Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: indirect on January 18, 2011, 10:04:53 AM

Title: AAPL - Apple Inc.
Post by: indirect on January 18, 2011, 10:04:53 AM
I have a friend who made good money on 300 2012 leaps. Now he is concerned about his profits and health of Steve Jobs. If he sells it will be a short term gain. Can he do a offsetting transaction and clear both transaction in June for long term gain. Any suggestions from experienced traders welcome.

PS I agree with his assessment of Steve Jobs. If he has recurrence, he is highly unlikely be able to come back. I am considering some long term puts
Title: Re: AAPL
Post by: Bronco on January 18, 2011, 10:58:06 AM
I am one of those people that thinks AAPL will produce tons of earnings/cash over the next year or so but I agree the long-term outlook just go murkier.  But I just bought a small amount of shares today to get back in.

What scares me more than Steve Jobs health is the clamoring for a dividend/buyback.  A buyback would be flat out stupid at this point.  Can't believe I am reading articles about this. 

I think the better long-term play is GOOG.  But I sold my shares and would wait for a pullback. 

I am not sure how many new devices Apple can produce now that their theme is out.  Integrated computers, phones, tablets and TV's.  How about integration with video?  There is no easy way to link my kid's videos into an Apple format that I know of (recorded on a Sony). 

It isn't too long ago I was taking the train to NY - trying to read content on my crappy PALM with service by sprint.  Technology does change fast. 



But integration and speed and extra features will the focus for the next 3 years IMO.  No big game changers. 



Title: Re: AAPL
Post by: given2invest on January 19, 2011, 05:40:33 PM
I would love to hear why you think a buyback would be stupid.

1)  The balance sheet is grossly overcapitalized.  Do you disagree?  If you don't, then the only way to fix that is through a buyback, dividend, or acquisition. 

2)  You think the stock is undervalued, since you bought it.  Why, if undervalued, would you think it's stupid for the company to buyback stock at this level, given the overcapitalization?

Title: Re: AAPL
Post by: Bronco on January 19, 2011, 08:33:43 PM
#1 - I bottom ticked and top ticked this MF'er.  Bought in pre-market and sold in after market same day and caught 18 points.

Am I am the man?  NO.  Just lucky on this one. 


A couple answers to your question.

1) THE BIG, HUGE, STARING YOU IN THE FACE difference between me buying apple and a buyback is my purchase is temporary and their purchase is permanent.  I can sell if/when things go bad.  If you took all the publicly traded companies over the last 50 - 60 years I wonder how many just grew and grew and how many went bust or decreased in value.  Will Apple be different than a $400B Cisco?  I don't know. 

2) Apple is not great value but you can say with certainty that they will produce a ton of cash over the next 1 year.  Tons.  Plus the $60B in the bank.  So maybe decent value and more safety than most stocks.

3)  If I was Apple and wanted to buy back stock, I would have done it at $90 and not $350.  Come on.

4)  Some of the best investors around keep a lot of cash.  The stock has been doing pretty well without your beloved buyback.  Compare that to companies that have bought back 10's of billions - GS, GE, MSFT.   Buybacks at good prices?  Return to shareholders?

Title: Re: AAPL
Post by: given2invest on January 20, 2011, 07:58:15 AM
I'm not going to answer all your points, though I will say this:

I don't own Apple but it's currently trading at 11X 2011 earnings (ex cash) growing like crazy.  Some very smart value investors own the stock.  No value investors owned Cisco at 80x earnings in 2000.  This is not the same situation.  I can't tell you if Apple's earnings will be halved in 10 years, but this isn't the same situation.

Regarding buybacks, we'll just have to agree to disagree.  In all situations where:

1)  You believe a balance sheet is overcapitalized
2)  You own stock in the company and can sell at anytime (ie, not liquidity constrained or locked up)

You would be ok and actually prefer a buyback to a dividend or cash sitting on the balance sheet.  

You said "some of the best investors keep cash around".

1)  Apple is an investor?  No, it's a company.  It's not a holding company that is supposed to deploy capital into non core assets.  
2)  How much cash then?  There has to be a number.  No value investor wants his cash stuck at the corporate level forever, unless that company is a diversified holding company and their purpose is to invest in diversified companies.
Title: Re: AAPL
Post by: Bronco on January 20, 2011, 08:55:27 AM
Agree to disagree.

But keep in mind we had huge buybacks in the 2000-2010 era and some call it the lost decade.

Bad timing by all these overcapitalized companies? 

I worked for a large Bermuda/Swiss conglomerate with steady cash flow and during the crisis they constantly had to sell their liquidity.  Cash on hand plus lines of credit...etc.

What is the correlation b/w the buybacks and the lost decade?  Any? 

Will buybacks work out well in the 2010 - 2020 era? 

I would be ok w/ a dividend but a 2% dividend would equate to $6B in a year.  Don't think Apple will do this.

I firmly believe that it is always better to work from a position of strength as opposed to weakness.  There are always critics to the companies that are always overcapitalized, but my guess is over the long-run these companies have MUCH better staying power. 
Title: Re: AAPL
Post by: given2invest on January 20, 2011, 09:20:22 AM
Let me ask you this then:

Why shouldn't they do secondary offerings to raise more cash if they can never have enough?  (I promise I'm going somewhere with this question.)

Title: Re: AAPL
Post by: Bronco on January 20, 2011, 09:45:39 AM
Obviously dilutive to shareholders, sends potenital bad signal to market, wouldn't make sense for a well capitalized company.  Of course, you will suggest that if it makes no sense to raise capital then it makes sense to do the opposite.

But neither you or I know there capital plans the next 5 years.  And in tech, you have no idea what their product cycles will look like (no one does).  Apple right now prefers to be conservative.  They don't make decisions quarter to quarter.  Similar strategy to Buffett by the way.

They could buy EMC tomorrow and have no cushion left.  Who knows what they will do?  But I am against the investment community / MBA program grain when it comes to this stuff.  I prefer to follow Buffett.
Title: Re: AAPL
Post by: given2invest on January 20, 2011, 10:09:28 AM
No, what I will argue is that there should be a right number in regards to capitalization, though two people can differ on what that number is.  Having general rules like "companies should never do buybacks, especially if their stock has quadrupled" are just as bad as "companies should always buyback stock, regardless of capitalization/value". 

It's corporate finance 101.  This has nothing to do with Apple, by the way. 

Title: Re: AAPL
Post by: Bronco on January 20, 2011, 10:13:11 AM
Tell Buffett about corporate finance 101.  I am sure he and Charlie would love to learn.  Love to be like everyone else.
Title: Re: AAPL
Post by: given2invest on January 20, 2011, 10:16:24 AM
Are you comparing BRK to AAPL?   Or saying Buffett is against dividends/buybacks in companies they invest in?



Title: Re: AAPL
Post by: Bronco on January 20, 2011, 10:25:06 AM
Would you have argued that it would have been wise for MSFT and DELL to buy back stock in 2000 at $50 and $40, respectively?
Title: Re: AAPL
Post by: given2invest on January 20, 2011, 10:30:33 AM
Would you have argued that it would have been wise for MSFT and DELL to buy back stock in 2000 at $50 and $40, respectively?

Friend, I'm not even arguing that Apple should anymore.  I'm just debating with you corporate finance. 
Title: Re: AAPL
Post by: ERICOPOLY on January 20, 2011, 10:46:52 AM
Would you have argued that it would have been wise for MSFT and DELL to buy back stock in 2000 at $50 and $40, respectively?

The math lays it out pretty damn clear:   a buyback at any price is equal to a dividend at any price -- as long as the shareholders sell an offsetting amount of their holdings.  In other words, it's a tax efficient pass-through of the cash.  The shareholders are the seller, the corporation is the buyer.  No value is destroyed, only returned to shareholders.  Run the math.

If you ever find yourself bitching at management for directing the corporation to buy back stock at an "inefficient" price, ask yourself why you aren't selling to them. 
Title: Re: AAPL
Post by: given2invest on January 20, 2011, 10:54:48 AM
Would you have argued that it would have been wise for MSFT and DELL to buy back stock in 2000 at $50 and $40, respectively?

The math lays it out pretty damn clear:   a buyback at any price is equal to a dividend at any price -- as long as the shareholders sell an offsetting amount of their holdings.  In other words, it's a tax efficient pass-through of the cash.  The shareholders are the seller, the corporation is the buyer.  No value is destroyed, only returned to shareholders.  Run the math.

Absolutely true.  Not debatable.  It's math.  

We can debate whether a stock is cheap or not, whether a stock is overcapitalized or undercapitalized, etc.  But you can't argue with math.  

Simply put, if you own a stock (I don't own Apple by the way) and you can sell it (not subject to liquidity issues), then you think the stock is undervalued.  You then need to ask yourself if the balance sheet is overcapitalized.   Many balance sheets are not!  But if it is, what is the best way to return/invest that overcapitalized balance sheet?

Suppose Apple won a $500 Billion lawsuit from the U.S. Government.  Let us also assume that the market cap went up $500 Billion as a result.  They now had $580 Billion on their balance sheet vs. a market cap of $800 Billion.  Do you think it makes sense for them to sit on $580 Billion or return some of that to shareholders?  Further, how should they do it?  Again, of you are long the stock - and could sell it at anytime - you would clearly prefer a buyback to a dividend, for tax purposes.  But regardless, you would just be happy with getting some of the cash returned to you.  
Title: Re: AAPL
Post by: Bronco on January 20, 2011, 11:01:14 AM
How can you run the math?  Companies don't tell you when and how much they buy back until after the fact.

I'm not looking to change anyone's opinions, and I obviously won't change yours.  But what you truly can't debate is why companies really do buybacks.  Quite simply, it is easy for CFO's and BOD's to do.  Low risk for them.  And I have been at enough big companies to know that.

And I completely don't buy into the theory that buybacks at any price are good.  Again, to me it smells of short-term thinking.  Q to Q management. 

Not for me.
Title: Re: AAPL
Post by: given2invest on January 20, 2011, 11:07:04 AM
Where did anyone say buybacks at any price are good????

It might help if you actually read what I've written and answer the questions. 

Title: Re: AAPL
Post by: ERICOPOLY on January 20, 2011, 11:21:49 AM
How can you run the math?  Companies don't tell you when and how much they buy back until after the fact.

I'll just lay out an example.  Let's say the company is a serial re-purchaser of it's own shares, irrespective of price or value.  Let's say that every quarter they buy back 1% of their outstanding shares, and you (as a shareholder) read about this every quarter.  So after getting the quarterly, you sell an offsetting amount of shares to bring your holdings back into balance and realize the cash distributed.  Some quarters you'll sell near or above the price the company paid, some quarters you'll sell at a lower price.  And you were the one telling me not to think on a short term basis?  Harumph!

Now, since you mentioned MSFT and DELL back in 2000, let's take a swing at that.  Back in 2000, the dividends were taxed as regular income.  So, for somebody with a cost basis of $50 in the 35% tax bracket, every $1 returned to shareholders via repurchase would be recovered on a tax-equivalent basis at a selling price of $32.50.

Yes, so while you might not necessary sell at the same price the corporation paid, you have a lot of room to go down -- potentially all the way to $32.50.  Other people with a higher cost basis would the added advantage of getting a tax loss, and some would be looking at a capital gain... but the capital gains rate was lower back then (relative to the dividend tax rate).

So it depends on a few factors... dividend tax rates vs capital gains tax rates, and cost basis being an important one.  But the serial repurchaser of shares will give their shareholders roughly equal chances to sell at lower or higher valuations over time.  Like you said, don't think short-term about this.


And I completely don't buy into the theory that buybacks at any price are good.

I'm not saying they are good either.  I'm just saying it's not really much different from paying a dividend, provided you sell some of your shares to offset your increased ownership.

I'll be the last one to bitch and moan if the company is willing to buy my shares for a high price.  Like... that's probably the least of my complaints about management!!!  Would somebody (anybody) please pay me at least full value?  I really don't mind who it is.

Title: Re: AAPL
Post by: given2invest on January 20, 2011, 11:24:18 AM
"I'll be the last one to bitch and moan if the company is willing to buy my shares for a high price.  Like... that's probably the least of my complaints about management!!!  Would somebody (anybody) please pay me at least full value?  I really don't mind who it is."

This. 

Title: Re: AAPL
Post by: ragnarisapirate on January 20, 2011, 11:25:59 AM
Would you have argued that it would have been wise for MSFT and DELL to buy back stock in 2000 at $50 and $40, respectively?

The math lays it out pretty damn clear:   a buyback at any price is equal to a dividend at any price -- as long as the shareholders sell an offsetting amount of their holdings.  In other words, it's a tax efficient pass-through of the cash.  The shareholders are the seller, the corporation is the buyer.  No value is destroyed, only returned to shareholders.  Run the math.

Absolutely true.  Not debatable.  It's math.  

We can debate whether a stock is cheap or not, whether a stock is overcapitalized or undercapitalized, etc.  But you can't argue with math.  

Simply put, if you own a stock (I don't own Apple by the way) and you can sell it (not subject to liquidity issues), then you think the stock is undervalued.  You then need to ask yourself if the balance sheet is overcapitalized.   Many balance sheets are not!  But if it is, what is the best way to return/invest that overcapitalized balance sheet?

Suppose Apple won a $500 Billion lawsuit from the U.S. Government.  Let us also assume that the market cap went up $500 Billion as a result.  They now had $580 Billion on their balance sheet vs. a market cap of $800 Billion.  Do you think it makes sense for them to sit on $580 Billion or return some of that to shareholders?  Further, how should they do it?  Again, of you are long the stock - and could sell it at anytime - you would clearly prefer a buyback to a dividend, for tax purposes.  But regardless, you would just be happy with getting some of the cash returned to you.  

Well, the preference would actually depend on how a person holds the shares. If they were in a ROTH, that would have different implications than if it was in a personal taxable account. Additionally, tax rates would have some influence on the preference of shareholders.

I realize that this is getting pretty particular, but, they are real issues.
Title: Re: AAPL
Post by: given2invest on January 20, 2011, 11:33:16 AM
My main point wasn't about dividends vs. buybacks but about optimal capitalization and that all companies should strive to achieve an ideal capital structure.  I think most boards fail miserably here and it's a shame because it's so fucking easy (compared to developing and marketing an Ipad) yet they ignore it. 

Title: Re: AAPL
Post by: Dazel on January 20, 2011, 12:08:43 PM


sorry guys.

I will make money shorting Apple over the next few years...it is impossible to keep a deflationary product
cycle going.......It has the 3rd biggest market cap on the planet...your top is near.(in the next year)...purely speculating of course.
I do not have a short postion.

Dazel.
Title: Re: AAPL
Post by: ERICOPOLY on January 20, 2011, 12:17:45 PM
Would you have argued that it would have been wise for MSFT and DELL to buy back stock in 2000 at $50 and $40, respectively?

The math lays it out pretty damn clear:   a buyback at any price is equal to a dividend at any price -- as long as the shareholders sell an offsetting amount of their holdings.  In other words, it's a tax efficient pass-through of the cash.  The shareholders are the seller, the corporation is the buyer.  No value is destroyed, only returned to shareholders.  Run the math.

Absolutely true.  Not debatable.  It's math.  

We can debate whether a stock is cheap or not, whether a stock is overcapitalized or undercapitalized, etc.  But you can't argue with math.  

Simply put, if you own a stock (I don't own Apple by the way) and you can sell it (not subject to liquidity issues), then you think the stock is undervalued.  You then need to ask yourself if the balance sheet is overcapitalized.   Many balance sheets are not!  But if it is, what is the best way to return/invest that overcapitalized balance sheet?

Suppose Apple won a $500 Billion lawsuit from the U.S. Government.  Let us also assume that the market cap went up $500 Billion as a result.  They now had $580 Billion on their balance sheet vs. a market cap of $800 Billion.  Do you think it makes sense for them to sit on $580 Billion or return some of that to shareholders?  Further, how should they do it?  Again, of you are long the stock - and could sell it at anytime - you would clearly prefer a buyback to a dividend, for tax purposes.  But regardless, you would just be happy with getting some of the cash returned to you.  

Well, the preference would actually depend on how a person holds the shares. If they were in a ROTH, that would have different implications than if it was in a personal taxable account. Additionally, tax rates would have some influence on the preference of shareholders.

I realize that this is getting pretty particular, but, they are real issues.

Yes they are real issues.  I don't deny it.  And another big issue for the small shareholder would be the transaction cost.

My point is just that buybacks are a return to the shareholder... if he chooses to reinvest in the stock then he does nothing.  If he chooses to use the cash elsewhere, he sells. 

For the best example I can think of, Microsoft returned a big chunk in a well advertised tender offer -- that's one way a company can return cash at a price you can sell it at, where you're not left to guess at whether or not they are buying back, and what was the price paid.  My father was actually holding some MSFT at the time that he had purchased at a higher price -- so better than a dividend where he would owe tax, he was able to sell at a loss and reduce his tax bill.

Title: Re: AAPL
Post by: Myth465 on January 20, 2011, 12:18:27 PM
I agree capital should be returned generally after a certain point for a none holding company. Alot of companies build capital simple to help push up the price on their options. If they pay out the capital then share prices generally fall.

Cash shouldnt be built up indefinitely and I am not sure why every tech company in the world likes to have $2 to $5 billion on hand "just in case"
Title: Re: AAPL
Post by: given2invest on January 20, 2011, 12:29:23 PM
I agree capital should be returned generally after a certain point for a none holding company. Alot of companies build capital simple to help push up the price on their options. If they pay out the capital then share prices generally fall.

Cash shouldnt be built up indefinitely and I am not sure why every tech company in the world likes to have $2 to $5 billion on hand "just in case"

Or in the case of Apple, $60 Billion.
Title: Re: AAPL
Post by: ERICOPOLY on January 20, 2011, 12:38:22 PM
I am not sure why every tech company in the world likes to have $2 to $5 billion on hand "just in case"

The point of having it is to piss it away at some point in the future while defending against disruptive technological shifts.  They know that if they pay it out today and later ask for it back (when their cash cows no longer bring the milk) as a capital raise you won't give it to them... because you'll consider it speculative at that point, which it would be!
Title: Re: AAPL
Post by: Myth465 on January 20, 2011, 12:41:11 PM
I guess I should have put things better. We all know why companies what the cash, but I dont understand why owners are comfortable with it.
Title: Re: AAPL
Post by: ragnarisapirate on January 20, 2011, 12:44:07 PM
Dazel: shorting aapl seems to me to be shorting netflix, but even ballsier. With netflix, you are betting that they can't grow like the market says (which, they very well could do). With Apple, you are betting that people won't want to streamline the products they already have with more apple products... I am about as anti apple as they come, but, they do make a good product, and my next computer might be a macbook, just because I want something that works all the time.

Either way, I won't be shocked if apple almost gets cut down (can anyone ever really replace Steve Jobs?) or, if they get a trillion dollar market cap.

Myth: going back to WDC, I am even more surprised that a tech company with an empire building CEO (which isn't uncommon) and a glut of cash doesn't take them out.
Title: Re: AAPL
Post by: ERICOPOLY on January 20, 2011, 12:48:59 PM
I guess I should have put things better. We all know why companies what the cash, but I dont understand why owners are comfortable with it.

They are fed the idea that it's prudent to keep a massive rainy day fund.  It is prudent from the standpoint of management, because it ensures they can keep their jobs no matter what happens to the cash cows of today.  Not prudent from the standpoint of the owner though.  I think this is yet one more reason why Buffett likes wholly owned companies for Berkshire -- it's just one more way in which he gets more value over time.
Title: Re: AAPL
Post by: Bronco on January 20, 2011, 02:08:23 PM
I can't answer as to what they will do with the $60B.  Hire a good looking tall CPA would be option #1.

Like I said, they could buy EMC tomorrow for cash and this becomes moot.

For the record, I would be happy with a one time dividend - I have been holding apple in a tax-deferred account.

If you guys are not in favor of buyback at any price, then there is a issue of when to buy back.

Maybe not true for Apple, but for many companies the "cash" is trapped and will NEVER be brought back, thanks to the JFK administration.  The NEVER may change if they change the tax laws and the accounting rules. 

Other than Microsoft (and I'm sure there may be more), I can't think of too many tech companies with a long lifespan that are in existance based on their original product.  Something like an IBM I would say is reinvented.  Perhaps that is why Apple wants to keep the cash - history is against them and they want as much dry powder to reinvent themselves if need be.  But that is 100% speculation.
Title: Re: AAPL
Post by: Myth465 on January 20, 2011, 02:43:22 PM

Myth: going back to WDC, I am even more surprised that a tech company with an empire building CEO (which isn't uncommon) and a glut of cash doesn't take them out.

My company is technically in oil and gas, but is really a boring old manufacturing company which services oil and gas clients. I am guessing most tech companies see WDC as a boring old manufacturing company. Not too sexy. Tech guys dont seem to look at cash flow, an empire builder typically ends up with the future failures at high prices - Myspace, Friendster, ect inmo.
Title: Re: AAPL
Post by: ERICOPOLY on January 20, 2011, 02:44:35 PM
If you guys are not in favor of buyback at any price, then there is a issue of when to buy back.

I am actually okay with a buyback at any price...

I simply did not say it is "good".  Neither did I say it is "bad".  From my perspective, it is neither good nor bad -- the price really doesn't matter.  Just like with a dividend -- nobody cares at what price the stock was trading at when the dividend was paid.  

The point is that the cash is being returned to shareholders -- either way.  Cash is cash.  Under the serial buyback scenario I would tend to believe that you would benefit (over time) from that method relative to the alternative which is to get your cash via a dividend.... but that's due to tax considerations only.  In a tax-free world, I would prefer to only get my money back via a dividend (no transaction costs and generally smoother).

Now, one benefit of a buyback (versus) a dividend when the price is low is that you might have wanted to reinvest in the company anyhow -- so you'd be bitching if they paid it to you as a dividend due to the extremely inefficient tax implications.  But aside from tax, if they paid you a dividend you could just buy the shares yourself... so no advantage to a buyback at low prices versus a dividend at low prices (unless tax is an issue).  The recurrent theme is tax.


Title: Re: AAPL
Post by: Myth465 on January 20, 2011, 02:47:20 PM
If you guys are not in favor of buyback at any price, then there is a issue of when to buy back.

I am actually okay with a buyback at any price...

I simply did not say it is "good".  Neither did I say it is "bad".  From my perspective, it is neither good nor bad -- the price really doesn't matter.  Just like with a dividend -- nobody cares at what price the stock was trading at when the dividend was paid.  

The point is that the cash is being returned to shareholders -- either way.  Cash is cash.  Under the serial buyback scenario I would tend to believe that you would benefit (over time) from that method relative to the alternative which is to get your cash via a dividend.... but that's due to tax considerations only.  In a tax-free world, I would prefer to only get my money back via a dividend (no transaction costs and generally smoother).

Now, one benefit of a buyback (versus) a dividend when the price is low is that you might have wanted to reinvest in the company anyhow -- so you'd be bitching if they paid it to you as a dividend due to the extremely inefficient tax implications.  But aside from tax, if they paid you a dividend you could just buy the shares yourself... so no advantage to a buyback at low prices versus a dividend at low prices (unless tax is an issue).  The recurrent theme is tax.




You two are funny. I have seen this song and dance many times and look forward to the next engagement. With that said Ericopoly has won me over, it may not be prudent but its the same except for the tax differences.
Title: Re: AAPL
Post by: DCG on January 20, 2011, 02:50:30 PM
Apple has been my largest holding for a while, and I haven't sold any shares on the Jobs news. I'd rather wait for more specific information on his current health (if we ever hear anything), rather than joining the heard in selling shares just because people think other people/funds will be selling shares.  This is of course not his first leave of absence.

I of course worry about their future innovation if Steve passed away, but think their product pipeline will be strong for the next several years, with or without Jobs. Tim Cook has shown he can lead, and I think people underestimate the amount of the company's innovation that is tied to Jonathan Ive. That said, Steve Jobs is probably the best innovator and smartest marketer the world has seen in at least the last century, and he is extremely important to Apple in the long term.

Regarding their boatload of cash, I wouldn't complain if they paid a dividend, but it's also nice to know it's there in case they want to do a large acquisition. They have a rather impeccable history of not making stupid acquisitions. There are a much stupider things they can do with their cash than sit on it. The last thing I want to see is them become someone like Cisco that constantly makes acquisitions just for the hell of it. I think they would like to make a few acquisitions, but are incredibly patient and will only do so if it makes perfect sense to do so.
Title: Re: AAPL
Post by: ERICOPOLY on January 20, 2011, 03:09:34 PM
If you guys are not in favor of buyback at any price, then there is a issue of when to buy back.

I am actually okay with a buyback at any price...

I simply did not say it is "good".  Neither did I say it is "bad".  From my perspective, it is neither good nor bad -- the price really doesn't matter.  Just like with a dividend -- nobody cares at what price the stock was trading at when the dividend was paid.  

The point is that the cash is being returned to shareholders -- either way.  Cash is cash.  Under the serial buyback scenario I would tend to believe that you would benefit (over time) from that method relative to the alternative which is to get your cash via a dividend.... but that's due to tax considerations only.  In a tax-free world, I would prefer to only get my money back via a dividend (no transaction costs and generally smoother).

Now, one benefit of a buyback (versus) a dividend when the price is low is that you might have wanted to reinvest in the company anyhow -- so you'd be bitching if they paid it to you as a dividend due to the extremely inefficient tax implications.  But aside from tax, if they paid you a dividend you could just buy the shares yourself... so no advantage to a buyback at low prices versus a dividend at low prices (unless tax is an issue).  The recurrent theme is tax.




You two are funny. I have seen this song and dance many times and look forward to the next engagement. With that said Ericopoly has won me over, it may not be prudent but its the same except for the tax differences.

Well, Buffett would probably howl because Berkshire's capital gains tax rates are higher than Berkshire's dividend tax rates.  But then, this is coming from Buffett... the guy who advocates raising the personal dividend tax rate but has yet to advocate raising the dividend tax rate that applies to Berkshire..
Title: Re: AAPL
Post by: ERICOPOLY on January 20, 2011, 04:27:22 PM
Would you have argued that it would have been wise for MSFT and DELL to buy back stock in 2000 at $50 and $40, respectively?

The math lays it out pretty damn clear:   a buyback at any price is equal to a dividend at any price -- as long as the shareholders sell an offsetting amount of their holdings.  In other words, it's a tax efficient pass-through of the cash.  The shareholders are the seller, the corporation is the buyer.  No value is destroyed, only returned to shareholders.  Run the math.

Absolutely true.  Not debatable.  It's math.  

We can debate whether a stock is cheap or not, whether a stock is overcapitalized or undercapitalized, etc.  But you can't argue with math.  

Simply put, if you own a stock (I don't own Apple by the way) and you can sell it (not subject to liquidity issues), then you think the stock is undervalued.  You then need to ask yourself if the balance sheet is overcapitalized.   Many balance sheets are not!  But if it is, what is the best way to return/invest that overcapitalized balance sheet?

Suppose Apple won a $500 Billion lawsuit from the U.S. Government.  Let us also assume that the market cap went up $500 Billion as a result.  They now had $580 Billion on their balance sheet vs. a market cap of $800 Billion.  Do you think it makes sense for them to sit on $580 Billion or return some of that to shareholders?  Further, how should they do it?  Again, of you are long the stock - and could sell it at anytime - you would clearly prefer a buyback to a dividend, for tax purposes.  But regardless, you would just be happy with getting some of the cash returned to you.  

Well, the preference would actually depend on how a person holds the shares. If they were in a ROTH, that would have different implications than if it was in a personal taxable account. Additionally, tax rates would have some influence on the preference of shareholders.

I realize that this is getting pretty particular, but, they are real issues.

The mention of the ROTH is interesting.  I just thought of something!  Shares of foreign corporations (like FFH) held in a Roth are tax inefficient because there is no foreign tax credit to recover.  The Canadian government would take a cut of my FFH dividend and the US government would not reimburse me (because I have no US tax liability).  So in that case, it's a huge advantage to go the buyback at any price route on FFH dividends for US investors that hold in a ROTH (or regular IRA).
Title: Re: AAPL
Post by: ragnarisapirate on January 20, 2011, 06:49:14 PM
If you guys are not in favor of buyback at any price, then there is a issue of when to buy back.

I am actually okay with a buyback at any price...

I simply did not say it is "good".  Neither did I say it is "bad".  From my perspective, it is neither good nor bad -- the price really doesn't matter.  Just like with a dividend -- nobody cares at what price the stock was trading at when the dividend was paid.  

The point is that the cash is being returned to shareholders -- either way.  Cash is cash.  Under the serial buyback scenario I would tend to believe that you would benefit (over time) from that method relative to the alternative which is to get your cash via a dividend.... but that's due to tax considerations only.  In a tax-free world, I would prefer to only get my money back via a dividend (no transaction costs and generally smoother).

Now, one benefit of a buyback (versus) a dividend when the price is low is that you might have wanted to reinvest in the company anyhow -- so you'd be bitching if they paid it to you as a dividend due to the extremely inefficient tax implications.  But aside from tax, if they paid you a dividend you could just buy the shares yourself... so no advantage to a buyback at low prices versus a dividend at low prices (unless tax is an issue).  The recurrent theme is tax.





I may be missing something here, but, it seems to me that there is "good" and "bad" here.

Lets say that a company is trading well below net cash, is earning some money and their ROIC in the operating business is more or less break even (1%). Wouldn't it make sense to buy back the stock with their cash? Under that circumstance, they could effectively buy a dollar of cash on the balance sheet, for significantly less.

If they are a money losing company, that trades at some crazy premium to book value (more specifically intrinsic value), then, a buyback would be a terrible idea (as well as arguably owning the stock), and a dividend is more desirable.

It also seems to me that a buyback isn't really wholly returning money to shareholders, as, the people selling back to the company are either diluting themselves out of the company, potentially profiting less from the buyback, or, are selling completely out, so it isn't like they care about the company after the announcement of the buyback.

I fully believe that net of tax consequences to shareholders, AAPL would be better off declaring a dividend, and a company like EVI would be better off buying back stock (up to a certain level, as, due to their inordinate cash horde relative to market cap, it is really inexpensive to do).

Right?

BTW, I don't own either EVI or AAPL.
Title: Re: AAPL
Post by: ERICOPOLY on January 20, 2011, 07:14:24 PM

Lets say that a company is trading well below net cash, is earning some money and their ROIC in the operating business is more or less break even (1%). Wouldn't it make sense to buy back the stock with their cash? Under that circumstance, they could effectively buy a dollar of cash on the balance sheet, for significantly less.

Consider that if they paid the cash out to you as a dividend, you could own more shares instead by purchasing them with your dividend.  Either way, you own an equally greater economic share of the same cheap thing.   Just a wash, except for tax differences.



If they are a money losing company, that trades at some crazy premium to book value (more specifically intrinsic value), then, a buyback would be a terrible idea (as well as arguably owning the stock), and a dividend is more desirable.


The buyback merely increases your economic ownership of this terrible thing -- sell a proportionate amount of shares to bring your ownership level of the bad thing back to the prior level.  You have the same % ownership of the company, and you have the same cash you would otherwise have gained from the dividend -- but perhaps you'll be ahead by paying less taxes.


It also seems to me that a buyback isn't really wholly returning money to shareholders


This would be like saying that automatic dividend reinvestment programs (DRIPs) aren't wholly returning money to shareholders.


the people selling back to the company are either diluting themselves out of the company


The sales are not dilutive -- they own the same share of the company (post sale) as before the buyback took place.

Likewise, if you don't 100% reinvest your normal dividend into shares of the stock, then you are slowly being diluted out of the company by people who do!


, potentially profiting less from the buyback, or, are selling completely out, so it isn't like they care about the company after the announcement of the buyback.


There is no profit to be made from buybacks.  It's just the return of profits.  Similarly, there is no profit in the purchasing of new shares with your dividend.  There is no alchemy.


Right?

I guess I don't need to answer that one  :D
Title: Re: AAPL
Post by: given2invest on January 20, 2011, 07:58:33 PM
While I agree 100% with Eric, I'd like to reiterate one huge point:

If you own a stock, and can sell it at any time (liquidity is of no concern), then you believe the stock to be undervalued.

Given this fact, you should have no problem with a company buying back stock, given they have an overcapitalized balance sheet. 

Period.

As Eric has pointed out, if you believe that your ownership % of the company is too high post their buyback, you can sell stock and turn the buyback into a dividend. 

Let me give you an example: 

Company A is trading at $19.  It has $15 in cash, no debt, and earns $1 a year.  You have made it a 10% position since it trades at 4X earnings, net of cash. 

Company A announces that it is tendering for 50% of its outstanding shares at $20.  You can:

Tender.  Or not tender.  What is the result? 

If you tender, you now have a 5% position in a $20 stock that will earn $2 a share (share count cut in half) with $10 a share in cash (rough rounding).  You own the same % of the company as you did before the tender and the earnings multiple is 5.

If you don't tender, you still have a 10% position but your stake in the company has doubled.  An overcapitalized balance sheet has become less overcapitalized. 

Of course, in this example the stock would probably trade above the tender price and the company would end up buying back none of the stock.  Why is that?   Cause the market is rewarding the company and the board for giving the cash back to shareholders and right sizing the massively overcapitalized balance sheet.
Title: Re: AAPL
Post by: ERICOPOLY on January 20, 2011, 09:00:19 PM

If you own a stock, and can sell it at any time (liquidity is of no concern), then you believe the stock to be undervalued.

Given this fact, you should have no problem with a company buying back stock, given they have an overcapitalized balance sheet.  

Period.


Totally!

Logically, "hold" is the same as "buy" in this game (in a tax free world).  Psychology is different though from logic.  

Title: Re: AAPL
Post by: given2invest on January 20, 2011, 09:14:27 PM

If you own a stock, and can sell it at any time (liquidity is of no concern), then you believe the stock to be undervalued.

Given this fact, you should have no problem with a company buying back stock, given they have an overcapitalized balance sheet.  

Period.


Totally!

Logically, "hold" is the same as "buy" in this game (in a tax free world).  Psychology is different though from logic.  



I'm new to this board and I assume you are of the male persuasion given your screen name and I'm a male and of the heterosexual persuasion but will you marry me?

Yours,
given2invest
Title: Re: AAPL
Post by: Myth465 on January 20, 2011, 09:32:35 PM
This thread has taken a material turn for the worst.  ;D

Eric, I think you were on third and about halfway to forth. I would put your glasses on because your partner is a male. I feel like im back in Thailand.
Title: Re: AAPL
Post by: ERICOPOLY on January 20, 2011, 11:46:17 PM
It's been a few years since I last posted about this on this board, but I feel like we as men are due for a refresher:

http://stupidcelebrities.net/wp-content/danica_mckellar_l1.jpg

That's the girl who sat next to me in Linear Algebra, Fall 1995, UCLA Mathematics.

Go bruins!

(she is also known as Winnie Cooper -- remember the TV show "The Wonder Years").
Title: Re: AAPL
Post by: DCG on January 21, 2011, 05:29:55 AM
It's been a few years since I last posted about this on this board, but I feel like we as men are due for a refresher:

http://stupidcelebrities.net/wp-content/danica_mckellar_l1.jpg

That's the girl who sat next to me in Linear Algebra, Fall 1995, UCLA Mathematics.

Go bruins!

(she is also known as Winnie Cooper -- remember the TV show "The Wonder Years").

You win the thread.  :o  I used to have a big crush on her when I was a kid...I imagine most of your school did as well.
Title: Re: AAPL
Post by: given2invest on January 21, 2011, 06:01:44 AM
It's been a few years since I last posted about this on this board, but I feel like we as men are due for a refresher:

http://stupidcelebrities.net/wp-content/danica_mckellar_l1.jpg

That's the girl who sat next to me in Linear Algebra, Fall 1995, UCLA Mathematics.

Go bruins!

(she is also known as Winnie Cooper -- remember the TV show "The Wonder Years").

You win the thread.  :o  I used to have a big crush on her when I was a kid...I imagine most of your school did as well.

I've seen this before.  I have no problem seeing it again. 
Title: Re: AAPL
Post by: ericd1 on January 21, 2011, 09:26:08 AM

That's the girl who sat next to me in Linear Algebra, Fall 1995, UCLA Mathematics.

Go bruins!

Did she have trouble with the course?  I hope you were willing to help her. 

Guess she decided higher math wasn't her thing... :)
Title: Re: AAPL
Post by: rmitz on January 21, 2011, 10:15:16 AM
Totally!

Logically, "hold" is the same as "buy" in this game (in a tax free world).  Psychology is different though from logic.  

Unfortunately we don't actually live in a tax free world, which makes this much more complicated.
Title: Re: AAPL
Post by: Bronco on January 21, 2011, 12:11:28 PM
Like I said, I'm not going to change any minds and neither will you gents.  Maybe we all agree on the wonder years chick. 

