Apple Is Not THAT Valuable

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This guy puts the whole "Apple the most valuable company in America" thing into perspective. I'm sure this will piss off more than a few Apple fans but, for the rest of us, it is refreshing to hear someone talking common sense.

Just because Apple’s market capitalization exceeded everyone else’s market capitalization for a short time, that doesn’t make it the most valuable company in America. There are too many other factors, intangible factors, that make up a company’s value. Especially a technology company like Apple. As business owners, many of us fantasize about the millions we’ll make one-day when we sell our companies or retire comfortably as we pass our assets down to deserving family members. Like Apple’s valuation, much of this is fantasy.
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Apple is like Facebook and Twitter. Worth millions now, worth nothing in 10 years. Soon as Jobs kicks the bucket, and lets face it he ain't exactly in the best of health... bye bye Apple.
 
"For example, Apple’s wealth is built on amazing, game-changing products like the iPod, iPhone, iPad and MacBook. Their ability to innovate has been second to none over the past few years. But the value of these products is fleeting. These are not technologies that build infrastructure or that are mission critical for getting business done. These are gadgets used by teenagers who bite their nails and adults who want something cool to divert themselves from the boredom of their jobs."
^This.

"Their biggest cheerleaders are consumers but these same consumers are happy to buy any new technology that makes them seem cooler than the next guy. There’s no middleman teaching them the value of what they have, helping them to use it better, recommending other technologies that complement it and supporting them when they get frustrated."

^and this.
 
Definitely makes some good points.

Apple's rapid decline when Jobs was fired back in the 80's should give everyone a pretty clear picture of what happens when Jobs eventually kicks the bucket.
 
All good and valid points made there. It is true though, when Steve kicks it, Apple is going to be in a bad spot.
 
Sorry guys, but if Apple's market cap exceeded everyone else, then they were the most valuable company on the planet. Do you think the market price doesn't factor in the fleeting nature of their business? You can argue that the market overvalues Apple, but you can't argue that the market thought they were the most valuable company on the planet. Well, I guess you could, but you'd just be revealing your ignorance of how the market works.

If this arm-chair CEO (whoops, he prefers "consultant") has such insight into how Apple's future value will compare to other companies, he should short AAPL and buy whoever will go up.
 
This maybe a newsflash to most people, but the value of company is based on a lot of factors, including stock price, which veterans know is based more upon feelings and perception than hard numbers.
 
kevinpet said:
Sorry guys, but if Apple's market cap exceeded everyone else, then they were the most valuable company on the planet. Do you think the market price doesn't factor in the fleeting nature of their business? You can argue that the market overvalues Apple, but you can't argue that the market thought they were the most valuable company on the planet. Well, I guess you could, but you'd just be revealing your ignorance of how the market works.

If this arm-chair CEO (whoops, he prefers "consultant") has such insight into how Apple's future value will compare to other companies, he should short AAPL and buy whoever will go up.
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Sorry, but you seem to be confusing stock price with actual value.

If stock prices actually represented the real company value, then making money in the stock market would be a simple exercise in logic and research. In the real world, stock the price is also based on emotion, marketing, speculation, manipulation, and even fraud.

Apple is largely a "fad" company, and people overpay for their products because they think it will make them look cool. The same applies to their stock.
Even though there where tablets before the ipad, tablets didn’t become popular until they had the “Apple” label on them.
Being able to charge higher prices because you have the cool products is great for business, until your products lose that cool factor.
 
kevinpet said:
Sorry guys, but if Apple's market cap exceeded everyone else, then they were the most valuable company on the planet. Do you think the market price doesn't factor in the fleeting nature of their business? You can argue that the market overvalues Apple, but you can't argue that the market thought they were the most valuable company on the planet. Well, I guess you could, but you'd just be revealing your ignorance of how the market works.

If this arm-chair CEO (whoops, he prefers "consultant") has such insight into how Apple's future value will compare to other companies, he should short AAPL and buy whoever will go up.
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Did somebody get thier feelings hurt? One thing you missed in the article is that Apple does all it's buisness in an extremely volitile market segment. Apple has already proven once that they can almost completely dissappear from relevenacy. A huge portion of thier revenue comes from iphones. Ask Nokia how quickly a cellphone can go from valuable inventory to having a supply chain full of ledger depreciations. While I love apple products, they generally don't offer much that cannot be found in a competetor's product. They do have one advantage, superb marketing and "sex" appeal. plus look at apple's stock value when Jobs had his medical leave, the stock value tanked. While Apple is a very well managed company much of it's percieved value is in it's image. if that image is tarnished the value drops quickly. therefor I feel the article is valid. Other top 10 companies didn't devalue anywhere as drastic as apple when leadership was changed, questioned etc.
 
The most important point he made was towards the end. Cricket is indeed not a sport. It's a name for a certain insect.
 
In the technology business (perhaps)_, but not in the world...and what about companies like qualcomm that supprt their stuff...? I'm sure the not THE biggest most powerful company in America
 
Wow, only 1 fanboy post so far?

Where is everyone? Some huge piece of the internet take a shit this morning or what?

