Apple falls to fourth place

From Alan Murray's Fortune CEO Daily:

Remember when Apple was the world’s most valuable company? (Two months ago) Or when it became the first trillion dollar American public company? (Five months ago.) Well as of this morning, Apple sits in the No. 4 spot on the valuation charts ($675 billion), having fallen yesterday past Alphabet ($710 billion) and Amazon ($734 billion). Microsoft, at $748 billion, retains top honors.

My take: Not that it matters (unless you have to sell).

15 Comments

  1. Michael Thompson said:
    I cannot agree that a significant loss of account equity doesn’t matter unless you have to sell.

    For those that run their life on their account equity and trade against account equity, the loss of equity is harmful, both mentally and from an account health standpoint.

    The loss of Apple power in the stock market, very negatively affects Apple’s recruiting efforts. Even though Apple is the most profitable public company in the world, we were painted as losers yesterday. It will take awhile to wash the stench off ourselves.

    Either Tim Cook makes Apple grow again or Tim must be replaced.

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    January 4, 2019
    • David Emery said:
      With all respect, ‘trading on account equity’ is NOT the same thing as ‘living on account equity.’

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      January 4, 2019
    • George Ewonus said:
      Strangely enough – I know a talented engineer who is applying to Apple right now. The current stock valuation doesn’t seem to be a factor.

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      January 4, 2019
  2. Alan Birnbaum said:
    Where is facebook (FB) & Netflix (NFLX) , those other ‘darlings’ of WS?

    /s

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    January 4, 2019
    • S Lawton said:
      Seriously? You don’t think Facebook suffers major problems of their own. Without their own self inflicted problems, they would be up tgere. Sarcastic or not, face the fact that Apple has a problem where it’s main source of revenue is the iPhone and China has been a major part of that.

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      January 4, 2019
      • Aaron Belich said:
        Apple’s main source of revenue is happy customers.

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        January 4, 2019
  3. Dan Pallotta said:
    This is about the calls for Tim Cook’s head in much of the media today. It’s somewhat relevant to this post.

    Two points, somewhat at odds with one another.

    First, if the Chinese economy weren’t deteriorating and Apple hit its guidance, people would be singing Tim Cook’s praises. There would be zero calls for his head and zero talk of existential iPhone issues. iPhone sales are growing everywhere else. The macro factor is beyond his control and he shouldn’t be blamed for it. A $5 billion haircut on a $260 billion year and a $20 billion profit quarter does not call for a $450 billion haircut in market cap.

    Second, there is a lot for which he can be blamed:

    a. He should have announced that Apple wouldn’t be reporting iPhone unit sales with a year’s heads-up, to get analysts used to the idea and show them alternative, better measures of the company’s health and how iPhone unit sales fail those measures.

    b. Get a new God-damned cinema display out there. You’re leaving money on the table with pro users and others, and you have ugly black plastic LG displays contaminating the aesthetic of the Apple stores, and, presumably, the new spaceship. I wrote ten Apple executives a thoughtful letter on how this was about more than cinema displays, but about the overall Apple brand experience. I Fedexed all ten letters. I got no response. I wrote again. I got one form letter back. So, not only are you failing on the cinema display, you’re failing with customer care.

    c. Introduce a state-of-the-art wifi mesh system so that I’m not taken back in time ten years dealing with Verizon and their horrible routers. Again, this is about the Apple brand experience — holistic, total solutions that make life easier, not more difficult for customers. Steve Jobs understood that.

    d. Stop posting iPhone full purchase prices on the Apple website and stores. Post monthly payments only and sell all of the iPhones on a pay-over-time basis, unless the customer specifically requests otherwise. We all buy and pay for lots of products and services — Netflix, for example — that way. If Netflix charged us $399 for a three-year subscription, it would affect adoption. I’ve never understood, since 2007, why Apple would force consumers to look at the full cost of their phones when carriers always articulated pricing to them on a monthly payment basis. This change would be huge.

    e. Advertise Apple Pencil. The thing is a miracle and no one knows about it.