Anyway, here is an interesting article that you probably won't agree with but maybe provides a different perspective.


http://stocks.investopedia.com/stock-analysis/2011/Diamond-Offshore-Goes-Deep-DO-L-BWP-CNA-RIG0121.aspx?partner=YahooSA

Keep in mind that I am heavy in this stock (thru the parent), which actually does tons of buybacks.  Ironic twist to this saga.

Have a good weekend all you crazy buyback lovin MF'ers and enjoy some football and another ass-kicking by my Phila Flyers.

Title: Re: AAPL
Post by: Bronco on January 22, 2011, 08:19:05 AM
Article on Buybacks in barrons ... Lawrence strauss
Title: Re: AAPL
Post by: ERICOPOLY on January 22, 2011, 09:13:12 AM
Totally!

Logically, "hold" is the same as "buy" in this game (in a tax free world).  Psychology is different though from logic.  

Unfortunately we don't actually live in a tax free world, which makes this much more complicated.

Sort of.  I would find it interesting to conduct a study on people who invest solely through their IRA accounts.  My thinking is that you'd still hear them say things like "well it was a buy back when it was $10, but now that it's gone up a few bucks now so I'd recommend not buying it at these levels, but it has a little bit further to go so people who already own it should continue to hold".
Title: Re: AAPL
Post by: Myth465 on January 22, 2011, 10:56:20 AM
The thing that got me was, if you think buybacks are stupid then why do you own at that level.
Title: Re: AAPL
Post by: given2invest on January 22, 2011, 02:22:33 PM
The thing that got me was, if you think buybacks are stupid then why do you own at that level.

That's basically my point all along.

Title: Re: AAPL
Post by: valueInv on January 23, 2011, 12:09:51 PM
Apple still has some uses for its cash:
 - Ensuring production capacity- http://www.asymco.com/2011/01/23/the-bank-of-apple-using-capital-to-ensure-additional-capacity-and-supply/
 - Acquisitions
 - They built one of the largest data centers in the world in North Carolina. Possibly need additional capex
 - There are a number of lawsuits pending that may require large payments 
Title: Re: AAPL
Post by: S2S on January 26, 2011, 08:02:32 PM
Great discussion.

NYU professor Damodaran recently posted his thought on the topic. I copied and pasted his conclusion below, but to find out his (very well thought-out, IMHO) reasoning, do read the full article:
http://aswathdamodaran.blogspot.com/2011/01/buybacks-and-stock-prices.html

Quote
... here is what I would expect to see in response to a stock buyback:

  • The most positive impact on stock prices should be at mature firms that have a history of earning poor returns on operating assets and are under levered. You get a triple whammy at these firms: the market probably is discounting cash at these firms because it does not trust the management, the firm is under levered and there is little likelihood of the buyback being viewed as a negative signal (since expectations for growth were low to begin with).
  • The most negative impact on stock prices will be at high growth firms with a history of generating high returns on operating assets and little debt capacity. Cash at these firms is unlikely to be discounted (and may be even be viewed as a strategic asset), there is little potential for value gain from financial leverage and the buyback is more likely to be viewed as a negative signal about future growth potential.
In my earlier post on Apple, this is why I argued against a buyback. Apple meets two of the three criteria for the second group: superb returns on operating assets and perceptions that there is still growth potential. It is true that Apple has some debt capacity (though its effect on value is muted). The debate about whether and when Apple should use this debt capacity is a good one to have, but I think that the argument for using debt right now is weak. That will change, as the debt capacity continues to grow, and returns on operating assets weaken (as they inevitably will).

Title: Re: AAPL
Post by: given2invest on January 27, 2011, 08:47:54 AM
Apple can't deploy its 60b in cash let alone its "debt" capacity which is probably another 50b if they needed it.  It is self funding generating billions in excess cash a month.   
Title: Re: AAPL
Post by: Bronco on February 18, 2011, 11:18:32 AM
Myth - to your point above - I would have gladly invested in BRK as a $30 million company (of course in hindsight) knowing that Buffett wouldn't do buybacks (into a shitty textile business) but instead to the best sources.

So the question of whether or not to own a stock isn't measured by the willingness of the buyback, but rather the capital allocation.  If a buyback is good (and I'll cave on this for now) b/c the stock is trading much below IV, so be it.  If the buyback is bad (like my company right now, like SHLD in the 100's, like GS in the 200's, like MSFT in the 30's, etc) then it is bad. 

I am not really saying this right but my point is I can own a stock and not want a buyback (BRK is best example and impossible to argue IMO).  And with tax deferred accounts, a dividend is great.  Fantastic and much better than a buyback.  And please, no more with the synthetic buyback comments...I will vomit on the spot.
Title: Re: AAPL
Post by: Bronco on February 18, 2011, 11:19:47 AM
A side point - if Jobs never returns to Apple (draw your own conclusions) - what is your purchase price for AAPL?

I am going with $280, maybe $300.

Good weekend to all.  And let's go Flyers (best team in sports???)




Title: Re: AAPL - Apple Inc.
Post by: Liberty on July 18, 2011, 08:32:41 PM
Very smart of AAPL if true:

http://alexblom.com/blog/2011/07/forget-acquisitions-apple-control-the-supply-lines/

Quote
Put simply, new components are not cheap. The upfront capital requirement to build manufacturing plans is huge, and the margins shrink so quickly as technology moves that manufacturers cannot raise capital. According to the anonymous responder, Apple pay a significant portion of the factory construction cost in exchange for exclusive rights to the output for a set period of time, and then for a discount once this period expires.

Not only does this allow Apple to come out with new components long before rivals, but these components are impossible to duplicate (think of how long Apple had the touch screen monopoly for).

By the time competitors catch up on component production, Apples lower cost period is in play. That means that every time a competitor buys a component, they are potentially overpaying so that the factory can subsidize Apples discount.
Title: Re: AAPL - Apple Inc.
Post by: DCG on July 19, 2011, 01:38:30 PM
Another incredible quarter from Apple.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on July 19, 2011, 02:03:39 PM
Very impressive indeed:

http://blogs.wsj.com/marketbeat/2011/07/19/apple-earnings-a-big-beat/?mod=e2tw
Title: Re: AAPL - Apple Inc.
Post by: Parsad on July 19, 2011, 02:04:25 PM
Just nuts!  What a quarter...what a nine months!  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: given2invest on July 19, 2011, 02:07:49 PM
What a company. 
Title: Re: AAPL - Apple Inc.
Post by: DCG on July 19, 2011, 02:11:00 PM
cash and securities is up to $76 billion.
Title: Re: AAPL - Apple Inc.
Post by: Parsad on July 19, 2011, 02:17:02 PM
And of course, the stock sells off in after hours trading!  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: Liberty on July 19, 2011, 02:20:51 PM
And of course, the stock sells off in after hours trading!  Cheers!

You see it down? I see it up 5.7% on Google Finance.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on July 19, 2011, 02:23:09 PM
This was a quarter where they had supply constraints due to Japan.
And delays in launching the iPhone 5.
Title: Re: AAPL - Apple Inc.
Post by: DCG on July 19, 2011, 02:24:49 PM
And of course, the stock sells off in after hours trading!  Cheers!

It went us to $405 US before pulling back a bit. Trading was halted around the time of the earnings release (it was down a bit after hours before being haulted) but has been up since trading resumed.
Title: Re: AAPL - Apple Inc.
Post by: Parsad on July 19, 2011, 02:33:45 PM
Yeah it was down $27 on Yahoo Finance after the report, but now it's up $20.  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: DCG on July 19, 2011, 02:38:14 PM
Yeah it was down $27 on Yahoo Finance after the report, but now it's up $20.  Cheers!

Yahoo Finance is buggy. I trust Google Finance much more.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on July 19, 2011, 02:50:56 PM
Yeah it was down $27 on Yahoo Finance after the report, but now it's up $20.  Cheers!

Yahoo Finance is buggy. I trust Google Finance much more.

I like the "key statistics" page on Yahoo finance, but for everything else I prefer Google Finance.
Title: Re: AAPL - Apple Inc.
Post by: DCG on July 19, 2011, 03:08:42 PM
Yeah it was down $27 on Yahoo Finance after the report, but now it's up $20.  Cheers!

Yahoo Finance is buggy. I trust Google Finance much more.

I like the "key statistics" page on Yahoo finance, but for everything else I prefer Google Finance.

Agreed. If it weren't for the Key Statistics page I'd never check Yahoo.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on July 19, 2011, 06:54:27 PM
Agreed. If it weren't for the Key Statistics page I'd never check Yahoo.

Ha! I'm exactly the same. Time to send a suggestion email to the Google guys..
Title: Re: AAPL - Apple Inc.
Post by: jjsto on July 19, 2011, 07:19:12 PM
Yeah, if you take away ipad supply constraints and add in back-to-school sales, holiday sales, refreshed mac mini/macbook/mac airs, cloud computing, Lion, and the release of iPhone 5...the next 2 quarters have the potential to be kinda nuts.  If you just take this quarters earnings, multiply it by 4, and subtract the cash off the balance sheet apple appears pretty cheap even if sales "just" remain flat in the future. It seems like the only product they are selling less of is the iPod.

I would sure like to see international sales broken out by countries.  It seems like they are still barely scratching the surface in some areas like China, India, etc.  I live in Argentina, and the iphone4 has been sold out for months, you cant get an ipad2. Apparently it is the same in Brazil. 
Title: Re: AAPL - Apple Inc.
Post by: tombgrt on July 20, 2011, 07:17:26 AM
Even after the bounce $315, it looks undervalued at current numbers.

What is the market discounting?
Its size?
Cash position?
Steve Jobs' health?

Probably a combination.
Title: Re: AAPL - Apple Inc.
Post by: DCG on July 20, 2011, 07:30:26 AM
Their cash flow from this quarter alone is almost enough to buy RIM and shut the company down and convert the Waterloo headquarters into a giant Apple Store.  :P
Title: Re: AAPL - Apple Inc.
Post by: rmitz on July 20, 2011, 08:39:06 AM
Even after the bounce $315, it looks undervalued at current numbers.

What is the market discounting?
Its size?
Cash position?
Steve Jobs' health?

Probably a combination.

Almost certainly.  The main reason I can't accept it as a long term hold is Jobs.  I just don't know if he's built a culture that will truly maintain itself after he's gone, and he is pretty necessary at this point.  Size is there but they can grow quickly for a while yet.
Title: 35% of US consumers plan to buy iPhone 5
Post by: tengen on July 27, 2011, 03:29:54 PM
Pricegrabber, an online "deal finder", is reporting results from a survey indicating that 35% of online shoppers are planning to buy an iPhone 5.

Some other interesting numbers:

48% prefer iOS (19% Android, 7% Windows, 6% RIM)
69% would most like to receive an iPhone as a gift

http://www.pricegrabber.com/about.php/about=press/article=187/
Title: Re: AAPL - Apple Inc.
Post by: Liberty on July 29, 2011, 07:48:20 AM
Looks like Apple has now more cash than the US government:

http://www.bbc.co.uk/news/technology-14340470

 ;D
Title: Re: AAPL - Apple Inc.
Post by: Carvel46 on July 29, 2011, 09:14:04 AM
Apples to oranges comparison. The US Government can print its own currency.
(Despite Apple's beautiful products and cult brand, they cannot print their own currency. Different structures.)
This is a stupid story...ah, the media. Sad.

Title: Re: AAPL - Apple Inc.
Post by: Liberty on July 29, 2011, 09:26:35 AM
Apples to oranges comparison. The US Government can print its own currency.
(Despite Apple's beautiful products and cult brand, they cannot print their own currency. Different structures.)
This is a stupid story...ah, the media. Sad.

Well, duh. I think you're taking this light-hearted comment of mine a bit too seriously. Value investors can have fun too, can't they?
Title: Re: AAPL - Apple Inc.
Post by: Carvel46 on July 29, 2011, 10:03:04 AM
Fair enough. ;D I'm just tired of hearing political hyperbole from politicians, the media/newsletter authors and portfolio managers.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on July 29, 2011, 10:04:36 AM
Fair enough. ;D I'm just tired of hearing political hyperbole from politicians, the media/newsletter authors and portfolio managers.


I hear ya, brother! The sooner the circus ends, the better. Can't wait to be back to a more boring news cycle about white women being missing and celebrities overdosing.
Title: Re: AAPL - Apple Inc.
Post by: Carvel46 on July 29, 2011, 10:30:02 AM
That's funny!
Jonah Lehrer had a great article on social media that relates to many tech companies, Apple included. There must be some cognitive bias in here somewhere! :-X
Why You Just Shared That Baby Video
The Internet shows our deep preference for emotional arousal over bare facts

http://online.wsj.com/article/SB10001424052702303661904576454342874650316.html (search on google for full article)
Title: Re: AAPL - Apple Inc.
Post by: DCG on August 08, 2011, 07:19:07 AM
AAPL is at only 14X current earnings.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on August 13, 2011, 06:06:08 PM
Some food for thoughts: http://www.cultofmac.com/ipod-iphone-ipad-why-apple-is-done-inventing-new-devices-2/108753
Title: Re: AAPL - Apple Inc.
Post by: DCG on August 14, 2011, 09:30:41 AM
Some food for thoughts: http://www.cultofmac.com/ipod-iphone-ipad-why-apple-is-done-inventing-new-devices-2/108753

Good article, except for that Apple doesn't really invent products. They didn't invent desktop and laptop computers, they didn't invent mp3 players, they didn't invent cell phones, they didn't invent tablet computers, they didn't invent software to let people record music, organize their photos and edit movies. What they do is make products that work and look better and are easy to use, and they do that better than any company on the planet.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on August 14, 2011, 10:14:13 AM
Indeed. I didn't write the article, so it's not my choice of words. But I thought the part about their strategy and why it could be nearing some stable state was insightful.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on August 15, 2011, 02:47:20 PM
I'm so pre-ordering this:

http://9to5mac.com/2011/08/15/official-steve-jobs-biography-set-for-november-21-release-based-on-forty-interviews/

Isaacson is a great biographer.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on August 16, 2011, 01:11:50 PM
This patent stuff is getting ridiculous..

http://www.reuters.com/article/2011/08/16/us-apple-htc-idUSTRE77F38E20110816
Title: Re: AAPL - Apple Inc.
Post by: Rabbitisrich on August 24, 2011, 03:43:32 PM
Steve Jobs handed in his resignation letter.

http://finance.yahoo.com/news/Letter-from-Steve-bw-2200607574.html?x=0&.v=1 (http://finance.yahoo.com/news/Letter-from-Steve-bw-2200607574.html?x=0&.v=1)


One of the greatest businessmen of all time.
Title: Re: AAPL - Apple Inc.
Post by: JSArbitrage on August 24, 2011, 03:46:07 PM
Awful news.  This probably means his health is really bad.  As someone who uses a Blackberry and an iPhone 4, I can say that RIM makes good phones, but Steve makes great art.
Title: Re: AAPL - Apple Inc.
Post by: AZ_Value on August 24, 2011, 03:48:22 PM
Awful news.  This probably means his health is really bad.  As someone who uses a Blackberry and an iPhone 4, I can say that RIM makes good phones, but Steve makes great art.

Really sad indeed as his health is probably deteriorating again.
Title: Re: AAPL - Apple Inc.
Post by: DCG on August 24, 2011, 03:59:30 PM
Very sad.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on August 24, 2011, 04:13:07 PM
Sad indeed.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on August 24, 2011, 04:16:16 PM
Terrible news  :'(
Title: Re: AAPL - Apple Inc.
Post by: DCG on August 24, 2011, 04:32:21 PM
Not surprisingly, the stock is down 5% after hours, but the stock has been already discounting in this possibility. Tim Cook has shown he is more than capable of successfully running the company, and the product pipeline is strong for at least the next couple years.

Most importantly, I really hope his health is ok and wish him the best.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on August 24, 2011, 07:32:24 PM
http://blogs.wsj.com/digits/2011/08/24/steve-jobss-best-quotes/
Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 21, 2011, 12:47:58 PM
http://allthingsd.com/20110921/apple-to-hold-special-event-on-october-4/

iPhone 5 on October 4th, most likely.

I'd love iPad 3 too, but that's a lot less likely...
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 21, 2011, 01:18:47 PM
http://allthingsd.com/20110921/apple-to-hold-special-event-on-october-4/

iPhone 5 on October 4th, most likely.

I'd love iPad 3 too, but that's a lot less likely...

Just so it's clear, the announcement event is on oct 4th. The iPhone release date is expected to be in mid oct.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 04, 2011, 11:40:04 AM
Looks like only iPhone 4S, not iPhone 5..  :-[
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 04, 2011, 12:46:31 PM
I think they did the right thing from a business POV. I'd sure love to see the iPhone 5, but they shouldn't tip their hand faster than they have to. competitors are still catching up to the iPhone 4, and the 4S will make that even harder. So they can keep the 5 under wraps until they need it more. Same with iPad 3.
Title: Re: AAPL - Apple Inc.
Post by: misterstockwell on October 04, 2011, 12:51:38 PM
I think they did the right thing from a business POV. I'd sure love to see the iPhone 5, but they shouldn't tip their hand faster than they have to. competitors are still catching up to the iPhone 4, and the 4S will make that even harder. So they can keep the 5 under wraps until they need it more. Same with iPad 3.

What? You think they are holding back? That would be so stupid. Competitors have caught up, and surpassed iPhone4. The 4S simply fixes the problems spots on the the 4. If people wait in line for this, my faith in humanity will be completely lost.
Title: Re: AAPL - Apple Inc.
Post by: Dash on October 04, 2011, 12:58:27 PM
I'm going to pre-order this Friday.... And wait in line to pick it up...
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 04, 2011, 12:58:54 PM
I don't think anyone has caught up to the iPhone 4 when it comes to the whole package (the integration of design+hardware specs+UI+apps+content). Some phones have better specs, or similar design, etc.. But none give quite the same experience to the average user IMHO. And I say that as a fan of Android as a strong second.

Holding back makes a ton of sense. Just look at the iPhone -> iPhone 3G -> iPhone 3GS sequence. You squeeze a lot more money out of the same design and investment. Why reinvent the iPhone every year and a half if you don't have to? Why let your competitors know what new features you've been working on sooner than you have to?

Chances are the 4S costs them significantly less to produce than did the original iPhone 4 when it came out, so even if they don't see as much over the holidays as if they had the 5, they can still make a lot of dough.

In short, I think that if someone was holding their feet to the fire and kicking their ass, they probably would have had an iPhone 5 ready for the holidays this year.
Title: Re: AAPL - Apple Inc.
Post by: misterstockwell on October 04, 2011, 01:24:33 PM
I'm going to pre-order this Friday.... And wait in line to pick it up...

Ugh.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on October 04, 2011, 01:54:04 PM
That was a pretty underwhelming unveiling.

I figured that Apple wouldn't bring out an iPhone 5 because they won't release a 4G device until the carriers give them the go ahead.  Don't think the carriers can handle a 4G iPhone at this time.

However, I expected the new iPhone to at least be thinner or have NFC built into it.  It will be interesting to see how it compares to the Nexus Prime and the Windows Mango phones that come out in the next couple of months.   

Also, the Siri assistant doesn't seem to be ready for prime time.  That creepy robot voice doesn't really fit well with the aesthetic of the iPhone.
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 04, 2011, 02:45:19 PM
I agree with Liberty. Regarding them holding back, I don't think that means that they have the 'iPhone5' fully designed and everything and don't want to release it yet; I think they've probably been experimenting with different design options but don't think they have anything they want to rush out yet.

The main things missing that people were hoping for with the iPhone5 are true '4G'(although Apple claims the 4GS is as fast as what other companies are calling 4G) and a larger screen. Otherwise, the hardware specs are pretty much what people were looking for. '4G/LTE rollout is still months away in most places. And changing the screen size can be tricky. App developers have to redesign apps to display/function better on a larger screen (while also designing for people who would have the current models). This is a problem with Android. There are lots of different screen sizes out there and not all apps display well on all of them.

And the design of the iPhone4 is very good. As Liberty said, there's really no need to redesign it every year & 1/2. I plan on getting the 4S in a couple weeks (fyi..I currently have an older Android phone - I'm not saying I would upgrade to the 4S from the iPhone4 if I had one). I think the iPhone4S looks better than any other phone out there.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 04, 2011, 03:01:53 PM
I think they did the right thing from a business POV. I'd sure love to see the iPhone 5, but they shouldn't tip their hand faster than they have to. competitors are still catching up to the iPhone 4, and the 4S will make that even harder. So they can keep the 5 under wraps until they need it more. Same with iPad 3.

What? You think they are holding back? That would be so stupid. Competitors have caught up, and surpassed iPhone4. The 4S simply fixes the problems spots on the the 4. If people wait in line for this, my faith in humanity will be completely lost.

I don't think they're holding back. Their industrial design cycles are 2 years long. Thats how long it takes them to perfect a new design. If they could've introduced a new form factor, they would have.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 04, 2011, 03:09:20 PM
That was a pretty underwhelming unveiling.

I figured that Apple wouldn't bring out an iPhone 5 because they won't release a 4G device until the carriers give them the go ahead.  Don't think the carriers can handle a 4G iPhone at this time.

However, I expected the new iPhone to at least be thinner or have NFC built into it.  It will be interesting to see how it compares to the Nexus Prime and the Windows Mango phones that come out in the next couple of months.   

Also, the Siri assistant doesn't seem to be ready for prime time.  That creepy robot voice doesn't really fit well with the aesthetic of the iPhone.

It didn't seem underwhelming to me:

http://www.apple.com/iphone/features/siri.html

A lot of features they are introducing were announced at the last event. But make no mistake, they've made big, big changes. Their biggest being the cloud features. It is a big move both technically and strategically. This is no longer an itunes-centric system.

They're also promoting a new cloud architecture. Before this, that cloud was mostly coupled with web applications. Apple is saying - the cloud is just a service that can be integrated with any application, web or not. You can pick the best interface - web or native - and still integrate with the cloud. This is very different from the architecture the Google is promoting which is a web-based cloud. This has far reaching implications for the industry. 

Note the above relates to consumer applications, not enterprise.
Title: Re: AAPL - Apple Inc.
Post by: tradevestor on October 04, 2011, 05:13:26 PM
First real competition to ipad.

http://img.ibtimes.com/www/articles/20111004/225021_amazon-kindle-fire-preorder-touch-3g-silk.htm
Title: Re: AAPL - Apple Inc.
Post by: tombgrt on October 04, 2011, 05:23:26 PM
First real competition to ipad.

http://img.ibtimes.com/www/articles/20111004/225021_amazon-kindle-fire-preorder-touch-3g-silk.htm

And they aren't even selling in Europe... ( :( )
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 04, 2011, 05:26:48 PM
I don't think they're holding back. Their industrial design cycles are 2 years long. Thats how long it takes them to perfect a new design. If they could've introduced a new form factor, they would have.

Depends how you define holding back. So far they haven't really had to because they've never been really too threatened, so you can call it their normal cruising speed. But I'm pretty sure they aren't going flat out and releasing new major upgrades as soon as they can.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 04, 2011, 05:47:27 PM
I don't think they're holding back. Their industrial design cycles are 2 years long. Thats how long it takes them to perfect a new design. If they could've introduced a new form factor, they would have.

Depends how you define holding back. So far they haven't really had to because they've never been really too threatened, so you can call it their normal cruising speed. But I'm pretty sure they aren't going flat out and releasing new major upgrades as soon as they can.

Not really threatened? Android is gaining marketshare. Jobs himself has told employees "Make no mistake, Google wants to kill the iPhone".
I'm pretty sure they understand the threats.

Where do you see evidence that they are not working as hard as they can to release their products quickly? In fact, I see evidence to the contrary. This release has a LOT of new features and far-reaching changes in the architecture, likely to have taken a longer implementation cycle.

Title: Re: AAPL - Apple Inc.
Post by: Hester on October 04, 2011, 07:12:47 PM
No company is going to kill Apple through imitation products. None. The brand is too strong, too "cool" right now, and besides the products are pretty damn good to begin with and tough to even imitate at a lower price and add much value.

The only thing that will kill apple is failure of future innovation. That will kill it's brand and customer loyalty. Eventually the product cycle will work it's magic and the current Apple products will start to look more and more like the walkman does now. There is no question in 10 years Apple will need different products, the question is can they innovate without Jobs and keep the same level of success and profitibility. They eventually have to replicate an entire line of extremely popular products on a massive level, before we even talk about long term growth. I think it's a long shot. But they can coast on their current products for the next few years and Job smay or may not be with the company so there is no reason to short.

But when I see an article or someone say something like "product XYZ is an Ipad/Iphone killer" I laugh. The products are too good, brand too strong right now. The only Iphone killer will be the inevitable advancement of technology.
Title: Re: AAPL - Apple Inc.
Post by: Hester on October 04, 2011, 07:26:23 PM
"Amazon unveiled its new iPad competitor, the Kindle Fire! I'm gonna use mine to order the new iPhone!"
-Steven Colbert
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 04, 2011, 07:58:20 PM
Not really threatened? Android is gaining marketshare. Jobs himself has told employees "Make no mistake, Google wants to kill the iPhone".
I'm pretty sure they understand the threats.

I agree with you on what we could call the 'macro' level, but on the 'micro' level, sales of the iPhone 4 are still very strong and nobody else has the combination of integration of design+hardware specs+UI+apps+content that I mentioned earlier. The competition has gotten better, but the iPhone is still more than competitive and so even without a new generation it can still sell quite well, squeezing more out of what was invested in producing it. In aggregate Android has nice market share, but on a phone-to-phone level, the iPhone dominates (including in margins per phone), and as long as it's a leader with consumers, releasing something completely new would be kind of a waste if they can squeeze more out of the current model with a refresh.

Quote
Where do you see evidence that they are not working as hard as they can to release their products quickly? In fact, I see evidence to the contrary. This release has a LOT of new features and far-reaching changes in the architecture, likely to have taken a longer implementation cycle.

What are those changes you talk about? I see they integrated the Siri acquisition, they used the iPad 2's chip with some tweaks, they improved the camera, and there's iOS 5 and iCloud which they've been working on for a while. This is a long list and hard to achieve, but it's nothing compared to going from, say, the iPhone 3 to the iPhone 4.

I think they could probably go faster than they do because most of their innovations are modular (and the way these things work, they probably had 5 iPhone 5 external designs in the oven by the time the iPhone 4 hit the shelves). I mean that you can include X features in the next generation or X+Y or whatever. So an iPhone 5 released today might have had X new features while one released in 1 year will have X+Y features because of the longer lead time. If they were really getting their ass kicked in the marketplace by a new entrant or whatever, I'm pretty sure they wouldn't have just a refreshed iPhone 4 for the biggest quarter of the year. But I can't be sure of that, nor can you, so we'll probably never know.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 04, 2011, 10:09:11 PM

What are those changes you talk about?

Watch the whole video:

http://www.youtube.com/watch?v=9046oXrm7f8

They just changed their vision.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 04, 2011, 10:32:19 PM

What are those changes you talk about? I see they integrated the Siri acquisition, they used the iPad 2's chip with some tweaks, they improved the camera, and there's iOS 5 and iCloud which they've been working on for a while. This is a long list and hard to achieve, but it's nothing compared to going from, say, the iPhone 3 to the iPhone 4.


Watch this:


http://9to5mac.com/2011/10/03/co-founder-of-siri-assistant-is-a-world-changing-event-interview/

And then watch this:


http://www.apple.com/iphone/features/siri.html

There is a BIG difference, this integrates almost every aspect of IOS.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 05, 2011, 06:09:31 AM
It doesn't change anything to what I said.
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 05, 2011, 06:19:36 AM
I think you guys are mostly arging the same thing.

I don't think theory are necessarily holding back, but they are not rushing out un-perfected/finished products (like RIM does) just for the the sake of appeasing tech bloggers and other media.


AAPL stock is getting super cheap.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 05, 2011, 08:25:17 AM
It doesn't change anything to what I said.

Read this:

http://disruptivewireless.blogspot.com/2011/10/my-suspicions-on-iphone-delays-chipset.html

You're making the same mistake that everyone else is - you're judging the book by its cover. You're looking
at the exterior design of the iPhone and saying "Meh, nothing much changed". Not true.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 05, 2011, 08:35:34 AM
It doesn't change anything to what I said.

Read this:

http://disruptivewireless.blogspot.com/2011/10/my-suspicions-on-iphone-delays-chipset.html

You're making the same mistake that everyone else is - you're judging the book by its cover. You're looking
at the exterior design of the iPhone and saying "Meh, nothing much changed". Not true.

You're putting words in my mouth, I never said nothing changed or that what mattered was the external design. I just said that from the 4 to the 4S the step was smaller than from the 3 to the 4.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 05, 2011, 09:38:51 AM
This patent crap is going to far, on all sides:

http://www.bloomberg.com/news/2011-10-05/samsung-to-seek-ban-on-iphone-4s-sales-in-france-italy-in-patent-dispute.html

Can't wait for a big reform, hopefully throwing out 90% of software patents and changing the rules for the creation of new ones...
Title: Re: AAPL - Apple Inc.
Post by: beerbaron on October 05, 2011, 09:38:56 AM
Here is a funny statement from a friend of mine in China that wanted me to buy him a iPhone 5. That tells us the perception of the 4s, not that one opinion has any impact on the future of Apple...

Ok,Jim Cook said Apple Inc. has not iphone5 to sell your guys,We said we have not money to buy your funny toy iphone4s.
I believed that Apple is getting Waterloo...


BeerBaron


Title: Re: AAPL - Apple Inc.
Post by: JAllen on October 05, 2011, 09:59:33 AM
I wonder what the reaction would have been if they had called this the iPhone 5?  Everything is vastly improved except for the shape of the exterior!  Are iPhones for looking at or for using?!
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 05, 2011, 10:34:39 AM
I wonder what the reaction would have been if they had called this the iPhone 5?  Everything is vastly improved except for the shape of the exterior!  Are iPhones for looking at or for using?!

Version numbers are always arbitrary, but once you pick a way to do it, consistency is best. If they had called the iPhone 3GS the iPhone 4, maybe the 4 would have been the 5 and this one would have been the 6th... But now they've established that full version bumps are for exterior redesigns, IMO. Deception would have been greater if they had called it the 5, so it wasn't a winning proposition.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 05, 2011, 10:35:23 AM
It doesn't change anything to what I said.

Read this:

http://disruptivewireless.blogspot.com/2011/10/my-suspicions-on-iphone-delays-chipset.html

You're making the same mistake that everyone else is - you're judging the book by its cover. You're looking
at the exterior design of the iPhone and saying "Meh, nothing much changed". Not true.

You're putting words in my mouth, I never said nothing changed or that what mattered was the external design. I just said that from the 4 to the 4S the step was smaller than from the 3 to the 4.

You stated that Apple was holding back. I am refuting that by showing that
  1, Apple actually has included a lot in this release 
  2, Delayed in the product release from summer to fall
  3, Kept one key feature in beta at the time of release i.e. not yet ready - something that you don't usually see with Apple.

1+2+3 would indicate that they're not holding back, no? They're not holding back if they can't finish the product in time, right?
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 05, 2011, 10:47:21 AM
This doesn't mean that if X numbers of months ago (these things have a long lead time) they had felt threatened and saw really scary things on the horizon from their competitors, that they couldn't have decided to pick one of the external designs that they have been testing and launch production on it for it to be ready around this time of year. Other features that we're seeing today would still be present, and the one in beta might still be in beta, but we could also be having a different exterior with probably a few more features to warrant a full version number bump. As I said, a lot of those feature are rather modular and don't have that many dependencies now that the iPhone has most of the hardware that can be expected in a phone (GPS, accelerometer, multi-touch, camera, etc).

Title: Re: AAPL - Apple Inc.
Post by: rmitz on October 05, 2011, 11:01:17 AM
Here is a funny statement from a friend of mine in China that wanted me to buy him a iPhone 5. That tells us the perception of the 4s, not that one opinion has any impact on the future of Apple...

Ok,Jim Cook said Apple Inc. has not iphone5 to sell your guys,We said we have not money to buy your funny toy iphone4s.
I believed that Apple is getting Waterloo...


BeerBaron

Indeed.  For many folks the iPhone isn't just functional, it's a status symbol.  That doesn't help when you don't change the outside.  Can't say I care.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 05, 2011, 01:41:32 PM
It doesn't change anything to what I said.

Read this:

http://disruptivewireless.blogspot.com/2011/10/my-suspicions-on-iphone-delays-chipset.html

You're making the same mistake that everyone else is - you're judging the book by its cover. You're looking
at the exterior design of the iPhone and saying "Meh, nothing much changed". Not true.

You're putting words in my mouth, I never said nothing changed or that what mattered was the external design. I just said that from the 4 to the 4S the step was smaller than from the 3 to the 4.

And I'm not sure where your getting that from. If you saw the video from 2001, you'll see that they changed the entire vision and architecture that they have been executing on for the whole of last decade. The PC is no longer the digital hub. They don't have a hub and spoke architecture. They have moved to a cloud-based one. You think this is a smaller change than the change from 3 to 4?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 05, 2011, 02:15:46 PM
And one more thing:

The 4S is to the previous generations of the iPhone what the original iPhone was to the then state-of-art i.e. Blackberry

The original iPhone essentially represented an innovation in the interface. It did not have many applications or many features that the Blackberry had. In fact, it had far less. What was different was a full screen, virtual keyboard, a touch interface and the accompanying interface widgets. This allowed for better browsing,etc. This started a whole revolution with everyone copying Apple's design.

Up till now, our smartphone have essentially been tools. When you need to perform a task, you pull up the appropriate app, enter the information and finish the task. If your task had multiple steps, you often pulled up different apps and co-ordinated different steps much like using a set of tools to finish a task. In effect, the phone simply reacted to input you provided. Siri has the potential to change all of that..It may not have everything on day one but it is likely to have it over the next two years.

Siri is a completely new interface that shifts the phone from being a set of reactive tools to being an intelligent agent. You express your task to Siri, it figures out which application to pull up, automatically enters the information and shows you the results. It even co-ordinates multiple steps for you. Taken to the extreme, Siri can eliminate the need for apps themselves. Instead of viewing restaurant on Yelp, you just ask Siri for the best place. Siri pulls the reviews from the best sites in the back end. You don't even need to know where they came from.

Let me illustrate with an example of meeting a friend for lunch at a sushi place.

In the previous version you would do the following.
 1, Pull up Yelp to find a good sushi place, Narrow you search to sushi, scroll through the reviews and pick one.
 2, Pull up Opentable, find the sushi place and make a reservation
 3, Open up mail, find your friends address and compose an email with the place and time , send to friend.
 4, When your friend confirms, mark your calendar, selecting the date and time and entering "Lunch with Bill"
 5, On the day of, pull up Maps and find the directions to the place 
 6, Book a taxi through Taxi Magic.

With Siri ,
  1,  You simply say "Best sushi near here". Siri pulls up the top rated sushi places. You say "Book Ebisu for Thu at 10 with Bill"
        Siri contacts open table to make the reservation. Once that is done, it finds Bill in your address book and emails him an invitation with the
        info. When Bill confirms, it automatically marks your calendar. On the day of, it reminds you on the lunch meeting and shows you 
        directions. You say "book a taxi" and 10 minutes later, a taxi shows up at your office. 

 
In other words, Siri could make current smartphones look like a dumb phones. 
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 05, 2011, 02:48:06 PM
And I'm not sure where your getting that from. If you saw the video from 2001, you'll see that they changed the entire vision and architecture that they have been executing on for the whole of last decade. The PC is no longer the digital hub. They don't have a hub and spoke architecture. They have moved to a cloud-based one. You think this is a smaller change than the change from 3 to 4?

This is something completely different from the specific hardware and software changes between the iPhone 4 and 4S. I could have been accomplished on an iPhone 3 or 5.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 05, 2011, 02:55:48 PM
I agree about Siri being a big deal, but it's still an acquisition and still a feature that could have been implemented on any version of the iPhone. It's not iPhone 4S specific since what you need it a microphone and a connection to the internet (in fact, there was a Siri app available previously, though it wasn't quite the same as what was released). The change of direction to more cloud based services (SaaS) is industry-wide and not iPhone 4S specific. In fact, even if they had not released any new version of the iPhone they could still have gone ahead with iCloud and Siri and PC-less synching and all that. I still maintain that there's a difference between changing the whole phone between 3 and 4 and what happened between 4 and 4S, and even Apple seems to agree since they didn't call it the 5.

