Are Apple Investors Right to Be Pessimistic?

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Jan. 28 (Bloomberg) -- Tony Dwyer, managing director at Canaccord Genuity and Bloomberg Contributing Editor Nick Thompson examine Apple results on Bloomberg Television’s “Bloomberg Surveillance.”

This morning?

Somehow i think he will be ok.

The most important point is the corporate on market, the corporate credit new issuance last year was a record.

It is starting out at a record pace this year.

That is what fuels these buybacks.

You need an open credit market.

Uni companies with the ability to raise money.

Every company seems to have that ability with high yield debt.

I know you cannot talk about apple but -- we have a terrific analyst on the start and he lowered his target slightly this morning.

Why is tim cook taking so long on being a share buyback stock?

What is the reluctance?

Honestly, i would rather roll that to mike.

People don't know what the environment will look like as we progress through these currency issues.

Tim cook has already returned 100 billion dollars in buybacks.

He has put a little bit of that money to work.

What does 51 million iphones really look like?

It is six times the market cap a blackberry and twice as big as sony.

It is hard to get a sense of how big those numbers are.

Nick, one analyst said what he things will drive the stock is this tug-of-war between whether revenue growth matters more or whether profitability matters more.

You saw improvement at the margins.

Apple is about profitability and that's the decision that people have criticized.

That is what the iphone is.

Apple is kind of moving into the bmw model.

They will be a smaller percentage of the marketplace that will maintain their brand and reputation for excellence and that's why they resisted doing the cheap phone.

It should increase profitability but you look at their market share and it is gone from 22% to 18%. they are growing at a slower rate and maintaining their high margins.

It is hard to say whether that was the right choice.

This phone is a miracle and they are selling tons of them.

Tim cook said there was a robert mix problem -- there was a product mix problem.

Says the challenges the focus on a few things that deserve all of our strategy.

Is that the right approach?

Apple has a very narrow focus strategy.

The advantage is that because they have a narrow product line, it is easy to design apps for it and add-ons.

That helps the other line of business, the app store.

If you took the name apple out and called it sterns, everyone would've said it was a pretty good attorneys report.

-- earnings report.

Look at the profitability.

It is not a great sign and that combined with the other struggles since tim cook took over -- you look rate on instagram.

Nick thompson, that's what you can do with this toy.

It's a pretty case ,too.

Imagine when it becomes your wallet.

A couple of years ago, you could not pull it up on another phone and now you can.

This is the beginning of the story and nick thompson as our guest host.

This is our twitter

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