Thursday, September 12, 2013

Apple's stock price on the downslide, re-evaluated

If you've read my entries on stock pricing, you might remember how I talk about stock "anal"ysts.  They can't follow trends.  They can't follow forecasts.  They don't notice the run-up in Apple stock price prior to an announcement and the sell-off after the announcement.  However, they know everything there is to know.

Apparently, the new iPhone 5c has caused Apple to be on the way out of business.  It's too expensive for emerging markets, and it's likely too expensive to make.  So, three of the world's finest stock brokerages/investment firms have downgraded Apple, after which the stock price dropped due to a sell-off.  (Update: As of the end of October, the stock price has rebounded and Apple has sold too many of the iPhone 5s and not as many of the 5c but they are re-working production to help with the demand.)

Could Apple go out of business because of one product?  It's not likely.  I think they learned their lesson with the Cube.  Those were hard times and yet, they didn't go out of business.  They just threw away some money and frustrated some people.

Is the iPhone 5c too expensive?  (If you have to ask, you can't afford it?)

I've only seen the unlocked price for T-Mobile and that was the 32 GB version for US$649.  That seems US$50 too high, compared to other phones selling on-contract for US$199.  Is T-Mobile in an emerging market?  No, and we don't know the pricing for every country, do we?

I don't expect that everyone in the world will be buying a premium phone, and while cheaper than the iPhone 5 or 5s, the 5c is still a premium phone.  At the lowest level, it has 16 GB of storage, most of that is usable by the user.  Compare that to a free Android phone that maybe contain anywhere from 512 MB to 2 GB of storage, and may only have 170 MB available to the user.  I recall this quite well from my LG Optimus S, which wasn't free at the time and gave me frequent messages about a lack of available storage.  The original 8 GB Google Nexus 7 tablet was infamously short on usable space.

So, will someone who can barely afford to eat buy an iPhone 5c?  I wouldn't think so.  Food is important.  Will someone with a good job who already eats well and lives cheaply buy an iPhone 5c?  I'd bet they'll take a serious look at it, along with a look at some inexpensive Android-based phones.

Can someone who eats well, owns whatever they want, and manipulates people into buying stocks that they may not want understand how the rest of us live?  I doubt it.  Of course, they could eat snails because they like them, and the poor could eat snails because those are available.  Maybe, the rich really do understand the dirt poor.  That was sarcasm, if you didn't notice.

How Apple will survive is anyone's guess.  More innovation would be good, and for me, more bug fixing.  Being conservative on popular products isn't a great way to handle things, but I don't see a bunch of people dropping Apple products.  Those who like Google and Android are there already, and the undecided will search and try things.  I'd like to try the LG (Optimus) G2 or Google Nexus 5, but after my Nexus 7 "fun" and my LG Optimus S, I'm not sure I can live with a broken phone.

Update 2014.12.11: Apple has recently had all-time record stock prices.  This week, they're falling, but the company is still doing well.  It seems that they're still the company in the world with the largest valuation--on paper anyway.

I got one of the new iPhone 6 models with 64GB of storage.   I can understand why it is popular.  I'm still finding it a pain to switch but it's better than switching to another company's phone.  I like Android but my 2013 Nexus 7 tablet hasn't been incredible, with version 4.3.x, 4.4.x, or 5.0.x.  The operating system is getting better but it's still a bit like a product in its infancy, unfortunately.  You'd hope that it would be more mature.  It's probably a lack of real-world testing.  Apple does very little real-world testing, but it's a bit more than what Google does.

I wonder what will happen with the Apple Watch.  I suspect that will really cause the stock price to drop.  The good thing is that they don't need agreements with anyone else to make it work, a la Apple TV.  By that time, Apple Pay should be firmly entrenched.  I haven't used it yet.  I don't trust iOS 8.1.1 completely and I know that 8.2 is in the beta process, and of course, there will be an 8.2.1.

I'm guessing that Apple Pay will help offset Apple Watch.

No comments:

Post a Comment