But as always, discussion with you rapidly becomes totally unproductive and pointless, so respectfully, count me out of this one.
Title: Re: AAPL - Apple Inc.
Post by: tombgrt on October 07, 2011, 04:29:27 AM
I'm so pre-ordering this:

http://9to5mac.com/2011/08/15/official-steve-jobs-biography-set-for-november-21-release-based-on-forty-interviews/

Isaacson is a great biographer.

http://www.guardian.co.uk/technology/2011/oct/07/steve-jobs-biography-official-release

Strike while the iron is hot I guess.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 07, 2011, 07:27:12 AM
Isaacson's biography of Ben Franklin was amazing. I can't wait to get my hands on this one, even if I'm very sad at the circumstances  :-[

Quote
Simon & Schuster's synopsis says the book is based on more than 40 interviews with Jobs conducted over two years – as well as interviews with more than a hundred family members, friends, adversaries, competitors, and colleagues. "Although Jobs co-operated with this book, he asked for no control over what was written nor even the right to read it before it was published. He put nothing off-limits. He encouraged the people he knew to speak honestly. And Jobs speaks candidly, sometimes brutally so, about the people he worked with and competed against.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 09, 2011, 10:51:45 PM
http://www.bloomberg.com/news/2011-10-10/death-of-jobs-increases-plea-for-release-of-apple-s-76-billion-cash-tech.html
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 10, 2011, 05:17:48 AM
http://www.bloomberg.com/news/2011-10-10/death-of-jobs-increases-plea-for-release-of-apple-s-76-billion-cash-tech.html

I trust Apple's decision on what to do with their cash much more than short-term impatient investors and moronic analysts.

Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 10, 2011, 11:39:47 AM
Like it said:

http://www.appleinsider.com/articles/11/10/10/inside_apples_iphone_4s_s_is_for_siri_voice_recognition.html
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 18, 2011, 02:05:23 PM
Apple misses:

http://www.bloomberg.com/news/2011-10-18/apple-s-results-miss-estimates-as-iphone-sales-fall-short-shares-decline.html

Stock down about 6% afterhours.

Good, goody, gumdrops  :) :) :)
Title: Re: AAPL - Apple Inc.
Post by: jeffmori7 on October 18, 2011, 03:14:18 PM
Apple still growing super fast. I don't care about analyst expectations!

Good wrteup here : http://www.macrumors.com/2011/10/18/apple-records-q4-2011-earnings-of-6-6b-on-28-3b-in-revenue-tops-100-billion-in-sales-for-fiscal-2011/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 21, 2011, 11:33:00 AM
Now, this is what I've been waiting for!!

http://www.loopinsight.com/2011/10/21/att-tremendous-tremendous-demand-for-iphone-3gs/
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 22, 2011, 11:18:12 AM
I'm loving my 4S so far. Switched from Android (I have an iPad as well, so I've been using iOS for a while even before getting an iPhone.

Seems like most of my friends who have Android phones are planning on switching to iPhone as well. Seems like Apple is selling every 4S they can produce right now.
Title: Re: AAPL - Apple Inc.
Post by: JAllen on October 22, 2011, 12:05:26 PM
I'm loving my 4S so far. Switched from Android (I have an iPad as well, so I've been using iOS for a while even before getting an iPhone.

Seems like most of my friends who have Android phones are planning on switching to iPhone as well. Seems like Apple is selling every 4S they can produce right now.

Why did you switch from Android DCG?
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 22, 2011, 01:11:32 PM
I'm loving my 4S so far. Switched from Android (I have an iPad as well, so I've been using iOS for a while even before getting an iPhone.

Seems like most of my friends who have Android phones are planning on switching to iPhone as well. Seems like Apple is selling every 4S they can produce right now.

Why did you switch from Android DCG?

My Android phone worked well for about a year, and has been awful for the last year. Part of the reason is the manufacturer (Motorola) stopped supporting my phone after only one year (meaning no operating system updates, and most of the apps on my phone did not work well on an older version of Android. This is a  big problem with Android. Manufacturers are cranking out around 20 Android phones a year (globally). They stop supporting the 'older' phones very quickly, even though phones are purchased with 2-year contracts.

I had been having a ton of problems with individual Android apps crashing, and apps generally taking about 20 seconds to load onto the screen each time I turned my phone on (from sleep mode) or pressed the home button). Apps such as the camera stopped working entirely months ago. I did a few restores, which, each time, worked for a week or two, and then my phone went back to working terribly.

Apps generally work better on iPhones, in my experience. Also, I have a Mac computer, so iCloud is a big draw for me. Being able to take a photo on my iPhone, and have it instantly be available in iPhoto on my computer (without having to upload anything, connect my phone to my computer or email myself photos to download) is great.

I should also point out that I use a lot of Google products as well. I use GMail (and Google contacts), Google Docs, Google Calendar, Google Voice Search, Google Shopping and other products, and the one reason I was hesitant about switching to iPhone was that I assumed Google products would not be integrated as well on the iPhone, compared to Android. I've honestly found so far that most Google products/apps actually work even better on the iPhone than on my Android phone. That could (at least partially) be due to me having a relatively old Android phone though.

Title: Re: AAPL - Apple Inc.
Post by: Uccmal on October 22, 2011, 02:57:12 PM
Dcg, I didn't know that about android phones, or at least motorola.  That for me would be a game ender.  I want the full contract out of my device.

Also, being only moderately savvy with this stuff these days, upgrading manually and restoring would just tick me off.
Title: Re: AAPL - Apple Inc.
Post by: MarioP on October 24, 2011, 04:07:29 PM
Some of my friends who owns androids phone also told me that the ecosystem is a mess. Since Android is open source you never know if an app will work on your version of android. It will probably discourage a lots of app developpers too because those multiplying versions is certainly a real headache if you want to sell to every owner of an android.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 24, 2011, 08:19:02 PM
Some of my friends who owns androids phone also told me that the ecosystem is a mess. Since Android is open source you never know if an app will work on your version of android. It will probably discourage a lots of app developpers too because those multiplying versions is certainly a real headache if you want to sell to every owner of an android.

I am beginning to notice a shift among my friends too. A lot of sworn Android users are getting the iPhone 4S.
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 08, 2011, 05:36:42 AM
Some interesting thoughts:

5 Reasons Google Is Sweating Apple:
http://www.fastcompany.com/1793401/google-is-really-scared-of-apple?partner=rss&utm_source=pulsenews&utm_medium=referral&utm_campaign=Feed%3A+fastcompany%2Fheadlines+%28Fast+Company+Headlines%29 (http://www.fastcompany.com/1793401/google-is-really-scared-of-apple?partner=rss&utm_source=pulsenews&utm_medium=referral&utm_campaign=Feed%3A+fastcompany%2Fheadlines+%28Fast+Company+Headlines%29)
Title: Re: AAPL - Apple Inc.
Post by: Smazz on November 08, 2011, 09:51:41 AM
Be wary of some of those APPS also "security" problems.

http://beta.finance.yahoo.com/news/apple-security-expert-finds-apps-004258010.html
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 08, 2011, 09:58:14 AM
iPhone 4S pre-orders sold out in only 10 minutes.
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 09, 2011, 05:00:03 AM
Jobs wins again...

http://www.macrumors.com/2011/11/09/adobe-discontinues-development-on-mobile-flash/?utm_medium=referral&utm_source=pulsenews (http://www.macrumors.com/2011/11/09/adobe-discontinues-development-on-mobile-flash/?utm_medium=referral&utm_source=pulsenews)
Title: Re: AAPL - Apple Inc.
Post by: Smazz on November 09, 2011, 12:29:48 PM
Jobs wins again!

I'll be honest, I kind of laughed when i saw that cause i wondered "how can a guy win when he just died" lol...

Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 10, 2011, 06:18:32 AM
I understand that HTML5 will do the same thing as Adobe Flash.  RIMM is moving to HTML5.  My two cents from a technical idiot.

RE: Iphone 4S - I tried a friend's SIRI the other night and it works incredibly well.  A giant leap forward in voice recognition.  We asked for the market cap of Linked In.  It googled that and delivered the answer to us.  Then one of us said:  "What about Netfliix?"  The system contextualized this in relation to the first question and gave us the Market cap of Netflix.  Two different voices.  Mighty impressive.  I hope they migrate the app to the IPAD2 soon.  I still think AAPL is fairly to overvalued though.
Title: Re: AAPL - Apple Inc.
Post by: Smazz on November 11, 2011, 01:34:33 PM
I understand that HTML5 will do the same thing as Adobe Flash.  RIMM is moving to HTML5.  My two cents from a technical idiot.

RE: Iphone 4S - I tried a friend's SIRI the other night and it works incredibly well. 
Al your friend may have been one of the luckier ones.

There was a video on - Market Watch I think - they were talking about the dissatisfaction with that service and the guy right in the middle of the video/interview was asking Siri questions and the replies were nothing related - it was actually kind of funny seeing them do it live.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 11, 2011, 01:44:19 PM
I understand that HTML5 will do the same thing as Adobe Flash.  RIMM is moving to HTML5.  My two cents from a technical idiot.

RE: Iphone 4S - I tried a friend's SIRI the other night and it works incredibly well.  A giant leap forward in voice recognition.  We asked for the market cap of Linked In.  It googled that and delivered the answer to us.  Then one of us said:  "What about Netfliix?"  The system contextualized this in relation to the first question and gave us the Market cap of Netflix.  Two different voices.  Mighty impressive.  I hope they migrate the app to the IPAD2 soon.  I still think AAPL is fairly to overvalued though.

RIMM plans to continue with its own version of Flash:
http://www.pcmag.com/article2/0,2817,2396171,00.asp#fbid=zRumLGnGrFd
Title: Re: AAPL - Apple Inc.
Post by: rmitz on November 11, 2011, 03:08:57 PM
I understand that HTML5 will do the same thing as Adobe Flash.  RIMM is moving to HTML5.  My two cents from a technical idiot.

RE: Iphone 4S - I tried a friend's SIRI the other night and it works incredibly well. 
Al your friend may have been one of the luckier ones.

There was a video on - Market Watch I think - they were talking about the dissatisfaction with that service and the guy right in the middle of the video/interview was asking Siri questions and the replies were nothing related - it was actually kind of funny seeing them do it live.

It's been working very, very well for making calls for me.  I just say "call Foo" and it hasn't messed up yet.  There is a learning curve for other stuff--it's not *really* natural yet.  But it's a lot closer than anything else has gotten so far.
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 11, 2011, 03:29:32 PM
Siri is designed to respond to specific commands, not to answer every single question. It is outstanding for things like scheduling appointments and making calls.' For some reason, people are executing it to be like Watson and are disappointed that it can't do everything.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 11, 2011, 04:39:57 PM
Siri is designed to respond to specific commands, not to answer single question. It is outstanding for things like scheduling appointments and making calls.' For some reason, people are executing it to be like Watson and are disappointed that it can't do everything.

Here's how Siri is designed:

http://www.quora.com/Siri-product/Why-is-Siri-important?__snids__=28204880%2C27763186%2C27461575#ans778959-ans788281-ans801950
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 14, 2011, 12:19:58 PM
Any logic behind the recent decline in AAPL beyond just all the momentum traders selling just because other people are selling?  Ii know there's some speculation about the Kindle Fire eating into iPad sales, but it sounds like they are selling every iPhone4s they can produce. Trading only 13x earnings and 9x conservative estimates.
Title: Re: AAPL - Apple Inc.
Post by: JAllen on November 14, 2011, 12:27:37 PM
Probable Thailand supply problems:

http://blogs.marketwatch.com/thetell/2011/11/14/ipad-overdue-for-a-price-cut/?mod=google_news_blog

I find the fact that iPad prices haven't been cut yet very interesting.  Also, they can release a low storage (8GB) wifi only iPad for prices substantially less than the original and not hurt our margins.


There's a better article going into much more detail about the Goldman note from yesterday somewhere but I can't find it.
Title: Re: AAPL - Apple Inc.
Post by: biaggio on November 14, 2011, 02:49:34 PM
Dont own any AAPL. Have bought a lot of different apple products.

Was at the mall on Saturday. The Apple Store was packed. There was a 150ft line of people outside the store. I asked "Is that the line to get in the store?" They said "No, that's the line up of people that want to buy the iphone today"

It was the busiest most packed store by far.

By the way, for what its worth, it did not feel like we were in a recession-lots of people out shopping + buying.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 14, 2011, 03:10:35 PM
Probable Thailand supply problems:

http://blogs.marketwatch.com/thetell/2011/11/14/ipad-overdue-for-a-price-cut/?mod=google_news_blog

I find the fact that iPad prices haven't been cut yet very interesting.  Also, they can release a low storage (8GB) wifi only iPad for prices substantially less than the original and not hurt our margins.


There's a better article going into much more detail about the Goldman note from yesterday somewhere but I can't find it.

The iPad was competitively priced right out of the gates. Competitors were having trouble matching the price until recently.
 
Since Apple had  experience with the iPhone, they knew where the right price points were. The iPhone was the first of its kind for Apple so it took them a couple of tries to get the price right.

If I am not mistaken, the iPad has lower margins than the iPhone. I wouldn't expect a price cut but better price segmentation. I'm guessing that they'll continue to sell the original version of the iPad for a pretty big discount once they release the iPad 3. The newer devices will maintain the higher price points. They're using this strategy for the iPhone and it seems to be working well.
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 15, 2011, 04:35:43 PM
Bob Iger named Director; Art Levinsn named Chairman of the Board:

http://www.huffingtonpost.com/2011/11/15/bob-iger-named-director-apple_n_1095825.html?1321394051&ncid=edlinkusaolp00000009 (http://www.huffingtonpost.com/2011/11/15/bob-iger-named-director-apple_n_1095825.html?1321394051&ncid=edlinkusaolp00000009)
Title: Re: AAPL - Apple Inc.
Post by: Liberty on December 05, 2011, 06:22:43 PM
From the rumor mill:

http://www.appleinsider.com/articles/11/12/05/apple_television_rumored_to_come_in_3_sizes_including_32_and_55.html
Title: Re: AAPL - Apple Inc.
Post by: valueInv on December 13, 2011, 04:45:24 PM
The money still seems to be in the IOS ecosystem:

http://blog.flurry.com/bid/79061/App-Developers-Bet-on-iOS-over-Android-this-Holiday-Season
Title: Re: AAPL - Apple Inc.
Post by: CanadianMunger on January 08, 2012, 03:47:22 PM
With apologies to Apple bulls:

Open Letter to Apple Shareholders

http://modeledbehavior.com/2012/01/06/open-letter-to-apple-shareholder/
Title: Re: AAPL - Apple Inc.
Post by: Liberty on January 10, 2012, 05:41:16 PM
http://online.wsj.com/article/SB10001424052970204124204577152503598025844.html

Quote
Eastman Kodak Co. filed patent lawsuits Tuesday against Apple Inc. and HTC Corp. as the struggling imaging company continued trying to mine its intellectual-property portfolio for much-needed cash.

Kodak also shook up its business structure, realigning itself into two units that will absorb parts of its shrinking film operations as well as the new printing technologies on which it is pinning its hopes for the future. Kodak said in a statement Tuesday that the changes, effective Jan. 1, would save money and hasten its turnaround efforts.

The company's shares were up 50% at 60 cents in 4 p.m. trading Tuesday on the New York Stock Exchange.
Title: Re: AAPL - Apple Inc.
Post by: DCG on January 11, 2012, 07:27:46 AM
Kodak has become a joke and has resorted to suing companies because they can't figure out any other ways to try to generate cash.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on February 14, 2012, 01:41:26 PM
Tim Cook on the law of large numbers:

http://www.asymco.com/2012/02/14/tim-cook-on-the-law-of-large-numbers/
Title: Re: AAPL - Apple Inc.
Post by: stahleyp on February 14, 2012, 03:02:24 PM
I wonder if Apple will break the trillion dollar market cap.  :o
Title: Re: AAPL - Apple Inc.
Post by: DCG on February 14, 2012, 03:20:04 PM
Apple is still very cheap to me.
Title: Re: AAPL - Apple Inc.
Post by: Hester on February 14, 2012, 06:14:01 PM
Kodak has become a joke and has resorted to suing companies because they can't figure out any other ways to try to generate cash.

You're right and unfortunately that business model isn't confined to Kodak. See TIVO.
Title: Re: AAPL - Apple Inc.
Post by: ExpectedValue on February 14, 2012, 06:22:08 PM
David Einhorn on Apple at the CIMA conference

-trades at a low multiple because historically investing in high multiple hardware cos ends up bad
-Apple creates recurring revenue streams by getting customers to adopt platform. iPod > iPhone > iPad > iTV (you start with one and typically buy the others)
-Once a customer, very likely to renew
-Every 2 years people buy a new device, so like an annuity
-Reality: apple is a high growth company at low multiple

On valuation:
-TV potential is being ascribed no value
-Trades at 390 ex-cash, should earn 45, so 8 P/E
-grew revs at 70%
-iPad, iPhone penetration still ongoing
-Large margin for error in value destruction
-No crazy M&A so far, R&D spending is controlled
-Hidden potential: they might revolutionize TV and create new device with high margins
-Don't need TV for Apple to be cheap right now.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on February 14, 2012, 11:04:48 PM
The full interview:

http://www.macrumors.com/2012/02/14/apple-ceo-tim-cook-speaks-at-goldman-sachs-technology-conference/
Title: Re: AAPL - Apple Inc.
Post by: Ben Graham on February 15, 2012, 12:55:10 AM
David Einhorn on Apple at the CIMA conference

-trades at a low multiple because historically investing in high multiple hardware cos ends up bad
-Apple creates recurring revenue streams by getting customers to adopt platform. iPod > iPhone > iPad > iTV (you start with one and typically buy the others)
-Once a customer, very likely to renew
-Every 2 years people buy a new device, so like an annuity
-Reality: apple is a high growth company at low multiple

On valuation:
-TV potential is being ascribed no value
-Trades at 390 ex-cash, should earn 45, so 8 P/E
-grew revs at 70%
-iPad, iPhone penetration still ongoing
-Large margin for error in value destruction
-No crazy M&A so far, R&D spending is controlled
-Hidden potential: they might revolutionize TV and create new device with high margins
-Don't need TV for Apple to be cheap right now.

I'd like to see how Steve Jobs cracked it. Bring on iTV
Title: Re: AAPL - Apple Inc.
Post by: Arden on February 15, 2012, 02:18:21 AM
"-trades at a low multiple because historically investing in high multiple hardware cos ends up bad
-Apple creates recurring revenue streams by getting customers to adopt platform. iPod > iPhone > iPad > iTV (you start with one and typically buy the others)
-Once a customer, very likely to renew
-Every 2 years people buy a new device, so like an annuity
-Reality: apple is a high growth company at low multiple
"

Like an annuity? yeah right. I don't see Apple automatically sending their new device to my home every year, I have to go to the store and buy it. If the new device hasn't advanced much since the last version- I won't bother. Apple has a huge competitor in itself. it is always competing with the future apple and the past apple. if they make a great and extremely innovative phone, the year afterwards they will have to compete with that phone to make people buy a new on .Apple must always innovate to stay in place.

About the loyalty and the likeliness to renew, I'm really not sure that's true.. Many people who used RIM for years and invested tons of time on getting used to the small ass keyboard changed brands without hesitation.

I think that phone operating systems aren't like PC OS, and if someone explains to you how to get to the menu screen and download apps on an android you can know everything there is to know about using a phone OS in 5 minutes.

BTW, is it true that you can't play most computre games on a mac?
Title: Re: AAPL - Apple Inc.
Post by: ExpectedValue on February 15, 2012, 02:46:23 AM
I think there's always going to be certain tech-savvy/extremely price sensitive/budget-oriented consumers that will not buy Apple products. Computer gaming is pretty irrelevant because I would argue that PC gaming as a percentage of video game profits is probably a lot smaller than it was 10 years ago and is on the decline. PC gaming I think will settle on a really niche audience while the masses consume games through consoles.

That being said, I think Apple's strategy works pretty well to get you to adopt their platform. I work in an environment with a lot of older people and they have adopted the iPad, iPhone, and will probably be purchasing a mac PC for personal use soon. Some have even went with the current Apple TV.

It seems like if they can get you to adopt their hardware platform, and eventually really incorporate iCloud to make you tie all your information and data onto the platform, they can create a good amount of stickiness as long as they keep coming out with quality products.

I think RIMM is a terrible example to bring up, because it's just not the same thing. They just had a phone. That's it. It's different when you're having a bunch of devices, tied to some sort of cloud, and apps that sync across those devices. We haven't seen anything like this before but I think it's where things are heading in tech, and Google seems to be trying to follow the same lead (android phones, chrome PCs, tablets, now even a home media center).
Title: Re: AAPL - Apple Inc.
Post by: Arden on February 15, 2012, 04:34:20 AM
Tariq- Android has a market share greater than apple's in the US in smartphones, and most PCs and laptops sold aren't apple's. You think that's because the majority of population is price sensitive and tech savvy?

 About computer games- I'm not sure there's less computer gamers now than there were a few years ago. Just think about games like World of warcraft, starcraft, starwars the old republic- all of them have millions of players and can be played only on PCs. more importantly- gamers are the ones that buy the most expensive computers, so you want them to be your customers. anyway, Im pretty sure there is a way to get around the problem and play most games on a mac.. I do however think Apple's threat in the PC OS market is credible enough for me not ot invest in MSFT..

Even if there would be some kind of cloud- what makes you think that it would be apple's? google is the dominant player online, has very strong Phone OS market share. and almost everybody have a Windows PC where most of their information is stored. Why is Apple a better candidate than any of them to create a cloud system? (there's something called a google tv, and you can watch netflix movies using Xbox..)

Even if I have an Iphone, why would I get a mac? learning to use a PC is hard (my parents are still learning to use a computer, both of them have iphones), learning a phone OS is easy- so if anything I would deduce that people would now buy a Windows phone, I think we both agree that's unlikely..

About the iTV- it does look interesting. I wonder if it'll work for them.help me understand - if say you buy a movie on the iTV (you can only buy movies? some are for free?), you can watch it on your iphone or ipad later for free? and if you have an android you can't?
 I wonder how they dealt with the copyright issues..
Title: Re: AAPL - Apple Inc.
Post by: Hester on February 15, 2012, 06:39:43 AM
David Einhorn on Apple at the CIMA conference

-trades at a low multiple because historically investing in high multiple hardware cos ends up bad
-Apple creates recurring revenue streams by getting customers to adopt platform. iPod > iPhone > iPad > iTV (you start with one and typically buy the others)
-Once a customer, very likely to renew
-Every 2 years people buy a new device, so like an annuity
-Reality: apple is a high growth company at low multiple

I'd like to ask Einhorn "why" on all those points. Why does Apple create recurring revenue streams and new devices people want to constantly buy? Has that reason, perhaps, passed away.
Title: Rare interview with Jony Ive
Post by: tengen on March 12, 2012, 01:59:26 PM
The London Evening Standard has an interview with Jonathan Ive, the creative genius behind Apple's iProducts:

http://www.thisislondon.co.uk/lifestyle/london-life/sir-jonathan-ive-the-iman-cometh-7562170.html

There's some interesting insight into Apple's design culture.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on March 18, 2012, 06:56:29 PM
Dividend coming?

http://www.bloomberg.com/news/2012-03-18/apple-to-discuss-outcome-of-discussions-over-handling-its-cash.html
Title: Re: AAPL - Apple Inc.
Post by: DCG on March 18, 2012, 07:32:49 PM
That's my assumption. Don't see them announcing any share buybacks or major acquisitions.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on April 02, 2012, 03:01:12 PM
Apple's products continue to be unimpressive post-Jobs:

http://www.informationweek.com/news/mobility/smart_phones/232800138
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/04/02/bloomberg_articlesM1UNR41A74E901-M1VDN.DTL

 ;) ;)
Title: Re: AAPL - Apple Inc.
Post by: Hester on April 02, 2012, 04:57:48 PM
Apple's products continue to be unimpressive post-Jobs:

http://www.informationweek.com/news/mobility/smart_phones/232800138
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/04/02/bloomberg_articlesM1UNR41A74E901-M1VDN.DTL

 ;) ;)

I wouldn't expect the popularity of Apple's existing products to crash just because Jobs died. But, just wait until the technology advances and they have to actually create some new products without Jobs.
Title: Re: AAPL - Apple Inc.
Post by: brker_guy on April 02, 2012, 05:25:30 PM
http://allthingsd.com/20120402/iphone-outselling-all-other-smartphones-combined-at-sprint-and-att/?reflink=ATD_yahoo_ticker

"iPhone Outselling All Other Smartphones Combined at Sprint and AT&T"

“In fact, we believe iPhones are outselling all other smartphones combined at Sprint and AT&T and selling at roughly equal volume to all Android smartphones at Verizon.”

Title: Re: AAPL - Apple Inc.
Post by: JAllen on April 02, 2012, 11:28:32 PM
Apple's products continue to be unimpressive post-Jobs:

http://www.informationweek.com/news/mobility/smart_phones/232800138
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/04/02/bloomberg_articlesM1UNR41A74E901-M1VDN.DTL

 ;) ;)

I know!  What horrible products!: http://www.washingtonpost.com/business/economy/consumer-reports-recalibrates-excellent-rating-for-new-ipad/2012/04/02/gIQAU0AprS_story.html?tid=pm_business_pop
Title: Re: AAPL - Apple Inc.
Post by: valueInv on April 03, 2012, 12:37:31 AM
If you segment the US market by price and operator, the iPhone covers about 2/3rds of it.
Over the next few years, we can expect Apple to cover close to 100% of it. What would the marketshare
look like then?

$0$99$199+
ATTYYY
VerizonNYY
SprintNNY
T-MobileNNN
Metro, Cricket & OthersNNN
Title: Re: AAPL - Apple Inc.
Post by: valueInv on April 12, 2012, 01:17:28 PM
In my view, this is one of Apple's biggest problems:

http://www.businessweek.com/articles/2012-04-12/apple-and-the-revenge-of-the-phone-carriers

If I were Tim Cook, I would make fixing the subsidy issue the number one priority. The operators are  the reason why Android took off on smartphone market but is nowhere in the tablet market.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on April 20, 2012, 07:51:37 PM
Great article on Apple and the law of large numbers:

http://www.networkworld.com/community/blog/apple-and-myth-law-large-numbers

Couldn't agree more.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on April 21, 2012, 01:02:26 PM
Real-time IOS Vs Android usage stats:

http://labs.chitika.com/mobiledominance/

Their sampling is probably not very good but others have reported similar stats.
This also correlates stats from Flurry showing that developers make 4 times the amount of
money on IOS compared to Android.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on April 24, 2012, 10:08:07 PM
The law of large numbers seems to be slowing Apple down:

http://online.wsj.com/article/SB10001424052702303459004577364293267650950.html

 ;)
Title: Re: AAPL - Apple Inc.
Post by: Parsad on April 24, 2012, 10:37:51 PM
Just crazy what Jobs created!  A monster business and generating profits that no other corporation comes close to.  Numbers are just nuts.  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: jeffmori7 on April 25, 2012, 04:21:05 AM
Yep..the largest market cap in the world..and still growing near a 100% YoY..crazy!

Substracting cash, still valued at 10 times profit.
Title: Re: AAPL - Apple Inc.
Post by: orion on April 25, 2012, 05:32:13 AM
Up 10% in pre-market trading. This increase in market cap alone equals about 1.5x DELL´s total market cap. Amazing.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on April 25, 2012, 08:17:02 AM
And there is more to come.
Title: Re: AAPL - Apple Inc.
Post by: DCG on April 25, 2012, 08:30:10 AM
99% of analysts and talking heads out there are complete morons.

I had CNBC on for a few minutes yesterday and it was one analyst after another talking about how Apple is dead and how 'the price action of the stock indicates the company is in shambles'. Guy Adami and the rest of the Fast Money idiots were just as moronic. How do any of the idiots on CNBC all day make any money?

Title: Re: AAPL - Apple Inc.
Post by: BargainValueHunter on April 25, 2012, 08:54:36 AM
I think the question is not "what is the next development in mobile technology that will change the game as much as the iPhone's touch screen a few years ago?" but "will it come from Apple?"

Title: Re: AAPL - Apple Inc.
Post by: txlaw on April 25, 2012, 09:38:22 AM
The iPhone unit sequential change is the most astounding part of the numbers.  The drop was really small for being out of the holiday season. 

I wonder how much of that is due to the Sprint commitment?  Presumably, international sales also comprised a disproportionate percentage of those unit sales.  Any anecdotal evidence from Sprint users and people abroad could be informative. 

For you guys in Asia, for example, are you seeing the iPhone become a hot commodity?  Which version -- the 3Gs?
Title: Re: AAPL - Apple Inc.
Post by: txlaw on April 25, 2012, 10:08:21 AM
Never mind, just skimmed CC transcript.  Looks like the 4S is probably the hot seller in Asia.

One thing I noticed when I read the CC is that the analysts who cover AAPL are not actually dumb.  They ask very good questions.  It's just dumb that they have to put price targets on the stock, try to predict earnings, and ignore the fundamental concepts of business investing when making recommendations.
Title: Re: AAPL - Apple Inc.
Post by: DCG on April 25, 2012, 11:13:19 AM
Never mind, just skimmed CC transcript.  Looks like the 4S is probably the hot seller in Asia.

One thing I noticed when I read the CC is that the analysts who cover AAPL are not actually dumb.  They ask very good questions.  It's just dumb that they have to put price targets on the stock, try to predict earnings, and ignore the fundamental concepts of business investing when making recommendations.

The problem is that most analysts make predictions and recommendations based on what individual stocks are doing at any moment, not what the actual companies are doing. Analysts rush to raise their price targets when stocks go up, and quickly cut their price targets when stocks go down. I hate listening to these people, but look to take advantage of good buying opportunities created by stupid comments from analysts and pundits (such as them harping on iPhone sales being down in this last quarter compared to Q4 of 2011, which was a holiday shopping period and included the release of the iPhone 4S).
Title: Re: AAPL - Apple Inc.
Post by: valueInv on April 26, 2012, 01:03:32 PM
Now, thats a moat!!

http://www.pcmag.com/article2/0,2817,2403623,00.asp
Title: Re: AAPL - Apple Inc.
Post by: valueInv on May 03, 2012, 09:10:26 AM
Apple likely regaining marketshare in the US:

http://www.businessinsider.com/apples-us-smartphone-marketshare-versus-android-for-q1-2012-5
http://www.appleinsider.com/articles/12/05/03/kindle_fire_shipments_drop_sharply_as_apples_ipad_takes_68_tablet_share.html

What is particularly interesting about the smartphone marketshare is that it is the second quarter for the iPhone 4S - a quarter where there is a sharp fall off in sales.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on May 23, 2012, 05:45:54 PM
Great interview with Jony Ive. Explains some of Apple's magic:

http://www.telegraph.co.uk/technology/apple/9283486/Jonathan-Ive-interview-Apples-design-genius-is-British-to-the-core.html
Title: Re: AAPL - Apple Inc.
Post by: Liberty on June 01, 2012, 10:53:35 AM
Wow

http://www.theatlantic.com/technology/archive/2012/05/wow-apple-turns-over-its-inventory-once-every-5-days/257915/

Guess they really don't want a big supply chain disruption, though..
Title: Re: AAPL - Apple Inc.
Post by: brker_guy on June 01, 2012, 01:36:14 PM
Great interview with Tim Cook:

http://allthingsd.com/20120529/live-apple-ceo-tim-cooks-first-time-in-the-hot-seat-at-d/
Title: Re: AAPL - Apple Inc.
Post by: Grenville on June 01, 2012, 01:46:13 PM
Great interview with Tim Cook:

http://allthingsd.com/20120529/live-apple-ceo-tim-cooks-first-time-in-the-hot-seat-at-d/

Thanks!
Title: Re: AAPL - Apple Inc.
Post by: beerbaron on June 01, 2012, 01:54:04 PM
Wow

http://www.theatlantic.com/technology/archive/2012/05/wow-apple-turns-over-its-inventory-once-every-5-days/257915/

Guess they really don't want a big supply chain disruption, though..

The guys is probably calculating the turnover with the software, music, services, etc..

BeerBaron
Title: Re: AAPL - Apple Inc.
Post by: Liberty on June 11, 2012, 12:20:10 PM
Tons of really nice stuff announced by Apple. Nothing that will shock the market, but a lot of things that will keep Apple ahead of competitors. The new Macbook Pros certainly seem like the best laptops on the market right now, and iOS 6 seems like the best mobile OS.

http://www.apple.com/macbook-pro/

Title: Re: AAPL - Apple Inc.
Post by: racemize on June 11, 2012, 03:43:47 PM
Tons of really nice stuff announced by Apple. Nothing that will shock the market, but a lot of things that will keep Apple ahead of competitors. The new Macbook Pros certainly seem like the best laptops on the market right now, and iOS 6 seems like the best mobile OS.

http://www.apple.com/macbook-pro/

that macbook pro looks pretty great, I have to say.  If only I didn't want to buy a bunch of stocks at the same time...
Title: Re: AAPL - Apple Inc.
Post by: bargainman on June 11, 2012, 08:21:16 PM
Looks like they got rid of their 17" Macbook Pro option...
Title: Re: AAPL - Apple Inc.
Post by: tradevestor on June 12, 2012, 09:50:24 AM
http://www.zdnet.com/blog/cell-phones/android-ics-already-offers-more-than-what-is-coming-in-ios-6/7769

Summary: It looks like Apple’s days of blowing people away with new features and functions has cooled now that solid platforms like Ice Cream Sandwich and Windows Phone exist.
Title: Re: AAPL - Apple Inc.
Post by: DCG on June 12, 2012, 12:22:31 PM
http://www.zdnet.com/blog/cell-phones/android-ics-already-offers-more-than-what-is-coming-in-ios-6/7769

Summary: It looks like Apple’s days of blowing people away with new features and functions has cooled now that solid platforms like Ice Cream Sandwich and Windows Phone exist.

Regarding Android's turn-by-turn directions - while Android has had this for a long time, when I had an Android phone, the GPS directions often told me my location was in the middle of NY state (I live in Vermont) and frequently told me to turn down non-existing roads. I'm hoping Apple's turn-by-turn directions are better than this.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on June 12, 2012, 06:29:34 PM
Not very consequential, but it looks like Ping is going the way of the dodo. Not surprising, as I've never heard of anyone using it.

http://allthingsd.com/20120612/apples-ping-to-end-with-a-thud-in-next-release-of-itunes/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on June 26, 2012, 11:12:53 PM
Big win for Apple in the courts:

http://gigaom.com/apple/apple-wins-preliminary-injunction-on-u-s-sales-of-samsung-galaxy-tab-10-1/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on June 29, 2012, 05:24:48 PM
2nd big win for Aapl:

http://www.reuters.com/article/2012/06/29/us-apple-samsung-idUSBRE85S1J320120629
Title: Re: AAPL - Apple Inc.
Post by: Liberty on July 24, 2012, 03:33:47 PM
http://www.apple.com/pr/library/2012/07/24Apple-Reports-Third-Quarter-Results.html

Another excellent quarter, as usual.

Quote
CUPERTINO, California—July 24, 2012—Apple® today announced financial results for its fiscal 2012 third quarter ended June 30, 2012. The Company posted quarterly revenue of $35.0 billion and quarterly net profit of $8.8 billion, or $9.32 per diluted share. These results compare to revenue of $28.6 billion and net profit of $7.3 billion, or $7.79 per diluted share, in the year-ago quarter. Gross margin was 42.8 percent compared to 41.7 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s revenue.

The Company sold 26.0 million iPhones in the quarter, representing 28 percent unit growth over the year-ago quarter. Apple sold 17.0 million iPads during the quarter, an 84 percent unit increase over the year-ago quarter. The Company sold 4.0 million Macs during the quarter, a two percent unit increase over the year-ago quarter. Apple sold 6.8 million iPods, a 10 percent unit decline from the year-ago quarter.

Apple’s Board of Directors has declared a cash dividend of $2.65 per share of the Company’s common stock. The dividend is payable on August 16, 2012, to stockholders of record as of the close of business on August 13, 2012.

“We’re thrilled with record sales of 17 million iPads in the June quarter,” said Tim Cook, Apple’s CEO. “We’ve also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we’ve got in the pipeline.”

“We’re continuing to invest in the growth of our business and are pleased to be declaring a dividend of $2.65 per share today,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $7.65.”
Title: Re: AAPL - Apple Inc.
Post by: tombgrt on July 24, 2012, 03:38:23 PM
Not sure if posted already but thought it was a good read:

http://www.obermeyerasset.com/images/uploads/2012_March_Commentary_1.pdf

Basically my view on AAPL and a lot of other companies.
Title: Re: AAPL - Apple Inc.
Post by: zarley on July 24, 2012, 03:56:20 PM
Not sure if posted already but thought it was a good read:

http://www.obermeyerasset.com/images/uploads/2012_March_Commentary_1.pdf

Basically my view on AAPL and a lot of other companies.

That's an excellent and succinct argument for not holding AAPL.  Thanks for sharing.
Title: Re: AAPL - Apple Inc.
Post by: JAllen on July 24, 2012, 04:23:49 PM
Not sure if posted already but thought it was a good read:

http://www.obermeyerasset.com/images/uploads/2012_March_Commentary_1.pdf

Basically my view on AAPL and a lot of other companies.

