Apple wows IT crowd with product launch, but investors nonplussed
PHOTO: Analysts say the launch of the iPad Pro may be recognition that tablet sales are Apple's weak spot.(Reuters: Beck Diefenbach)
RELATED STORY: Apple unveils '3D-touch' iPhone, giant iPad pro and TV with voice control
Apple's latest product launch went off with a bang in San Francisco overnight, but the reaction is less enthusiastic on Wall Street.
The tech giant has unveiled two new iPhones, a 32-centimetre iPad Pro and an upgrade to Apple TV.
Editor of Macworld Australia Anthony Caruana said Apple gave tech-watchers more than they were expecting.
"It's an unusual product announcement from Apple's point of view, because they've actually announced their product portfolio for the next few weeks, whereas typically they would announce and release within a week," Mr Caruana said.
Apple shares fell nearly 2 per cent after the launch, but they had risen 4 per cent the previous day.
At $110 per share, Apple stock was trading near its record high, and at a price-earnings ratio of 12 times.
Loftus Peak chief executive Alex Pollack said that was not expensive.
"Software companies trade on 20, 30, 40, 50, 100 times and people increasingly view Apple as an ecosystem, where the software keeps people coming back for the hardware, which makes it repeatable sales. And for that, the 12 multiple makes it look cheap," Mr Pollack said.
Will pros jump at Apple's new iPad?
Will the punters bite, especially when so much of the tech has been around for a while now? Alex Kidman writes.
The iPhone continues to be at the heart of Apple's success, accounting for 40 per cent of revenue.
Quarterly sales of the iPhone have grown from $5 million in 2007 to more than $50 billion in the first three months of this year.
While Samsung is still the top global smartphone seller, iPhone sales surged more than 30 per cent in the last year, as Samsung's market share slipped.
The question for the markets, though, was whether the Apple business model — charging premium prices and counting on customers to keep buying products in the "Apple ecosystem" — will work.
"It gets harder and harder for people to jump out of that and get a different device," Mr Pollack said.
"Because everything won't talk to everything else. So as long as they keep fielding good enough products with good enough software that is interesting enough to keep people in, people will stay in and the business model continues to work."
Still, Mr Caruana said Apple was making a more concerted pitch for the business market.
"What has changed over the last year or so, particularly for business people, is they have now announced alliances with the likes of IBM and Cisco, so that Apple products are now actually really becoming viable alternatives for enterprises," he said.
iPad sales Apple's weak spot?
However, the launch of the iPad Pro may be recognition that tablet sales are Apple's weak spot.
In 2014, global tablet sales 4 per cent, but sales of the iPad fell 18 per cent.
Mr Pollack said part of the problem was that early iPads were too good, and lasted a lot longer than people expected.
"A lot of those iPads in my view will start to get replaced over the next 12 months, and the new iPad will be part of that replacement," he said.
"So people will start to switch out their iPads and I suspect we will get a big spurt in iPad sales in the next 12 or 18 months."
Apple's product launch also gave a nod to another competitive threat — video on demand.
The company announced major upgrades to Apple TV, in a bid to make services like Netflix more attractive through the Apple device.
"Apple still wins on this," Mr Caruana said.
"If people are subscribing to Netflix and paying their subscription through iTunes on their Apple TV, Apple's skimming 30 per cent of that transaction anyway.
"So they are making money on it without providing the service, effectively just providing the conduit for people to watch it."
RELATED STORY: Apple unveils '3D-touch' iPhone, giant iPad pro and TV with voice control
Apple's latest product launch went off with a bang in San Francisco overnight, but the reaction is less enthusiastic on Wall Street.
The tech giant has unveiled two new iPhones, a 32-centimetre iPad Pro and an upgrade to Apple TV.
Editor of Macworld Australia Anthony Caruana said Apple gave tech-watchers more than they were expecting.
"It's an unusual product announcement from Apple's point of view, because they've actually announced their product portfolio for the next few weeks, whereas typically they would announce and release within a week," Mr Caruana said.
Apple shares fell nearly 2 per cent after the launch, but they had risen 4 per cent the previous day.
At $110 per share, Apple stock was trading near its record high, and at a price-earnings ratio of 12 times.
Loftus Peak chief executive Alex Pollack said that was not expensive.
"Software companies trade on 20, 30, 40, 50, 100 times and people increasingly view Apple as an ecosystem, where the software keeps people coming back for the hardware, which makes it repeatable sales. And for that, the 12 multiple makes it look cheap," Mr Pollack said.
Will pros jump at Apple's new iPad?
Will the punters bite, especially when so much of the tech has been around for a while now? Alex Kidman writes.
The iPhone continues to be at the heart of Apple's success, accounting for 40 per cent of revenue.
Quarterly sales of the iPhone have grown from $5 million in 2007 to more than $50 billion in the first three months of this year.
While Samsung is still the top global smartphone seller, iPhone sales surged more than 30 per cent in the last year, as Samsung's market share slipped.
The question for the markets, though, was whether the Apple business model — charging premium prices and counting on customers to keep buying products in the "Apple ecosystem" — will work.
"It gets harder and harder for people to jump out of that and get a different device," Mr Pollack said.
"Because everything won't talk to everything else. So as long as they keep fielding good enough products with good enough software that is interesting enough to keep people in, people will stay in and the business model continues to work."
Still, Mr Caruana said Apple was making a more concerted pitch for the business market.
"What has changed over the last year or so, particularly for business people, is they have now announced alliances with the likes of IBM and Cisco, so that Apple products are now actually really becoming viable alternatives for enterprises," he said.
iPad sales Apple's weak spot?
However, the launch of the iPad Pro may be recognition that tablet sales are Apple's weak spot.
In 2014, global tablet sales 4 per cent, but sales of the iPad fell 18 per cent.
Mr Pollack said part of the problem was that early iPads were too good, and lasted a lot longer than people expected.
"A lot of those iPads in my view will start to get replaced over the next 12 months, and the new iPad will be part of that replacement," he said.
"So people will start to switch out their iPads and I suspect we will get a big spurt in iPad sales in the next 12 or 18 months."
Apple's product launch also gave a nod to another competitive threat — video on demand.
The company announced major upgrades to Apple TV, in a bid to make services like Netflix more attractive through the Apple device.
"Apple still wins on this," Mr Caruana said.
"If people are subscribing to Netflix and paying their subscription through iTunes on their Apple TV, Apple's skimming 30 per cent of that transaction anyway.
"So they are making money on it without providing the service, effectively just providing the conduit for people to watch it."
Comments
Post a Comment