Is Apple dying?
I want you to bring in our next guests. I've been to an apple apple Amazon all morning, and I think you've got some great insights here. But I got one story I'm standing on Fifth Avenue. With one of the great giants of early Apple Analysis. Lawrence Haverty of Putnam and of Gabelli, and everyone around us was talking about the death of Apple and Larry have already stood. Next to be and he said, Tom, it is total baloney. Larry. However, he was right 10 years ago, telling that might have been the 1st 2nd 3rd 4th Exactly. We've done that. I think we've done it five times since it's well joining us Now we're lucky to have a meet Dario Nardi ever caught outside Apple analyst with us right now, I made how on Earth do south, $26 billion worth of iPhones. Or the world simile Shut down. You know, That's a great question. I think it's a combination ofthe perhaps having the right product launched. I see a lower price product. But importantly in the apple management extensively about this The benefits of the economic stimulus that kind of permeated through the ecosystem. For them. Something is a combination of those two. But for the one of the really make it, perhaps to Corbett, where we've all been fixated on how public cloud off from his data centers are the new narrative. Perhaps the importance of Apple and its ecosystem is also gone up, especially from a consumer standpoint, so I mean, let's be really clear about this. Is this a consumer staple something you have to have or luxury goods company that leverage the massive fiscal stimulus of the last few months? It's somewhere in the middle of this right now. It is definitely a higher prize Luxury. Good, aspirational product. There's no denying that right. You could buy a cheaper for me. Goodbye, Cheaper piece if you want it. So there is a luxury element to this, but it has also the same time become business people built for individuals that work everything delivered in the stats. Apple Hod I thought with fairly impressive, which is 50% of the Max and iPad was the first time buyers ever 75% of Watts was sold to the first time buyers ever. Wow. I mean, that is tremendous, and it really highlights the importance of the hardware aspect of apple. Even though a lot of people were saying heading into this year, This had to become more of a services company. They had to get more revenue. From their iTunes and there are other services that was in line with expectations didn't have the massive beat of the other hardware focused aspects. What do you take away from that going forward? Yeah, you keep it up services are field was up 15% of the no, Not not not a terrible number, but clearly not the way it's been going in the past. I think the reality of services It's a massive business today. There are lots of puts and takes to it. And so what they saw was perhaps the advertising business licensing business. There is actually a ghoul, um, and apple care business, which is effectively the Newport Those those products of those services were declining. A bit more faster, did not grasp the flipside was things like Apple music. Things like APP store did much better if it was a bit of focus. Your tale of two cities. But you step back and think about this just keeps validated the point that this is diversity at scale. And even if you don't see services are iPhones rate, things like Apple Watch Variables and Max are doing better. I mean, I've been looking for an entry point on Apple for seven years, and I'm still searching for myself. A January 1st, mate, I want you to tell me the kiss and kiss January 1 return on Apple. This would 10% dividend growth. And also with that massive, persistent share buyback program, and I locked in for an 8% return day one. You know the buy back alone, a TTE least for the next four years. It's not longer probably will give you about a 6% return that she ever doctor will be about 6% right? You know, the dividend yield. Given the stock has improved. Paramount is about a one person today it's in the ZIP code. It's about 7% return between buybacks and evidence that you get annually. I look at this folks and just extraordinary. What was just said. They're about a 7% return day. One is well. Tim Cook spoke about the social issues. That they are not zero sum. Anybody in economics knows that that is back to Torsten Veblen. Is Apple, adding to society or they just stealing share from everything else out there that can't compete. Um I would imagine that they are more adding to the society. Worse is not, And you know, if you look at Apple's market shit, it is not a large number by any means any metric that they're playing right? Attend a video eating what Apple is done what others have done. Perhaps make things more productive, more interactive or efficient. Everyone benefited from that transition if you may, but I don't think that Taking anything away. That probably added to the society. We tried to have this conversation in the last Lets do it again. What's behind this stock split? Well, I think the official's times was, this makes it more accessible for investors will stand. Julie, not if it matters right. It doesn't create much economic well hear the end of the day, right? If I own one Charlotte for Chester. It's a bit of a non event. From our perspective From economic perspective. It's a non event. But their take is it helps the smaller retail investors more so we should do it.