I didn't find anything specifically about Apple's products and how there was something better than the iPhone/iPad out there in that article!  It was full of the usual mumbo-jumbo about Apple's size, comparisons to other large companies, and how all other tech companies have reached their zenith.  People seem to be totally close-minded to an unprecedentedly large and growing company which is Apple.  Of course Apple's reign will end, but there's very little evidence of that occurring in the near-medium term.  You actually could have predicted RIM's demise in 2008 after the iPhone came out.  I can remember the first time I ever played with an iPhone; I was giddy with amazement at being able to surf the internet with something the size of my hand and immediately wanted one.  If there's something that's clearly better than the iPhone out there like the iPhone was to the Blackberry in 2008 (a year after it was out and you could clearly see the popularity of the iPhone) please let me know.  So far, the only thing I see is many people with products nearly as good as the iPhone and iPad but not as good - primarily because of the multiple product ecosystem/stickiness and fairly large lead with third-party apps I believe Apple has. 

Why is it so hard to believe that yes, Apple is an enormous company that has products that benefit nearly all middle-class people, only a few people have them, and can therefore grow rapidly for a while longer?
Title: Re: AAPL - Apple Inc.
Post by: tombgrt on July 24, 2012, 04:50:00 PM
You are missing the point completely. It's about 'not knowing' and how it doesn't justify an investment for them (and myself) because of that.
Title: Re: AAPL - Apple Inc.
Post by: tombgrt on July 24, 2012, 04:59:33 PM
Why would you take the bet that they will defy history? You can most likely get the same returns with companies that aren't subject to these kind of unknowns.

Oh and yes, I've actually heard plenty of people say that Samsung's galaxy S3 is much better than the latest Iphone. I've also noticed that smartphones from competitors are becoming increasingly higher quality for much much lower prices than anything that Apple sells. The difference is slinking month after month. Hell, I've heard people complaining about Apple's ecosystem (Itunes!). I'm not saying Apple won't grow (both in revenue as profits) but am just trying to explain how natural market forces will sooner or later strike a big dent in Apple's smartphone/tablet market shares, margins, ... and that we could even see the first signs of it already today. Hindsight is too easy.

To be absolutely clear: I'm neither bearish or bullish on AAPL, I just don't know.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on July 24, 2012, 05:02:23 PM
Not sure if posted already but thought it was a good read:

http://www.obermeyerasset.com/images/uploads/2012_March_Commentary_1.pdf

Basically my view on AAPL and a lot of other companies.

I didn't find anything specifically about Apple's products and how there was something better than the iPhone/iPad out there in that article!  It was full of the usual mumbo-jumbo about Apple's size, comparisons to other large companies, and how all other tech companies have reached their zenith.  People seem to be totally close-minded to an unprecedentedly large and growing company which is Apple.  Of course Apple's reign will end, but there's very little evidence of that occurring in the near-medium term.  You actually could have predicted RIM's demise in 2008 after the iPhone came out.  I can remember the first time I ever played with an iPhone; I was giddy with amazement at being able to surf the internet with something the size of my hand and immediately wanted one.  If there's something that's clearly better than the iPhone out there like the iPhone was to the Blackberry in 2008 (a year after it was out and you could clearly see the popularity of the iPhone) please let me know.  So far, the only thing I see is many people with products nearly as good as the iPhone and iPad but not as good - primarily because of the multiple product ecosystem/stickiness and fairly large lead with third-party apps I believe Apple has. 

Why is it so hard to believe that yes, Apple is an enormous company that has products that benefit nearly all middle-class people, only a few people have them, and can therefore grow rapidly for a while longer?
+1.

Because it makes so much sense that a company with less than 10% share in the worldwide phone market will stop growing tomorrow. ;)

Because when competitors catch up a tech product, margins get squeezed. Like how it happened with the iPod and the Mac. Like how Google's margins got squeezed when Bing caught up with it. ;) 

Because it is unfathomable that Apple could successfully enter new markets now that Jobs is dead and all of Apple's engineers are sitting around in Cupertino drinking tea.  ;)

Title: Re: AAPL - Apple Inc.
Post by: tombgrt on July 24, 2012, 05:09:27 PM
Are you guys doing this on purpose?  ???

Unpredictable future, even if very reasonable chance of succeeding in next 5-10 years -> doesn't justify an investment. The end.
Title: Re: AAPL - Apple Inc.
Post by: JAllen on July 24, 2012, 05:16:04 PM
Are you guys doing this on purpose?  ???

Unpredictable future, even if very reasonable chance of succeeding in next 5-10 years -> doesn't justify an investment. The end.

My time horizon isn't 10+ years like Buffett's is.  I'm not managing $250B and don't have $20B flowing to me each year.  I constantly look for evidence that Apple's moat has been crossed.  It's absolutely inevitable; I just don't see any evidence for it yet.  In 2008, there was ample evidence that RIM's had been crossed, and perhaps a hole had been drilled in the castle.  I don't see it with Apple yet.  And yes, my girlfriend bought an Android (Nexus S I believe) - it cost less and she got a $30/month plan.  We'll see, and I love the discussion!

Title: Re: AAPL - Apple Inc.
Post by: JAllen on July 24, 2012, 05:17:36 PM
Why would you take the bet that they will defy history? You can most likely get the same returns with companies that aren't subject to these kind of unknowns.

Oh and yes, I've actually heard plenty of people say that Samsung's galaxy S3 is much better than the latest Iphone. I've also noticed that smartphones from competitors are becoming increasingly higher quality for much much lower prices than anything that Apple sells. The difference is slinking month after month. Hell, I've heard people complaining about Apple's ecosystem (Itunes!). I'm not saying Apple won't grow (both in revenue as profits) but am just trying to explain how natural market forces will sooner or later strike a big dent in Apple's smartphone/tablet market shares, margins, ... and that we could even see the first signs of it already today. Hindsight is too easy.

To be absolutely clear: I'm neither bearish or bullish on AAPL, I just don't know.

iTunes is very horrible software, agreed.  It's also an increasingly smaller and unimportant part of the ecosystem. 
Title: Re: AAPL - Apple Inc.
Post by: valueInv on July 24, 2012, 05:28:05 PM
Why would you take the bet that they will defy history? You can most likely get the same returns with companies that aren't subject to these kind of unknowns.

Oh and yes, I've actually heard plenty of people say that Samsung's galaxy S3 is much better than the latest Iphone. I've also noticed that smartphones from competitors are becoming increasingly higher quality for much much lower prices than anything that Apple sells. The difference is slinking month after month. Hell, I've heard people complaining about Apple's ecosystem (Itunes!). I'm not saying Apple won't grow (both in revenue as profits) but am just trying to explain how natural market forces will sooner or later strike a big dent in Apple's smartphone/tablet market shares, margins, ... and that we could even see the first signs of it already today. Hindsight is too easy.

To be absolutely clear: I'm neither bearish or bullish on AAPL, I just don't know.

Which people are you talking to?
http://techcrunch.com/2012/07/23/ios-soars-ahead-of-android-development-as-apple-quietly-makes-move-into-the-enterprise-market
http://blog.flurry.com/bid/85911/App-Developers-Signal-Apple-Allegiance-Ahead-of-WWDC-and-Google-I-O

App store revenues are actually accelerating:
http://techcrunch.com/2012/07/24/apple-app-store-hits-650000-apps-250000-designed-for-ipad-5-5b-paid-out-to-devs/

BTW:
http://www.bloomberg.com/news/2012-06-27/apple-said-to-prepare-itunes-overhaul-improving-storage-sharing.html
Title: Re: AAPL - Apple Inc.
Post by: premfan on July 24, 2012, 05:51:11 PM
Apple is the dominant player in the biggest market in the history of mankind. The mobile market is in its infancy. No one will come close to putting a dent in apples market share for at least another business cycle.


disclosure : no position 
Title: Re: AAPL - Apple Inc.
Post by: oddballstocks on July 24, 2012, 06:00:10 PM
I can remember the first time I ever played with an iPhone; I was giddy with amazement at being able to surf the internet with something the size of my hand and immediately wanted one.  If there's something that's clearly better than the iPhone out there like the iPhone was to the Blackberry in 2008 (a year after it was out and you could clearly see the popularity of the iPhone) please let me know.  So far, the only thing I see is many people with products nearly as good as the iPhone and iPad but not as good - primarily because of the multiple product ecosystem/stickiness and fairly large lead with third-party apps I believe Apple has. 


I had a similar experience.  I was backpacking with my brother and he had the original iPhone.  We were near a highway and he pulled up a weather radar.  It was on one bar of Edge and probably took a half hour, but I was blown away.  The ability to access something like that in a remote area blew my mind, I had the same feeling, I had to get one as well.  I haven't been let down so far.
Title: Re: AAPL - Apple Inc.
Post by: DCG on July 24, 2012, 06:19:50 PM
I Wish just one news source would post a headline like 'Analysts did a bad job at predicting Apple's earnings; another strong quarter for Apple', compared to the current headline about them missing estimates. this is of course not just true for Apple - same thing when analysts always blame the company every time their predictions are wrong.
Title: Re: AAPL - Apple Inc.
Post by: alertmeipp on July 24, 2012, 06:57:53 PM
maybe this will end up like auto market, human invention to the man-kind; but companies in there won't make much money at the end.

IF that's the case, Prem's bet on RIMM is a high-risk low return one.
Title: Re: AAPL - Apple Inc.
Post by: stahleyp on July 24, 2012, 07:05:00 PM
For the bulls on Apple, what will make you sell it? How do you know that you won't get into the same mindset trap as RIMM investors? The whole "oh, well, they'll come back. The stock is down 10% now. I'm not gonna sell" philosophy. I think you can successfully trade it, but you have to keep that in mind - you're trading it and not investing (well, in the value investing sense). I have no position but look at it like this (as others have already mentioned).

They stock isn't very expensive by most valuation metrics (that's a plus).
It's the top company in one of the world's fastest growing industries (plus).
It's relatively "sticky" people love the company and products (plus).

The visionary is gone. Say what you will about the engineers and Cook, but from almost everything I've read, Jobs is the main pillar of this company and he's no longer around (negative).
There are a ton of companies who want that market share - huge, huge competition (negative)
The carriers would like to lower their costs and would like to see Apple successful, but not too, too successful (negative)
Leaders can get destroyed in a hurry (RIMM, NOK, XRX, Netscape, etc) in these disruptive industries. (negative).
It's pretty hard to move the market cap of a $600 billion company (negative).

I suppose it's all about where you want to lay your chips. No one, outside of Apple, can predict where this company will be in 10 years. As anything else, the investment might work out splendidly. Apple might continue to innovate like crazy and people will continue to pay high prices for their products....or maybe not. For what it's worth, I've been wrong on Apple for a long time now. I'm shocked they have continued to innovate like the have.  I'm comfortable being wrong though.
Title: Re: AAPL - Apple Inc.
Post by: premfan on July 24, 2012, 07:10:31 PM
Good point. The middlemen who service the mobile market will be the big winners.  I like prem's investment in rim. Its high reward low risk in my opinion. As long as they survive as a company its a homerun. The mobile market will keep getting larger. I see no end to the mobile market. I cant function without my smart phone.  The main issue is its going to take a looooong time for a turnaround. If no turnaround they will be sold. Averaging down for prem is a great idea. 
Title: Re: AAPL - Apple Inc.
Post by: premfan on July 24, 2012, 07:21:00 PM
Hi stahley,

Great post. A couple things:


-Huge competition creates more liquidity to the market hence a future bigger market. The market leader in the future will have a bigger piece of the pie cause of all the liquidity thrown at it.

-Yes leaders get destroyed in disruptive industries all the time. The key is the product hits a market that is much superior to the market leader. I see no product that currently competes with apples products.


Title: Re: AAPL - Apple Inc.
Post by: stahleyp on July 25, 2012, 05:12:39 AM
Good insights, too, premfan.

I ran across this article...kinda funny.

http://www.cnn.com/2012/07/25/opinion/obeidallah-iphone/index.html?hpt=hp_c3
Title: Re: AAPL - Apple Inc.
Post by: berkshiremystery on July 25, 2012, 05:39:01 AM
Good insights, too, premfan.

I ran across this article...kinda funny.

http://www.cnn.com/2012/07/25/opinion/obeidallah-iphone/index.html?hpt=hp_c3

Hilarious,...  ;D
I laughing my ass off,... very funny point of view.

Even our worst moment, the time I accidentally dropped the iPhone in the toilet bowl, didn't slow us down. Despite everyone saying my iPhone would never be the same after this incident, it was better than ever....

....However, when I'm eligible for a new phone in six months, I can't promise I'll stay with my iPhone. But if I do buy a new phone, I'll probably change my service carrier to help me forget. Not that I'll ever be able to.

Title: Re: AAPL - Apple Inc.
Post by: DCG on July 25, 2012, 06:57:53 AM
For the bulls on Apple, what will make you sell it? How do you know that you won't get into the same mindset trap as RIMM investors? The whole "oh, well, they'll come back. The stock is down 10% now. I'm not gonna sell" philosophy.

This sounds like a momentum investors approach. Sell just because other people sell?

This is the same thing that happened last year in the quarter before the new iPhone release. Stock dropped 5% when they missed earnings due to people waiting for the new iPhone. Demand for the iPhone 5 still seems incredibly strong.

-Seems like Europe is an issue right now though.
Title: Re: AAPL - Apple Inc.
Post by: stahleyp on July 25, 2012, 07:10:24 AM
For the bulls on Apple, what will make you sell it? How do you know that you won't get into the same mindset trap as RIMM investors? The whole "oh, well, they'll come back. The stock is down 10% now. I'm not gonna sell" philosophy.

This sounds like a momentum investors approach. Sell just because other people sell?

This is the same thing that happened last year in the quarter before the new iPhone release. Stock dropped 5% when they missed earnings due to people waiting for the new iPhone. Demand for the iPhone 5 still seems incredibly strong.

-Seems like Europe is an issue right now though.

I wouldn't suggest to sell just because other people are selling. If you know more than other market participants know, it might be a good reason to back up the truck and add more. However, I fail to see how anyone can know, with a high degree of certainty anyway, what the future will bring in an industry like this. Many, many have fallen.  Will Apple still reign 5 years from now? The odds are against it, but that doesn't mean they won't still be victorious. I really have no idea.
Title: Re: AAPL - Apple Inc.
Post by: VAL9000 on July 25, 2012, 07:21:10 AM
My thoughts on Apple are..

Long term, they will continue to be pressured by stiffening competition.  This will result in margin compression or lower market share over time.  What time-frame looks like, we have no idea, but it's probably more than a year and less than ten.  Feel free to argue this all you want, but I take it as an economic axiom: high margin businesses attract competitors, who then destroy industry profits.  We can take about moat this and brand that..  but really, this is consumer electronics.  We're talking about the industry that included the Walkman, Beta, the Discman, Atari 2600, Nintendo NES, and the Mac.  None of which are relevant today.  None of which reigned for more than 10 years.  iProducts and Beta are probably closest in analogy, where iProducts are first mover, better tech, and run on a proprietary system that is tightly controlled..  making Android the VHS du jour.  But I'll leave it at that because board members tend to get very worked up over analogies..  it's just interesting to me.

Short term, you're betting on product cycle.  The most recent quarter perfectly reflects that.  iPhone sales are down from 35mm Q1 to 26mm Q2.  What is the reason for this?  Survey says: delaying purchase until the next version of the product is released.  This is remarkable.  You've got a 9mm unit sales step down on an anticipated and as-yet-unannounced product release.  Steve Jobs said that he prefers the consumer market because people vote with their wallets.  Well, here's at least $6bn in revenue that depends on the perceived quality of the iPhone 5.  Keep in mind that those 9mm people have said "I am not buying Apple today" and not "I am buying Apple in 3 months time."  The decision to buy hasn't been made yet, only the decision to not buy.  In other words, Apple must win all of these customers again with the release of iPhone 5.  I suspect that an even greater number of purchases will be delayed this quarter, further upping the ante.

I'm with tombgrt on this:  The long term picture isn't clear and the short term picture is a betting man's game.  Well maybe I'm more specifically bearish on AAPL in the long term, and in the short term it's interesting fun but not my cup of tea.
Title: Re: AAPL - Apple Inc.
Post by: jjlin on July 25, 2012, 08:10:23 AM
I always think of the Munger quote about evaluating barriers to entry — in this case, if you gave anyone in the world even a trillion dollars, there's no way to even get close to what Apple is doing and will continue to do for the intermediate term.

What they are doing is incredibly, incredibly difficult and they have a lock on most of the key resources required to do it: Everything from the components to the manufacturing to even the shipping, not to mention the design talent (nobody comes close), the brand, the distribution network, customer loyalty (I believe a recent survey showed 94% of iPhone owners will buy another iPhone: http://thenextweb.com/apple/2011/08/04/94-of-iphone-users-will-buy-another-most-blackberry-users-just-want-one-already/ ), and most importantly, developer mindshare (Microsoft in the PC era, anyone?). Anyone that does mobile development starts with iOS with Android second. Oh yeah, and the whole iPad thing — creating and utterly dominating the fastest-adopted consumer technology device of all time. When you are making all the profit in an industry and your competitors are struggling to keep up, and you are still dominating even when they are willing to sell at a breakeven to a loss (Kindle fire, Nexus 7), I would say you have a pretty strong position.

This company has been setting the pace for the last five years or so and everyone in the industry has been scrambling to figure out how to compete with them and coming up short. That this company trades at a P/E ratio of under 14, not including the $117B in cash, given all this is a bit puzzling unless the explanation is most people fail to understand how utterly they dominate the competition.

Disclosure: I woke up earlier than normal to sell some stuff in order to add to my AAPL position this morning anticipating folks reacting to earnings.

"For the bulls on Apple, what will make you sell it? How do you know that you won't get into the same mindset trap as RIMM investors? The whole "oh, well, they'll come back. The stock is down 10% now. I'm not gonna sell" philosophy."


Stuff to look for:
- The products are no longer great
- Loss of developer mindshare
- Everyone else comes around to my understanding of how and why this company is impossible to beat  ;)
Title: Re: AAPL - Apple Inc.
Post by: tombgrt on July 25, 2012, 08:43:30 AM
You are underestimating what $1 trillion dollars can do, especially in technology where things are constantly changing. It's almost arrogant to believe that AAPL will always be on top of future technology that we can't even perceive of yet. They don't have to screw up big to lose market share, a temporary loss of focus or slowdown in innovation in its short product cycles for ex. is enough to make them lose part of the cake. No brand or "customer loyalty" will save them if something better comes along, neither will their distribution network (how is that an advantange for the consumer that will keep competitors out?). This isn't KO. They have an ecosystem but how many people are really bound to it that they can't change? A minority imo. This isn't MSFT's windows + office.
It's bound to happen sooner or later imo and I doubt wether it will be foreseeable.

Apple sure has this god-like status in the US... I don't feel it here. You have what you could call 'believers' (most often bound to the ecosystem as well) but most are equally happy to use an Android. The attitude to anything else than Iphone has changed in the last 1-2 years. If you wanted the best phone before that period, you needed an Iphone. A lot of people don't necessarily believe that anymore in my experience. It shows how short these cycles really are.
Title: Re: AAPL - Apple Inc.
Post by: DCG on July 25, 2012, 09:18:30 AM
However, I fail to see how anyone can know, with a high degree of certainty anyway, what the future will bring in an industry like this.

There really aren't many industries that you can predict the future with a high degree of certainty.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on July 25, 2012, 09:28:08 AM
Apple sure has this god-like status in the US... I don't feel it here. You have what you could call 'believers' (most often bound to the ecosystem as well) but most are equally happy to use an Android. The attitude to anything else than Iphone has changed in the last 1-2 years. If you wanted the best phone before that period, you needed an Iphone. A lot of people don't necessarily believe that anymore in my experience. It shows how short these cycles really are.

It sounds like you don't believe in Apple because of your personal view on their products rather than an objective evaluation of the company and its prospects. The data seems to indicate something very different from what you're saying. I already posted data on how the iPhone was holding its own on this thread yesterday.

I also see a contradiction in the points you're making. On one hand you're view on Apple are "Neither bullish nor bearish, I don't know" but then you talk about why they are not likely to not do well.  If you don't know or if its too difficult , how do you know they're not a good investment?
Does it make sense to form an opinion on something you don't understand?
Title: Re: AAPL - Apple Inc.
Post by: tombgrt on July 25, 2012, 09:51:29 AM
Just stating the facts of 1) general unpredictability of the future (in general and technology) and 2) my personal environment. Sure, I said "It's bound to happen sooner or later imo and I doubt wether it will be foreseeable."; that wasn't really in line with not forming an opinion. The odds are likely against them in the long term (opinion or fact?) but that doesn't mean I'm bearish. For me it's a bad investment because I don't have a clue what the market will look like in 3-5 years.

You have to have some form of opinion on the general predictability of the future and technology to say "I don't know and am neither bullish nor bearish.".
Title: Re: AAPL - Apple Inc.
Post by: DCG on July 25, 2012, 11:16:10 AM
Just stating the facts of 1) general unpredictability of the future (in general and technology) and 2) my personal environment. Sure, I said "It's bound to happen sooner or later imo and I doubt wether it will be foreseeable."; that wasn't really in line with not forming an opinion. The odds are likely against them in the long term (opinion or fact?) but that doesn't mean I'm bearish. For me it's a bad investment because I don't have a clue what the market will look like in 3-5 years.

You have to have some form of opinion on the general predictability of the future and technology to say "I don't know and am neither bullish nor bearish.".

Sure the law of averages will eventually catch up to them. It's already caught up to Coke, but their ok to invest in?

Yes, technology is tough to predict; maybe a bit more than other industries, but let me know an industry that's easy to predict.

Even if you mention a company like Coke, were you able to predict about a decade ago that there would be a pretty wide-scale change where people would cut down on cola consumption and switch to water and juice? Coke reacted to this trend by acquiring various different companies, but they've still had a pretty hard time producing strong growth.

Title: Re: AAPL - Apple Inc.
Post by: texual on July 25, 2012, 05:15:38 PM
I invested in Apple in 2003 and 2004 when I got hold of the original iPod and had a mac. I was one of the only people I knew who used these products and I got many friends interested and became followers. My investment ended in 2010 after the last part of my investment thesis came to a close. I originally invested into the idea that the iPod would be the music player consumers love. Then after iTunes and the laptops become standard college fare, their parents would become hip to them. That ended around 2007 when everyone I knew had a macbook and an ipod. I shifted my investment thesis to the iPhone being a major catalyst. After that the last piece was clear: iPad. I dont see any further successes coming from Apple after these three major, incredible successes. Chances are, even the apple tv will not be such a great product - case in point: after I took my last shares of apple off the table I waited for another slam dunk tech investment. This year I put all that money into MSFT ;)
Title: Re: AAPL - Apple Inc.
Post by: valueInv on July 25, 2012, 05:36:01 PM
I dont see any further successes coming from Apple after these three major, incredible successes. Chances are, even the apple tv will not be such a great product - case in point: after I took my last shares of apple off the table I waited for another slam dunk tech investment. This year I put all that money into MSFT ;)
Why don't you see any further successes? Why do you think AppleTV will fail?
Title: Re: AAPL - Apple Inc.
Post by: stahleyp on July 25, 2012, 05:57:10 PM
Just stating the facts of 1) general unpredictability of the future (in general and technology) and 2) my personal environment. Sure, I said "It's bound to happen sooner or later imo and I doubt wether it will be foreseeable."; that wasn't really in line with not forming an opinion. The odds are likely against them in the long term (opinion or fact?) but that doesn't mean I'm bearish. For me it's a bad investment because I don't have a clue what the market will look like in 3-5 years.

You have to have some form of opinion on the general predictability of the future and technology to say "I don't know and am neither bullish nor bearish.".

Sure the law of averages will eventually catch up to them. It's already caught up to Coke, but their ok to invest in?

Yes, technology is tough to predict; maybe a bit more than other industries, but let me know an industry that's easy to predict.

Even if you mention a company like Coke, were you able to predict about a decade ago that there would be a pretty wide-scale change where people would cut down on cola consumption and switch to water and juice? Coke reacted to this trend by acquiring various different companies, but they've still had a pretty hard time producing strong growth.

Coke still makes Coke. Fifty years from now, I'll hazard to guess that they'll still make Coke. In 50 years, what do you think is more predictable: Coke will make Coke or Apple will still make phones?
Title: Re: AAPL - Apple Inc.
Post by: stahleyp on July 25, 2012, 06:00:03 PM
I dont see any further successes coming from Apple after these three major, incredible successes. Chances are, even the apple tv will not be such a great product - case in point: after I took my last shares of apple off the table I waited for another slam dunk tech investment. This year I put all that money into MSFT ;)
Why don't you see any further successes? Why do you think AppleTV will fail?

You gotta remember that Apple TV has been around since 2007. There is a huge difference in failing and not being a blockbuster product.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on July 25, 2012, 06:05:02 PM
For the bulls on Apple, what will make you sell it?

1, When I see Apple fall behind competitors features-wise in a pretty significant way.
2, When I see Apple fall below 10% marketshare in smartphones and tablets
3, When I see them make more than one strategic blunder
4, When I see product quality fall enough to tarnish the brand
5, When I see the core leadership team leave and don't have confidence in the new team

How do you know that you won't get into the same mindset trap as RIMM investors?
I didn't get into the RIMM mindset trap. I sold RIMM 6 months after the iPhone came out. I process every piece of Apple info I can get my hands on and constantly question my thesis. I am always scanning for Apple threats. I consider my investment a hypothesis that needs to be constantly validated by data and facts.

The whole "oh, well, they'll come back. The stock is down 10% now. I'm not gonna sell" philosophy.
My biggest disappointment is that it didn't fall 10% today.

I think you can successfully trade it, but you have to keep that in mind - you're trading it and not investing (well, in the value investing sense).
I have held Apple for over 10 years and not sold a single share. I think that qualifies it as a investment for me. I think it is the best values out there but evaluating it requires a different circle of competence . That said, it does not have a margin of safety like say J&J. But then I don't consider many stocks on this board to have a big margin of safety (RIMM, FTP, even MSFT currently, etc). In many ways, margin of safety seems to be in the eye of the beholder.

No one, outside of Apple, can predict where this company will be in 10 years.
I don't think even anyone inside Apple can predict where Apple will be in 10 years. It is just the nature of tech (and many other industries). Do you think Gilette will hold the position it has today in 10 years?

http://online.wsj.com/article/SB10001424052702303624004577338103789934144.html

Tech is not an isolated vertical. The industry is constantly trying to disrupt other industries and is succeeding in many cases. The winners are frequently not the incumbents.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on July 25, 2012, 06:07:13 PM
I dont see any further successes coming from Apple after these three major, incredible successes. Chances are, even the apple tv will not be such a great product - case in point: after I took my last shares of apple off the table I waited for another slam dunk tech investment. This year I put all that money into MSFT ;)
Why don't you see any further successes? Why do you think AppleTV will fail?

You gotta remember that Apple TV has been around since 2007. There is a huge difference in failing and not being a blockbuster product.
Sorry, I don't mean the current product. I mean the new one that Apple is likely working on and that Steve Jobs talked about. Call it iTV, if you will.
Title: Re: AAPL - Apple Inc.
Post by: texual on July 25, 2012, 09:37:19 PM
My thoughts on Apple are complicated but I will certainly help by sharing my investment concerns. Since you asked about Apple TV I will share my findings:

This future television product by Apple may very well turn out a blockbuster. I have no idea about that but I did some searching around. First of all I don't see the product happening this year, or even most of next. They've got a new iPhone this winter, and will attempt another iPad model next year. Also you may notice that the TV business is going through a bit of a metamorphasis: a lot of mergers, feuding studios and distribution channels are growing and shifting. It really isn't the best time to start a TV product until the dust settles.

It also turns out Microsoft has a much better shot at winning this market segment. The Xbox is growing rapidly and there is renewed focus on the product as a entertainment hub. People apparently use their Xbox to stream content more hours than playing games! Apple does not have 60+ million households hooked up to their TV product. And if you recall the Xbox 360 was released in 2005/2006 and the Apple TV in 2007. However Xbox as a streaming and media console really didn't take off until after 2010. In that short a time I believe Microsoft has a trojan horse already sitting in millions of homes.

I believe the next iteration of Xbox will present a full home theater, entertainment, and television hub. It will be lucrative and successful.

So thats one part of it. Another part is how the Windows 8 platform works between phones, tablets and the xbox to deliver a singular environment. People will appreciate that Xbox is something you can use to listen to music, watch tv and play games, and its controllable from many points or hubs. It's really smart.

Apple so far has not got that much stickiness. Sure they've got iOS on the phone and iPad, and its melding with OSX but I don't see how they infect the home theater like Xbox. I mean, you have to have a TV thats hooked up to a device. Apple can try all it wants, but short of selling a full television with a sick design and great features (which is also costly) I don't see that product from Apple taking off like the iPhone or iPad. They've had a few years of Apple TV and it really hasn't given me reason to believe they can pull this off.

My opinion is that unless you really want to bet on their fourth Messiah product, TV isn't the one. So that leaves me with no product that I can predict with reasonable accuracy that would logically follow a music player, a phone, and a slate (all of which I believe were well known and hyped before their release).

My expectations is that Apple will milk the phone and tablet market for a few years and grow their laptop businesses just fine. However, just like the iPod there will come a time when everyone has a iPhone and the iPad has become a commodity product. They'll make plenty of money from this existing model but I don't particularly see another decade like the last. Hope that helps.
Title: Re: AAPL - Apple Inc.
Post by: texual on July 25, 2012, 09:46:16 PM
A poster here mentioned that he owned the shares for 10 years, and I believe that is a smart investment return! You need not worry about a loss of capital at this point in the game. I was simply suggesting a new investor in Apple will NOT retain those percentages going forward. I really give you props for holding on longer than I did, and I consider myself a forever type holder.

That also would mean your dividend returns would be amazing, and you would be better off holding the stock and collecting those payments and let whatever happen, happen! But for me, my investment thesis did come to an end a bit premature in 2010 when I saw that the major pieces of this company had come into place and Jobs was on his last few months with the company. I don't regret selling those shares and I don't think he can be replaced. I like Tim Cook a lot, but he ain't Steve. That said, Apple is a great American company up there with the best of the Dow industrials and will likely be here for another generation. Hopefully they can find ways to build consumer products that are smash hits. But for me those hits were 1. the ipod, 2. the iphone and lastly 3. the ipad. After that the tunnel ends, my rides over.

Best of luck to everyone.
Title: Re: AAPL - Apple Inc.
Post by: DCG on July 26, 2012, 07:31:26 AM
My thoughts on Apple are complicated but I will certainly help by sharing my investment concerns. Since you asked about Apple TV I will share my findings:

This future television product by Apple may very well turn out a blockbuster. I have no idea about that but I did some searching around. First of all I don't see the product happening this year, or even most of next. They've got a new iPhone this winter, and will attempt another iPad model next year. Also you may notice that the TV business is going through a bit of a metamorphasis: a lot of mergers, feuding studios and distribution channels are growing and shifting. It really isn't the best time to start a TV product until the dust settles.

It also turns out Microsoft has a much better shot at winning this market segment. The Xbox is growing rapidly and there is renewed focus on the product as a entertainment hub. People apparently use their Xbox to stream content more hours than playing games! Apple does not have 60+ million households hooked up to their TV product. And if you recall the Xbox 360 was released in 2005/2006 and the Apple TV in 2007. However Xbox as a streaming and media console really didn't take off until after 2010. In that short a time I believe Microsoft has a trojan horse already sitting in millions of homes.

I believe the next iteration of Xbox will present a full home theater, entertainment, and television hub. It will be lucrative and successful.

So thats one part of it. Another part is how the Windows 8 platform works between phones, tablets and the xbox to deliver a singular environment. People will appreciate that Xbox is something you can use to listen to music, watch tv and play games, and its controllable from many points or hubs. It's really smart.

Apple so far has not got that much stickiness. Sure they've got iOS on the phone and iPad, and its melding with OSX but I don't see how they infect the home theater like Xbox. I mean, you have to have a TV thats hooked up to a device. Apple can try all it wants, but short of selling a full television with a sick design and great features (which is also costly) I don't see that product from Apple taking off like the iPhone or iPad. They've had a few years of Apple TV and it really hasn't given me reason to believe they can pull this off.

My opinion is that unless you really want to bet on their fourth Messiah product, TV isn't the one. So that leaves me with no product that I can predict with reasonable accuracy that would logically follow a music player, a phone, and a slate (all of which I believe were well known and hyped before their release).

My expectations is that Apple will milk the phone and tablet market for a few years and grow their laptop businesses just fine. However, just like the iPod there will come a time when everyone has a iPhone and the iPad has become a commodity product. They'll make plenty of money from this existing model but I don't particularly see another decade like the last. Hope that helps.

I've owned Apple stock for about 5 & 1/2 years and I've heard people saying this same type of thing for the last 6 or so years. 
Title: Re: AAPL - Apple Inc.
Post by: DCG on July 27, 2012, 06:58:46 PM
The main area I've noticed a drop in quality without Steve Jobs is in their marketing. There have been several television ads that there's no way Jobs would have approved. The ads during the Olympics to tonight being the worst of them so far.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on July 28, 2012, 10:07:58 AM
The main area I've noticed a drop in quality without Steve Jobs is in their marketing. There have been several television ads that there's no way Jobs would have approved. The ads during the Olympics to tonight being the worst of them so far.

It looks like they're appealing to a different audience with a different level of sophistication. They are finally marketing a different aspect of their offering - their service and their store experience.

 I think they need to break from the inspirational style of ads they've been using. It's losing its novelty and competitors are copying the style. In that sense,
these ads are long overdue. I would have run them once Windows 8 came out. It would position the Mac as a easy, comfortable alternative to the confusion facing users with the brand new Metro interface.

But I wouldn't call these their best work either. A little reminiscent of the old Mac Vs PC ads.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on August 03, 2012, 04:11:06 PM
So Apple's been thinking about a 7 inch tablet for a year and a half right now:

http://www.reuters.com/article/2012/08/03/us-apple-samsung-trial-idUSBRE87118P20120803
Title: Re: AAPL - Apple Inc.
Post by: valueInv on August 03, 2012, 04:18:36 PM
iPad increases marketshare:
http://gigaom.com/apple/apple-keeps-vise-like-grip-on-tablet-market-for-now/

And the iPhone gains marketshare ahead of iPhone 5 in the US:

http://news.cnet.com/8301-13579_3-57482090-37/android-loses-ground-to-apple-in-second-quarter/
http://www.engadget.com/2012/08/01/comscore-android-back-above-51-percent-of-us-share-ios-still-up/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on August 06, 2012, 01:11:39 PM
First Maps, now YouTube:

http://techcrunch.com/2012/08/06/youtube-app-removed-from-ios-6-because-apples-licensing-agreement-is-over/

Apparently, the licensing deal is over. I guess they signed a 5 year deal for YouTube. Wonder how many years their search deal was signed for?
Title: Re: AAPL - Apple Inc.
Post by: DCG on August 06, 2012, 01:47:59 PM
 'Don’t fret too much though, because Apple reports that Google is working on its own iOS-friendly YouTube app for inclusion in the iOS App Store.'.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on August 06, 2012, 10:44:57 PM
Money can't buy publicity like this:

http://mashable.com/2012/08/06/apple-nasa-ad-photo/
Title: Re: AAPL - Apple Inc.
Post by: bargainman on August 07, 2012, 07:51:26 PM
Money can't buy publicity like this:

http://mashable.com/2012/08/06/apple-nasa-ad-photo/

Or this....

http://money.cnn.com/2012/08/07/technology/mat-honan-hacked/index.htm?hpt=hp_t3
Title: Re: AAPL - Apple Inc.
Post by: valueInv on August 07, 2012, 11:27:17 PM
Money can't buy publicity like this:

http://mashable.com/2012/08/06/apple-nasa-ad-photo/

Or this....

http://money.cnn.com/2012/08/07/technology/mat-honan-hacked/index.htm?hpt=hp_t3
http://www.engadget.com/2012/08/07/amazon-apple-stop-taking-key-account-changes-over-the-phone/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on August 16, 2012, 04:33:54 PM
Looks like the new TV product is pretty close:

http://online.wsj.com/article/SB10000872396390444375104577593693481339210.html
Title: Re: AAPL - Apple Inc.
Post by: valueInv on August 16, 2012, 04:35:36 PM
Something good cooking up in the security/payments side:

http://gigaom.com/apple/pre-merger-apple-authentec-were-working-on-new-tech-together/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on August 27, 2012, 10:46:20 PM
The story of Xerox and Apple:

http://www.newyorker.com/reporting/2011/05/16/110516fa_fact_gladwell?currentPage=all
Title: Re: AAPL - Apple Inc.
Post by: hellsten on August 28, 2012, 08:30:33 AM
http://www.ifoapplestore.com/db/2012/08/27/reports-persist-of-budget-cuts-emphasis-on-revenue/
 
Quote
Despite a public acknowledgement by Apple that recent retail store staffing changes were “a mistake” and have been reversed, store employees still haven’t received an official explanation of the changes, and signs persist of a continuing focus on revenues and profit instead of customer satisfaction. Sources say employee performance standards have changed to emphasize the employee sales functions, more small products will be stocked at the stores, and that several budget categories have been slashed, including for store maintenance. All the while, morale continues to drift lower among many retail store employees.

