Information technology

Has Apple peaked?

The world’s most valuable firm may be past its prime

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Readers' comments


Paulo Sérgio

According to the Theodore Piepenbrock Theory On the Evolution Of Business Ecosystems (Red-Blue), Apple can now probably be considered to be producing integral products (red), where the primary form of innovation is product evolution, not the kind of revolution that launched the iPhone and Google's Android way back when. And, same {¿}problem over at Samsung, and basically all the other fiefdoms. With {¿}5 years of this app-driven market ecosystems, we're basically in for more of the same, incremental improvements, not giants leaps. Whoever shakes-up this town with a breakthrough modular (blue) product/vision, they're gonna rule over the empire for the next bit.

At this point, the market has reached maturity - price based competition will be the order of the day, especially between Apple & Samsung, which are increasingly evenly matched.


You can get a brand new (but already obsolete) smartphone from Samsung for $130 (android 2.3 on galaxy ace) when android 4.1 is current, that's why they claim to sell so many. Samsung is quantity, Apple is ability to upgrade handsets.


Sir, you mentioned "In China, where some men have reportedly been dumped for failing to buy their girlfriends iPhone 5s". Well, iPhone 5s so far is only being rumored... I guess a lot of Chinese guy will have to make do alone for a while...

Juan Carlos Zuleta

In my Seeking Alpha article published a couple of days ago I arrived at similar conclusions regarding Apple´ peak, albeit for somewhat different reasons. See:


I was wondering if anyone could help me find the date of when this article was published. I am doing a summary on it for an assignment and I do not see the date of publication or the Author. This is my first time on the site so please forgive me for not being knowledgeable about it.


Apple is inevitably running into the exclusive club paradox eloquently stated by Yogi Berra: "It's so popular nobody goes there any more."

It's too late for a the iFaithful's next great hope - the revolutionary smart TV. The cable carriers have sewn up too much essential content with deals like Comcast/NBC/Universal, and Google is not likely to let a YouTube app onto someone else's box without a continuing revenue stream to recover all the ad revenue that they'd lose. Google has locked out Roku already and are clearly willing to do it again. And integrating the outboard converter box more deeply than you can do with an AppleTV box and velcro or duct tape has already been tried with outmuch success -- remember all those Google TV's? Roku's UI is more TV oriented than either Android or iOS, but their Streaming Stick USB dongle isn't getting much traction, either.

If you want a leading indicator of a really new concept from Apple, look at their cash on hand. When you see that they're spending some of that $130 billion on real stuff rather than financial games, you can bet that they're onto something exciting.

Occams Chainsaw

I'd venture to say that Apple's large capital expenditure will be relevant only if they come up with something relatively ingenious, like the product of the Jobs era.


didn't the stock price peak sometime around iPhone 5 launch, now it's back to numbers until a charisma and excitement are here again, but who will do it? Steve Wozniak doesn't seem interested even though his geekeness does have some following. Apple stores are as busy as always, but Microsoft is making a small dent if not in consumer then definitely in the corporate market. what will iPhone 6 do what Samsung and others can't?


Why Apple will decline is because the brains are leaving.
Technical head is an industrial designer who designs the outer structure, not the innards.
All old employees of Apple must be multimillionaires. So they need to work only because of passion.
Jobs generated passion. Cook can not. That is why he will be a Sculley.


I'll start by staging the obvious. Apple has performed spectacularly for the last few years. How it managed to create and disrupt so many markets appears to be gravity-defying.

But that's just it. Apple is a very well run company, but if you think that it has discovered a recipe for reinventing business every few years, you are just wrong.

Success, in the amount that Apple has had doesn't rely on just work, smarts, and discipline. It also requires luck. Lots and lots of it. And while nothing is impossible, Apple can't count on keep having it.

Apple will keep making money from smartphones, tablets and computers, but it will keep loosing market share, and will have to accept lower margins. A few years back, Iphone was king. Now, it may or may not be the best in class, but if it is, firms like Samsung have gotten a lot closer.
Barring another miracle product, Apple will find out what everyone else has. It is difficult to make money from hardware. Especially if it is thinking on reinventing tv. It is possible to con your customers into upgrading continuously, and paying a brand premium, while selling small computer devices that are priced in the 500 dollars range. It would be a lot harder to do so from premium tvs that sell for the thousands of dollars.

