Apple could never recreate the success of the iPhone. But it doesnt need to

Tim Cook and his investors seem confident that TV programmes, music and software are the path to the future Apple has been punished by investors in the wake of recent financial results that have posted growth in revenues, iPhone sales and business in China. Shareholders were concerned that the tech groups growth was not as meteoric as expected, so they sold down the stock. Last week, however, Apples shares surged on a 15% decline in revenues, falls in sales of iPhones, iPads and Macs, and a 33% drop in Chinese revenue. Has Wall Street lost its bearings, or does it know something other people dont? After all, it is unlikely that the iPhone will ever repeat the red-hot growth of 2014, when larger-screened models drove the companys biggest-ever quarter for revenues and profit. Smartphone sales generally have cooled. Unlike 2010-12, when annual growth rates for all handsets were between 60% and 90%, so far this year worldwide sales growth has been below 1%. Apple has underperformed the market, recording two successive quarters of falling iPhone sales amid fears that consumers will not flock to upgrade when Apple launches new models in the autumn. Asked about those concerns last week, Apples chief executive, Tim Cook, said the non-hardware part of the business would take the strain. Cook said he expected the services unit to be a star performer, through iTunes, app and iCloud storage sales. We think [revenue from] services will continue to grow very briskly, he said. Nonetheless, despite their positive response last week, investors are understandably keen for Apple to unearth another big seller, with the iPad and the Watch failing to match the iPhones success. Could Project Titan the codename for Apples electric car project be the new smash hit? Or might virtual reality headsets, or some augmented reality product akin to Pokmon Go, prompt a new reason for overnight queues outside Apple stores? Analysts are sceptical. With a billion iPhones sold since the handsets 2007 release, it is the most successful consumer product ever, generating almost $625bn (475bn) in revenues in just nine years. Apple will struggle to come up with a concept or a category that matches the iPhone what other hi-tech product could you potentially sell to everyone in the world? There are 2.5 billion smartphone users around the world, calculates Benedict Evans, an analyst at venture capital firm Andreessen Horowitz. That will rise to 5 billion over time. He estimates there are 630 million iPhones in use worldwide, and another 250 million iPads; outside China, there are about 1.35 billion phones made by the likes of Samsung and HTC that use Googles Android system as well as 175 million Android tablets. Inside China, about 450 million phones and 200 million tablets use Android software albeit without access to the Google search engine. Both Apple and Android have sufficient scale for their [smartphone] ecosystems to be viable, Evans notes. No one else does. The likely buyers of the next 2.5 billion smartphones will not be […]

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Gold, Silver and Debt

  “Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, and debt is the money of slaves” At present, I would have to say gold may not actually be considered money as the bankers find it difficult to control it, can not dilute it, and governments have a difficult time taxing it. For our purposes at this particular time in history, what should gold be to us? Now this is all my opinion and you can either agree with me, or you can simply be wrong. Gold is a concentrated store of wealth. It really is not a consumable like corn or crude oil. It can change shape but ultimately there is a finite amount of gold in the world. One can attempt to trade paper that supposedly represents gold much like the dollar supposedly is backed by the full faith and taxing authority of the US government, in the case of the dollar. We all know that is a silly notion. Gold is not an item one should buy to seek a return on or to seek an elevated value. When gold does enjoy an elevated value, it is being pegged to a paper currency that is simply going down in value in comparison to the gold. I suggest folks purchase gold and silver. In my opinion, silver will be more useful for every day living and trading. Let me illustrate. Supposing we see the dollar stumble, unemployment rises dramatically, and more and more people are on the public dole. Assuming some level of inflation kicks in, the so called value of gold would go up. Consider this, I have read that 2,000 years ago, one ounce of gold would buy 1 loaf of bread every day for a year. I don’t know what bread costs but I would think it is about 3.50 to maybe 4.50 a loaf. Let’s say $4.00 as an average times 365 days. That comes to about $1,460 so clearly gold has not really become more valuable in these last two millenia but rather everything else around gold has changed in price. There are all kinds of examples that will punch holes in that theory from the last 120 years, but overall, I believe, gold is simply a store of wealth as is silver. Consider silver at about $20 an ounce. If one were to buy a sack of junk silver, those coins are extremely difficult to forge for the average citizen where paper money is much easier. Coins from 1964 and earlier such as dimes, quarters, half dollars, and silver dollars, are around 90% silver. A sack of junk silver is $1,000 face value meaning if you have a sack of junk silver quarters, you will have about 4,000 quarters. Each sack is about 715 ounces of real silver. So it takes nearly 5 quarters to make an ounce. Divide $20 by 5 and we know, in relative terms, one quarter is worth approximately […]

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