But in 2009, Jobs took six months of medical leave and put Tim Cook in charge of the company, including the retail stores. Cook is primarily an “operations guy,” sources explain, and his natural focus is revenues and profits, not customers. While Jobs was away, Cook and chief financial officer Peter Oppenheimer began to confront Johnson on his customer-centric retail philosophy—both felt the stores didn’t generate enough revenues to justify operating expenses.

According to accounts, Cook pushed Johnson “quite hard” about how other channels were selling more Mac’s per-capita than the retail stores. Without Jobs’ support, Johnson found it was nearly impossible to keep Cook and Oppenheimer from switching the chain’s primary purpose from a superior experience to revenues.

Last year when Cook became the permanent CEO, he hired Browett from UK-based Dixons to head the retail chain. Cook was apparently attracted by Browett’s like-minded focus on the more traditional concepts of retailing—logic and process leading to revenues and profits. With his new position as CEO and staffed with a revenue-focused Sr. VP, Cook naturally moved the retail operation in different directions, the sources say, resulting in last month’s staffing changes.

This could be just rumors. Who knows... The comments are also interesting.

What would happen to Dell or Microsoft if the founder(s) died?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 05, 2012, 11:35:11 PM
Best description of what new features mean:

http://www.roughlydrafted.com/2012/09/05/whats-tim-cooks-one-more-thing-for-iphone-5/
Title: Re: AAPL - Apple Inc.
Post by: bathtime on September 07, 2012, 08:49:22 AM
"AMD Poaches Jim Keller from Apple, One of Greatest Contemporary CPU Architects"

http://www.brightsideofnews.com/news/2012/8/1/amd-poaches-jim-keller-from-apple2c-one-of-greatest-contemporary-cpu-architects.aspx

"Following stints in BroadCom and PA Semi, Jim ended up in Apple, where he lead "a small team" to create SoC designs for Apple, more known as the A4, A5 and the A5x. Based on our conversations with the insider sources, Jim also worked on the A6 SoC, the next-generation chip which will power Apple's products in 2013 onward. Our sources also state that the 'silicon renaissance' is over at Apple, and the brightest minds are shopping around to see where they could land."

Will AAPL lose talent because the upside in terms of equity appreciation is limited at a company with the largest market cap?
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 07, 2012, 10:11:28 AM
So what are people thinking about the new Kindles?  I haven't gotten a chance to really delve into the specs and features, but the discounted 4G subscription seems like a brilliant move by Amazon. 

The competition heats up even more!
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 07, 2012, 10:53:57 AM
"AMD Poaches Jim Keller from Apple, One of Greatest Contemporary CPU Architects"

http://www.brightsideofnews.com/news/2012/8/1/amd-poaches-jim-keller-from-apple2c-one-of-greatest-contemporary-cpu-architects.aspx

"Following stints in BroadCom and PA Semi, Jim ended up in Apple, where he lead "a small team" to create SoC designs for Apple, more known as the A4, A5 and the A5x. Based on our conversations with the insider sources, Jim also worked on the A6 SoC, the next-generation chip which will power Apple's products in 2013 onward. Our sources also state that the 'silicon renaissance' is over at Apple, and the brightest minds are shopping around to see where they could land."

Will AAPL lose talent because the upside in terms of equity appreciation is limited at a company with the largest market cap?

Are people really working at Apple for equity appreciation? Do you know that Apple is not generous at all with stock for its rank and file employees?

Apple is not a chip company. They haven't done anything interesting with chips yet. Keller (and others) would not have made much of an impact working there. He'll controls a lot more at AMD, so he left.

Frankly, I don't think it makes much sense for Apple to be designing its own chips - they certainly have had no advantage with that in the iDevices. I wouldn't be surprised to see Apple switch to commodity chips in the future.

Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 07, 2012, 12:36:29 PM
I don't know, Apple has bought two chip design firms (PA Semi and Intrinsity), I think they'll probably keep designing them but based on the ARM standard, which means they don't have to do all the heavy lifting of making something from the ground up.

I think there's an advantage to doing some chip design in-house, though I hope they won't start buying/building fabs. That's the part that is best left outsourced.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 07, 2012, 12:53:40 PM
I don't know, Apple has bought two chip design firms (PA Semi and Intrinsity), I think they'll probably keep designing them but based on the ARM standard, which means they don't have to do all the heavy lifting of making something from the ground up.

I think there's an advantage to doing some chip design in-house, though I hope they won't start buying/building fabs. That's the part that is best left outsourced.

Whats the advantage?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 07, 2012, 12:55:59 PM
So what are people thinking about the new Kindles?  I haven't gotten a chance to really delve into the specs and features, but the discounted 4G subscription seems like a brilliant move by Amazon. 

The competition heats up even more!

http://www.pcmag.com/article2/0,2817,2409389,00.asp

Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 07, 2012, 01:08:52 PM
Whats the advantage?

Getting exactly the designs you want without letting your competitors have access to them or outsourcing it to a third party over which you don't have complete control (and which can leak things or make blunders that are harder to prevent from outside). It fits with Apple's strategy of vertical integration when it comes to design (as opposed to manufacturing).

I think there's a fair chance that over time Apple's silicon will become more and more differentiated from the competition, as efforts from the recently acquired companies have time to bear fruits. Who knows, maybe we'll hear more about that on the 12th.

To inverse things: Why do you think it would be better for them to go with commodity chips? (as opposed to leveraging general ARM improvements and then adding some custom stuff on top)
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 07, 2012, 02:40:18 PM
Whats the advantage?

Getting exactly the designs you want without letting your competitors have access to them or outsourcing it to a third party over which you don't have complete control (and which can leak things or make blunders that are harder to prevent from outside). It fits with Apple's strategy of vertical integration when it comes to design (as opposed to manufacturing).

I think there's a fair chance that over time Apple's silicon will become more and more differentiated from the competition, as efforts from the recently acquired companies have time to bear fruits. Who knows, maybe we'll hear more about that on the 12th.

To inverse things: Why do you think it would be better for them to go with commodity chips? (as opposed to leveraging general ARM improvements and then adding some custom stuff on top)

Apple hasn't produced anything that seems to be better than its competitors and gives it an edge. Qualcomm, etc are revving faster with more clock speed, more cores, better consumption, etc. Differentiation only works if what you have is better. The top people leaving tells me that Apple is not doing anything interesting enough for them to stay. Apple has been through multiple generations of its Ax series without any advantage. Are they going to suddenly product chips far better than anything else out there?

On the flip side, they are dependent on their biggest competitor for their chip manufacturing. Samsung uses an identical chip in its phones. Not only are they adding to their competitors profits but also giving them economies of scale which it then uses to undercut Apple in price.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 07, 2012, 02:46:34 PM
So what are people thinking about the new Kindles?  I haven't gotten a chance to really delve into the specs and features, but the discounted 4G subscription seems like a brilliant move by Amazon. 

The competition heats up even more!

http://www.pcmag.com/article2/0,2817,2409389,00.asp
http://parislemon.com/post/31047436477/the-499-kindle-fire-hd
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 07, 2012, 03:17:25 PM
So what are people thinking about the new Kindles?  I haven't gotten a chance to really delve into the specs and features, but the discounted 4G subscription seems like a brilliant move by Amazon. 

The competition heats up even more!

http://www.pcmag.com/article2/0,2817,2409389,00.asp
http://parislemon.com/post/31047436477/the-499-kindle-fire-hd

Interesting.  I'm gonna look into these things a bit more this weekend.  I doubt I would buy the Kindle Fire, but I just pre-ordered a Kindle Paperwhite.

I'm more interested in hearing what other board members are thinking on whether they would buy the Kindle Fire vs. Nexus vs. iPad vs. Surface vs. some other tablet.  Or whether people are just waiting until everything is out for the holiday season.
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 07, 2012, 04:24:19 PM
I'm more interested in hearing what other board members are thinking on whether they would buy the Kindle Fire vs. Nexus vs. iPad vs. Surface vs. some other tablet.  Or whether people are just waiting until everything is out for the holiday season.

I am in the market for a tablet.  My main criteria are speed, HD video con, ease of use, and price.  I think iPad still leads in terms of ease of use, but others are catching up quickly.  For speed, I am using a 4S myself and it is really slow lately because I am running out of storage space, although I wouldn't say it was fast in the beginning either.  Perhaps the android tables with quad-core can solve the speed issues.  And for prices, iPad is more expensive than comparable tablets by at least $100!  Why would one choose to buy it anymore other than legacy (if i may use this word to describe a 2-year old product) reasons, say facetime with friends, app investment, etc.

I will wait until at least the Surface comes out.  I would really love to have one ecosystem for all of my stuff.  I would stick to my PC for home computing.  If Win8 is good, I will probably buy a Surface tablet and a Nokia W8 phone.

Speaking of phones, Apple will announce the iphone 5 next week.  Based on the leaks so far, I think it will UNDERwhelm.  It would be interesting to see how the consumers will respond to a new iphone that's not the best and greatest available out there.
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 07, 2012, 04:37:17 PM
I'm more interested in hearing what other board members are thinking on whether they would buy the Kindle Fire vs. Nexus vs. iPad vs. Surface vs. some other tablet.  Or whether people are just waiting until everything is out for the holiday season.

I am in the market for a tablet.  My main criteria are speed, HD video con, ease of use, and price.  I think iPad still leads in terms of ease of use, but others are catching up quickly.  For speed, I am using a 4S myself and it is really slow lately because I am running out of storage space, although I wouldn't say it was fast in the beginning either.  Perhaps the android tables with quad-core can solve the speed issues.  And for prices, iPad is more expensive than comparable tablets by at least $100!  Why would one choose to buy it anymore other than legacy (if i may use this word to describe a 2-year old product) reasons, say facetime with friends, app investment, etc.

I will wait until at least the Surface comes out.  I would really love to have one ecosystem for all of my stuff.  I would stick to my PC for home computing.  If Win8 is good, I will probably buy a Surface tablet and a Nokia W8 phone.

Speaking of phones, Apple will announce the iphone 5 next week.  Based on the leaks so far, I think it will UNDERwhelm.  It would be interesting to see how the consumers will respond to a new iphone that's not the best and greatest available out there.

What do you mean by 2 years old with the iPad? The 3rd version of the iPad was released this past spring.

And I think the iPhone 5 will continue to be te best phone on the market. I would still take the 4s over any current android phone. I had an android phone for about 3 yeas. I've much happier with the iPhone. My droid (and several apps) would crash on me daily. Got the 4s when I was released and it has yet to crash on me a single time.

I also have the 3rd iPad and love it, but I can understand not wanting to spend the cash for it. We have a few android tablets at work, and I'm not overly impressed by them.
Title: Re: AAPL - Apple Inc.
Post by: bathtime on September 07, 2012, 06:17:42 PM

Are people really working at Apple for equity appreciation? Do you know that Apple is not generous at all with stock for its rank and file employees?

Apple is not a chip company. They haven't done anything interesting with chips yet. Keller (and others) would not have made much of an impact working there. He'll controls a lot more at AMD, so he left.

Frankly, I don't think it makes much sense for Apple to be designing its own chips - they certainly have had no advantage with that in the iDevices. I wouldn't be surprised to see Apple switch to commodity chips in the future.

I imagine the rank and file don't get big stock options, but that senior hires do. Apple isn't a chip company for their desktops/laptops, but they definitely are for their mobile devices. This piece quotes an exec as saying, “Steve Jobs told me he has 1,000 engineers working on chips,” he said. “Getting low power and smaller is the key to everything.”

http://techcrunch.com/2011/10/09/apple-1000-engineers-chips/
Title: Re: AAPL - Apple Inc.
Post by: bathtime on September 07, 2012, 06:28:22 PM
I use a MacBook Air, tried but returned the first gen iPad (didn't need it), and may buy an iPad mini for its portability. The new Kindles do look interesting though. Will at least check them out now.

I used to have iPhone 3GS, switched to an Android for the sake of signing up with Verizon before they ended unlimited data plans. Will probably go to iPhone 5 or 6 next year when my plan renews. I have an HTC Thunderbolt, the 4G is nice, but battery life sucks and it has been succeeded by much better 4G Android phones.

I do like the freedom to customize, etc. on Android. Apple has better design and integration, but it can be frustrating to have the user environment limited by Apple's dictates. Plus it's ridiculous that flash doesn't work on iPhones - although with the web switching to HTML5, maybe the issue of not being able to watch many video clips on iPhones is diminishing.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 07, 2012, 08:03:12 PM
Apple hasn't produced anything that seems to be better than its competitors and gives it an edge. Qualcomm, etc are revving faster with more clock speed, more cores, better consumption, etc. Differentiation only works if what you have is better. The top people leaving tells me that Apple is not doing anything interesting enough for them to stay. Apple has been through multiple generations of its Ax series without any advantage. Are they going to suddenly product chips far better than anything else out there?

On the flip side, they are dependent on their biggest competitor for their chip manufacturing. Samsung uses an identical chip in its phones. Not only are they adding to their competitors profits but also giving them economies of scale which it then uses to undercut Apple in price.

Those are good points, but it doesn't mean they aren't trying to differentiate (why buy all those chip designers?). Maybe they'll succeed, maybe they won't and will just go commodity. I think either way they should be fine since their chips aren't their secret sauce.
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 07, 2012, 11:22:47 PM
I'm more interested in hearing what other board members are thinking on whether they would buy the Kindle Fire vs. Nexus vs. iPad vs. Surface vs. some other tablet.  Or whether people are just waiting until everything is out for the holiday season.

I am in the market for a tablet.  My main criteria are speed, HD video con, ease of use, and price.  I think iPad still leads in terms of ease of use, but others are catching up quickly.  For speed, I am using a 4S myself and it is really slow lately because I am running out of storage space, although I wouldn't say it was fast in the beginning either.  Perhaps the android tables with quad-core can solve the speed issues.  And for prices, iPad is more expensive than comparable tablets by at least $100!  Why would one choose to buy it anymore other than legacy (if i may use this word to describe a 2-year old product) reasons, say facetime with friends, app investment, etc.

I will wait until at least the Surface comes out.  I would really love to have one ecosystem for all of my stuff.  I would stick to my PC for home computing.  If Win8 is good, I will probably buy a Surface tablet and a Nokia W8 phone.

Speaking of phones, Apple will announce the iphone 5 next week.  Based on the leaks so far, I think it will UNDERwhelm.  It would be interesting to see how the consumers will respond to a new iphone that's not the best and greatest available out there.

What do you mean by 2 years old wih the iPad? The 3rd version of the iPad was released this past spring.

I meant product line.  The original ipad was released on March 2010 if I remember correctly, so the entire ipad line has been out for 2.5 years.  What I meant to say is, if I were an existing ipad user with an older ipad version, I would probably upgrade to the new ipad over other tablets.  However, if I haven't had one before, the other options (android, win8) should be given serious considerations too.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 10, 2012, 07:57:39 PM
Kindle presentation:

http://www.youtube.com/watch?v=VYi1jZXz9Kg

-----

Amazon Doctrine

Above all else, align with customers.

Win when they win.

Win only when they win.


-----

How does this philosophy apply to hardware devices?

We want to make money when people use our devices, not when they buy our devices.

-----

Bezos is bringing it.  I like it.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 10, 2012, 08:02:25 PM
http://www.nbcnews.com/technology/gadgetbox/amazon-will-sell-ad-free-kindle-fire-hd-extra-15-987503

AMZN is going to allow buyers to get rid of special offers for $15. 

I think even the most die hard Apple fans will probably realize that this assault by Bezos poses a threat to AAPL's gross margins on the iPad.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 10, 2012, 10:21:59 PM
http://www.nbcnews.com/technology/gadgetbox/amazon-will-sell-ad-free-kindle-fire-hd-extra-15-987503

AMZN is going to allow buyers to get rid of special offers for $15. 

I think even the most die hard Apple fans will probably realize that this assault by Bezos poses a threat to AAPL's gross margins on the iPad.
Everything is a threat to Apple. The Kindle is probably even a  threat to Amazon's own profit margins. They're trying to subsidize the device by selling content. But then, they're selling books below their cost.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 11, 2012, 08:27:04 AM
http://www.nbcnews.com/technology/gadgetbox/amazon-will-sell-ad-free-kindle-fire-hd-extra-15-987503

AMZN is going to allow buyers to get rid of special offers for $15. 

I think even the most die hard Apple fans will probably realize that this assault by Bezos poses a threat to AAPL's gross margins on the iPad.
Everything is a threat to Apple. The Kindle is probably even a  threat to Amazon's own profit margins. They're trying to subsidize the device by selling content. But then, they're selling books below their cost.

Amazon is selling the Kindle Fire at or close to cost because the device is just a means to utilize content, which drives the use of AMZN assets. 

Amazon has a subscriber base because they offer awesome content and services at the lowest cost.  Prime and the release of new Kindle devices solidifies the relationship between current AMZN customers and makes it very likely that prospective "retail subscribers" sign up.  This is phenomenal for consumers.  And it means that one ought not to count on high gross margins for AAPL devices. 

Now let's see what types of services Apple starts to roll out and how popular they become.  Apparently, they are working on a Spotify competitor.  I'd love to see AMZN buy Spotify.
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 11, 2012, 09:31:22 AM
Not sure if it would pose any anti-trust issues, but I'd love to see Apple buy a few app manufacturers, such as Shazam, and make them part of iOS.
Title: Re: AAPL - Apple Inc.
Post by: globalfinancepartners on September 11, 2012, 09:45:12 AM
That's how they got Siri and it seemed to work well for them
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 11, 2012, 11:42:02 AM
http://www.nbcnews.com/technology/gadgetbox/amazon-will-sell-ad-free-kindle-fire-hd-extra-15-987503

AMZN is going to allow buyers to get rid of special offers for $15. 

I think even the most die hard Apple fans will probably realize that this assault by Bezos poses a threat to AAPL's gross margins on the iPad.
Everything is a threat to Apple. The Kindle is probably even a  threat to Amazon's own profit margins. They're trying to subsidize the device by selling content. But then, they're selling books below their cost.

Amazon is selling the Kindle Fire at or close to cost because the device is just a means to utilize content, which drives the use of AMZN assets. 

Amazon has a subscriber base because they offer awesome content and services at the lowest cost.  Prime and the release of new Kindle devices solidifies the relationship between current AMZN customers and makes it very likely that prospective "retail subscribers" sign up.  This is phenomenal for consumers.  And it means that one ought not to count on high gross margins for AAPL devices. 

Now let's see what types of services Apple starts to roll out and how popular they become.  Apparently, they are working on a Spotify competitor.  I'd love to see AMZN buy Spotify.

OK, let me repeat - Amazon is selling devices at or below cost, they are selling many books at below cost too. So what are they subsidizing their losses in these two areas with? Apps? Music? They don't sell that many prime subscriptions.
 
Title: Re: AAPL - Apple Inc.
Post by: Olmsted on September 11, 2012, 12:00:45 PM
OK, let me repeat - Amazon is selling devices at or below cost, they are selling many books at below cost too. So what are they subsidizing their losses in these two areas with? Apps? Music? They don't sell that many prime subscriptions.

Amazon is the proverbial company being run at zero margin to maximize market share.  Great for consumers.  Normally not so great for stockholders (though the price can stay wacky for a while).  Horrible for everyone they compete with - Barnes & Noble, Best Buy, Netflix, etc... and Apple?  We shall see.

I sold my Apple after the Samsung pop.  There are cheaper things out there, growth should level off soon, and I am not willing to bet that they will be able to maintain their margins.  They might, they might not, but I do not have an edge anymore and therefore chose to let someone else figure that out.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 11, 2012, 12:01:54 PM
http://www.nbcnews.com/technology/gadgetbox/amazon-will-sell-ad-free-kindle-fire-hd-extra-15-987503

AMZN is going to allow buyers to get rid of special offers for $15. 

I think even the most die hard Apple fans will probably realize that this assault by Bezos poses a threat to AAPL's gross margins on the iPad.
Everything is a threat to Apple. The Kindle is probably even a  threat to Amazon's own profit margins. They're trying to subsidize the device by selling content. But then, they're selling books below their cost.

Amazon is selling the Kindle Fire at or close to cost because the device is just a means to utilize content, which drives the use of AMZN assets. 

Amazon has a subscriber base because they offer awesome content and services at the lowest cost.  Prime and the release of new Kindle devices solidifies the relationship between current AMZN customers and makes it very likely that prospective "retail subscribers" sign up.  This is phenomenal for consumers.  And it means that one ought not to count on high gross margins for AAPL devices. 

Now let's see what types of services Apple starts to roll out and how popular they become.  Apparently, they are working on a Spotify competitor.  I'd love to see AMZN buy Spotify.

OK, let me repeat - Amazon is selling devices at or below cost, they are selling many books at below cost too. So what are they subsidizing their losses in these two areas with? Apps? Music? They don't sell that many prime subscriptions.

Selling devices at or below cost doesn't matter to AMZN.  And, btw, even if they are selling below cost, does that change the thesis on gross margin decline for iPads?  My answer is "no."

Do you really believe AMZN is selling all of its books below cost?  Publishers accuse them of doing this.  I believe what's actually happening is that there are large parts of the catalogs they buy access to that get subsidized by the better selling titles.  As long as the publishers control large catalogs of content that consists of both great and crappy titles, that's how it's going to be for Amazon.

But look, I'd love to hear from people in the publishing industry.  I know at least some board members have indicated that that's the business they're in.

Amazon's playing the long game.  Take a look at their revenue growth.  They're creating a relationship with consumers that will make them the Walmart/Costco of the new generation.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 11, 2012, 12:04:40 PM
OK, let me repeat - Amazon is selling devices at or below cost, they are selling many books at below cost too. So what are they subsidizing their losses in these two areas with? Apps? Music? They don't sell that many prime subscriptions.

Amazon is the proverbial company being run at zero margin to maximize market share.  Great for consumers.  Normally not so great for stockholders (though the price can stay wacky for a while).  Horrible for everyone they compete with - Barnes & Noble, Best Buy, Netflix, etc... and Apple?  We shall see.

I sold my Apple after the Samsung pop.  There are cheaper things out there, growth should level off soon, and I am not willing to be that they will be able to maintain their margins.  They might, they might not, but I do not have an edge anymore and therefore chose to let someone else figure that out.

Personally, I would not own AMZN at this price.

However, I believe Bezos has learned from the Costco model.  Run at margins well below what you could probably sustain in order to rapidly increase revenue growth and build a huge moat.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 11, 2012, 12:53:20 PM
http://www.nbcnews.com/technology/gadgetbox/amazon-will-sell-ad-free-kindle-fire-hd-extra-15-987503

AMZN is going to allow buyers to get rid of special offers for $15. 

I think even the most die hard Apple fans will probably realize that this assault by Bezos poses a threat to AAPL's gross margins on the iPad.

Everything is a threat to Apple. The Kindle is probably even a  threat to Amazon's own profit margins. They're trying to subsidize the device by selling content. But then, they're selling books below their cost.

Amazon is selling the Kindle Fire at or close to cost because the device is just a means to utilize content, which drives the use of AMZN assets. 

Amazon has a subscriber base because they offer awesome content and services at the lowest cost.  Prime and the release of new Kindle devices solidifies the relationship between current AMZN customers and makes it very likely that prospective "retail subscribers" sign up.  This is phenomenal for consumers.  And it means that one ought not to count on high gross margins for AAPL devices. 

Now let's see what types of services Apple starts to roll out and how popular they become.  Apparently, they are working on a Spotify competitor.  I'd love to see AMZN buy Spotify.

OK, let me repeat - Amazon is selling devices at or below cost, they are selling many books at below cost too. So what are they subsidizing their losses in these two areas with? Apps? Music? They don't sell that many prime subscriptions.

Selling devices at or below cost doesn't matter to AMZN.  And, btw, even if they are selling below cost, does that change the thesis on gross margin decline for iPads?  My answer is "no."

Do you really believe AMZN is selling all of its books below cost?  Publishers accuse them of doing this.  I believe what's actually happening is that there are large parts of the catalogs they buy access to that get subsidized by the better selling titles.  As long as the publishers control large catalogs of content that consists of both great and crappy titles, that's how it's going to be for Amazon.

But look, I'd love to hear from people in the publishing industry.  I know at least some board members have indicated that that's the business they're in.

Amazon's playing the long game.  Take a look at their revenue growth.  They're creating a relationship with consumers that will make them the Walmart/Costco of the new generation.

So, they're looking to drop their profits further?

http://www.readwriteweb.com/archives/the-difference-between-apple-amazon-in-one-chart.php
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 11, 2012, 01:01:04 PM
http://www.nbcnews.com/technology/gadgetbox/amazon-will-sell-ad-free-kindle-fire-hd-extra-15-987503

AMZN is going to allow buyers to get rid of special offers for $15. 

I think even the most die hard Apple fans will probably realize that this assault by Bezos poses a threat to AAPL's gross margins on the iPad.

Everything is a threat to Apple. The Kindle is probably even a  threat to Amazon's own profit margins. They're trying to subsidize the device by selling content. But then, they're selling books below their cost.

Amazon is selling the Kindle Fire at or close to cost because the device is just a means to utilize content, which drives the use of AMZN assets. 

Amazon has a subscriber base because they offer awesome content and services at the lowest cost.  Prime and the release of new Kindle devices solidifies the relationship between current AMZN customers and makes it very likely that prospective "retail subscribers" sign up.  This is phenomenal for consumers.  And it means that one ought not to count on high gross margins for AAPL devices. 

Now let's see what types of services Apple starts to roll out and how popular they become.  Apparently, they are working on a Spotify competitor.  I'd love to see AMZN buy Spotify.

OK, let me repeat - Amazon is selling devices at or below cost, they are selling many books at below cost too. So what are they subsidizing their losses in these two areas with? Apps? Music? They don't sell that many prime subscriptions.

Selling devices at or below cost doesn't matter to AMZN.  And, btw, even if they are selling below cost, does that change the thesis on gross margin decline for iPads?  My answer is "no."

Do you really believe AMZN is selling all of its books below cost?  Publishers accuse them of doing this.  I believe what's actually happening is that there are large parts of the catalogs they buy access to that get subsidized by the better selling titles.  As long as the publishers control large catalogs of content that consists of both great and crappy titles, that's how it's going to be for Amazon.

But look, I'd love to hear from people in the publishing industry.  I know at least some board members have indicated that that's the business they're in.

Amazon's playing the long game.  Take a look at their revenue growth.  They're creating a relationship with consumers that will make them the Walmart/Costco of the new generation.

So, they're looking to drop their profits further?

http://www.readwriteweb.com/archives/the-difference-between-apple-amazon-in-one-chart.php

From that article:

Obviously, if short-term profit is all that matters, Apple is winning by a mile. Apple has generated more than $73 billion of profit over the span of this chart, while Amazon is around $2 billion. Some of that has to do with the relative size of the companies; Apple is about three times bigger, sales-wise. But Apple's approach is still dramatically more profitable on a relative basis.

That said, there's also merit to Amazon's approach. By pricing its devices lower, it's potentially bringing its technologies to more people in different economic positions. Apple has lowered its pricing premium significantly over the years, but there are still potentially millions of people who could justify buying a $200 Kindle Fire but not a $400 iPad. Apple is now expected to launch a smaller, cheaper iPad, something it once suggested it wouldn't do - an action attributable in part to Amazon's success.

Will Amazon's approach ever lead to substantial profits? If Apple and Google are driving media and app prices lower, that leaves less room for Amazon to profit in the future. But Amazon is a multifaceted machine, ranging from digital media sales to paper-towel delivery. It's possible that getting customers all-in on Amazon's digital and Prime services will eventually lead to greater profits across the board.

Another question: Could competition from Amazon force Apple to lower its prices, potentially at the expense of its profit margins? Perhaps, over the long term, on some models.
Title: Re: AAPL - Apple Inc.
Post by: Olmsted on September 11, 2012, 01:20:29 PM
Personally, I would not own AMZN at this price.

However, I believe Bezos has learned from the Costco model.  Run at margins well below what you could probably sustain in order to rapidly increase revenue growth and build a huge moat.

Yes, I understand that that is the bull explanation for Amazon long-term.  It makes some sense.  And it very well could work out that way.  Shareholders have to trust that management will switch from go-go expansion mode to hang-out-behind-the-moat-raise-margins-and-generate-cash mode.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 11, 2012, 01:50:48 PM
http://www.slate.com/articles/technology/design/2012/09/iphone_design_documents_from_the_samsung_trial_reveal_more_than_ever_about_apple_s_secretive_design_process_.single.html
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 11, 2012, 06:16:58 PM

Obviously, if short-term profit is all that matters, Apple is winning by a mile.
I have held AAPL for more than 10 years. They have been far more consistent with their profits during that period than Amazon.

 Apple is now expected to launch a smaller, cheaper iPad, something it once suggested it wouldn't do - an action attributable in part to Amazon's success.
Yeah, right:

http://www.engadget.com/2012/08/03/eddy-cue-wanted-7-inch-ipad/

But Amazon is a multifaceted machine, ranging from digital media sales to paper-towel delivery. It's possible that getting customers all-in on Amazon's digital and Prime services will eventually lead to greater profits across the board.
That strategy certainly hasn't been working. Take a look at recent financials. Here's the other thing. They are going to have to pay sales tax in the future and they're promised many states to open up fulfillment centers and hire people. All this while they're planning to move to more digital goods from physical goods. That should juice up profits plenty  ;)

Another question: Could competition from Amazon force Apple to lower its prices, potentially at the expense of its profit margins? Perhaps, over the long term, on some models.

Tell me how as the appearance of me too competitor products affects the margins of:
iPods
Macs (2nd Steve Jobs era)
iPhones

We should have about 10 years worth of history on this.
Title: Re: AAPL - Apple Inc.
Post by: VAL9000 on September 11, 2012, 07:34:30 PM
txlaw,

I think your Costco analogy is interesting..  My own twist to this is that Amazon is incredibly aware of the damage that they did to significant chunks of the retail industry.  Knowing how fragile business models can be, they are making a proactive bid to be the leaders in the business that will put them out of business.   Amazon has historically done plenty of business selling books, CD's, and DVD's.  They see where content is going and are working hard to maintain/obtain mindshare as the location of choice to buy this media in its latest incarnation.  The threat 5-10 years down the line?  3D printing could seriously damage the physical goods business.  Of course, 3D printing is also primarily a content problem (after the messy physical bit gets sorted out).  Very prescient of AMZN & Co to be heading this direction today.

valueInv,

Just because AAPL is a good business, doesn't mean that other businesses (e.g. AMZN, GOOG) are not also good businesses.  They could just be different and in different stages.  Just think about how absolutely stupid the world said you were for buying stock in AAPL 10 years ago.  Today you have reaped the benefits of making a very wise and very bold choice.  Don't you also think that it's sensible to apply the same model of forward thinking to businesses that may not look like home runs today, but have a shot at becoming "the next Apple" in their respective segments?  Even where these segments overlap with Apple?  That's certainly what I'm thinking when I see interesting technology.  Not sure if others agree on that.  I think it's fair to say that Apple is "the next Apple", too.  There are certainly enough consumer electronics product categories that would benefit from Apple's attention.

I want to add that I can see how it might be frustrating as an Apple shareholder on this board.  Unfortunately for you, it seems that most people here enjoy rooting for the underdog (which used to mean rooting for Apple).  Now that Apple is top dog, it seems that there is a consensus that Apple must fall.  Which may not ever happen.  Anyway, I just wanted to clarify that I think Apple is a phenomenal business and that all of their investors should be proud of their gains.  Apple shares aren't for me, but that's more of a preference in taste than a belief that their business is going to flounder.

Title: Re: AAPL - Apple Inc.
Post by: Olmsted on September 11, 2012, 08:52:56 PM
I think a lot of individuals here like "rooting for the underdog" because the risk-reward can be good (though to be fair, I think a lot of investors' utility is derived at least partly from a feeling of having 'outsmarted' the consensus, as opposed to being a function of returns only).  Top dog Apple may do really well, probably will continue to actually.  But the bet is different now than it was even a year ago.  It takes a lot more to "move the needle."  That doesn't mean predicting Apple's imminent decline - far from it - it just means there may be more attractive bets elsewhere.
Title: Re: AAPL - Apple Inc.
Post by: Grenville on September 11, 2012, 09:37:19 PM
Kindle presentation:

http://www.youtube.com/watch?v=VYi1jZXz9Kg

-----

txlaw,

Thank you for posting this. Awesome presentation. So much better watching it then trying to read the live blog. It doesn't do it justice at all.

Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 12, 2012, 10:15:07 PM
Apple hasn't produced anything that seems to be better than its competitors and gives it an edge. Qualcomm, etc are revving faster with more clock speed, more cores, better consumption, etc. Differentiation only works if what you have is better. The top people leaving tells me that Apple is not doing anything interesting enough for them to stay. Apple has been through multiple generations of its Ax series without any advantage. Are they going to suddenly product chips far better than anything else out there?

On the flip side, they are dependent on their biggest competitor for their chip manufacturing. Samsung uses an identical chip in its phones. Not only are they adding to their competitors profits but also giving them economies of scale which it then uses to undercut Apple in price.

Those are good points, but it doesn't mean they aren't trying to differentiate (why buy all those chip designers?). Maybe they'll succeed, maybe they won't and will just go commodity. I think either way they should be fine since their chips aren't their secret sauce.

Ok, maybe I'm wrong on this:

http://appleinsider.com/articles/12/09/12/apples_new_a6_iphone_5_appears_to_be_first_arm_cortex_a15_phone

They also have some proprietary image processing stuff in their chips.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 13, 2012, 11:01:42 AM
Ok, maybe I'm wrong on this:

http://appleinsider.com/articles/12/09/12/apples_new_a6_iphone_5_appears_to_be_first_arm_cortex_a15_phone

They also have some proprietary image processing stuff in their chips.

I think it makes sense for them. Once they know there's something computationally expensive they want to do a lot of, building specialized hardware to do it will make it much faster and significantly more energy-efficient than a software-only solution, which over a few such tasks can add up to an advantage over the competition.

The question is: Can they find enough such tasks that deserve their own piece of silicon to add up to a big enough difference compared to a more vanilla chip? And will the competition start to customize their chips more too? Guess we'll have to wait and see.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 13, 2012, 11:29:45 AM
Ok, maybe I'm wrong on this:

http://appleinsider.com/articles/12/09/12/apples_new_a6_iphone_5_appears_to_be_first_arm_cortex_a15_phone

They also have some proprietary image processing stuff in their chips.

I think it makes sense for them. Once they know there's something computationally expensive they want to do a lot of, building specialized hardware to do it will make it much faster and significantly more energy-efficient than a software-only solution, which over a few such tasks can add up to an advantage over the competition.

The question is: Can they find enough such tasks that deserve their own piece of silicon to add up to a big enough difference compared to a more vanilla chip? And will the competition start to customize their chips more too? Guess we'll have to wait and see.
Agreed. They are currently doing it with image processing. Security is another candidate.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 13, 2012, 11:35:05 AM

Agreed. They are currently doing it with image processing. Security is another candidate.

They're already doing some very solid hardware encryption:

http://support.apple.com/kb/HT4175
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 14, 2012, 01:32:03 PM
Another win for Aapl:

http://www.bloomberg.com/news/2012-09-14/apple-wins-ruling-in-case-brought-by-samsung-at-trade-agency.html
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on September 15, 2012, 06:23:32 PM
Apple is going to see heavy margin compression going forward.  The US carriers are sarting to take an anything but Apple approach.  The Verizon CEO is already touting the BB10 as an alternative.  At the first sign of weak sales of this dud, the carriers will be forcing Apple's pricing down real quick.  Another mistake I see them making is trying to go head to head with Google in mapping and services provision.

The new Ipods are overpriced for the Tween market they sell to. 

People, including many Apple owners, such as myself, hate the way Apple tries to force everything through Itunes. 

The phones are insanely overpriced.  I bet you see 5 pricing at or below similar Androids very quickly.  And the andriods will come down in price to meet every Apple drop.  We are quickly going to see a race to the bottom.

Valueinv, Did you read any if the comment posts about the presentation of the new Iphone.  People were bored.  They offered nothing new or groundbreaking.  They got all the mileage they could out of this but the fad is past. 

Apple TV is nowhere to be seen.  Why - Networks dont want to do business with Apple because Apple has a reputation of screwing everyone. 