;)
 
Why would Apple fans be pissed off? Really? I get that this is rapidly becoming the Apple-bashing site. If there is an article anywhere in the world that even hints at dissing Apple, it appears here. I guess it makes some people feel better about their own passions. I don't agree with it, but I try to ignore those and look for the good articles. Unfortunately I've noticed a trend toward more and more negative Apple press here. Whatever.:rolleyes:
 
kevinpet said:
Sorry guys, but if Apple's market cap exceeded everyone else, then they were the most valuable company on the planet. Do you think the market price doesn't factor in the fleeting nature of their business? You can argue that the market overvalues Apple, but you can't argue that the market thought they were the most valuable company on the planet. Well, I guess you could, but you'd just be revealing your ignorance of how the market works.

If this arm-chair CEO (whoops, he prefers "consultant") has such insight into how Apple's future value will compare to other companies, he should short AAPL and buy whoever will go up.
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If you think that Apple is the most valuable company in the world, based on some numbers (that can be manipulated) then you're delusional.

Let's play a game. Let's start pretending certian companies just up and dissapear overnight.

Apple: Hipsters, douche bags, and idiots who don't know they are paying a premium for older tech are without some phones, laptops, and tablets.

Now let's get rid of Exxon overnight: Gas prices skyrocket due to less production, mass panic, riots, et cetera.

Now let's get rid of GE, produces of medical equipment and a ton of other stuff:......well, you get the idea.

Just because a few select people are making money off of Apple does not make it the most valuable company on the planet.
 
djiliff said:
Why would Apple fans be pissed off? Really? I get that this is rapidly becoming the Apple-bashing site. If there is an article anywhere in the world that even hints at dissing Apple, it appears here. I guess it makes some people feel better about their own passions. I don't agree with it, but I try to ignore those and look for the good articles. Unfortunately I've noticed a trend toward more and more negative Apple press here. Whatever.:rolleyes:
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No, there is plenty of "Apple bashing" out there. But what those of you who are brain washed don't get is that it's not bashing. It's pointing out common sense.

Apple charges a premium for older tech. Apple totally bullshits through 99% of the their marketing and advertising. Most people recognize this, and have disdain for CrApple. A select few....~10% believe the bullshit and ignore the facts.
 
Boomstick said:
No, there is plenty of "Apple bashing" out there. But what those of you who are brain washed don't get is that it's not bashing. It's pointing out common sense.

Apple charges a premium for older tech. Apple totally bullshits through 99% of the their marketing and advertising. Most people recognize this, and have disdain for CrApple. A select few....~10% believe the bullshit and ignore the facts.
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This seems pretty accurate, but Apple legionaries just can't let this be so. I like how the article pointed out Jobs as a significant factor since history has shown us multiple times Apple's stock price is all over the place when health issues become rumor for him...
 
djiliff said:
Why would Apple fans be pissed off? Really? I get that this is rapidly becoming the Apple-bashing site. If there is an article anywhere in the world that even hints at dissing Apple, it appears here. I guess it makes some people feel better about their own passions. I don't agree with it, but I try to ignore those and look for the good articles. Unfortunately I've noticed a trend toward more and more negative Apple press here. Whatever.:rolleyes:
Click to expand...

There are just so many things to say about Apple, their fans, and Steve Jobs.
 
djiliff said:
Unfortunately I've noticed a trend toward more and more negative Apple press here. Whatever.:rolleyes:
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I don't know who pulls the strings around [H] but they need to sort that out. You're right in that it's been increasing in frequency and fervour over the last couple of years.

[H] needs to stick to what it's respected for and throttle back on the unprofessional stuff. It might just be one person with a pathological grudge against Apple but it reflects badly on the entire website and drags the other excellent contributors down, imho.
 
Finkus said:
I don't know who pulls the strings around [H] but they need to sort that out. You're right in that it's been increasing in frequency and fervour over the last couple of years.

[H] needs to stick to what it's respected for and throttle back on the unprofessional stuff. It might just be one person with a pathological grudge against Apple but it reflects badly TO THOSE OF US WHO ARE COMPLETELY BRAINWASHED BY APPLE!! .
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Don't worry, the rest of us know it's not bashing, it's just factual new reporting.

Go cry somewhere else. Or, at least bring some facts to the table. Change our minds. I'm open. Like I said, I had an iPhone and loved it. Doesn't mean I'm going to ignore what Apple does those. For instance, ripping MS all throughout the 80's and 90's about monopolistic type stuff and then do it themselves.

Or making stupid commercials, some of which flat out lie. Or how Apple will disappear when Jobs dies.

Again, use facts to change my mind.
 
Boomstick said:
Don't worry, the rest of us know it's not bashing, it's just factual new reporting.

Go cry somewhere else. Or, at least bring some facts to the table. Change our minds. I'm open. Like I said, I had an iPhone and loved it. Doesn't mean I'm going to ignore what Apple does those. For instance, ripping MS all throughout the 80's and 90's about monopolistic type stuff and then do it themselves.

Or making stupid commercials, some of which flat out lie. Or how Apple will disappear when Jobs dies.