On the other hand, Apple can try to do for tv programming what it did for music or what amazon did for e-books. But everybody has wisen up to that act by now. I don’t see cable companies and the rest of the industry going for it.

Again, Apple might surprise us once more. But I wouldn't bet on it, and investors apparently don't think so either.


Terrible article. Not because it lays out the facts, but because it says 2 really dumb things:1. "its shares will not reconquer last year’s peak" and then reiterates "it has peaked", so sure the author is right in predicting the future. You could have said that in 2000 when, Apple along with the rest of the techies were hitting multi-year highs. The highs made back then are minuscule compared to the last few years' run. Even Mr. Softie, everyone's favourite techie whipping-boy is not far off its all time high from the dot-com era if you take into consideration the subsequent split and dividends. If the author from this article which is heavy on opinion and light on historic comparisons believes they are right, then they should be able to flog long-dated call options on Apple and sit back and collect the premium without worry of being on the wrong side of the trade. I for one would buy the lot from said "financial journalist" not because the facts they laid out are wrong, but becuase they're seeming infallible predictive powers are in my humble opinion, overrated.

lrh in reply to Dhc2aMusPe

Agreed... It's like they don't think we understand "regression to the mean." (Daniel Kahneman devoted a good chapter exposing this age old pundit's ploy in Thinking Fast and Slow.)

And seriously anytime I see the word "may" in a headline I roll my eyes. How does this stuff get past the senior editors?

lastcenturydude in reply to Dhc2aMusPe

Judging from the title, this 'article' is click bait. Yes, even reliable TE has succumbed to the realities of digital scavenging. Back to Apple, some thoughts.
1. the price of their products is not the problem, they have sufficient demand across all of their products. They were supply constrained according to their report.
2. they did an incredible job, of managing their business last quarter.
3. they made lots of money.
4. by PE, before their report, they were priced like a mature tech. company (e.g. cisco, msft) but were punished like they were a young startup.
5. they are broadening their footprint in China, a market with more upside.
6. at >$450 a share, one lot is about $45k, these are probably not mom and pop traders moving this stock, more likely hedge funds and other institutions.


Like a typical post subPrime crisis company since 2008, Apple is sitting on a mountain of cash. Give a hute, don't dilute; leverageing up until the 50%/50% Debt/Equity ratio limit; leverageing magnifies Net Income gains and losses; and Apple stock buyback will increase the EPS/Dividend as concervative as cash cow arbitrage. Without the divine inspiration of Steve Jobs, Apple may not want to gamble increase payroll. If ever in the future Apple wants to make a merger/aquisition, Apple can have a 2ndary offering of equity, and a bull futures price.

The story of the post subPrime crisis equity market has been: top line revenue has dropped; but third line gross margin has been strong, because 2nd line COGS has been low. In Apples 2012 4th Q, GM has was frozen because of an increase in COGS. It is time to end emergency QE. Back to the summer of 2007, the more the Fed Funds rate went up 0.25% per 6 week period increments, the sooner the supPrime Ponzi scheme crashes, and the fewer the people whom get sucked into the Ponzi scheme.


Last year,I bought an Ipod for my toddler.And the after-sale service is very,very dispointing and terribly bad. Accidentally it was wetted by drops of water and just stopped working. And I took it to repair center which is far away from my location. After several munites check, I was told that I have to pay 80% of the price for a new ipod. They said they have to replace all the contents inside the ipod. So it was still comparatively cheaper than a brand new one. After they returned the ipod. I found it was very slow at reponse. And the itune is always working like a snail. I was told by the service center that the low speed of itune downloading was because it was in America. Shouldn't a multinational company which aims to sell their products globally make their crucial software more friendly for their largest consumer country?
Now I am considering to buy another brand which is not so 'high-positioned'.


"as more people get sucked into the firm’s “ecosystem” of linked devices and software."

Sony tried this strategy.


Even at a modest 11 multiple of this year's expected earnings of $47.97, there is a potential 17 percent upside from these levels. The article also mentions Apple's $130 billion plus cash hoard. I don't know how fast the company can grow earnings in the coming years, but the company should handily outperform the S&P this year.



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