They are building a smaller IPad.  Apple under Steve Jobs would never have copied the other manufacturers.  They WERE the leaders. 

I could type an essay on consumer behaviour that applies directly to Apple.  Sometimes people change just because they want  something different.  This applies especially to people who bought into a fad in the first place. 
Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 15, 2012, 09:01:20 PM
Ok, maybe I'm wrong on this:

http://appleinsider.com/articles/12/09/12/apples_new_a6_iphone_5_appears_to_be_first_arm_cortex_a15_phone

They also have some proprietary image processing stuff in their chips.

http://www.anandtech.com/show/6292/iphone-5-a6-not-a15-custom-core
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 16, 2012, 04:57:10 PM
Ok, maybe I'm wrong on this:

http://appleinsider.com/articles/12/09/12/apples_new_a6_iphone_5_appears_to_be_first_arm_cortex_a15_phone

They also have some proprietary image processing stuff in their chips.

http://www.anandtech.com/show/6292/iphone-5-a6-not-a15-custom-core

Yup, looks like you were right. I still find it hard to believe that Apple may be building better chips than Qualcomm or Nvidia but it looks like they might be. This also negates some of the Samsung's scales economies that I mentioned before.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 16, 2012, 05:03:11 PM
Apple is going to see heavy margin compression going forward.  The US carriers are sarting to take an anything but Apple approach.  The Verizon CEO is already touting the BB10 as an alternative.  At the first sign of weak sales of this dud, the carriers will be forcing Apple's pricing down real quick.  Another mistake I see them making is trying to go head to head with Google in mapping and services provision.

The new Ipods are overpriced for the Tween market they sell to. 

People, including many Apple owners, such as myself, hate the way Apple tries to force everything through Itunes. 

The phones are insanely overpriced.  I bet you see 5 pricing at or below similar Androids very quickly.  And the andriods will come down in price to meet every Apple drop.  We are quickly going to see a race to the bottom.

Valueinv, Did you read any if the comment posts about the presentation of the new Iphone.  People were bored.  They offered nothing new or groundbreaking.  They got all the mileage they could out of this but the fad is past. 

Apple TV is nowhere to be seen.  Why - Networks dont want to do business with Apple because Apple has a reputation of screwing everyone. 

They are building a smaller IPad.  Apple under Steve Jobs would never have copied the other manufacturers.  They WERE the leaders. 

I could type an essay on consumer behaviour that applies directly to Apple.  Sometimes people change just because they want  something different.  This applies especially to people who bought into a fad in the first place.

I am not going to waste my breath deconstructing your post. My $5000 bet is still open and I'll up the market cap to $800 B within two years of this post. If you truly believe what you posted, then take the bet. Don't make an excuse that you don't short stocks. Unlike shorting, your downside here is limited to $5K.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on September 16, 2012, 06:49:45 PM
Valueinv, How about this one....

Why did Buffett buy IBM, not Apple. 

Apple is overvlaued now, its earnings stream is unpredictable, and prone to extreme competition. 

The reason you dont want to deconstruct my post is because you cant.  So you hide behind your little bet. 

And lets see, by your argument, Apple is going to worth 800 B sometime in the next two years.  That is a whopping 20% over two years.  Stellar returns you'll be getting on this one. 

Every single company on the planet in the IT space now wants what Apple has, and you know what, many will get it. 

Title: Re: AAPL - Apple Inc.
Post by: ExpectedValue on September 16, 2012, 06:59:49 PM
Al, can you quantify how Apple is overvalued? I think you're being a little overconfident by making such declarative statements about the company, without really quantifying anything.

There's a difference between having less of a moat -- or more precisely, being in a hits driven business versus being overvalued. I'd argue that Apple is in a hits driven business and is trying to make itself more recurring by getting users to accept its platform. At least in its current form, I wouldn't own Apple (I do however own a little Google).

You're right to say that Apple's earnings are less predictable, especially when compared to IBM. But if Apple can keep just maintaining share/retaining its customers, it's a cheap stock with optionality on any new markets they enter. I don't see how anyone can refute that.

I'd be willing to wager that over the next two years, Apple will probably outperform IBM. Also - I don't think IBM is screaming cheap. To me, the reason Buffett bought it was simply because its a good business that should keep growing with competitive moats, so with his access the float the return on that investment will be pretty good. For me though, I'd rather own other names besides IBM.

Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 16, 2012, 11:19:29 PM

The reason you dont want to deconstruct my post is because you cant.  So you hide behind your little bet. 


I'm the one willing to put my money where my mouth is and you say I am hiding? I have deconstructed your arguments many times before and you keep repeating the same things over and over again.

Once in a while, it good to pay attention to reality:
http://www.usatoday.com/tech/personal/story/2012/09/16/apple-iphone-5-likely-to-spur-record-lines/57789680/1
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 16, 2012, 11:39:55 PM
Ok, maybe I'm wrong on this:

http://appleinsider.com/articles/12/09/12/apples_new_a6_iphone_5_appears_to_be_first_arm_cortex_a15_phone

They also have some proprietary image processing stuff in their chips.

http://www.anandtech.com/show/6292/iphone-5-a6-not-a15-custom-core

Benchmakr looks pretty good too:

http://news.cnet.com/8301-13579_3-57513867-37/iphone-5-benchmarks-surface-performance-doubles/
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on September 17, 2012, 04:00:20 AM
Hi Tariq,

I sort of thought it was fairly valued in the sub 500 B range. 

I have nothing against Apple.  I even own a couple of their products (mac 3 yrs old and an IPAD).

From my perspective Apple is now overvalued because:
1) they cant sustain the margins indefinitely... the competition is gaining strength and numbers.
2) Someone is going to step up and offer to give Apple ecosystem users discounts or complete tranferability to another ecosystem.  i.e. We know you already bought this app from Apple.  We will give it to you for free.
3) They have had an incredible run but its all going to slow down eventually. I enumerated all of the past consumer electronics companies elsewhere but will recap a few: sony, msft, rim, atari, kodak, commodore, netscape, polaroid.m When it slows there will be immense margin compression.

When the margins compress the stock will compress.  Forty percent margins are unsustainable in the environment they are operating in.  When it normalizes, shareholders are in for a rude awakening.

This is not to say that Apple will not continue to build great products but rather that their profitability will decrease.  It is also telling to see that there are no inside buyers, only sellers. 

Valueinv sees only half of the equation, and denies the existence of history.  No company has ever grown profits indefinetly without hiccups, or competitors swarming to them like bees to honey. 
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 17, 2012, 04:32:42 AM
Ufcmal, some of your arguments here are pretty ridiculous.

Buffet not buying Apple over IBM? Well, why didn't buy apple 5-10 yeas ago? Buffet buying IBM has no relation to Apple. I can point out 40 tech companies that I think will do better than IBM in the next 5-10 years, but that does mean Buffet understands them.

You keep stating the obvious that Apple can't sustain their growh forever. No company can sustain 70% growth indefinitely. Im interested in all the other companies you follow or own that you think will sustain huge growth for the rest of time.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on September 17, 2012, 05:31:49 AM
DCf, you kind of missed the point. 

Apples stock price is based on 40% margins, today, and huge growth rates.  When these falter, the stock will get slaughtered.  Its that simple and in all of investing history it has never failed to happen. 

Part 2: Buying Apple now to get a 20% return over two years, with huge downside risk makes no sense.  Therefore holding Apple stock at these levels makes no sense either.

I generally dont buy growth companies inless they are dirt cheap: BAC, JPM, AIG, FFH. 

Now I will sit and wait and ignore the Apple thread.
Title: Re: AAPL - Apple Inc.
Post by: berkshiremystery on September 17, 2012, 06:49:41 AM
Good point Uccmal,...

I own an iPhone 3GS & iPad2, because they were the only leading products on the market around the time of my purchase. I don't hold any Apple stock,... because every time someone asked me for some cheaper alternative, I could advise and lead them to some cheaper competitor product like Samsung or some rock bottom Huawei phone. Samsung Galaxy mobile products are awesome,... and me Scrooge McDuck would probably buy them, if I would have to start all over again, today. Only one thing keeps me back,... the nightmare burden to transfer all data to some other ecosystem (i.e., phone book, notes, files...etc).

Since Samsung et al, make so awesome great competing products,... what will be the likelihood that Apple can sell at current margins forever. Apple has an installment base of 400 million iOS devices, but can they continue to sell "at the same margins forever" to the rest of the world's remaining citizens (perhaps some 6.6 billion). The further they want to reach the remaining billions of users in less developed countries, they have to face the reality that those have some lower purchasing powers, thus they choose some cheaper alternative.

I have one simple question!


"Is this extreme high net income margin sustainable forever ?"

Can Apple sustain 25-30% net margins for the next 50 years, and beyond forever ?!?!?!
Buffett knows Coca Cola margins will be forever the same, actually 'til the last judgement day.

We have seen these patterns before...
>>> ATARI, Commodore, Digital Equipment, Compaq Computer, Tandy Computer.
where are they now ?

>>> Nokia, RIMM,... had these margin compressions.

So one simple question!

"Can Apple keep these margins forever" ?

If not,... current holders might be in for some rude awakening. That awakening might be in RIMM like proportions. It was once one of Canada's most valuable company, worth almost $150 billion something. MSFT holders have seen some decade long stalled valuation, after a steep rise in the 1990's. Of course Apple will continue to produce marvelous products the same way MSFT did.

"Reality is merely an illusion, albeit a very persistent one" Albert Einstein


-----


http://www.nasdaq.com/MorningstarprofileReports/AAPL_USA.pdf












Title: Re: AAPL - Apple Inc.
Post by: DCG on September 17, 2012, 07:18:12 AM
DCf, you kind of missed the point. 

Apples stock price is based on 40% margins, today, and huge growth rates.  When these falter, the stock will get slaughtered.  Its that simple and in all of investing history it has never failed to happen. 

Part 2: Buying Apple now to get a 20% return over two years, with huge downside risk makes no sense.  Therefore holding Apple stock at these levels makes no sense either.

I generally dont buy growth companies inless they are dirt cheap: BAC, JPM, AIG, FFH. 

Now I will sit and wait and ignore the Apple thread.

I get that, but just because they can't sustain this 'forever', doesn't mean it can't be a good investment for at least the next couple years. And I personally think there is still more than 20% upside in the next 2 years. That said, I am not saying that their are not better bargains out there and that there won't be plenty of stocks that outperform Apple over the next several years, due to their size.

On that note, they sold 2 million iPhone 5's in the first 24 hours.
Title: Re: AAPL - Apple Inc.
Post by: bengrahamofthenorth on September 17, 2012, 08:47:45 AM
I'm not sure the Apple argument is as simple as 'margins will compress'. Of course they will, it happens in every product cycle. I think what alot of the Apple bulls are holding on to is the ecosystem. Its existing user base puts them in a great position to launch new products.
Title: Re: AAPL - Apple Inc.
Post by: berkshiremystery on September 17, 2012, 09:12:57 AM
DCf, you kind of missed the point. 

Apples stock price is based on 40% margins, today, and huge growth rates.  When these falter, the stock will get slaughtered.  Its that simple and in all of investing history it has never failed to happen. 

Part 2: Buying Apple now to get a 20% return over two years, with huge downside risk makes no sense.  Therefore holding Apple stock at these levels makes no sense either.

I generally dont buy growth companies inless they are dirt cheap: BAC, JPM, AIG, FFH. 

Now I will sit and wait and ignore the Apple thread.

I get that, but just because they can't sustain this 'forever', doesn't mean it can't be a good investment for at least the next couple years. And I personally think there is still more than 20% upside in the next 2 years. That said, I am not saying that their are not better bargains out there and that there won't be plenty of stocks that outperform Apple over the next several years, due to their size.

On that note, they sold 2 million iPhone 5's in the first 24 hours.

If you are investing only for the next couple of years in AAPL,... then you pay some very high price for this cheery consensus of lofty margins, with no deep margin of saftey. Prem probably got some deeper value with his slow RIMM turtle,... at least it's breakup value, or selling outright the entire company would instantly yield more than the 20% of your fast moving AAPL hare, since it's almost below half book value. In the end, it's only price what you pay, and value what you get, nothing more. That might also include that RIMM might not have any bright future at all. If you would force me at gun point to invest 10% of my portfolio in some mobile phone equipment manufacture for the next couple of years (2-3yrs), only for the biggest total shareholders gain, my Darwinian gut feeling would let me choose RIMM,... but definitely not AAPL.
Title: Re: AAPL - Apple Inc.
Post by: CONeal on September 17, 2012, 09:30:41 AM
I know that I will be lambasted for this since most of the board loves Apple and their products. 

I really want to short this stock.  Think they are real close to their peak in terms of consumer penetration.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 17, 2012, 09:32:57 AM
I know that I will be lambasted for this since most of the board loves Apple and their products. 

I really want to short this stock.  Think they are real close to their peak in terms of consumer penetration.
Go ahead, what's stopping you? The interesting thing about Apple bears is its all talk, no action. I haven't seen a single person short the stock or even take my bet. Tells you a lot about their conviction, doesn't it?
Title: Re: AAPL - Apple Inc.
Post by: racemize on September 17, 2012, 09:33:19 AM
I know that I will be lambasted for this since most of the board loves Apple and their products. 

I really want to short this stock.  Think they are real close to their peak in terms of consumer penetration.

Actually, I feel like most people on this board do not like Apple.
Title: Re: AAPL - Apple Inc.
Post by: CONeal on September 17, 2012, 09:43:17 AM
I know that I will be lambasted for this since most of the board loves Apple and their products. 

I really want to short this stock.  Think they are real close to their peak in terms of consumer penetration.
Go ahead, what's stopping you? The interesting thing about Apple bears is its all talk, no action. I haven't seen a single person short the stock or even take my bet. Tells you a lot about their conviction, doesn't it?

I don't know what your bet is.   The only thing that is stopping me right now is I've never shorted a stock before so I have to get over the psychological barrier.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on September 17, 2012, 09:49:49 AM
the apple bears have zero conviction.  as for me I would not buy it here. I would not short it here. As for apple being lumped in with all the other consumer device makers, subject to the same margin pressures of a commodity builder?...would you lump in Porsche, BMW, and Mercedes with Chevrolet and and Hyundai? No you wouldn't. they are fundamentally different companies with different selling models. Would you lump Omega in with Timex? no you would not. there are various price and value categories of almost any consumer product. The point is you better know exactly where apple fits in that structure before you buy it or sell it.
Title: Re: AAPL - Apple Inc.
Post by: berkshiremystery on September 17, 2012, 10:03:26 AM
I know that I will be lambasted for this since most of the board loves Apple and their products. 

I really want to short this stock.  Think they are real close to their peak in terms of consumer penetration.

Actually, I feel like most people on this board do not like Apple.

I own 2 Apple products (iPhone & iPad), and enjoy them. It's only that I try to separate my thoughts
the bipolar type of way,... i.e.  consumer/investor.  Asking myself, can I predict the future net margins without using too much brain power.
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 17, 2012, 10:09:09 AM
The point is you better know exactly where apple fits in that structure before you buy it or sell it.

Good point.  I think many people assume that Apple will continue to increase market share, and that's wrong.  The majority can't own BMW (or Omega), otherwise BMW would lose its luster and exclusiveness.

iPhone's market share in the smartphone category (for purchases and to a milder degree, existing ownership) has been declining as Android is gaining share.  Now that Win8 is coming, iphone's share may decline more.  Same trend will happen for ipad.  Now, it will still sell greater quantities of iphone/ipad, because the pie is getting better quickly.  However, there will be a point of saturation, probably in 5-10 years.

Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 17, 2012, 10:36:04 AM
Just for fun, here are two pics... one is an ad made by Samsung comparing its flagship S3 to the iphone 5.  In response, an Apple enthusiast made a similar pic touting the iPhone 5.  Tell me which company you think is more innovative.

http://www-bgr-com.vimg.net/wp-content/uploads/2012/09/samsung-iphone-5-ad.jpg
http://cdn.iphoneincanada.ca/wp-content/uploads/2012/09/iphone-version.jpg

And in the meantime... Samsung S4 will arrive early next year.  The competition is only getting more intense.
http://www.iclarified.com/entry/index.php?enid=24475
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 17, 2012, 10:41:39 AM
Just for fun, here are two pics... one is an ad made by Samsung comparing its flagship S3 to the iphone 5.  In response, an Apple enthusiast made a similar pic touting the iPhone 5.  Tell me which company you think is more innovative.

http://www-bgr-com.vimg.net/wp-content/uploads/2012/09/samsung-iphone-5-ad.jpg
http://cdn.iphoneincanada.ca/wp-content/uploads/2012/09/iphone-version.jpg

Not getting your point here. An awful Samsung ad modified by some random person is an example of Samsung being innovative? Samsung's entire mobile business model over the last several years has been to take Android, and modify it to create iPhone clones (and now they're paying Apple for stealing from them). Real innovative.
Title: Re: AAPL - Apple Inc.
Post by: bmichaud on September 17, 2012, 10:47:48 AM
Re the discussion of Apple as an investment over the next two years...

Apple is in no way a Buffett inevitable company because nobody with a straight face can predict what its earning power will look like in ten years. That being said - I think it deserves a place in the "surfing" category Charlie Munger has discussed before, where investors "surf" a particular technology for an imtermediate amount of time. Very interesting concept that I think fits Apple quite well.
Title: Re: AAPL - Apple Inc.
Post by: rmitz on September 17, 2012, 11:26:33 AM
DCf, you kind of missed the point. 

Apples stock price is based on 40% margins, today, and huge growth rates.  When these falter, the stock will get slaughtered.  Its that simple and in all of investing history it has never failed to happen. 

Part 2: Buying Apple now to get a 20% return over two years, with huge downside risk makes no sense.  Therefore holding Apple stock at these levels makes no sense either.

I generally dont buy growth companies inless they are dirt cheap: BAC, JPM, AIG, FFH. 

Now I will sit and wait and ignore the Apple thread.

Hm, I don't think today's stock price at all prices in 40% margins and huge growth rates.  Back out the cash, and it looks like the market is already pricing in a good amount of margin compression/lower growth.  Now there are a number of problems with AAPL as an investment at this time, but I don't think those are accurate.
Title: Re: AAPL - Apple Inc.
Post by: rmitz on September 17, 2012, 11:30:06 AM
Can Apple sustain 25-30% net margins for the next 50 years, and beyond forever ?!?!?!
Buffett knows Coca Cola margins will be forever the same, actually 'til the last judgement day.

1) maybe, maybe not.
2) I don't think KO is that sure a thing anymore either.  Judgement day?  That's clearly hyperbole. 
Title: Re: AAPL - Apple Inc.
Post by: watsa_is_a_randian_hero on September 17, 2012, 11:32:40 AM
DCf, you kind of missed the point. 

Apples stock price is based on 40% margins, today, and huge growth rates.  When these falter, the stock will get slaughtered.  Its that simple and in all of investing history it has never failed to happen. 

Part 2: Buying Apple now to get a 20% return over two years, with huge downside risk makes no sense.  Therefore holding Apple stock at these levels makes no sense either.

I generally dont buy growth companies inless they are dirt cheap: BAC, JPM, AIG, FFH. 

Now I will sit and wait and ignore the Apple thread.

Hm, I don't think today's stock price at all prices in 40% margins and huge growth rates.  Back out the cash, and it looks like the market is already pricing in a good amount of margin compression/lower growth.  Now there are a number of problems with AAPL as an investment at this time, but I don't think those are accurate.

+1

also, uccmal, i don't think any of the 4 companies you listed could be classified as "growth".  Banks/insurers are inherently not growth companies as they are return on capital companies. 
Title: Re: AAPL - Apple Inc.
Post by: LC on September 17, 2012, 11:39:14 AM
Can Apple sustain 25-30% net margins for the next 50 years, and beyond forever ?!?!?!
Buffett knows Coca Cola margins will be forever the same, actually 'til the last judgement day.

1) maybe, maybe not.
2) I don't think KO is that sure a thing anymore either.  Judgement day?  That's clearly hyperbole.

Can you expand on your thoughts about KO?
Title: Re: AAPL - Apple Inc.
Post by: Ross812 on September 17, 2012, 11:43:37 AM
Apple is not expensive; the balance sheet backs the valuation. I just think at some point the valuation of the entire business is absurd. At todays valuation, let alone a market cap of 800 billion in two years, Apple is worth more than all the TBTF banks combined, the combined market cap of the airlines and railroads, or all the auto makers and Boeing.

800 billion for a company that essentially innovates the original iPod (a toy) every five years and incrementally adds to their innovation in the interim is absurd. I cannot bring myself to invest in Apple (though I like their products) because there is no way to project their earnings into the future. I don't see a clear moat other than their size. I'm positive an entrepreneur could build another Apple for 600 billion; furthermore, if everyones iDevice stopped working tomorrow, the world would continue to run without much of a hiccup.

Apple might continue at it's present trajectory and be worth 800 billion in a couple years. I don't trust the market to have enough sense to value this toy maker at a reasonable level in the next two years, and there is no way I would short it. I would guarantee Berkshire Hathaway with or without Buffett will be worth more than Apple in 2030, 2050, or 2100 so I will just buy BRK instead and let those who want to chase Apple chase it.
Title: Re: AAPL - Apple Inc.
Post by: mpauls on September 17, 2012, 11:44:30 AM
you guys should seriously consider shorting AAPL.
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 17, 2012, 12:00:39 PM
Just for fun, here are two pics... one is an ad made by Samsung comparing its flagship S3 to the iphone 5.  In response, an Apple enthusiast made a similar pic touting the iPhone 5.  Tell me which company you think is more innovative.

http://www-bgr-com.vimg.net/wp-content/uploads/2012/09/samsung-iphone-5-ad.jpg
http://cdn.iphoneincanada.ca/wp-content/uploads/2012/09/iphone-version.jpg

Not getting your point here. An awful Samsung ad modified by some random person is an example of Samsung being innovative? Samsung's entire mobile business model over the last several years has been to take Android, and modify it to create iPhone clones (and now they're paying Apple for stealing from them). Real innovative.

My point is, by comparing the "extra" features in each phone, I would say that the extra features of S3 are more desirable than those of i5.  Btw, some of the extra i5 features are available in S3 already (icloud --> 25GB dropbox; panaroma --> just an camera app!; Free OS update --> check; 700k apps --> Android probably has similar #; iMessage  --> Whatsapp is cross-platform; facetime --> Skype)

It's true that Samsung has lost a lawsuit and many of its features are "inspired" by the iPhone.  However, I think an inflection point has occured in which Samsung (and other manufacturers) are outcompeting Apple.

Again, I am not advocating a short and AAPL may as well go up in the short-term; but I won't go long now.
Title: Re: AAPL - Apple Inc.
Post by: racemize on September 17, 2012, 12:09:39 PM
I'm largely ambivalent re the Apple discussion (probably more on the long side).  However, I think it is a mistake to judge products by comparing spec lists.  The overall experience is what counts--including the ecosystem, ease of synching/purchasing, actual experience of the product (e.g., UI/responsiveness of the phone), etc.  For example, Apple makes custom hardware that is designed for the software--the processor speed of two products doesn't show the effects of customizations.  I also hear a lot regarding the bugginess of the customizations you can do with Android. 

Similar to the above, I spend more an Apple laptops, and it isn't based on specs.

Also, how long did Apple dominate the iPod area--did their margins come down significantly with those?  Arguably those were much easier to clone than a phone right? 


Title: Re: AAPL - Apple Inc.
Post by: DCG on September 17, 2012, 12:18:29 PM
My point is, by comparing the "extra" features in each phone, I would say that the extra features of S3 are more desirable than those of i5.  Btw, some of the extra i5 features are available in S3 already (icloud --> 25GB dropbox; panaroma --> just an camera app!; Free OS update --> check; 700k apps --> Android probably has similar #; iMessage  --> Whatsapp is cross-platform; facetime --> Skype)

A long list of tech specs with fancy names is not why most people buy certain phones. Samsung and other manufacturers sell features. Apple sells the user experience. Marketing 101. I know that sounds like a 'fanboy' view, but that's a bit reason Apple has been so successful.
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 17, 2012, 12:23:17 PM
Apple is not expensive; the balance sheet backs the valuation. I just think at some point the valuation of the entire business is absurd. At todays valuation, let alone a market cap of 800 billion in two years, Apple is worth more than all the TBTF banks combined, the combined market cap of the airlines and railroads, or all the auto makers and Boeing.

800 billion for a company that essentially innovates the original iPod (a toy) every five years and incrementally adds to their innovation in the interim is absurd. I cannot bring myself to invest in Apple (though I like their products) because there is no way to project their earnings into the future. I don't see a clear moat other than their size. I'm positive an entrepreneur could build another Apple for 600 billion; furthermore, if everyones iDevice stopped working tomorrow, the world would continue to run without much of a hiccup.

Apple might continue at it's present trajectory and be worth 800 billion in a couple years. I don't trust the market to have enough sense to value this toy maker at a reasonable level in the next two years, and there is no way I would short it. I would guarantee Berkshire Hathaway with or without Buffett will be worth more than Apple in 2030, 2050, or 2100 so I will just buy BRK instead and let those who want to chase Apple chase it.

Fair Enough (although all the airlines that are losing money every year are a tough comparison).
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 17, 2012, 12:31:19 PM
My point is, by comparing the "extra" features in each phone, I would say that the extra features of S3 are more desirable than those of i5.  Btw, some of the extra i5 features are available in S3 already (icloud --> 25GB dropbox; panaroma --> just an camera app!; Free OS update --> check; 700k apps --> Android probably has similar #; iMessage  --> Whatsapp is cross-platform; facetime --> Skype)

A long list of tech specs with fancy names is not why most people buy certain phones. Samsung and other manufacturers sell features. Apple sells the user experience. Marketing 101. I know that sounds like a 'fanboy' view, but that's a bit reason Apple has been so successful.

Ya, fancy names like "Retina Display", "Facetime", "Airplay".  I agree that Apple has been a genius at marketing.  But marketing has to be substantiated.  I feel that Apple's "substance" is trailing further and further behind its "marketing".  They don't call it reality distortion field for nothing.

Just to give on example, the 4S was marketed as being xx% faster than the 4.  I owned both phones, but don't notice much difference.  Speed is a pretty critical component of user experience to me.  Now, iPhone 5 is again being marketed as being 2x as fast as 4S.  I will have to see whether the user can realize such speed improvement during real world use.

Btw, other manufacturers are catching up quickly on the user experience.  Most people who have used Win7 phones (mostly Nokia Lumia) speak highly of them.  The promise of an integrated ecosystem of deskop, tablet, phone, and xbox in win8 must be quite appealing to a certain segment of the market.
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 17, 2012, 12:36:06 PM
Btw, other manufacturers are catching up quickly on the user experience.

To an extent. The Android ecosystem is still a disaster.

I'm curious to see how well Windows 8 does. It has a long way to go to catch up in terms of apps though (which is the issue with Windows 7 mobile).
Title: Re: AAPL - Apple Inc.
Post by: berkshiremystery on September 17, 2012, 12:50:28 PM

Can Apple Defy Gravity Forever?
Sep. 17th, 2012
http://beta.fool.com/rsaintvilus/2012/09/17/can-apple-defy-gravity-forever/12089/

Sir Isaac Newton reminded the world that "for every action, there is an equal or opposite reaction." According to history, Newton’s theory was said to have been inspired by a fallen apple.
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 17, 2012, 12:54:32 PM
Btw, other manufacturers are catching up quickly on the user experience.

To an extent. The Android ecosystem is still a disaster.

I'm curious to see how well Windows 8 does. It has a long way to go to catch up in terms of apps though (which is the issue with Windows 7 mobile).

Yes, the android mess is what has kept me from switching to it so far, although I think for the typical user it shouldn't be too bad.  I really want to see Win8 successful (ya so i am biased), so that I can manage all my gadgets within the windows system.

Windows phone has over 100k apps. The gap is also closing quickly.  If I were a developer, would I want to develop a new app that may fill a need in a new growing ecosystem, or just another app to differentiat myself in a jungle of 800k apps?  "Developer arbitrage" would really help closing the gap.



Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 17, 2012, 01:09:55 PM
Ironic,the Apple bears in this thread seem to buy Apple products themselves and think that other people will stop buying them.

BTW, the evidence seems to be pointing towards a GM decline ;)
http://www.intomobile.com/2012/09/17/iphone-5-flop-apple-doomed-oh-wait-its-most-successful-iphone-yet/
Title: Re: AAPL - Apple Inc.
Post by: Parsad on September 17, 2012, 01:45:53 PM
Ironic,the Apple bears in this thread seem to buy Apple products themselves and think that other people will stop buying them.

BTW, the evidence seems to be pointing towards a GM decline ;)
http://www.intomobile.com/2012/09/17/iphone-5-flop-apple-doomed-oh-wait-its-most-successful-iphone-yet/

Remarkable...and they'll dominate for some time!  But remember this?

http://finance.yahoo.com/echarts?s=IBM+Interactive#symbol=ibm;range=19701106,19930215;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

How about this?

http://finance.yahoo.com/echarts?s=msft#symbol=msft;range=19950217,20030901;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Lastly?

http://finance.yahoo.com/echarts?s=aapl#symbol=aapl;range=19840907,19971230;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

"Those Who Forget The Past, Are Doomed To Repeat It"

Cheers!
Title: Re: AAPL - Apple Inc.
Post by: racemize on September 17, 2012, 02:50:30 PM
Come on Parsad, that MSFT one was a bit cheap--the P/E was crazy high at its peak!
Title: Re: AAPL - Apple Inc.
Post by: VAL9000 on September 17, 2012, 02:58:45 PM

Here's an interesting article covering the rapidly declining cost of hardware.  Apple and Amazon are both mentioned:
http://venturebeat.com/2012/09/15/hardware-is-dead/
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 17, 2012, 03:02:01 PM
Come on Parsad, that MSFT one was a bit cheap--the P/E was crazy high at its peak!
But I would say MSFT is more of an annuity business than AAPL - at least until recently.  Namely, people bought desktops every 3 or so years and upgrade from Win3.1 --> 95 --> 2000 --> XP, etc.  Can't say the same would go on for as long period for AAPL.  For myself, I did buy iphone 4 and 4S, but would likely switch to another brand next time.
Title: Re: AAPL - Apple Inc.
Post by: racemize on September 17, 2012, 03:11:10 PM
Come on Parsad, that MSFT one was a bit cheap--the P/E was crazy high at its peak!
But I would say MSFT is more of an annuity business than AAPL - at least until recently.  Namely, people bought desktops every 3 or so years and upgrade from Win3.1 --> 95 --> 2000 --> XP, etc.  Can't say the same would go on for as long period for AAPL.  For myself, I did buy iphone 4 and 4S, but would likely switch to another brand next time.

sure, but I don't think anyone would even be discussing Apple if it were at a P/E of 60 (or MSFT at that time).  Additionally, MSFT has actually performed very well from its peak, so it just doesn't seem that relevant. 

Speaking for myself, the competition will have to be significantly be better than iPhone to get me to switch, so I'm pretty much on a 2 year phone annuity...
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 17, 2012, 03:55:56 PM
Speaking for myself, the competition will have to be significantly be better than iPhone to get me to switch, so I'm pretty much on a 2 year phone annuity...

Yes, I agree this would be the mentality for many iphone users.

There are a few billion people who has never had smartphone though.  Would they still consider buying one now?  Again, I still expect Apple to sell incrementally more iphones than 4S... before the trajectory is getting flatter... quickly.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 17, 2012, 04:24:16 PM
Speaking for myself, the competition will have to be significantly be better than iPhone to get me to switch, so I'm pretty much on a 2 year phone annuity...

Yes, I agree this would be the mentality for many iphone users.

There are a few billion people who has never had smartphone though.  Would they still consider buying one now?  Again, I still expect Apple to sell incrementally more iphones than 4S... before the trajectory is getting flatter... quickly.

So, you think doubling of sales is incremental?
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on September 17, 2012, 04:32:25 PM
Apple is not expensive; the balance sheet backs the valuation. I just think at some point the valuation of the entire business is absurd. At todays valuation, let alone a market cap of 800 billion in two years, Apple is worth more than all the TBTF banks combined, the combined market cap of the airlines and railroads, or all the auto makers and Boeing.

800 billion for a company that essentially innovates the original iPod (a toy) every five years and incrementally adds to their innovation in the interim is absurd. I cannot bring myself to invest in Apple (though I like their products) because there is no way to project their earnings into the future. I don't see a clear moat other than their size. I'm positive an entrepreneur could build another Apple for 600 billion; furthermore, if everyones iDevice stopped working tomorrow, the world would continue to run without much of a hiccup.

Apple might continue at it's present trajectory and be worth 800 billion in a couple years. I don't trust the market to have enough sense to value this toy maker at a reasonable level in the next two years, and there is no way I would short it. I would guarantee Berkshire Hathaway with or without Buffett will be worth more than Apple in 2030, 2050, or 2100 so I will just buy BRK instead and let those who want to chase Apple chase it.

Very well articulated. 

RE: apple bears owning the products.  I can like Coke but be bearish on the stock.  I have never implied that Apple was going to go out of business or stop making decent products.  Their profits are going to normalize, and so is their stock price. 
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 17, 2012, 04:35:28 PM
Speaking for myself, the competition will have to be significantly be better than iPhone to get me to switch, so I'm pretty much on a 2 year phone annuity...

Yes, I agree this would be the mentality for many iphone users.

There are a few billion people who has never had smartphone though.  Would they still consider buying one now?  Again, I still expect Apple to sell incrementally more iphones than 4S... before the trajectory is getting flatter... quickly.

So, you think doubling of sales is incremental?

I was referring to iphone 5 vs 4S worldwide sales.  Is it what you see doubling?  I doubt it is, and even if it is it is irrelevant because that's just a few days of sales.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 17, 2012, 05:02:46 PM
Ironic,the Apple bears in this thread seem to buy Apple products themselves and think that other people will stop buying them.

BTW, the evidence seems to be pointing towards a GM decline ;)
http://www.intomobile.com/2012/09/17/iphone-5-flop-apple-doomed-oh-wait-its-most-successful-iphone-yet/

Remarkable...and they'll dominate for some time!  But remember this?

http://finance.yahoo.com/echarts?s=IBM+Interactive#symbol=ibm;range=19701106,19930215;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

How about this?

http://finance.yahoo.com/echarts?s=msft#symbol=msft;range=19950217,20030901;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Lastly?

http://finance.yahoo.com/echarts?s=aapl#symbol=aapl;range=19840907,19971230;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

"Those Who Forget The Past, Are Doomed To Repeat It"

Cheers!

This is like trying to predict how the stock market will perform this year by looking at skirt lengths. Here's the funny thing with history:

   - History never repeats itself, but rhymes
   - No two versions of history agree with each other

Therein lies the problem with the bears - they're simply not willing to do an analysis of the business and instead quote analogous companies. Take your investment in Dell, I can point out 10 tech companies that failed turnarounds and you can point to 10 that did. Do you think that would meaningfully help you predict how Dell will turn out? This is what I call reasoning by analogues and I see people use it when they're not willing to do the analysis work.

Lets take this "GMs will decline since competitors have caught up" theory:

1, It does not explain Apple's past. GMs for products in the 2nd Steve Jobs era, GMs did not decline in a big way for iPods or Macs despite more feature-filled offerings  from competitors (Zune, etc)
2, It does not explain Apple's present. According to you guys, Samsung and other have equivalent or better devices currently or have already had them for a year. However, Apple's sales show signs of continuing to double. So guess what, Tim Cook has no reason to drop prices and impact GMs

So you have a theory that does not explain the past or the present. So what goes a logical person do? Use the theory to predict the future?

Uccamal predicted that Apple would stumble this year and would peak at $500-$600B. Well, Apple went on to one of the biggest patent wins in history and blew past the market cap limit within 6 months. Now, you would this that this would make one rethink or write it off as something one doesn't understand but no way. Instead, its like the ECRI recession call - "it'll happen soon". When Liberty presented with with facts about Apple's processor, I quickly admitted I was wrong and changed my position. Its like arguing with intelligent design proponents, the more facts you produce, the more they retrench and rationalize.

I don't see any depth of argument, an understanding of what drives Apple's sales or arguments supported by facts. Instead, I see vague, surface arguments (Steve Jobs is dead, Samsung has feature X or I don't like iPhones anymore) or cliches (no company can grow forever, they are bound to screw up, they have too much competition, they are too big).

Thats my problem with the bears- No analysis, no facts, no understanding, no conviction

 
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 17, 2012, 05:03:54 PM
Speaking for myself, the competition will have to be significantly be better than iPhone to get me to switch, so I'm pretty much on a 2 year phone annuity...

Yes, I agree this would be the mentality for many iphone users.

There are a few billion people who has never had smartphone though.  Would they still consider buying one now?  Again, I still expect Apple to sell incrementally more iphones than 4S... before the trajectory is getting flatter... quickly.

So, you think doubling of sales is incremental?

