CNBC: Prepare to be disappointed by Apple (video)

According to this currency trader, the fate of global markets next Tuesday hangs on one demo.

“I’ll be watching the Apple demo on Sept. 12 for a whole bunch of reasons,” BK Asset Management’s Boris Schlossberg told a trigger-ready TV audience Friday.

This is going to be a seminal event for Apple, which is the largest company in the world now and really needs to hit a home run to convince investors that they have something very special rolling out for the Christmas season…

The real story in the Apple demo is going to be the software services, especially the augmented reality that they’ve been teasing to investors for the last couple of weeks. If Apple’s going to release some incredibly interesting use cases for augmented reality, that could create an enormous amount of enthusiasm for the iOS 11 release which could increase their software revenue base tremendously.

If the demo disappoints, if there really isn’t any great, sexy new application the market gets excited about, there is a very strong potential here that Apple could take the whole market down.

My take: Apple isn’t the largest company in the world; it’s the most valuable. It hasn’t been teasing investors with the potential of AR for a couple of weeks; Tim Cook’s been dropping hints for seven months. Apple doesn’t have a software revenue base; the value of its software is built into the price of its hardware. And its services revenue is growing quite nicely without AR apps, thank you very much.

Talk about setting Apple up for a fall! Did I mention that Schlossberg’s expertise is currency trading?

Cue the video:

How a disappointing Apple event could take the whole market down with it from CNBC.

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8 Comments

  1. Gianfranco Pedron said:

    ” If Apple’s going to release some incredibly interesting use cases for augmented reality …”

    Apple provides the tools, developers are usually the ones who surprise us all, even Apple, I’m sure, with those “… incredibly interesting use cases …”

    Don’t quit your day job quite yet, Mr. Schlossberg. You have a ways to go before you can comment authoritatively about Apple.

    Yet again, we are reminded that Apple must hit a home run every time it is at bat or it is doomed to be booed off the playing field even if it wins the games consistently. Anybody else can just chill on the playing field wearing fancy uniforms to be hailed and cheered as the next Apple killers.

    This is getting old, very old.

    7
    September 9, 2017
    • Jonathan Mackenzie said:

      I was reminded recently about the analyst who said — this was years ago sometime around the 5c — he said Apple is doomed because he couldn’t imagine a future where people lined up to buy the iPhone 87. Given Apple’s naming scheme he was going more than 150 years into the future!

      I guess there’s no limit to the ways Apple can disappoint us.

      2
      September 9, 2017
  2. Robert Paul Leitao said:

    PED said, “My take: Apple isn’t the largest company in the world, it’s the most valuable. It doesn’t have a software revenue base; the value of its software is built into the price of its hardware. And its services revenue is growing quite nicely without AR, thank you very much.”

    Well stated.

    iOS and macOS are platforms. How well Apple provides for the interests of developers and meets the increasingly complex needs of enterprise buyers are far more important to the company’s growth prospects than what’s announced at one of the company’s annual iPhone events.

    Growth in Apple’s Services (not software) revenue segment is driven by increases in platform adoption and eco-system development. Necessarily, Services revenue growth is heavily influenced by the products and content developed by 3rd parties for distribution as eco-system components.

    I believe Mr. Schlossberg’s point of view is overly simplistic and lacks any real depth of understanding of the company’s market approach. He then extrapolates his views on Apple and what may or may may not be announced next week as more important to the broad market than macro-economic conditions and profit growth in the entire global economy.

    In my view his comments are a puzzling combination of over simplicity and hyperbole.

    1
    September 9, 2017
  3. Fred Stein said:

    Very disappointed by Boris S. Just a few:
    1) “The real story” about software and services is already out. They rock. And finally Wall Street ‘gets it’ hence the appreciation in the price of AAPL.
    2) His Video shows VR Goggles when talking about AR. Tim has been clear, for a year (not weeks) that his focus is AR, less so VR.
    3) His Video shows the old campus. Just going to Spaceship Cupertino and being the first in Steve Jobs auditorium will be a life event for the lucky and deserving ones.
    4) As Philip reminds us, Apple bundles the OS and software subscriptions AND support. It’s all about Apple’s ‘it just works’ and UX. If priced separately they would account for over $200 per phone. If you buy the upgrade plan, they basically give away an extended warranty.
    5) Ignores the new iPhone, which will be snapped by App developers who will create AR Apps. The rumors about the price of the rumored iPhone miss the point. It’s the value, not the price. Customers and developers will validate its value, not on September 12, but over the next three years.

    2
    September 9, 2017
  4. Ken Cheng said:

    When someone says, “very strong potential here that Apple could take the whole market down.” it also implies the opposite could be true.

    1
    September 9, 2017
  5. William Kortum said:

    Most of the changes to be announced at this week’s event are already public knowledge – as is the addition of a platform for augmented reality. Where augmented reality is going to lead us is not yet known & is likely to be determined by independent developers. Stating that Apple has a disaster on it’s hands if it doesn’t bowl everyone over on day one is foolish. Apple has a long history of releasing products – including the original iPhone – that were publicly panned until folks waited in line to buy them.

    1
    September 9, 2017
    • David Drinkwater said:

      Nah. I think “Apple” is just a less intimidatng way of saying “Cyberdyne Systems:”. 😉

      0
      September 10, 2017

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