    f. Return to the hard-working product differentiation advertising exemplified by, “I’m a Mac”/”I’m a PC.” Stop with the self-aggrandizing image creative and start showing consumers, methodically, consistently and persistently why they should switch to the Apple ecosystem.

    g. Update the iMac every year the way Steve Jobs did. Create consumer desire. Every year, we waited with baited-breath to see what the new iMac would look like.

    h. Start introducing some of the products on stage yourself. Don’t leave it all to lieutenants. It looks like you have no personal passion for the product. Whatever the most important product is, you should be up there introducing it, making the case for it, showing us how the world was and how it will now be.

    i. Talk less as the CEO about sell-through promotions and strategies for the iPhone and more on the future Apple is going to create for the whole world. Excite us. Delight us. Take our breath away again.

    This is a partial list.

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    January 4, 2019
    • Grady Campbell said:
      I started writing something like this and it just got too long. To add briefly, Apple’s strength has always been (1) technical excellence, (2) a coherent vision, and (3) focus. It seems to me all of these have been diluted. They still seem to have the first (e.g., iCloud finally works, A series chips are exceptional, and Mac is starting to move in the right direction) but the vision is starting to fragment (e.g., leaving a hole that used to be filled by Airport/TimeCapsule, letting the Mac stagnate for years, and limiting iWork capabilities so they would run on the iPhone when the iPad and Mac versions could do much more). Worst of all, the focus on services, with billions for original video, another video streaming service, self-driving cars, healthcare, augmented reality, and machine learning, looks like a lack of focus to me. Is Apple betting all of these will pay off or are they trying to emulate Alphabet, hoping at least one will actually succeed and make money?

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      January 4, 2019
  4. Gregg Thurman said:
    I think everybody needs to take a deep breath and exhale slowly, rinse and repeat (several times).

    I agree Apple’s Airport (still using mine) is a wonder of simplicity, but others are doing a very good job on their UIs and LG could do much better on their display designs, but both products sold in very limited numbers on low (by Apple’s standards) margins.

    Better that Apple eliminate the distraction of these minor products in favor of other initiatives with much greater revenue and margin potential.

    Because we don’t know what’s in Apple’s product road map doesn’t mean NOTHING is in its road map. We didn’t know we wanted a digital music player: we the iPod. We wanted a cellphone that played music: we got the iPhone. We wanted a ‘net PC: we got the iPad. We didn’t know we wanted a wearable: we got the Apple Watch. I think Apple, as a Company, is headed in the correct direction. There are only so many people you can sell razors to, but those people will consume (on a regular basis) millions of razor blades.

    The handset market is saturated, growth will be nominal (population growth bound). Primarily sales will be replacement of older (4 years+?) models and replacement of broken units. There is no future in that scenario. On the other hand, Apple’s installed customer base, a customer base that is very loyal to the Apple BRAND will consume bodacious amounts of Apple BRANDED content and services targeting that base.

    In the near term I see two major catalysts pushing growth: 5G networks and content (video and music), both of which will begin to play out in 2020.

    Criticisms on Mac upgrades are legitimate, but incorrectly directed at Apple. The problem here is Intel’s inability to produce an LPDDR compatible processor supporting 32 Gb of memory. Intel still doesn’t have one, neither is it capable of designing 7nm processors. Intel is falling dangerously behind Qualcomm, AMD and TSMC for the heart of digital products. Let’s not blame Apple for Intel’s failings. Remember, Apple didn’t switch from Motorola’s PPC because Pentium was better, Apple switched because the PPC hit a wall and Motorola (like IBM before them) wasn’t interested in trying to break through it.

    The world’s (including China) economies will resume growth and the US and China will resolve their trade disagreements. These issues are always transitory, so let’s not lose our heads in the meantime.

    Lastly, it’s easy to call for Cook’s head, it’s a lot harder to find someone better.

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    January 4, 2019
  5. Rick Raphael said:
    IMO, Apple ought to get out of the business of quarterly earnings calls (like Berkshire Hathaway) and limit guidance to the 10K or not at all. Who benefits or needs it except the fortune tellers/analysts who make beaucoup $$ telling people everything they know – which amounts to nothing.

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    January 4, 2019

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