I was referring to iphone 5 vs 4S worldwide sales.  Is it what you see doubling?  I doubt it is, and even if it is it is irrelevant because that's just a few days of sales.

Have you seen the news?
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 17, 2012, 05:15:58 PM
Speaking for myself, the competition will have to be significantly be better than iPhone to get me to switch, so I'm pretty much on a 2 year phone annuity...

Yes, I agree this would be the mentality for many iphone users.

There are a few billion people who has never had smartphone though.  Would they still consider buying one now?  Again, I still expect Apple to sell incrementally more iphones than 4S... before the trajectory is getting flatter... quickly.

So, you think doubling of sales is incremental?

I was referring to iphone 5 vs 4S worldwide sales.  Is it what you see doubling?  I doubt it is, and even if it is it is irrelevant because that's just a few days of sales.

Have you seen the news?

Enlighten me.  Like I said, I was making a call on the iphone 5 vs 4S sales, and there's no meaningful iphone 5 sales figures yet given it has only been available for pre-ordering for a few days.

In case you didn't catch it, I am not a AAPL bear.  I am just a non-bull who's commenting because I am interested in the cellphone industry.  And have I seen the news, you ask?  I am sure I have seen more cellphone-related news than most on this board.  You base your calls on the past and present.  I base mine on what I see going forward.  Btw, I didn't become *less optimistic* on Apple's prospect until recently, so it's not like I was calling on the demise of Apple when it put out iphone 3G.
Title: Re: AAPL - Apple Inc.
Post by: kevin4u2 on September 17, 2012, 05:57:04 PM

I don't see any depth of argument, an understanding of what drives Apple's sales or arguments supported by facts. Instead, I see vague, surface arguments (Steve Jobs is dead, Samsung has feature X or I don't like iPhones anymore) or cliches (no company can grow forever, they are bound to screw up, they have too much competition, they are too big).

Thats my problem with the bears- No analysis, no facts, no understanding, no conviction

As I mentioned before you appear quite biased toward the company, and that can be a dangerous in investing.  I don't know if any argument would be sufficient for you. 

You asked for some facts and analysis, so here are some

http://aswathdamodaran.blogspot.ca/2012/08/apples-crown-jewel-valuing-iphone.html (http://aswathdamodaran.blogspot.ca/2012/08/apples-crown-jewel-valuing-iphone.html)

Let me quote part of the article.

Here is the larger point, though. About 55% of Apple's business value comes from its iPhone franchise and there are three pressure points that will test this value.

The first is Apple's capacity to maintain pricing power and earn its current margins; there isn't a competitor within shouting distance of Apple, when it comes to margins. If the after-tax margin drops to 15% from its current 21%, the value of the franchise drops to $219 billion (estimated value of $307 billion).

The second is that Apple will be able to prevent the life cycle from speeding up further and that it can continue to innovate at a reasonable cost (with this cost in conjunction with the loss in earnings during the second part of the cycle not exceeding 50% of the after-tax earnings during the period). Reducing the life cycle to one year from two almost halves the value of the franchise.

The third is that Apple is able to maintain a net positive switching ratio (more of the competitors' customers switch to Apple than vice versa), allowing it to increase in market share in dollar value terms. Assuming a neutral switching ratio (customers switching in = customers switching out), reduces the value of the franchise to $255 billion.
 

And...

The question that investors face right now is whether Apple can continue its winning streak. The high valuations attached to the company assume that the company can keep doing what it is right now, that the iPhone 5 will not only launch successfully, but be followed by the iPad Mini and the iPhone 6 and so on. The risk that investors have to take into account when investing in Apple is that somewhere along the way, the winning streak may will be broken. Unlike other large market cap companies with long product life cycles or diversified product portfolios, Apple’s value rests on being a Phoenix, constantly reinventing itself every few years.

That last point is exactly why Buffett would never invest in Apple despite what you claim.  One would have to know the future in order to accurately value Apple. 

Buffett doesn't invest in these types of rapidly changing industries for a reason.  He prefers bubble gum, carpet, and bricks.  Demand for those items will be higher in the future, but what about the iphone?  Nobody knows.  Five years ago the iphone didn't even exist.  Change is the enemy of a value investor. 

I have maintained that much of the success of Apple is because of social metaphysics.  Sure they make good products, but many people buy them because they want to be percieved to be "cool" by their friends.  Many people derive their self worth based on what other's think of them.  This is the reason for the overwhelming success of Facebook and the endless nonsense posted on everyone's bragging board.  It's the reason why people wear brand names (and pay high prices), to be socially accepted by the group.  Nobody wants to be rejected by their peers.  So much of social interaction is based on these principles.  These are powerful psychological forces, but predicting and investing in them are very difficult.  However if you can ever get them to work in your favor, as Apple has, the results are huge. 
Title: Re: AAPL - Apple Inc.
Post by: ExpectedValue on September 17, 2012, 06:49:46 PM
Who cares about whether or not Buffett would buy Apple. It's besides the point.

To be clear, I have no position in Apple, but it's a company I monitor with interest. I think it's important to stick with the facts, it seems like a lot of people have instinctive emotions driving their feelings towards Apple, when they really should just look at the company's numbers.

At its current price, Apple is not expensive, instead, it looks pretty cheap. The company trades at between 9-10x EV/EBIT, which for a company with Apple's growth thus far, is really really good.

There definitely is a law of large numbers issue, where its going to get harder and harder for Apple to grow and contribute materially as its size grows. But the market is not really pricing Apple for growth, it is priced like any other value stock (low price relative to cash flows).

A lot of you are harping on about the margins being so high. One of the reasons the company's margins are growing is a result of its fixed costs. So if you think margins have to compress, you will need volumes to decline or pricing to compress. On the first point, given that the smartphone market is competitive, it's possible this could happen. On the second point, I'm really not so sure. I'd argue that over the last 10 years or at least since 2003, Apple has really not played the game of being the lowest cost provider for anything. On their computers, tablets, mp3 players, phones, etc -- everything always goes after the premium segment. Apple seems pretty content with chasing profit-share not market-share and that's a really important distinction. I think it's highly unlikely that you'll see competitive pressures forcing Apple prices down.

Some of you seem to think growth in smartphones will run out. Maybe that's true, but I think there's still a pretty decent runway where you'll have penetration spreading to a lot of underserved markets. Increasingly, the smartphone market looks like an iOS/Android world, with a small sliver out there for Microsoft/NOK. You've also got embedded call options on things like TVs, etc.

What's interesting, what that "Hardware is Dead" article mentions, is the idea that brands are beginning to become important in consumer electronics. I think this is a point that might not be appreciated by a lot of folks on here, but is important to consider. I'm not saying it's going to happen, but if it does happen it can have pretty substantial implications. If consumer electronics shifts to a hardware + software + brand model, you could very well have margins continue to stay elevated.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on September 17, 2012, 07:13:31 PM
Valueinv, I probably never should have attached a number to my thesis. 

The problem in your analysis is that you dont understand social psychology. 
You'll learn it one day the hard way.  People love something until they dont.  It happens very quickly and no one ever knows what the catalyst is going to be. 

I have no bet on Apple, either way, nor will I.  I have conviction that Apple is not going to get bigger forever, and that will bring the stock price down to earth.  Does one require a financial commitment to prove I have conviction. 

Shorting Apple is not on my radar when I can make vast amounts of returns much faster in beaten down banks and insurers. 
Title: Re: AAPL - Apple Inc.
Post by: finetrader on September 17, 2012, 07:42:59 PM
This summer I told my friend, who love Apple's products, that I would short AAPL would the market cap reach 1000G$. Maybe I will have a chance to do so..
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 17, 2012, 08:43:05 PM
The problem in your analysis is that you dont understand social psychology. 
Hahahahah, you just love to jump to conclusions, don't you?  ;D ;D ;D

I have been studying social psychology long before I had even heard of value investing. In fact, I could completely deconstruct your posts based on social psychology alone. Ask yourself if you are ignoring hard facts presented in this and other threads and why?

Why do you think I am pushing for a bet of $5000 publicly on a forum on the Internet?  ;) 
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 17, 2012, 11:59:28 PM
FWIW, a jailbreaker's POV on the iphone 5 / iOS 6:

http://thebigboss.org/ios-6-a-dud?utm_source=rss&utm_medium=rss&utm_campaign=ios-6-a-dud

Jailbreakers are among the most enthusiastic users of iphones.  It has been said that some new features (e.g. drag-down notifications; physical camera shutter button) are "inspired" by the jailbreaker community.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 18, 2012, 01:23:24 AM
I don't know if any argument would be sufficient for you. 
Thanks you, I try to maintain high standards  ;)

You asked for some facts and analysis, so here are some
Thanks for posting, now we are getting into a more meaningful discussion.



Let me quote part of the article.

Let me add something interesting from the article:

I justified my decision to sell not on valuation (since I found the stock to be worth $700+) but on two counts. First, I argued that the company had become a momentum play and that the pricing process had lost its connection to the valuation process. Second, I also felt uncomfortable with the mix of dividend, growth and momentum stockholders, with differing expectations about the company and differing demands of it. Even though Apple’s stock price has gone up about 10% since I sold it, I have no regrets about selling. Since my original case for selling the shares was predicated on a fickle investor base with conflicting views, I believe that the stock price gyrations over the last six months supports that thesis. The stock price dropped as low as $530 and now risen to its high for the year without any dramatic news announcements for the most part driving the price (until the last week). My intrinsic valuation has not changed much in that period and remains over $700, with the updated numbers through the end of last quarter.

Need I offer a rebuttal on a forum for value investing? Which value investor do I need to quote on stocks being pieces of an enterprise? 

The first is Apple's capacity to maintain pricing power and earn its current margins; there isn't a competitor within shouting distance of Apple, when it comes to margins. If the after-tax margin drops to 15% from its current 21%, the value of the franchise drops to $219 billion (estimated value of $307 billion).
Firstly, there is an "if" like in "if Buffet made a series of blunders, the value of Berk will drop". Well, duh.  This is what I mean by depth of analysis. That "if" statement becomes meaningful only when you analyze why and how margins will drop (or are dropping). If you build an analysis on assumptions, you need to be able to handicap those assumptions.

For margins to drop, Apple has to have no moat. If Apple has no moat, how come it has had high margins on the iPhone for 5 years? How is iPhone pricing really structured to the end user?

Secondly, it assumes that turnover will not increase if margins decrease. The reality is pricing (and hence margin) is a knob that Tim Cook can turn to increase or decrease marketshare. They are clearly priced for profits and not marketshare. 

The second is that Apple will be able to prevent the life cycle from speeding up further and that it can continue to innovate at a reasonable cost (with this cost in conjunction with the loss in earnings during the second part of the cycle not exceeding 50% of the after-tax earnings during the period). Reducing the life cycle to one year from two almost halves the value of the franchise.
1, This ignores that fact that the life cycle is set by operator contract durations (2 years).
2, Apple's R&D expenses are 2% of revenues. It spends far less on R&D than most tech companies. The industrial design team at Apple is 15 people - Yup, 15 guys design all the physical aspects of all Apple products.

The third is that Apple is able to maintain a net positive switching ratio (more of the competitors' customers switch to Apple than vice versa), allowing it to increase in market share in dollar value terms. Assuming a neutral switching ratio (customers switching in = customers switching out), reduces the value of the franchise to $255 billion.
Another surface "if" statement. How about actually going into what the switching ratio will be? How about looking at satisfaction ratings? How is marketshare progressing in key countries like the US? How about looking at how many iPhones the operators sold in recent quarters?
 

And...

The question that investors face right now is whether Apple can continue its winning streak.
This is another "Apple needs to produce more hits" argument. First, the use of words like "hits", "winning streak",etc assumes that Apple is getting lucky and that its innovation are the fruits of random events and not skill or company culture or strategy or anything similar. The irony is that the same people who believe that Buffet produces better returns through skill think that Apple produces successful products through luck. I call it the efficient market theory of innovation.

How about actually analyzing whether Apple's organization has something different that allowed it to revolutionize PCs, phones and  tablets? How about analyzing if that is repeatable? How about comparing the way Apple operates to the way Samsung does? How are decisions made? What do the managers believe in? What are their biases? What resources can they deploy?
 
The risk that investors have to take into account when investing in Apple is that somewhere along the way, the winning streak may will be broken.
This establishes that there risk in Apple, not that it will fail or why GMs will decrease. As Buffet said, knowledge is the only antidote to risk. If this is the depth of his analysis, I agree, its too risky of a stock for him.

Another point, most companies have a lot more risk than people assume. How many people were pricing in a risk of a major oil spill at BP or unrest in China affecting Toyota?

Apple’s value rests on being a Phoenix, constantly reinventing itself every few years
If you focus on innovation, it follows that you will re-invent yourself. Most tech companies will have to re-invent themselves constantly. IBM did it, Google is doing it now and even Facebook is forced to do it. How about analyzing which companies have organizations that allow of more successful re-invention?

That last point is exactly why Buffett would never invest in Apple despite what you claim.
I never claimed Buffet would invest in Apple. In fact, I claim that Buffet is very unlikely to invest because of a concept he understands much better than the detractors - circle of competence.

If you want to invest in what Buffet invests in, buy Berk.

One would have to know the future in order to accurately value Apple.
Like one would have to know the future of the stock market to accurately value Berk?

Change is the enemy of a value investor. 
Well, as a value investor, I surely hope that the stock prices of my investments change from my purchase price. ;)

 Sure they make good products, but many people buy them because they want to be percieved to be "cool" by their friends. 
I don't see a logical connection between the former and the latter. The former is a fact, the latter an assumption. Care to substantiate the assumption. Why does the possibility not exist that people buy products because they are good or that they're more familiar or that they identify with the brand or a 100 other reasons.

Many people derive their self worth based on what other's think of them.  This is the reason for the overwhelming success of Facebook and the endless nonsense posted on everyone's bragging board.
Same as above.

It's the reason why people wear brand names (and pay high prices), to be socially accepted by the group.  Nobody wants to be rejected by their peers.  So much of social interaction is based on these principles.  These are powerful psychological forces, but predicting and investing in them are very difficult.
I don't try to predict them and its a myth that Apple's success is based on it. Apple is not creating "fads". If they were, the iPhone's external design would be changing very fast. Instead, Apple found something that works and is sticking to it. The design process is not about trends, its about solving people's problems. Go through the list of features in the iPhone 5 and IOS 6 and ask yourself why they decided to include those features? Why is NFC left out when it is all the rage? Why are there "boring" features like FB integration or VIP lists in email? Why are they working on improving the audio of a phone call or the quality of their earphones instead of a kickstand? Why does the phone not have 20 hour battery life or a 5 inch screen? Why don't they go for flashy features like a stylus?

Once you start answering those questions and you'll see how the organization thinks and functions. Once you do that, work your way up to market, operations, brand and competitive position and finally, work your way up to the financials. Then you'll begin to understand Apple.
Title: Re: AAPL - Apple Inc.
Post by: Ross812 on September 18, 2012, 06:56:15 AM

For margins to drop, Apple has to have no moat. If Apple has no moat, how come it has had high margins on the iPhone for 5 years? How is iPhone pricing really structured to the end user?


Apple maintains high margins as a luxury item; not due to some sort of competitive advantage. I define a moat as how much money it would take to substantially affect a company's market share. Google spent 14 Billion on Android or 2-3% (Apples market cap) and now controls over 50% of the smart phone market. Please share where you see Apple's moat. I now see Apple trying to defend their products in court because other products are catching up. If Apple was so far out in front would they bother with law suits?
Title: Re: AAPL - Apple Inc.
Post by: rmitz on September 18, 2012, 08:08:16 AM

For margins to drop, Apple has to have no moat. If Apple has no moat, how come it has had high margins on the iPhone for 5 years? How is iPhone pricing really structured to the end user?


Apple maintains high margins as a luxury item; not due to some sort of competitive advantage. I define a moat as how much money it would take to substantially affect a company's market share. Google spent 14 Billion on Android or 2-3% (Apples market cap) and now controls over 50% of the smart phone market. Please share where you see Apple's moat. I now see Apple trying to defend their products in court because other products are catching up. If Apple was so far out in front would they bother with law suits?

Yeah, they probably would.  Certainly Jobs set the tone there on this--I imagine a number of internal people really feel strongly about the topic.
Title: Re: AAPL - Apple Inc.
Post by: stahleyp on September 18, 2012, 08:53:39 AM
Have you guys read the Jobs biography? I'm about a quarter of the way through and it is insane how much control and decision making he had with Apple, at least in the early days.
Title: Re: AAPL - Apple Inc.
Post by: FrankArabia on September 18, 2012, 08:59:06 AM
sorry for the basic question but where do you get the statistic that google spent $14 billion on Android?
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 18, 2012, 09:14:33 AM

For margins to drop, Apple has to have no moat. If Apple has no moat, how come it has had high margins on the iPhone for 5 years? How is iPhone pricing really structured to the end user?


Apple maintains high margins as a luxury item; not due to some sort of competitive advantage. I define a moat as how much money it would take to substantially affect a company's market share. Google spent 14 Billion on Android or 2-3% (Apples market cap) and now controls over 50% of the smart phone market. Please share where you see Apple's moat. I now see Apple trying to defend their products in court because other products are catching up. If Apple was so far out in front would they bother with law suits?

-How can a company be a 'luxury item' without having a competitive advantage?

-Go compare Google's profits from Android with Apple's profits with iPhone.

-So just because a company is far out in front means they should be completely fine with other companies stealing from them?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 18, 2012, 09:26:55 AM
sorry for the basic question but where do you get the statistic that google spent $14 billion on Android?

Motorola + other acquisitions. Somewhere in the ballpark
Title: Re: AAPL - Apple Inc.
Post by: Ross812 on September 18, 2012, 09:59:34 AM
sorry for the basic question but where do you get the statistic that google spent $14 billion on Android?

Motorola + other acquisitions. Somewhere in the ballpark

I read 14 billion in a Seeking Alpha article. Looking at the numbers myself I come up with:

-50 million for android OS in 2005
-30 million on the android desktop environment in 2010
-They made 11 other purchases related to android for undisclosed amounts - lets say 25 million each
-12.5 billion for Motorola
-800 million in R&D per year since 2005 ~5.6 billion

I added in the R&D costs and they are probably an over estimate for the early years.

18.5 Billion +/- 15% is my best guess

Title: Re: AAPL - Apple Inc.
Post by: FrankArabia on September 18, 2012, 10:05:55 AM
thanks. was curious to see if you incorporated Motorola in your assessment.
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 18, 2012, 10:38:51 AM
The second is that Apple will be able to prevent the life cycle from speeding up further and that it can continue to innovate at a reasonable cost (with this cost in conjunction with the loss in earnings during the second part of the cycle not exceeding 50% of the after-tax earnings during the period). Reducing the life cycle to one year from two almost halves the value of the franchise.
1, This ignores that fact that the life cycle is set by operator contract durations (2 years).
2, Apple's R&D expenses are 2% of revenues. It spends far less on R&D than most tech companies. The industrial design team at Apple is 15 people - Yup, 15 guys design all the physical aspects of all Apple products.

I don't agree with some of the points in your long post, but I think the above two stick out in particular:

1. If you are going to imply that operators have such great power to set renewal cycles and such, you won't like it to hear that now operators are telling their sales staff to persuade customers away from purchasing the iphone.  Why?  Because they don't make as much money on an iphone as other phones.  Operators want their margin too, and the competitions among the few operators in US (and Canada) are really not that fierce.  Why sell a phone where you make almost no money (based on various sources; talking about the phone hardware only, not monthly plan fees which are somewhat equal among smartphones) when you can sell another one which earns (say) an $100 extra?  In Canada, iphones are bought on 3-year (!) contracts, yet operators offer 2-year contracts on certain android phones - and sometimes those latter plans are cheaper too.  One thing that goes through many customers heads would be "oh should i be tied to a contract (and be stuck to the same phone) for 3 years?  The iphone X may be kick-ass now but by the third year it would be so outdated".  I wouldn't be surprised if US operators start offering 18-month contracts on android phones.

Here's the story (and of course AT&T denied it): http://www.gottabemobile.com/2012/08/01/att-telling-employees-not-to-sell-the-iphone/

2.  How is a low R&D expense % a good thing?  If they increase their R&D budget, perhaps they could have gotten out the iphone 5 last year and maintained the technology lead.  Yes, I am talking about "a list of specs" and skipping the "user experience / ecosystem" again, but both matter.

Btw, I read about the iphone 5 sales-doubling news.  This is really another example of "reality distortion field".  Not accusing the number is wrong, but it's manipulated to sound impressive -- I must admit Apple marketing is a genius at that.  There are a few contributing factors for the initial sales jump (over 4S): 1) Better and more distribution points this year.  New provider Sprint, and ability to online pre-order through carriers (in Canada; not sure about US). 2) First day availability in more countries, notably Hong Kong which is a proxy to the China market.  You can say, double is double.  True, but I maintain that this initial doubling of sales does not give an indication of its sales going forward.  In fact, it may be an indication of *some* sales drawn forward.


Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 18, 2012, 10:50:16 AM
-How can a company be a 'luxury item' without having a competitive advantage?

There's no direct correlation between luxury and competitive advantage.  It's just different marketing strategy / segmentation.  For example, Toyota has Toyota, Lexus, and Scion.  If luxury = competitive advantage, then Toyota would only sell Lexus.  Luxury sellers can have as fierce competition as the cheapo sellers.
Title: Re: AAPL - Apple Inc.
Post by: LC on September 18, 2012, 11:21:56 AM

-How can a company be a 'luxury item' without having a competitive advantage?


High quality does not equal competitive advantage.

Now, having a culture or infrastructure which allows your company to consistently offer the highest-quality product in a market is a competitive advantage. Whether that be a corporate culture which attracts the brightest employees, or patents on certain processes/machinery, or the best sourcing of materials, or something else.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 18, 2012, 11:26:15 AM

-How can a company be a 'luxury item' without having a competitive advantage?


High quality does not equal competitive advantage.

Now, having a culture or infrastructure which allows your company to consistently offer the highest-quality product in a market is a competitive advantage. Whether that be a corporate culture which attracts the brightest employees, or patents on certain processes/machinery, or the best sourcing of materials, or something else.

I'll tell you one thing, not having dumbasses working in your marketing dept. is a huge competitive advantage:

http://www.bgr.com/2012/09/18/samsung-iphone-5-ad-facebook-galaxy-s-iii/

 ;D ;D ;D
Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 18, 2012, 07:25:05 PM
http://www.engadget.com/2012/09/18/apple-iphone-5-review/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 18, 2012, 11:27:53 PM
I don't agree with some of the points in your long post, but I think the above two stick out in particular:

1. If you are going to imply that operators have such great power to set renewal cycles and such, you won't like it to hear that now operators are telling their sales staff to persuade customers away from purchasing the iphone. 


I have heard. And how is that working? Last quarter was slow for the iPhone due to leaks and iPhone 5 anticipation. Gokou3, could you tell me what % of smartphone sales were iPhone at the 3 large operators it was available at (Sprint, Verizon, ATT)?

This is what I mean by no facts.

I wouldn't be surprised if US operators start offering 18-month contracts on android phones.
So the operators must now amortize the subsidy over 18 months instead of 24 months. Does that work in their favor? What does it do to their churn numbers? How does it effect their customer acquisition costs?

2.  How is a low R&D expense % a good thing?  If they increase their R&D budget, perhaps they could have gotten out the iphone 5 last year and maintained the technology lead. 
Have you considered that they are spending less because they are more efficient? By having small teams, they are more nimble? Do you think that the best R&D comes from big bureaucratic organizations? Have you ever shipped a product? A bigger team does not necessarily help you ship faster. Read the "Mythical Man Month":
http://en.wikipedia.org/wiki/The_Mythical_Man-Month

I mentioned the R&D expense to show that even if it doubled, it's unlikely to effect margins, especially will the rates volumes are growing.
That is a good thing.

Btw, I read about the iphone 5 sales-doubling news.  This is really another example of "reality distortion field".  Not accusing the number is wrong, but it's manipulated to sound impressive -- I must admit Apple marketing is a genius at that.  There are a few contributing factors for the initial sales jump (over 4S): 1) Better and more distribution points this year.  New provider Sprint, and ability to online pre-order through carriers (in Canada; not sure about US). 2) First day availability in more countries, notably Hong Kong which is a proxy to the China market.  You can say, double is double.  True, but I maintain that this initial doubling of sales does not give an indication of its sales going forward.  In fact, it may be an indication of *some* sales drawn forward.
Really? Pop over to Apple site and see what the shipping delays are. They've already sold out about a months worth of production before they have even physically released the phone. I'm guessing you are going to rationalize this by saying that this month is drawing from next month's sales. I'm fine with that argument as long as it continues perpetually  ;)

Like I said, facts.
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 19, 2012, 12:34:20 AM
I don't agree with some of the points in your long post, but I think the above two stick out in particular:

1. If you are going to imply that operators have such great power to set renewal cycles and such, you won't like it to hear that now operators are telling their sales staff to persuade customers away from purchasing the iphone. 


I have heard. And how is that working? Last quarter was slow for the iPhone due to leaks and iPhone 5 anticipation. Gokou3, could you tell me what % of smartphone sales were iPhone at the 3 large operators it was available at (Sprint, Verizon, ATT)?

This is what I mean by no facts.

I wouldn't be surprised if US operators start offering 18-month contracts on android phones.
So the operators must now amortize the subsidy over 18 months instead of 24 months. Does that work in their favor? What does it do to their churn numbers? How does it effect their customer acquisition costs?

2.  How is a low R&D expense % a good thing?  If they increase their R&D budget, perhaps they could have gotten out the iphone 5 last year and maintained the technology lead. 
Have you considered that they are spending less because they are more efficient? By having small teams, they are more nimble? Do you think that the best R&D comes from big bureaucratic organizations? Have you ever shipped a product? A bigger team does not necessarily help you ship faster. Read the "Mythical Man Month":
http://en.wikipedia.org/wiki/The_Mythical_Man-Month

I mentioned the R&D expense to show that even if it doubled, it's unlikely to effect margins, especially will the rates volumes are growing.
That is a good thing.

Btw, I read about the iphone 5 sales-doubling news.  This is really another example of "reality distortion field".  Not accusing the number is wrong, but it's manipulated to sound impressive -- I must admit Apple marketing is a genius at that.  There are a few contributing factors for the initial sales jump (over 4S): 1) Better and more distribution points this year.  New provider Sprint, and ability to online pre-order through carriers (in Canada; not sure about US). 2) First day availability in more countries, notably Hong Kong which is a proxy to the China market.  You can say, double is double.  True, but I maintain that this initial doubling of sales does not give an indication of its sales going forward.  In fact, it may be an indication of *some* sales drawn forward.
Really? Pop over to Apple site and see what the shipping delays are. They've already sold out about a months worth of production before they have even physically released the phone. I'm guessing you are going to rationalize this by saying that this month is drawing from next month's sales. I'm fine with that argument as long as it continues perpetually  ;)

Like I said, facts.

1. Nice rebuttal attempt, but that AT&T news was from August 1, so there's no meaningful sales figures to back up whether the persuasion works or not yet.
2. Re: contract length, if you are a consumer given a choice of contract length, would you go for a shorter one, all else equal?  You can't argue there's no value to the consumer.  Of course, carriers don't like it, but that's just another way to compete.
3. Is this fact or opinion?  Like I said many times, they are no longer the leader in specs.  Perhaps if they have included NFC and offered a strategy for implementing it, I would have thought of the 5 much more highly, since at least there's some real innovation there and they would be enhancing the all-important user experience.  Btw, you must know that Apple spends billions of $ securing component supplies.  Do you call that nimble too?  Or is anti-nimble good now because Apple is doing it?  I guess that's what they have to do when they are not as vertically-integrated as their major competitor.
4. If you are using shipping delay as a proxy for demand, then don't feel too excited yet.  The longest delay I have seen is 5 weeks, vs. 3-4 weeks now.  There, a factoid for you.  Meanwhile, I am not sure how your shipping delay point counters my original explanation for the doubling in sales.  Remember, in some markets, the local online apple stores only sell unlocked iphones.  Those who wanted to purchase a carrier-subsidized one needed to call / physically go to their operators.  Starting this generation, one can pre-order carrier ones online.  I can't say for sure Apple counts those orders in their first 24 hour sales, but I don't see why not.


Title: Re: AAPL - Apple Inc.
Post by: Green King on September 19, 2012, 02:44:41 AM
I found a old MSN board Thread that can add some perspective to the current situation.

http://msnbrkboardarchive.multiply.com/journal/item/9240/The-Danger-in-Buying-the-Biggest

http://web.archive.org/web/20040512113619/http://www.pabraifunds.com/What%20Warren%20Buffett%20Can%20Teach%20Microsoft%20Jan%202%202003%20TheStreet.pdf
Title: Re: AAPL - Apple Inc.
Post by: berkshiremystery on September 19, 2012, 03:16:19 AM
I found a old MSN board Thread that can add some perspective to the current situation.

http://msnbrkboardarchive.multiply.com/journal/item/9240/The-Danger-in-Buying-the-Biggest

http://web.archive.org/web/20040512113619/http://www.pabraifunds.com/What%20Warren%20Buffett%20Can%20Teach%20Microsoft%20Jan%202%202003%20TheStreet.pdf

Green King,...

I know,... Mohnish also published the first article "The Danger in Buying The Biggest" in his first book.
It's one of the main reasons not to buy the biggest. But good that you repost this article to remind everybody.
Title: Re: AAPL - Apple Inc.
Post by: Green King on September 19, 2012, 03:44:59 AM
I found a old MSN board Thread that can add some perspective to the current situation.

http://msnbrkboardarchive.multiply.com/journal/item/9240/The-Danger-in-Buying-the-Biggest

http://web.archive.org/web/20040512113619/http://www.pabraifunds.com/What%20Warren%20Buffett%20Can%20Teach%20Microsoft%20Jan%202%202003%20TheStreet.pdf

Green King,...

I know,... Mohnish also published the first article "The Danger in Buying The Biggest" in his first book.
It's one of the main reasons not to buy the biggest. But good that you repost this article to remind everybody.

Thank You for your original post  :D
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 19, 2012, 07:07:01 AM
Like I said many times, they are no longer the leader in specs. 

You keep saying this, but it sounds like you really don't understand why the majority of people buy and use phones and technology. Hint..it has nothing to do with tech specs.
Title: Re: AAPL - Apple Inc.
Post by: racemize on September 19, 2012, 07:53:38 AM
Daring Fireballs' review (I generally like his take on things):

http://daringfireball.net/2012/09/iphone_5
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 19, 2012, 08:23:22 AM
Daring Fireballs' review (I generally like his take on things):

http://daringfireball.net/2012/09/iphone_5

That's a pretty good review.  I am looking forward to getting my hands on one and comparing it to a Razr HD.  Then I'll make a decision on what to get. 
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 19, 2012, 09:44:03 AM
Like I said many times, they are no longer the leader in specs. 

You keep saying this, but it sounds like you really don't understand why the majority of people buy and use phones and technology. Hint..it has nothing to do with tech specs.

Yes, as often as the people touting "user experience".  How can Apple enables users experience mobile payments (among others) without NFC, I don't know.  User experience and specs are complementary, and it used to be that Apple integrated the two beautifully.  Recently, however, its products' spec advancement trails that of the user experience.    That's the point that I have been driving at all along.
Title: Re: AAPL - Apple Inc.
Post by: Ross812 on September 19, 2012, 10:58:53 AM
Daring Fireballs' review (I generally like his take on things):

http://daringfireball.net/2012/09/iphone_5

I thought the article did a good job of capturing how the iPhone is luxury item. Apple had the first mover advantage into the smart phone market. Now they will have to rely on their brand and luxury status going forward.

Gone are the days where you are fed up with your clamshell and decide to get a smart phone, 'the' smart phone, an iPhone. Now you have a choice. Do you want a larger screen? Better processor? NFC? a phone that still has a little bit of the linux 'wanna pull your hair out every once in a while'? Even on this board, a very small cross section of smart phone users, you have people saying they will compare the new iPhone, razer, and SGS III. No one debated between three smart phones three or four years ago, and that is why I do not see a moat for Apple. Four years and less than 20 billion dollars later, Google has people fighting over which smart phone is the best.

What do the next four years look like in the smart phone business? I have no idea, so I'll invest elsewhere.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 19, 2012, 11:14:56 AM
1. Nice rebuttal attempt, but that AT&T news was from August 1, so there's no meaningful sales figures to back up whether the persuasion works or not yet.
Your link was the late one, operators were trying to steer customers away a long time before that:

http://appadvice.com/appnn/2012/05/further-proof-verizon-is-pushing-potential-iphone-customers-to-other-devices

What do you think? Operators issued the memo and bloggers found out and posted it the next day?

2. Re: contract length, if you are a consumer given a choice of contract length, would you go for a shorter one, all else equal?  You can't argue there's no value to the consumer.  Of course, carriers don't like it, but that's just another way to compete.

Do you know of any operators that offer cheap phones with a 1 year contract? Since when have operators put their customers first? Mobile networks is an industry built by barriers to entry and squeezing customers, no innovation.

3. Is this fact or opinion?  Like I said many times, they are no longer the leader in specs.  Perhaps if they have included NFC and offered a strategy for implementing it, I would have thought of the 5 much more highly, since at least there's some real innovation there and they would be enhancing the all-important user experience.  Btw, you must know that Apple spends billions of $ securing component supplies.  Do you call that nimble too?  Or is anti-nimble good now because Apple is doing it?  I guess that's what they have to do when they are not as vertically-integrated as their major competitor.
We were talking about R&D expense not operations (and hence has nothing to do with component supplies). Just because you didn't get the feature you wanted doesn't mean Apple is doing a bad job at R&D. How many NFC readers have you seen? Have you even used one?

Here's why Apple didn't include NFC, not because their couldn't:
http://allthingsd.com/20120912/interview-phil-schiller-on-why-the-iphone-5-has-a-new-connector-but-not-nfc-or-wireless-charging/

4. If you are using shipping delay as a proxy for demand, then don't feel too excited yet.  The longest delay I have seen is 5 weeks, vs. 3-4 weeks now.  There, a factoid for you. 
http://macdailynews.com/2011/12/27/foxconn-doubles-size-of-chinese-factory-to-produce-more-apple-iphones/

Do the math.
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 19, 2012, 11:36:44 AM
1. Nice rebuttal attempt, but that AT&T news was from August 1, so there's no meaningful sales figures to back up whether the persuasion works or not yet.
Your link was the late one, operators were trying to steer customers away a long time before that:

http://appadvice.com/appnn/2012/05/further-proof-verizon-is-pushing-potential-iphone-customers-to-other-devices

What do you think? Operators issued the memo and bloggers found out and posted it the next day?

2. Re: contract length, if you are a consumer given a choice of contract length, would you go for a shorter one, all else equal?  You can't argue there's no value to the consumer.  Of course, carriers don't like it, but that's just another way to compete.

Do you know of any operators that offer cheap phones with a 1 year contract? Since when have operators put their customers first? Mobile networks is an industry built by barriers to entry and squeezing customers, no innovation.

3. Is this fact or opinion?  Like I said many times, they are no longer the leader in specs.  Perhaps if they have included NFC and offered a strategy for implementing it, I would have thought of the 5 much more highly, since at least there's some real innovation there and they would be enhancing the all-important user experience.  Btw, you must know that Apple spends billions of $ securing component supplies.  Do you call that nimble too?  Or is anti-nimble good now because Apple is doing it?  I guess that's what they have to do when they are not as vertically-integrated as their major competitor.
We were talking about R&D expense not operations (and hence has nothing to do with component supplies). Just because you didn't get the feature you wanted doesn't mean Apple is doing a bad job at R&D. How many NFC readers have you seen? Have you even used one?

Here's why Apple didn't include NFC, not because their couldn't:
http://allthingsd.com/20120912/interview-phil-schiller-on-why-the-iphone-5-has-a-new-connector-but-not-nfc-or-wireless-charging/

4. If you are using shipping delay as a proxy for demand, then don't feel too excited yet.  The longest delay I have seen is 5 weeks, vs. 3-4 weeks now.  There, a factoid for you. 
http://macdailynews.com/2011/12/27/foxconn-doubles-size-of-chinese-factory-to-produce-more-apple-iphones/

Do the math.

1. So you think things like this take immediate effect?
2. You need to look outside of the US market.
3. The component supply example is indeed not about R&D, but it illustrates the common thinking that whatever Apple does is good, even in two contradictionary situations.
4. Capacity != sales.

