflix a lot sooner than they have with Apple TV+.
Also who do you think the top shareholders of Apple are? Apple making a profit doesn't necessarily hurt the Vanguard ETFs my government-employeed middle class American family members sock retirement saving into...?
Not sure what point you're trying to make with this low-effort falsehood. Buy backs are purchased with operating profits, if most of their profits were derived from their massive cash hoard you could label them as an Investment arm or something, but it's coming from their successful business operations and Apple's goal with its Buy Backs and Dividends is to move to a net zero-cash balance, so they have no interest in transitioning into becoming an Investment company.