Apple in 2019: Will a recession ruin its run?

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FineWine

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#245286 27-Jan-2019 17:30

I am unashamedly an Apple Fan so bearing that in mind I copy and paste the below article from AppleInsider.com.

My opinion first is that:

- yes Apple will be affected by a recession storm but not as hard as the rest of major tech industries who shamelessly imitate Apple after failing with their own innovation and failing again with the imitations.

BUT

- It will ride out the storm better than most tech companies not on the back of its hardware but on its Services divisions created by its premium priced hardware.

- The mobile phone hardware business is reaching or has plateaued but again Apple will survive this mainly due to offering a far more security conscience installed OS (iPhone, iPad, ATV, iWatch, HomePod, CarPlay and the mac's) which leads into their closed secure ecosystem. People are waking up to the fact that Android is a very insecure environment and they are tired and angered to find everyday their data has been stolen, lost or sold by companies the like of; google, Facebook etc. They are also realising that their Android devices quickly become more insecure as these manufactures stop supporting their Android based hardware after two years, whereas Apple support theirs' far far longer.

- They will ride out the storm by innovation with the release of new hardware and services that you properly didn't even know you needed or wanted. (home and automobile automation being two biggies)

- China is the big question mark for everyone but Apple is even now covering its A by moving quickly into India.

So moving on to the article:

Apple in 2019: Will a recession ruin its run?

Mod Edit MM: Please don't copy and paste complete articles from other websites.

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#2168540 27-Jan-2019 17:47

I think they will be OK.....

https://www.cnbc.com/2018/11/01/apple-now-has-237point1-billion-in-cash-on-hand.html

1 Nov 2018

Apple now has $237.1 billion in cash on hand.

FineWine

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Nurse (R)

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#2168551 27-Jan-2019 18:13

wellygary:

I think they will be OK.....

https://www.cnbc.com/2018/11/01/apple-now-has-237point1-billion-in-cash-on-hand.html

1 Nov 2018

Apple now has $237.1 billion in cash on hand.

Good point - forgot about that little piggy bank

Whilst the difficult we can do immediately, the impossible takes a bit longer. However, miracles you will have to wait for.

Batman

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#2168559 27-Jan-2019 18:37

Wow definitely need a TL;DR

tdgeek

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#2168564 27-Jan-2019 18:55

Im not reading all that.

Say there is a recession. A company who is listed, the shares will drop. Not because the company is sh!te, because the market dropped. All shares drop. Yet some companies are happily trading yet the shares dropped. Smart people will watch shares drop and buy when they feel the shares have bottomed out. Then lo and behold, the shares rise due to demand. Yet, all along the company has traded well.

When a company lists, you have two scenarios. The company trading and making a profit, and the shares. Shares are bought and sold on opinion and hope. The company trading is totally seperate from share trading. I will buy these shares as I think they will rise, and who i bought them from is glad to get rid of them.

In non recession times, shares have a P/E. Hope/opinion increases the P/E. A super company who is not "cool" will have a low P/E, great value.

Its a game

dafman

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#2168581 27-Jan-2019 19:07

Apple will need to rethink their pricing strategy for phones. Clearly, charging the equivalent of the GDP of a small pacific nation for a 720p phone isn't a winning strategy with punters at the moment.

tdgeek

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#2168586 27-Jan-2019 19:13

dafman:

Apple will need to rethink their pricing strategy for phones. Clearly, charging the equivalent of the GDP of a small pacific nation for a 720p phone isn't a winning strategy with punters at the moment.

I have an X is that 720p?

alasta

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#2168596 27-Jan-2019 19:36

I broadly agree with the principle that most computer makers price their product too low to be able to provide an acceptable user experience for mainstream (i.e. non technical) buyers. That explains how Apple have historically got away with higher pricing but with the 2018 iPhone pricing they went to an extreme that we haven't seen before, and I don't think they will get away with it.

Apple's services revenue will also come under pressure if their install base declines as a result of the hardware being unaffordable.

As for how they will be affected by a recession, I think it will be no more or less than any other tech company.

