After analyzing AAPL and speaking with dozens of fund managers, Horace Dediu of Asymco believes that Apple's innovation process is being valued at $0.
The consensus is that the value of future, unknown products is zero. Not only that but the probability that there will be any products at all is equally zero. Not only that but whatever Apple does to create new products is not perceptibly valuable. The company is simply the sum-of-the-product-parts and nothing more. Cash flows from current products can easily be shown to be more than the current valuation so even these products are deeply discounted. If and when a new product shows up, it will be considered and maybe if it shows promise, the stock will reflect that, briefly.
Dediu suggests that Apple is not being valued a process company because people don't believe predictable success in product development is possible. Innovations are perceived as valuable but an innovation process isn't believed to exist. If it did then it would be measured and valued.
Hit the link below to read Dediu's full analysis and examples of how this thinking has affected the Apple stock price in the past.
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Comments (7)
Comments are closed for this article.
0
Dan - November 23, 2011 at 2:49am
I dont understand it.
0
ted - November 23, 2011 at 12:59am
damn right crapple did not even invent anything so it is hard to expect it will.
Be it unix, touch screen, gui, siri - they just bought it all, clever marketing all over nice packaging that's it
0
Buggsy2 - November 23, 2011 at 2:48am
@Ted: true enough but so what? Apple added tremendous value to those products that others first invented.
0
THui - November 23, 2011 at 3:29am
It is not about whether u invented something or not. It is about how much u can improve on it and take steps to continue to innovate on that invention. Certainly companies like Apple and Google have done it.
0
Tony - November 22, 2011 at 11:47pm
These guys sound like they just dislike apple in general for no real reason.
At least that's my first impression.
0
Wall2010 - November 23, 2011 at 1:53am
These guys only like money, nothing more, nothing less!
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