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http://www.usatoday.com/story/tech/2013/01/14/apple-demand-future-innovation/1827607/
Stock plunge woes
Apple needs a new game-changing product to nudge the stock. Shares of Apple have drooped about 29% since they hit an all-time high of $705.07 last year. Investors are concerned Apple can't keep growing at the same rate without consuming another industry. The big problem is, Apple has run up against the law of numbers: To grow on a significant percentage basis -— Wall Street's quarterly fix — requires massive growth.
"They fight the law of large numbers — the company will need to go to new markets" to keep growth up, says Edward Jones analyst Bill Kreher. "There's a lot of concern about innovation and what Jobs brought to the table."
Without a new invention, Apple needs to sell an ever-increasing number of iPhones and iPads.
"They've had such a fabulous run. It's just hard to sustain such high growth once you get that big," says Richard Sloan, a professor at the University of California at Berkeley. "Apple was sort of the king of the glamour stocks since about 2009 with increased visibility on increased sales in iPhone and iPad."
The run, at this rate, had to end. "Everyone thinks this is going to be a flat quarter" compared with a year ago, Sloan says.
...
Still, both television makers and content owners are on notice that next in line is a game-changing TV. Rumors are rampant Apple will do just that — to be followed by more years of fat sales, burgeoning market share and investment by Apple. But some signs point in another direction.
Studios and cable providers have made it clear they don't want to work with Apple and would prefer to create their own business models, notes Keith Bachman of BMO Capital Markets. "We remain skeptical on Apple's eventual foray into TVs," he wrote last week to clients. "We think this will be a niche market opportunity for Apple."
Needham & Company analyst Charles Wolf concurred. "I frankly would be surprised if they launched a TV," he says. "The economics of a TV are so difficult. It's low-margin; the upgrade cycle is really slow."
Stock plunge woes
Apple needs a new game-changing product to nudge the stock. Shares of Apple have drooped about 29% since they hit an all-time high of $705.07 last year. Investors are concerned Apple can't keep growing at the same rate without consuming another industry. The big problem is, Apple has run up against the law of numbers: To grow on a significant percentage basis -— Wall Street's quarterly fix — requires massive growth.
"They fight the law of large numbers — the company will need to go to new markets" to keep growth up, says Edward Jones analyst Bill Kreher. "There's a lot of concern about innovation and what Jobs brought to the table."
Without a new invention, Apple needs to sell an ever-increasing number of iPhones and iPads.
"They've had such a fabulous run. It's just hard to sustain such high growth once you get that big," says Richard Sloan, a professor at the University of California at Berkeley. "Apple was sort of the king of the glamour stocks since about 2009 with increased visibility on increased sales in iPhone and iPad."
The run, at this rate, had to end. "Everyone thinks this is going to be a flat quarter" compared with a year ago, Sloan says.
...
Still, both television makers and content owners are on notice that next in line is a game-changing TV. Rumors are rampant Apple will do just that — to be followed by more years of fat sales, burgeoning market share and investment by Apple. But some signs point in another direction.
Studios and cable providers have made it clear they don't want to work with Apple and would prefer to create their own business models, notes Keith Bachman of BMO Capital Markets. "We remain skeptical on Apple's eventual foray into TVs," he wrote last week to clients. "We think this will be a niche market opportunity for Apple."
Needham & Company analyst Charles Wolf concurred. "I frankly would be surprised if they launched a TV," he says. "The economics of a TV are so difficult. It's low-margin; the upgrade cycle is really slow."