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gehenna

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#2168600 27-Jan-2019 19:44

tdgeek:

dafman:

Apple will need to rethink their pricing strategy for phones. Clearly, charging the equivalent of the GDP of a small pacific nation for a 720p phone isn't a winning strategy with punters at the moment.

I have an X is that 720p?

XR is somewhere between 720p-1080p. X is higher resolution than that.

matisyahu

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#2168691 28-Jan-2019 01:16

I think the greatest threat is if they don't diversify - services and software is where the growth is needed along with properly carving out a niche particularly in the engineering, science etc. areas. So far I don't see a willingness to make the sorts of investments I would love to see - imagine an Apple that buys out Maple, Mathlab and Solidworks then brings them natively to macOS and optimised for it, ships a high end Mac Pro with regular updates along with services required thus turning Apple into a one stop shop for engineering, creative etc. customers needs. Developing Pages/Keynote/Numbers to add basic features like bibliographical functionality, ad custom domain email hosting so that education customers can consolidate on a single platform including email to the Apple platform, target small to medium businesses with discounts on purchases of large fleets of Mac minis along with a more structured release schedule for macOS etc. Given the amount of discontent there is with Windows 10 I'm surprised that there isn't a strategy room on how Apple can position itself to make the most of that discontent.

Regarding the iPhone pricing - I don't think there would necessarily be a corresponding increase in volume for the drop in price given that we've already hit 'peak iPhone' and even Samsung is struggling with most of the engine of growth for most other vendors being at the low end and the mid range. People are now pushing their upgrade cycle out longer just like what happened in the PC world - the question is whether Apple seize the opportunities to grow other markets.

"When the people are being beaten with a stick, they are not much happier if it is called 'the People's Stick'"

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#2168698 28-Jan-2019 06:47

bit of smoke n mirrors from Apple.

They seem to be blaming word economy 'in advance' for a drop in sales.

When really, its perhaps their own doing.....'peak tech', where most people dont want to upgrade yearly and re content with what they have......the tech world is a bit different to 2007.....every man and his robotic dog factory has a device to cater for your needs.

ANglEAUT

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#2169315 28-Jan-2019 20:49

FineWine:

So moving on to the article:

Apple in 2019: Will a recession ruin its run?

Wow, what a long rant

Please keep this GZ community vibrant by contributing in a constructive & respectful manner.

mattwnz

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#2169317 28-Jan-2019 21:02

If there is a recession, I think we have a lot more to worry about than Apple. Especiallyy considering how much cash they are sitting on. They also own a lot of patents, services etc, so I think they will do well no matter how much stuff they are selling.

jfanning

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#2169337 28-Jan-2019 21:56

ANglEAUT:

Wow, what a long rant

That is Daniel for you, he will write a 1000 words to tell you what day it is, and in that 1000 words most of it will be how great apple is compared to anyone else

FineWine

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#2169481 29-Jan-2019 10:36

jfanning:

ANglEAUT:

Wow, what a long rant

That is Daniel for you, he will write a 1000 words to tell you what day it is, and in that 1000 words most of it will be how great apple is compared to anyone else

Daniel does have a point though that all the PC fan boys have been doom-saying Apple for decades except during the period when Steve Jobs was not running it and Apple released a multitude of products and let the OS go out to 3rd party hardware manufactures. Then they said that the CEO's the likes of Sculley were the greatest CEO's on the planet, mind you they said the same thing about Ballmer too. I mean look at the MS foray into the mobile hardware business - the PC fan boys said those products were best thing since sliced bread and were going to spell the end of Apple. MS phone was officially declared dead in 2017. MS should stick to what they are best at, writing legacy supported bloatware. Hardware manufactures they are not.

Whilst the difficult we can do immediately, the impossible takes a bit longer. However, miracles you will have to wait for.

alasta

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#2169651 29-Jan-2019 14:54

FineWine:

MS phone was officially declared dead in 2017. MS should stick to what they are best at, writing legacy supported bloatware. Hardware manufactures they are not.

It sounds like some large employers are finally starting to wake up to the fact that expecting non technical staff to use complicated and confusing Windows based systems is really not helping their productivity. That may be why MS is starting to focus more on their services business.

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