Apple released its quarterly earnings and based on how you want to view their business, it was strong or disappointing. They continue to generate an amazing amount of revenue while raising their gross margin. They have new businesses that are generating monthly revenues and an ecosystem that has delivered a loyal customer base. But the disappointment lies in its ability to continue to grow at a a high level quarter over quarter, year over year. Apple may be a profitable, successful company, but it is seen less as a growth company and more as an old timer, value company. They are no longer seen as Superman, simply as Clark Kent.
The challenge is that its mainstay product, the iPhone may have reached saturation. Are there more non Apple users out there ready to buy and are current users ready to upgrade. The level of each generation's improvement over the last no longer makes it so necessary to buy a new iPhone every year or two. Like its iPad, we may be able to enjoy using it for 5 or more years before we need to upgrade.
More importantly, investors are waiting for the next must have product for the home. It is yet to be the Apple Watch or iPad Pro or Apple TV and it is hard to see it extending out to an Apple Car. I've suggested Apple build its version of the Amazon Echo and deliver more of the Apple infrastructure into the home. No word yet on that idea. What 2016 will bring is next generations of each of their product lines. Great for Apple loyalists, but less impressive for Wall Street.
No comments:
Post a Comment