While Apple has worked on accelerating its refresh cycles and has even broadening its product line, all that has only slowed down its market share losses. But in turn, margin erosion has accelerated. In addition, Apple’s “Thermonuclear War” on patent protection is a “costly and ineffective distraction” and Sagawa is of the opinion that cross-licensing agreements are beneficial to shareholders in the longer term.
Do Apple Investors Need to Worry?
Sagawa highlighted several challenges, but did not stick to the pessimistic note all through. According to the analyst, if there is any company that can rise to this challenge, it’s probably Apple, “which rose from the dead some 15 years ago.”
According to the analyst, Apple seems to have “recognized its vulnerability and it has management talent, business momentum, and its prodigious cash hoard to help it succeed,” which means there is a reasonable case that Apple is worth the risk in the long term.
As Sagawa wrote, “if Jeff Bezos can convince the equity market to wait patiently for Amazon’s (NASDAQ:AMZN) profits, perhaps Tim Cook can do the same for Apple.”
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