Agree the sky is the limit for Google's future but there's always some risk that FB or Baidu or someone could come in and take 80% of Google's users.
Aso by any reasonable measure Apple's market cap should be well over a trillion. Take away their $165 billion cash pile from their $465 billion market cap, give them 0% growth and you're left with the idea that Wall St's expects Apple to be turning out the lights in 4 or 5 years depending on how you value their IP, tangible assets and other investments. That's why Apple is buying Apple stock like whoa.
That's the thing about Apple, they have $165 billion but they have no idea what to do with it. The only R&D they seem to be able to think of is how to make their consumer boxes shinier. No moonshots, no diversification. That's why Wall Street doesn't see any huge upside.
Says someone with no more insight than the rest of us on what's going on internally at Apple. Recent hires and job postings suggest that they're angling for the wearable electronics market, and I would bet they'll be years ahead of the Pebble of Galaxy Gear when they do announce something.
Would people prefer that they be like Google, with piles and piles of R&D projects that go public, get users, and are shorty abandoned? Ask me how long Google has been working on MMS support in Google Voice for. I honestly wish they'd never bought Grand Central, at least it would have improved in the last several years.
I suppose part of my problem is that I'm using it on iOS. Still no iOS 7 update, and there are some really braindead interface decisions in the client.
My personal favorite: Text conversations get new messages from the bottom. But when you open the app, it doesn't automatically load new messages. How do you get them? Pull to refresh. At the top of the conversation.
Yup, scroll up past several pages of messages to get to the start, pull to refresh, then go back down to read the new texts. Brilliant.
Apple is traded cheaply to its P/E. That's true. But I think any attempt to explain that in a single sentence is certainly flawed. It's complicated. Apple is widely held. There is ENORMOUS open Options interest in the stock. Etc. There are many reasons it's not trading at its ATH's.
So I think you're wrong about your conclusion but I also think you're wrong about your premise. Product development cycles take several years. It took 3 years to follow the iPhone with the iPad -- essentially just a big iPhone and a product that they started working on before the phone. There were 6 years between iPod and iPhone. It's not like cash is the only constraint here.
I of course do believe in Apple, and I use their products, and yes I'm definitely long on their stock. And I see so many people today frustrated by their low P/E. It delights me. Every month I dollar cost average into it and the longer it stays in this "cheap" P/E range the better.
The big reason investors are skeptical with Apple is that there is no guarantee they can pull the same revenue without creating a hit product every two years. Once the revenue starts to shrink, things go downhill very quickly.
Assuming you're talking about success revenue-wise, Google has created at least three revenue-successful products: Search ads, their display ad network (i.e. display ads on different sites), and YouTube ads (i.e. display ads on their own site). (Note that this is ignoring the myriad smaller ads products they have that aren't as significant/massive revenue-wise). Calling these all "one product" is the same as saying "Apple makes revenue from only one product: sales to consumers". In fact I'd go so far as to say that these revenue streams are far more different from each other than, e.g. iPod/iPhone/iPad sales are from each other.
This is a fair perspective, although if Google can only make money from winner-takes-all properties that are monetized by advertising, their options are still severely limited, and they have not demonstrated the ability to do anything else.
The idea that revenue from Apple lines quickly fades after 2 years doesn't seem to square with history. Desktops growing for over a decade, finally fading due to laptop cannibalization. Laptops growing for over a decade, perhaps stable now and fading in the future due to tablet cannibalization. Music player grew for better part of a decade until heavily cannibalized by phone. Phone still growing 7 years after introduction. Tablets still growing 5 years in. But even if you throw their growth away and say they do 0% for next 4 years the market cap doesn't add up.
I get what you are saying. My point is that even in the same product line, e.g. phones/tablets, there is no guarantee that Apple will be able to sell the same number of iphones/ipads in a few years. Case in point:
BB was growing like crazy for the whole decade till 2011, consistently ~40% year over year both in revenue/profit AND users. Just a dink in 2012, and kaboom, you know the rest of the story. And note that enterprise email was supposed to be the unbreachable moat for a business.
Aso by any reasonable measure Apple's market cap should be well over a trillion. Take away their $165 billion cash pile from their $465 billion market cap, give them 0% growth and you're left with the idea that Wall St's expects Apple to be turning out the lights in 4 or 5 years depending on how you value their IP, tangible assets and other investments. That's why Apple is buying Apple stock like whoa.