Apple and Facebook have struck consumer gold
People are spending more and more time in front of little screens, and these tech giants are capitalizing beautifully.
You know what was lost in the shuffle of all of the reports last night? How about spending? Specifically, how much are consumers worldwide spending on their devices, particularly when it comes to their expensive cellphones? How about: How much are advertisers spending online, and what results are they getting? Those were the twin takeaways from Apple (AAPL) and Facebook (FB), and I think they are still just beginning to materialize.
We talk a lot about how there are regions of the global economy that are waxing and waning, but given the secular growth in consumer and advertising spending online, this remains the fastest-growing sector in the world. You just don't get the kind of growth that Apple and Facebook are getting without spending by the Chinese, Russians, Brazilians, Indonesians, Europeans and Americans.
The implications of this then flow right back to the advertisers -- who recognize that there is such a wholesale shift in habits of consumers, and where they spend their time, that they have to follow the eyeballs away from every other form of media right to the computer. Plus, the sheer numbers of credit cards on file makes it so that the cellphone truly is going to be the fulcrum of all consumer activity. Facebook dismissed the payments issue as too nascent, but Apple highlighted it because it has 800 million credit cards.
That's what came out as you stepped back from the minutia of all the calls. The shift in "consumer time and attention" is the essence of last night's calls, to quote Facebook chief financial officer Sheryl Sandberg in that company's triumphant conference call. It's 4.5 hours per day watching television vs. 5.75 hours watching mostly the cellphone.
It is the consumption pattern worldwide that is so exciting. You upgrade your phone to faster phone lines so you can watch Facebook six out of seven days, as more than 50 percent of the people do -- thank you, Mark Zuckerberg. And because of the strong user graphics and terrific interface courtesy of Apple, you read good ads, chiefly from the news feeds, and then you buy goods using the payments systems that are advertised directly and through brand forms. It is a seamless world, and it is a world driven by consumers who want to spend and have the money to do so, particularly as it pertains to young consumers worldwide.
It is also clear that Facebook's deal to buy WhatApp, at least to me, will be as successful as Instagram has been -- which, like YouTube, still isn't even being monetized. When you think that Instagram in two years has gone from 22 million users to 200 million, you can tell that user engagement globally is endemic, if not pandemic!
Device to apps to ads. The Apple-to-Facebook ecosystem is based on consumer wealth and where it is going. It is going right to these companies and, to another extent, Google (GOOG), for search and watch.
I think, in the midst of this downturn, we've forgotten that this is what's happening.
May these quarterly numbers remind us what's really going on in the world's economy: banking, talking, spending, watching, communicating, showing. These are at the heart of the surge we are seeing, and it is still early, or at least earlier than what we thought had been possible at this seemingly late date.
Jim Cramer's Action Alerts Plus: Check out this charitable trust portfolio for the stocks Cramer thinks could be winners. The portfolio is long AAPL, FB and GOOG.
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Nothing can compare to the fantasy they hold.
- Not your kids on psychotherapeutic drugs to help the incompetent teachers cope
- Not your spouse on his/her back or knees with someone else at the office or back home
- Not your lifestyle of cool cars and mcmansions on a pile of debt
- Not the prospect of your "professional" career ending when its paper system evaporates.
Never mind - what apps you got man !
Well Jimmy, the Million Dollar Question is how long can the Working Poor and Fading Middle-Class afford the type of expensive Gadgets Apple sells when you can get the same results from something far Cheaper. Apple nor Facebook makes anything that anyone NEEDS. It's all more to do with keeping up with the Jones as opposed to anything else.
One poster stated that Facebook doesn't make anything Tangible, like Apple actual does. In the world of fake CrackDollars, the only thing that matters now is what folks are willing to pay even if on extended Credit. The Problem however, that Credit Bill is getting Far Bigger and it's way overdue to be PAID.
Facebook year over year numbers were great. Their quarter over quarter numbers were DOWN. Soon they will be coming against much harder quarter over quarter comparison as Competition isn't just sitting still. Apple Ipad and Ipod numbers were down and if IPhone numbers ever start really dropping, and they could, watch out below.
Sooner than later, this Robbing to Pay Peter will have an Ultimate Price. The longer before it happens, the much Bigger the Price. Corporations are FAR too engaged in using Crack-Dollars for Buybacks and dividends for the Now while neglecting Cap X spending that will ultimately determine their Future.
6. Japan is a disaster.
7. China is a disaster.
8. The world is being kept afloat by central bank fiddling.
9. The initial public offering flow doesn't stop.
10. Earnings will be terrible.
There, I made it. It's very easy to stand by. In fact, it's so easy that perhaps it's too easy, too obvious.
But for the moment I am just going to put it out there so I can say "Don't I know it" and "I see how we can get hammered."
Now I feel better. I have seen the call. I know the drill. And it does merit more downside.
Apple makes tangible goods ...facebook makes nothing ...that is why despite the clamour of insiders like bobo to further enrich zuckie and his collection of idea thieves fb is only up a couple of bucks while apple is up 10% ...
Are they Golden, NO. Are they worthy--for a spell but then again both produce additive habits, one produces gossiping habits and the other tech toy addictions which are not a positive in the long run.
Allow me to ask: can you leave home without any tech toys or devices? If not then you have an addiction to you tech toys and devices.
Think about it long hard and objectively. Do Your Children really need to take a cell Phone to school?
Some say yes I have to contact my child, Yet Parents didn't have to contact their child obsessively for decades and if by some chance an emergency did arise they could always call the school office!
And Kids do often abuse and Bully one another on FB thus it is it such a great service, as its only purpose is Gossip and some PR for Businesses!
Sure Tech is nice and quite convenient but when it takes over your life and you cannot function without it then you m have an addiction.
BTW: No I do not have a cell phone and I will only read Paper Books! And Yes I share them too but also get them back to reread many years later! In fact a favorite which can never be found on an E-device is "The Adventures of Christopher Robin written long before Pooh was a character to love and cherish!,
You buy it because it just works.
Anyone who says otherwise has not owned one.
I'm putting all my money on the ticker.
Btw barry - why is it every month or so some israeli publication spreads a rumor that SODA is being bought out by Coke or Pepsi or Starbucks ? The stock goes up 10% then trickles down over the next couple of days .....is the practice called "fleecing the goy" perhaps? Cramer knows !! ;)
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These hot movers could rise by double digits in coming months.
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