Again, use facts to change my mind.
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"But it's magical"
 
Feel free to look at book value if you like. The fact is stock price is the best measure of what people are willing to pay for a tradeable piece of a company. You can try to justify the reasons for or against the current market cap, but you don't need a separate fudge for "intangibles" to determine the value people place on a company.

If and when AAPL crashes, it would mean the company is being valued less by the market. It would be just as wrong then to say "this is now closer to the true value of the company" as if psychology were no longer a factor.
 
I loved the article, and agree with alot of the above posts. I have been telling people things like this for a while now.

The current business model of apple while questionable, is genius.

Like said above the problem is their dollar value vs real word value is just so far out of whack.

I loved the "disappearing company" analogy. If apple disappeared millions of iphone users would be butthurt for a few months. In a year or 2 everything apple made will have been replaced and no one would remember them.
 
hardware_failure said:
I loved the "disappearing company" analogy. If apple disappeared millions of iphone users would be butthurt for a few months. In a year or 2 everything apple made will have been replaced and no one would remember them.
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By that measure, is there a single S&P component we couldn't do without for a few months? Or are we just prejudiced against consumer electronics, in general?
 
Team Obi Juan said:
No shouting in thread titles
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That's emphasis, shouting is the entire title.
Astral Abyss said:
Apple is like Facebook and Twitter. Worth millions now, worth nothing in 10 years. Soon as Jobs kicks the bucket, and lets face it he ain't exactly in the best of health... bye bye Apple.
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I wouldn't say that. Though not an apple fan myself. I doubt it'll worth nothing or even close to nothing down the road. I'm sure it'll maintain a decent worth for a good long while, but I'm guessing it's worth will definitely die down.
 
Apple has a lot of desirable products.

If the "lesser" ones were more desirable (aka, non-Apple) then those companies would certainly charge more.

They cannot because they are all bottom feeders and are competing on volume and price. Good luck.
 
srangara said:
By that measure, is there a single S&P component we couldn't do without for a few months? Or are we just prejudiced against consumer electronics, in general?
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Yes, the loss of many other top 500 companies would hurt alot more. You are right, many people place less real world value on recreational consumer electronics. Its not a prejudice, its reality.

Stocks 101:
Apple is more or less a cyclical company. 99% of what they they sell people WANT vs NEED. The opposite would be healthcare, utilities, communication etc. If the big companies in these sectors folded then it would have a significant impact on many lives. The fact that Apples stock keeps going up regardless of lack of general economic growth is what makes it amazing but scary at the same time. People would rather buy a new iphone vs feed their kids, pay rent etc.

To compare what some might consider a similar company, M$ does more than make toys. What they do provides critical workings for 1000's upon 1000's of businesses around the world.
 
Whatever get's the circle-jerking fandroids to come out to generate page views, huh? Instead of enjoying their products, they worry about other people enjoying theirs. I guess that really does say something about the completion's products.
 
The only way to find the real value is through the PE ratio. If it is way high or a huge gap between price and earning's then it's way over valued. It's that simple.
 
Ryan711 said:
Whatever get's the circle-jerking fandroids to come out to generate page views, huh? Instead of enjoying their products, they worry about other people enjoying theirs. I guess that really does say something about the completion's products.
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A fine example of hypocrisy :)

The discussion/article is not about if apple makes good products (which they obviously do)
 
kevinpet said:
Sorry guys, but if Apple's market cap exceeded everyone else, then they were the most valuable company on the planet. Do you think the market price doesn't factor in the fleeting nature of their business? You can argue that the market overvalues Apple, but you can't argue that the market thought they were the most valuable company on the planet. Well, I guess you could, but you'd just be revealing your ignorance of how the market works.

If this arm-chair CEO (whoops, he prefers "consultant") has such insight into how Apple's future value will compare to other companies, he should short AAPL and buy whoever will go up.
Click to expand...

If Apple disappeared over night, it would hardly have a huge impact on the world as we know it. If a company like Intel, IBM, Cisco, GE, etc. disappeared over night, it would make a HUGE impact.

So who's more valuable?
 
I do agree that the demise of Apple would be barely register on an impact in the global market. With only 5% market share and a very small niche to tap into. The phone market is something that is easy to replace because well Apple isn't the manufacturer although they wish to be. It's not that difficult to cover from other players in the industry. Apple has no involvement in critical infrastructure unlike Microsoft, IBM (Fill in your random fortune 500 company), etc. There is a reason why they "spread the wealth" around because they're able to resist such a huge shock to their organization. AMD for example has to survive quarter by quarter in order to keep competitive but if AMD dies today, ya it would suck but they're on the same level as Apple.
 
Jesse B said:
If Apple disappeared over night, it would hardly have a huge impact on the world as we know it. If a company like Intel, IBM, Cisco, GE, etc. disappeared over night, it would make a HUGE impact.

So who's more valuable?
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That's intrinsic value vs economic value. I think your point is valid and correct, but so was the other point. The real value as I state above can be seen through the PE ratio, but again, that's economical value which is at the heart of this discussion.
 
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