[del82]

One question I have about Apple is: why should they want to build cars? Or anything else, really, except phones and computers and possibly other personal electronics? Why shouldn't they stick with what they're good at, invest their cash in that business when they can, and when they can't then either return it to shareholders or hire a portfolio manager or ten to invest it elsewhere?

People often criticize Twitter for trying to be Facebook instead of just being Twitter. Why shouldn't Apple just be Apple?

[mikhailt]

They already are, you have to understand, they're practically printing money with the iPhones. They are capturing more than 90% of the market's profits for high end smartphones.

They are not sitting around doing nothing. They cannot just print new innovation every year, it doesn't work like that.

The problem will be when the market is fully saturated and people start upgrading every 5-10 years instead of the current 2 years.

[valuearb]

I don't think saturation is a problem. You can't get silk from a souse ear, or something like that. Apple's growth rate will continue to slow, but as long as it maintains it's competitive position it will still be very profitable and a good investment.

The Buffett investment (actually his sub-managers did the investment I'd bet) is an example of Apple gradually becoming a more attractive investment to value investors as it gradually becomes a worse investment to growth investors.

[ghaff]

Furthermore, I have no doubt that Apple has people doing work in all sorts of adjacent markets like AR, VR, more wearables etc. But the consensus seems to be that it's going to take a lot of things coming together for true mainstream products in AR for example. And for better or worse releasing effectively a version 0.6-type product to test the waters just isn't Apple's style (at least deliberately).It's not just a matter of no company has invested enough money yet.

[dasil003]

Because Apple's secret sauce is great UX by vertical integration of hardware/software. Although a car is a much bigger challenge, it is one of the few markets that can move the needle for them. Apple has always placed strategic bets on the future, and now that they are currently the most valuable company in the world by a significant margin there's no better time.

The Twitter case is quite different; it's not as if Apple is going to turn the iPhone or Mac into a car. The problem with Twitter was that the original product vision was never coalesced and realized properly. Twitter in some ways is a beautiful thing that Apple, Microsoft or Facebook could never produce, but for whatever reason that was not good enough for stakeholders and they reached beyond their grasp.

[jorvi]

Because they need another golden geese. The iPhone alone accounts for 70%+ of their earnings, and the smartphone market is pretty much saturated and almost completely matured. What do you think investors will start to do once iPhone sales start slumping, and Apple has no 'next big thing' lined up for a growing market?

[srtjstjsj]

I still can't buy an iPhone 3 quality phone (+ camera!) for $200. Until I can, the smartphone market isn't saturated and Apple will keep printing money on new iterations of their devices, which tend to phy sically break down in <4 years.

[valuearb]

Who cares what investors will do?

I guarantee if iPhone sales plateau every shareholder who dumps their share will be replaced by a new shareholder. Value investors love nothing more than predictable cash generating businesses with low capital requirements.

No tree can grow to heaven and the growth potential for the most profitable business on earth is equally limited. There are investors for zero profit growth "stories" and investors for proven businesses with tremendous moats.

[pg314]

Warren Buffet seems to agree: Berkshire Hathaway built a $18B position in Apple recently. And I'm pretty sure that he would love nothing more than for Apple's stock price to go down in the short run, so that buybacks increase his percentage of the company even more.