This discussion has dragged on for longer than I wanted, and I don't feel like going back and forth on minute points.  I think I have hashed out many ideas multiple times, and it's ok if you don't agree.  My major point is that, to repeat with Ross said above, that Apple's moat is under attack from all sides -- competing phone manufacturers with deep pockets and perhaps slightly irrational persistence, operators who got squeezed by Apple for the last few years but now see a breakthrough in choices, and suppliers whose interests can align with whomever that give them the best benefits at the moment.  It's not obvious that Apple can maintain its lead in a rapid-changing industry for an extended period (next 3-5 years) -- one disappointing product release and the entire company's prospect suddenly change.  And thus, I do not invest in it.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 19, 2012, 12:48:15 PM
1. So you think things like this take immediate effect?
So if you're a ATT retail employee, you get a memo from corporate, you're going to wait for the next full moon to implement?

2. You need to look outside of the US market.

Feel free to show me 5 major markets anywhere in the world where operators offer well subsidized phones for a one year contract.

3. The component supply example is indeed not about R&D, but it illustrates the common thinking that whatever Apple does is good, even in two contradictionary situations.

We were talking about R&D costs to Damodaran's point, weren't we? Are you trying to change the subject since you don't have a rebuttal?


4. Capacity != sales.
Pre-ordered capacity translates to sales.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 20, 2012, 09:29:40 AM
Looks like the maps probably weren't fully baked..

http://theamazingios6maps.tumblr.com/

http://www.bbc.com/news/technology-19659736
Title: Re: AAPL - Apple Inc.
Post by: racemize on September 20, 2012, 09:39:23 AM
Looks like the maps probably weren't fully baked..

http://theamazingios6maps.tumblr.com/

http://www.bbc.com/news/technology-19659736

yeah, I guess the google relationship is really out the window--sad really, I like Apple hardware and google services. 
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 20, 2012, 09:54:38 AM
Looks like the maps probably weren't fully baked..

http://theamazingios6maps.tumblr.com/

http://www.bbc.com/news/technology-19659736

This is actually one of the major reasons why I might try out a Razr HD or Galaxy S3 instead of the iPhone 5.

Google Maps is the app I use the most on my iPhone.
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 20, 2012, 09:58:30 AM

Google Maps is the app I use the most on my iPhone.

The problem with it is it didn't offer turn-by-turn navigation, so Apple had to do something different to be able to offer this feature (without required a 3rd party app).
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 20, 2012, 10:01:17 AM
Looks like the maps probably weren't fully baked..

http://theamazingios6maps.tumblr.com/


That one's pretty funny.

I'm curious how much of the issues are due to the data provided by TomTom, compared to the app.
Title: Re: AAPL - Apple Inc.
Post by: globalfinancepartners on September 20, 2012, 10:04:32 AM
I'm sure google will very shortly have a google maps app that you could place on your home screen right where the old one was.  Until then you can save the html5 web app at maps.google.com as an icon on the home screen that launches right into it.  Very similar to the youtube deal - a stand alone youtube app came out right afterwards.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 20, 2012, 10:08:39 AM
Looks like the maps probably weren't fully baked..

http://theamazingios6maps.tumblr.com/


That one's pretty funny.

I'm curious how much of the issues are due to the data provided by TomTom, compared to the app.

One of the major issues is TomTom.  They are the worst of the map data providers.  Also, the search function apparently sucks on Apple's maps app (this has riled up small businesses who can't be found via Apple's map app), and there is no Street View.

Google Maps on Android will have turn by turn directions, so it will be even better to use on a Razr or S3.

It will be interesting to see if Google tries to get Maps into the App Store and when they might try to do so.  Who knows?  Maybe they will delay putting it in the App Store to incent people to switch.
Title: Re: AAPL - Apple Inc.
Post by: Ross812 on September 20, 2012, 10:22:11 AM
Looks like the maps probably weren't fully baked..

http://theamazingios6maps.tumblr.com/

http://www.bbc.com/news/technology-19659736

This is actually one of the major reasons why I might try out a Razr HD or Galaxy S3 instead of the iPhone 5.

Google Maps is the app I use the most on my iPhone.

WHAT? I've been paying attention to this thread and there is no way Apple would lose users to a competitor. Don't you understand how deep the moat is you are trapped in?  ;)
Title: Re: AAPL - Apple Inc.
Post by: damianolive on September 20, 2012, 10:23:10 AM
I've actually tried the new iOS 6 map application and the turn-by-turn navigation is flawless.
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 20, 2012, 10:28:19 AM
I used to have an Android phone and Google Maps' turn by turn directions are also pretty awful, for what it's worth.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on September 20, 2012, 10:50:39 AM
I see some tech bloggers are starting to turn on apple over this maps issue. lots of them don't think ios6 offers anything new. the tech bloggers are the canary in the coal mine. this maps thing is a big deal. nav is an important application for them. supposedly it's awful in urban areas. not saying apple is jumping the shark. but this is something to monitor. the tech bloggers are going to move to wp8 and android. apple is not cool for them any more. it's still cool for the masses. but the tech bloggers generally are out in front of trends.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 20, 2012, 11:20:26 AM
I've played around with the new maps, and one thing I like is the integration of Yelp reviews.
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 20, 2012, 11:25:06 AM
the tech bloggers are going to move to wp8 and android. apple is not cool for them any more. it's still cool for the masses. but the tech bloggers generally are out in front of trends.

What?? You're making this assumption based on the maps app?

The complaints are overblown. Google Maps on iOS has been neglected for a while. Google will release a new iOS app and the competition should make both companies try harder.  I like what I've seen from the Apple maps app in the brief time I've used it so far.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 20, 2012, 11:42:29 AM
Location is a key strategic piece of the phone. It is used everywhere Passbook, Siri, etc. I think Apple didn't want to be dependent on an outside company for such an important piece. Hence, the move. Notice, they didn't move to Nokia/Bing maps but are rolling out their own.

The thing about maps/location data is that a lot of it comes from usage i.e. they are collecting data from you as you use it. Apple was providing Google a ton of location data. Going forward, Apple will own that data and use it to improve its own mapping application. Over the long term, expect Apple's maps to get better and even surpass Google's maps - maps usage is likely to be higher on iPhones Vs Androids.

Short term - this is Tim Cook's first crisis test. It'll be interesting to watch how he responds. My guess is you won't hear from them until they get to the bottom of this. The possibilities are:

Its an algorithm problem: This is likely to be fixed quickly
Its a data problem: How quickly it gets fixed depends on how quickly Apple can incorporate location data it collects from users
Its both: My guess is this. You are likely to see a significant improvement over the short term with Google-catchup over the long term.

I upgraded to IOS 6 yesterday and played with maps a bit, I looked at my home and it worked pretty well - I could see the deck chairs on my roof. I like some of the features it has such as flyover.

The question is - Apple knew they had a problem and they would take a hit. Why did they not push back the release or call it a beta? How quickly can they fix it?
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 20, 2012, 12:54:06 PM
It's not a crisis (& is not anywhere near the antenna issue). Aside from bloggers looking for a story, everyone I've talked to (and on other forums) has said the app works well so far.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 20, 2012, 01:17:10 PM
It's not a crisis (& is not anywhere near the antenna issue). Aside from bloggers looking for a story, everyone I've talked to (and on other forums) has said the app works well so far.

It's a crisis in terms of perception. Antenna gate itself turned out to be not a huge issue in the end. In reality, there are plenty of apps out there to fill in while Apple fixes its own app. However, every blogger out there knows Apple-bashing drives traffic, expect them to take full advantage of this.

Apple invests a lot in its brand, so something like this is a big cost for them.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 20, 2012, 01:19:53 PM
So for folks comparing features between IOS and Android, compare this:

http://techcrunch.com/2012/09/20/chartboost-15-ios-6-adoption-rate-confirmed-highest-among-iphone-owners-at-17-in-24-hours/
http://developer.android.com/about/dashboards/index.html

ICS is what, a almost year old now?
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on September 20, 2012, 01:45:19 PM
I wonder if google might neglect ios mapping in order to drive people to Android. and yes this is a big deal. Apple is making some awful decisions lately. the bloggers also hate the new charging port.  more apple lock in. they don't think ios6 adds much value.  I said this was a canary in the coal mine. the unwashed masses who get the message late will still wait in line for this. but I am detecting a shift.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 20, 2012, 01:52:53 PM
It's not a crisis (& is not anywhere near the antenna issue). Aside from bloggers looking for a story, everyone I've talked to (and on other forums) has said the app works well so far.

It's a crisis in terms of perception. Antenna gate itself turned out to be not a huge issue in the end. In reality, there are plenty of apps out there to fill in while Apple fixes its own app. However, every blogger out there knows Apple-bashing drives traffic, expect them to take full advantage of this.

Apple invests a lot in its brand, so something like this is a big cost for them.

Apple bashing drives traffic?  Fanboyism drives just as much, if not more, traffic.

It's not a crisis.  However, you guys are fooling yourselves if you think the app is as good as Google Maps.  For anyone who is a bit savvy, not having the functionality of Google Maps is actually a big negative.  I will not upgrade to iOS 6 on my iPhone 4 because I want to keep on using Google Maps on it.  I did, however, upgrade my iPad to iOS 6.

This is not to say that Apple users won't get used to an inferior mapping product or personal assistant (Siri) or calendar or whatever.  I think the strength of the Apple brand means that they could very well get used to the inferior Apple version.
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 20, 2012, 02:03:18 PM
You guys are talking about this like the app is set in stone and Apple will never make improvements to it.

Title: Re: AAPL - Apple Inc.
Post by: DCG on September 20, 2012, 02:05:42 PM
I wonder if google might neglect ios mapping in order to drive people to Android. and yes this is a big deal. Apple is making some awful decisions lately. the bloggers also hate the new charging port.  more apple lock in. they don't think ios6 adds much value.  I said this was a canary in the coal mine. the unwashed masses who get the message late will still wait in line for this. but I am detecting a shift.

What awful decisions have they made? And this is coming from someone with a handle named after RIMM, a company that has ran themselves into the ground?

Have you actually used the app?
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on September 20, 2012, 02:50:28 PM
i don't use the app. but I know that others don't like it. apple screwed up here. I like apple products. I don't like being locked into their ecosystem. more and more lock in is what I am seeing out of them.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 20, 2012, 02:50:35 PM
You guys are talking about this like the app is set in stone and Apple will never make improvements to it.

Not at all.  Just pointing out some current deficiencies that could potentially make me switch to Android or even Windows in the near term.  Apple fans are more than willing to point out what they believe are deficiencies in Android that could easily be fixed going forward.

It's a good idea to be objective about these things, no?  Especially if we're trying to figure out what the innovation gap is between Apple and the Others.
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on September 20, 2012, 03:03:07 PM
Just for laughs:

http://theamazingios6maps.tumblr.com/
Title: Re: AAPL - Apple Inc.
Post by: kevin4u2 on September 20, 2012, 04:16:58 PM
I wonder if google might neglect ios mapping in order to drive people to Android. and yes this is a big deal. Apple is making some awful decisions lately. the bloggers also hate the new charging port.  more apple lock in. they don't think ios6 adds much value.  I said this was a canary in the coal mine. the unwashed masses who get the message late will still wait in line for this. but I am detecting a shift.

What awful decisions have they made? And this is coming from someone with a handle named after RIMM, a company that has ran themselves into the ground?

Have you actually used the app?

DCG you seem pretty emotionally involved here?  Do you work for Apple?
Title: Re: AAPL - Apple Inc.
Post by: bathtime on September 20, 2012, 04:25:54 PM
From the Arstechnica review of iOs 6:

http://arstechnica.com/apple/2012/09/review-ios-6-gets-the-spit-and-polish-treatment/

----------------------------
What's not in the new Maps is public transit directions. Google's API wasn't perfect, but transit directions were supported in many cities. As a city dweller who drives little, 9.9 out of every 10 times I use Maps is for public transit (transfer here, get off there)—not just in my own city, but whenever I'm traveling. I have virtually no reason to use Maps otherwise in my daily life, which is why its sudden absence in iOS 6 is deeply disappointing.

The button with a bus icon remains when you try to get directions—that's because Apple says it is opening up transit directions to third parties. At this writing, no apps were available to test the system, though some are in development. During the time I tested iOS 6, I ended up using Google Maps' mobile site in order to get from point A to point B via public transit—it works, but it's not the most enjoyable mobile experience (you have to re-enter your request for directions every time you leave and come back to Safari; under the old Maps, it would remember these parameters when you came back to the app).

I have confidence that some third-party developers will deliver on the transit end—at least here in Chicago, where I know some of them personally. But this may not be the case in every city, and not every app may be good or usable. One thing's for sure: the experience between cities won't be consistent. This is why I'm concerned about the usability of Maps in the long term; I think Apple risked alienating a huge chunk of the world's iOS-using population by going this route, but I keep my fingers crossed that it will work out in the end—or that Google will release its own Maps app for iOS, one that works more smoothly than its mobile site.
-----------------------------
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 20, 2012, 04:51:36 PM
I wonder if google might neglect ios mapping in order to drive people to Android. and yes this is a big deal. Apple is making some awful decisions lately. the bloggers also hate the new charging port.  more apple lock in. they don't think ios6 adds much value.  I said this was a canary in the coal mine. the unwashed masses who get the message late will still wait in line for this. but I am detecting a shift.

What awful decisions have they made? And this is coming from someone with a handle named after RIMM, a company that has ran themselves into the ground?

Have you actually used the app?

DCG you seem pretty emotionally involved here?  Do you work for Apple?

No. In not emotionally involved..just trying to put some of the recent comments on here in perspective.
Title: Re: AAPL - Apple Inc.
Post by: bathtime on September 20, 2012, 05:03:28 PM
Maybe Apple will fall on its face one day because of a kind of bureaucratic arrogance. (Note, I'm typing this on a Macbook Air, which I love).

I bought my parents an iMac four years ago for Christmas - their first computer. A couple of years in the screen started failing, a vertical line appeared on the display and grew wider over time - making it difficult to use. My parents only had the one year warranty. In the spring of 2011 they took it into get checked out by a Genius at an Apple store. He said the only fix would be to replace the screen for $500.

It continued to get worse and in the fall of 2011 I happened to research display failure on their particular model. Turned out that other people had the same problem and Apple had internally flagged specific iMacs in that model as eligible for a free display replacement. But they didn't notify customers of this. And they only permitted free replacement displays for a limited period of time under this new policy (for six months or a year, I forget).

I got in touch with customer service by phone, explained the story and they confirmed my parents model/serial number matched that eligible for replacement and the rep told my parents to take it to a Genius, though he couldn't assure me that they would get a free replacement. They took it to a Genius, explained the issue, and were told it would be $500 because the replacement policy had expired.

So my parents were no longer eligible for this free replacement, even though they had taken it in to a Genius during the replacement period - simply because the Genius at that time wasn't aware of the replacement policy. My guess is that the replacement policy was buried deep in Apple customer service in Cupertino, and only offered to customers who requested it  - ones who likely discovered that option from doing extensive research on web forums. I call that bad customer service.

On the new Macbook Pro w/ Retina display, the premium line laptop, some are having problems with ghosting/burn-in on the displays manufactured by LG (but apparently not Samsung) - see this thread, for example, with 3400 replies since June.

https://discussions.apple.com/thread/4034848?start=0&tstart=0

http://www.macrumors.com/2012/09/17/retina-macbook-pro-users-still-complaining-of-image-persistence/

After replacing laptops for people who have raised concerns, Apple is now saying that this is normal behavior for the display. I don't know if that will effect the exchange policy. So if you're going to pick up the expensive Apple laptop, make sure you get one with the Samsung built display. This kind of customer service attitude can be very frustrating for customers, and it doesn't match the benevolent image that Apple markets itself as having.
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 20, 2012, 05:40:57 PM
bugs aside, the 3d city view in the Maps app is really cool, especially on an iPad. Go to a city like San Francisco or NYC and zoom far in, and click the city button. It does take some time to load, but some of the images are cool to look at.
Title: Re: AAPL - Apple Inc.
Post by: Palantir on September 20, 2012, 09:36:01 PM
Those who are saying Apple could fail badly, what scenarios lead you into thinking that? Is it because you feel they will stop making good products, or that people will stop liking them? To me it does not seem that Apple's valuation show excessive growth expectations.


If anything, I feel that they have a lot of room to grow in the PC/tablet market.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 21, 2012, 12:21:00 AM
I forgot this little detail - The iPhone 4s was outselling all LTE smartphones combined at Verizon:

http://www.roughlydrafted.com/2012/09/13/bored-by-iphone-5-careful-you-might-get-what-youre-asking-for/


How is that for specs?
Title: Re: AAPL - Apple Inc.
Post by: bathtime on September 21, 2012, 09:42:07 AM
http://dashes.com/anil/2012/09/who-benefits-from-ios6s-crappy-maps.html

---------
 Apple made this maps change despite its shortcomings because they put their own priorities for corporate strategy ahead of user experience. That's a huge change for Apple in the post-iPod era, where they've built so much of their value by doing the hard work as a company so that things could be easy for users. I'm not suggesting (yet) that this is a pattern, and that Apple will start to regularly compromise its user experiences in order to focus on its squabbles with other tech titans. But history shows that dominant players in every era of operating system history have reached a turning point where they shift from the user experience and customer benefits which earned them their dominance to platform integration efforts which are primarily aimed at boxing out competitors. It'll be interesting to see which direction Apple's maps follow.
----------
Title: Re: AAPL - Apple Inc.
Post by: rmitz on September 21, 2012, 10:43:11 AM
http://dashes.com/anil/2012/09/who-benefits-from-ios6s-crappy-maps.html

---------
 Apple made this maps change despite its shortcomings because they put their own priorities for corporate strategy ahead of user experience. That's a huge change for Apple in the post-iPod era, where they've built so much of their value by doing the hard work as a company so that things could be easy for users. I'm not suggesting (yet) that this is a pattern, and that Apple will start to regularly compromise its user experiences in order to focus on its squabbles with other tech titans. But history shows that dominant players in every era of operating system history have reached a turning point where they shift from the user experience and customer benefits which earned them their dominance to platform integration efforts which are primarily aimed at boxing out competitors. It'll be interesting to see which direction Apple's maps follow.
----------

So, I've actually used the maps function and it seems like a vast improvement to me.  I'll take it.  The google maps app was left to rust by google, the apple one will be enhanced; it's just a matter of tradeoffs in terms of which features to work on first.

Also, all this yelling seems a lot to me like people complaining about not having a floppy drive in the original iMac.  Anyone remember that?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 21, 2012, 11:17:50 AM
Apple made this maps change despite its shortcomings because they put their own priorities for corporate strategy ahead of user experience.

In the short term yes, over the long term they they will probably produce a better user experience that Google. Already, the satellite/3D view is much better than Google's.

But history shows that dominant players in every era of operating system history have reached a turning point where they shift from the user experience and customer benefits which earned them their dominance to platform integration efforts which are primarily aimed at boxing out competitors.
The one company that does that comes to mind is Google. I don't think MSFT ever had a focus on user experience. In fact, they did a reverse shift - they went from not caring to actually innovating in user experience in Windows 8 (Finally!)
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 21, 2012, 12:07:31 PM
One thing that's interesting is that there are all of these comparisons on websites, but it doesn't seem them are comparing the previous Google Maps on iPhone to Maps on iPhone, they're comparing Android Google Maps to the Apple Maps App. Obviously Apple's isn't going to be as robust, as Google has been working on their Maps for years, but Google had really stopped updating the Google Maps app for iOS so this seems like a logical move for Apple.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 21, 2012, 12:26:59 PM
One thing that's interesting is that there are all of these comparisons on websites, but it doesn't seem them are comparing the previous Google Maps on iPhone to Maps on iPhone, they're comparing Android Google Maps to the Apple Maps App. Obviously Apple's isn't going to be as robust, as Google has been working on their Maps for years, but Google had really stopped updating the Google Maps app for iOS so this seems like a logical move for Apple.

The app is just a client for the back-end which is on Google's servers. Google maps on Android and iOS should be functionally pretty much the same.
Title: Re: AAPL - Apple Inc.
Post by: tng on September 21, 2012, 02:17:56 PM
I don't think the maps thing is a big deal. There was antenna gate. And there was iPads overheating, etc. The new maps app is not that bad. Google maps is better, but it is far from perfect. If I follow Google's maps I'd occasionally go off a bridge or into a building too.

Google pretty much forced Apple to make their own app when they refused to give turn by turn, started asking for a lot of money, and started injecting ads into the app. The Apple vs Google war is on and Google clearly wants the Android to be superior in this aspect.

Stuff like public transit can be added in with a software update. Getting high quality map data will be more difficult, but I think there is a lot of demand for a non-Google solution now because Google is trying to monetize Google Maps and many companies are not willing to pay up (ex: Four Square decided to change maps too).

I have always questioned Google's business strategy. Google has a bad habit of waging war with other tech giants and spending a lot of money in the process (and I don't think they get a reasonable return, if any, it's funded by their search/advertising product). I can see Apple striking back and turning Do Not Track on Safari, which would be a pretty big blow to Google, Microsoft is trying to do it on IE. Wouldn't it be crazy if Apple and Microsoft end up forming an unholy alliance and they team up on a maps project?  Because Microsoft has been putting a lot of work onto Bing's maps.
Title: Re: AAPL - Apple Inc.
Post by: stahleyp on September 22, 2012, 05:02:45 PM
Does anyone else think it's weird that apple's market cap is worth close to MSFT and XOM combined?   ???

I believe those are the top 3 market caps.
Title: Re: AAPL - Apple Inc.
Post by: LC on September 22, 2012, 05:32:38 PM
Does anyone else think it's weird that apple's market cap is worth close to MSFT and XOM combined?   ???

I believe those are the top 3 market caps.
\
I do. The only problem is timing the fall. History has shown time and time again that what goes up must come down, the only question is when.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on September 22, 2012, 05:49:33 PM
the question needs context. did you compare the profitability? or just market cap? did you compare the balance sheet? or just market cap? the market cap of apple is massive because the profits are massive. the balance sheet is massive. the margins are massive. the growth is massive. market caps are nothing without context. having said that I would not buy it today. I would not short it today.  the stock price is not expensive In Context. a stock like this back in mid 1990s would sell for 30-40 times earnings.
Title: Re: AAPL - Apple Inc.
Post by: bargainman on September 22, 2012, 06:52:36 PM
Another thing to consider is that AAPL is now a significant part of the index, and index funds and especially ETFs  are all the rage these days.  As such AAPL will have to move with the index more now.  The fact that it's got such a large market cap will likely affect the PE as well.  It would take a lot of money to double the market cap from here for example.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on September 22, 2012, 07:28:37 PM
Another thing to consider is that AAPL is now a significant part of the index, and index funds and especially ETFs  are all the rage these days.  As such AAPL will have to move with the index more now.  The fact that it's got such a large market cap will likely affect the PE as well.  It would take a lot of money to double the market cap from here for example.

No kidding....  Buy an index fund and you get an automatic 5 percent or higher position in Apple. 

Title: Re: AAPL - Apple Inc.
Post by: stahleyp on September 22, 2012, 08:01:27 PM
the question needs context. did you compare the profitability? or just market cap? did you compare the balance sheet? or just market cap? the market cap of apple is massive because the profits are massive. the balance sheet is massive. the margins are massive. the growth is massive. market caps are nothing without context. having said that I would not buy it today. I would not short it today.  the stock price is not expensive In Context. a stock like this back in mid 1990s would sell for 30-40 times earnings.

Just market cap. I'm well aware that market cap alone is not a valuation metric when comparing companies. However, it does put things in context. When has the #1 market cap company exceeded (or at least close to) the other two largest companies?
Title: Re: AAPL - Apple Inc.
Post by: Palantir on September 22, 2012, 08:25:16 PM
Anyone have insights into Apple's efforts in cloud computing? Supposedly they're building out a lot of servers. In the future, with virtualization, Mac OS could be run on top of a virtualization platform, and has significant growth opportunity there IMO. Anyone have insight into growth opps there?

To me it seems that:

Phones: Strong position, but market could be saturated, unclear of how strong annuity stream is.
Tablets: Dominant position in a growing market.
Desktop/future Virtual Desktops: Growing position in a market.

It seems to me that strong products in one area reinforce each other, and that Apple has good growth prospects in each space except for Phones.

The only worry for me is, that this stock is so well known and followed....what insight can I offer that everybody doesn't know..... :-[
Title: Re: AAPL - Apple Inc.
Post by: giofranchi on September 23, 2012, 06:30:55 AM
Some days ago bmichaud posted the link to an article by the Short Side of Long blog. I had never heard of that blog before, so I checked it out. What I found was a good analysis about precious metals and other macro economic topics. Today the following article about Apple was published on that same blog:

http://theshortsideoflong.blogspot.it/2012/09/off-topic-is-apple-biggest-mania-of-our.html

It doesn’t mean I agree with his thesis on Apple. 14% of GreenlightRe’s portfolio is currently in Apple and GLRE is my firm’s second largest position. So, I really hope his thesis is wrong! Anyway, watch the 1 min. video… it really is food for thought!

giofranchi
Title: Re: AAPL - Apple Inc.
Post by: tombgrt on September 23, 2012, 07:00:14 AM
Stunning...

An important rule when investing: Never fall in love with the products of a company.

Title: Re: AAPL - Apple Inc.
Post by: giofranchi on September 23, 2012, 07:55:02 AM
An important rule when investing: Never fall in love with the products of a company.

+1

That's another reason why I like insurance: there is really nothing to fall in love with! ;D

giofranchi
Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 24, 2012, 08:22:44 AM
http://www.bbc.co.uk/news/technology-19699632
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on September 24, 2012, 09:30:13 AM
An important rule when investing: Never fall in love with the products of a company.

+1

That's another reason why I like insurance: there is really nothing to fall in love with! ;D

giofranchi

+10

I guess banks, phone, cable, and oil companies fall into the same category.  But I do love my Exxon Gasoline..... :P
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 24, 2012, 10:46:14 AM
An important rule when investing: Never fall in love with the products of a company.

+1

That's another reason why I like insurance: there is really nothing to fall in love with! ;D

giofranchi

+10

I guess banks, phone, cable, and oil companies fall into the same category.  But I do love my Exxon Gasoline..... :P

Just like Peter Lynch advocated.  ;)
Title: Re: AAPL - Apple Inc.
Post by: bobp on September 24, 2012, 10:59:14 AM
Nokia is using the apple maps stumble to tout their own mapping. http://conversations.nokia.com/

They are, of course,  having a hard time producing a phone. Still, I like nok.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 24, 2012, 04:00:40 PM
http://arstechnica.com/apple/2012/09/early-adopters-experiencing-issues-with-apples-latest-iphone-5/

http://arstechnica.com/apple/2012/09/iphone-5-a-little-bit-taller-a-little-bit-baller/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 25, 2012, 09:02:43 AM
GMs might actually be increasing:

http://gigaom.com/apple/improved-iphone-5-less-expensive-to-make-than-iphone-4s/
Title: Re: AAPL - Apple Inc.
Post by: Liberty on September 25, 2012, 01:50:57 PM
http://www.macrumors.com/2012/09/25/teardown-of-apples-a6-chip-reveals-manual-layout-of-custom-dual-core-cpu/

A6 might be even more custom than we thought..
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 25, 2012, 04:24:12 PM
http://www.macrumors.com/2012/09/25/teardown-of-apples-a6-chip-reveals-manual-layout-of-custom-dual-core-cpu/

A6 might be even more custom than we thought..

People love to judge a book by its cover:
http://www.computerworld.com/s/article/9231698/iPhone_5_geometrically_more_complex_than_older_Apple_smartphones_says_expert

Boring update, Apple is not innovating, etc.
Title: Re: AAPL - Apple Inc.
Post by: jeffmori7 on September 28, 2012, 06:20:56 AM
Tim Cook on Maps :

http://www.apple.com/letter-from-tim-cook-on-maps/

Rarely seen Apple admitting some errors and refereing to competitors!
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 28, 2012, 01:05:53 PM
Tim Cook on Maps :

http://www.apple.com/letter-from-tim-cook-on-maps/

Rarely seen Apple admitting some errors and refereing to competitors!

Looks like Tim Cook's taking down the RDF with respect to maps. 

Nice to see Apple acknowledge how bad the thing is.  I wonder how fanboys will spin this.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 28, 2012, 01:18:12 PM
Tim Cook on Maps :

http://www.apple.com/letter-from-tim-cook-on-maps/

Rarely seen Apple admitting some errors and refereing to competitors!
http://venturebeat.com/2012/09/28/apple-iphone-apologies/

Looks like Tim Cook's taking down the RDF with respect to maps. 

Nice to see Apple acknowledge how bad the thing is.  I wonder how fanboys will spin this.

The fanboys love it. It shows that Apple is not full of hubris and is aware of its shortcomings. It shows communicates honestly with its customers unlike most of its competitors. . It takes the wind out of competitors' efforts to take advantage of Apple's efforts.

It also shows that Apple is in good hands after Steve.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 28, 2012, 01:21:30 PM
It's not a crisis (& is not anywhere near the antenna issue). Aside from bloggers looking for a story, everyone I've talked to (and on other forums) has said the app works well so far.

It's a crisis in terms of perception. Antenna gate itself turned out to be not a huge issue in the end. In reality, there are plenty of apps out there to fill in while Apple fixes its own app. However, every blogger out there knows Apple-bashing drives traffic, expect them to take full advantage of this.

Apple invests a lot in its brand, so something like this is a big cost for them.

Like I said, for Apple, this is a crisis. They value their brand the way Buffet values his reputation.

Tim Cook coming out with the apology and referring to competing offerings shows this. They also have a section right in front of the app store with a list of competitor mapping applications.

I was watching this whole thing to see if Tim Cook would manage it well. He did, with flying colors.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 28, 2012, 01:34:02 PM
It's not a crisis (& is not anywhere near the antenna issue). Aside from bloggers looking for a story, everyone I've talked to (and on other forums) has said the app works well so far.

It's a crisis in terms of perception. Antenna gate itself turned out to be not a huge issue in the end. In reality, there are plenty of apps out there to fill in while Apple fixes its own app. However, every blogger out there knows Apple-bashing drives traffic, expect them to take full advantage of this.

Apple invests a lot in its brand, so something like this is a big cost for them.

Like I said, for Apple, this is a crisis. They value their brand the way Buffet values his reputation.

Tim Cook coming out with the apology and referring to competing offerings shows this. They also have a section right in front of the app store with a list of competitor mapping applications.

I was watching this whole thing to see if Tim Cook would manage it well. He did, with flying colors.

Completely agree.  I think Tim Cook is great.

I was referring to fanboys defending the maps app itself. 
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 28, 2012, 01:39:47 PM
It's not a crisis (& is not anywhere near the antenna issue). Aside from bloggers looking for a story, everyone I've talked to (and on other forums) has said the app works well so far.

It's a crisis in terms of perception. Antenna gate itself turned out to be not a huge issue in the end. In reality, there are plenty of apps out there to fill in while Apple fixes its own app. However, every blogger out there knows Apple-bashing drives traffic, expect them to take full advantage of this.

Apple invests a lot in its brand, so something like this is a big cost for them.

Like I said, for Apple, this is a crisis. They value their brand the way Buffet values his reputation.

Tim Cook coming out with the apology and referring to competing offerings shows this. They also have a section right in front of the app store with a list of competitor mapping applications.

I was watching this whole thing to see if Tim Cook would manage it well. He did, with flying colors.

Completely agree.  I think Tim Cook is great.

I was referring to fanboys defending the maps app itself.

I didn't see any of the so called fanboys defend the bugs. They (and I) think that it has some great features but everyone agrees that it is really buggy.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on September 28, 2012, 02:19:31 PM
It's not a crisis (& is not anywhere near the antenna issue). Aside from bloggers looking for a story, everyone I've talked to (and on other forums) has said the app works well so far.

It's a crisis in terms of perception. Antenna gate itself turned out to be not a huge issue in the end. In reality, there are plenty of apps out there to fill in while Apple fixes its own app. However, every blogger out there knows Apple-bashing drives traffic, expect them to take full advantage of this.

Apple invests a lot in its brand, so something like this is a big cost for them.

Like I said, for Apple, this is a crisis. They value their brand the way Buffet values his reputation.

Tim Cook coming out with the apology and referring to competing offerings shows this. They also have a section right in front of the app store with a list of competitor mapping applications.

I was watching this whole thing to see if Tim Cook would manage it well. He did, with flying colors.

Completely agree.  I think Tim Cook is great.

I was referring to fanboys defending the maps app itself.

I didn't see any of the so called fanboys defend the bugs. They (and I) think that it has some great features but everyone agrees that it is really buggy.

Yeah, you're probably right.  Nobody in their right mind could defend maps now that all of these bugs have really been fleshed out.  Yet I have heard fanboys saying, it's not that bad and Apple will fix it, and look at these great features!

I will give you credit though for acknowledging from the start that maps was a problem.  Good on you.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 28, 2012, 04:51:28 PM
It's not a crisis (& is not anywhere near the antenna issue). Aside from bloggers looking for a story, everyone I've talked to (and on other forums) has said the app works well so far.

It's a crisis in terms of perception. Antenna gate itself turned out to be not a huge issue in the end. In reality, there are plenty of apps out there to fill in while Apple fixes its own app. However, every blogger out there knows Apple-bashing drives traffic, expect them to take full advantage of this.

Apple invests a lot in its brand, so something like this is a big cost for them.

Like I said, for Apple, this is a crisis. They value their brand the way Buffet values his reputation.

Tim Cook coming out with the apology and referring to competing offerings shows this. They also have a section right in front of the app store with a list of competitor mapping applications.

I was watching this whole thing to see if Tim Cook would manage it well. He did, with flying colors.

Completely agree.  I think Tim Cook is great.

I was referring to fanboys defending the maps app itself.

I didn't see any of the so called fanboys defend the bugs. They (and I) think that it has some great features but everyone agrees that it is really buggy.

Yeah, you're probably right.  Nobody in their right mind could defend maps now that all of these bugs have really been fleshed out.  Yet I have heard fanboys saying, it's not that bad and Apple will fix it, and look at these great features!

I will give you credit though for acknowledging from the start that maps was a problem.  Good on you.

I'll say what I've said before - its bad as a perception problem. It gives competitors and bloggers ammunition which, as I predicted, they took full advantage of. Apple has not been able to manage perceptions very well - a marketing problem. This is an "arrogant" company whose CEO has apologized and referred customers to competitors. Yet, "humble" companies like Google somehow never apologize for crappy products.

It is an inconvinience as a user problem. It means a user needs to click on a different maps application(such as Bing) instead of the default one. I already have Bing and Waze on my phone, for me, it means clicking on a different icon.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on September 29, 2012, 07:10:39 AM
Apology in this case is meaningless BS.  They knowingly put out a crap product, and hoped that no one would get too upset.  They severely miscalculated how many people use and like Google Maps, despite its occassional flaws.

I have deliberately not loaded IOS 6 on my IPad, or my Wifes phone due to this issue.  10% of my total usage of this -ipad- device is mapping.  I cant afford Apples ineptitude and overt lying.



Title: Re: AAPL - Apple Inc.
Post by: valueInv on September 29, 2012, 08:22:17 AM
Apology in this case is meaningless BS.  They knowingly put out a crap product, and hoped that no one would get too upset.  They severely miscalculated how many people use and like Google Maps, despite its occassional flaws.

I have deliberately not loaded IOS 6 on my IPad, or my Wifes phone due to this issue.  10% of my total usage of this -ipad- device is mapping.  I cant afford Apples ineptitude and overt lying.
Too much work for you to tap on a Bing icon ?
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 29, 2012, 09:03:46 AM
Apology in this case is meaningless BS.  They knowingly put out a crap product, and hoped that no one would get too upset.  They severely miscalculated how many people use and like Google Maps, despite its occassional flaws.

I have deliberately not loaded IOS 6 on my IPad, or my Wifes phone due to this issue.  10% of my total usage of this -ipad- device is mapping.  I cant afford Apples ineptitude and overt lying.

Why don't you actually try the Apple maps app before ripping it apart? While it is in no way as robust and detailed as Google maps (and I agree, it should've been more refined before releasing it), it is not nearly as bad as most people are making it out to be. I used the turn-by-turn directions on a trip from Vermont to New Jersey last weekend, and it worked great. I was also talking to a couple friends last night who have the 5 and they also said the Maps app has worked fine for them. Despite it's shortcomings, I find it quicker and easier to get and directions than the old Google maps app.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on September 29, 2012, 10:31:43 AM
Apology in this case is meaningless BS.  They knowingly put out a crap product, and hoped that no one would get too upset.  They severely miscalculated how many people use and like Google Maps, despite its occassional flaws.

I have deliberately not loaded IOS 6 on my IPad, or my Wifes phone due to this issue.  10% of my total usage of this -ipad- device is mapping.  I cant afford Apples ineptitude and overt lying.
Too much work for you to tap on a Bing icon ?

Sorry Valueinv, I thought your thesis around Apple was all about Ecosystem and ease of use.  They clearly put out an unfinished product... and then they Apologize?  I call BS this time. 

Title: Re: AAPL - Apple Inc.
Post by: kevin4u2 on September 29, 2012, 12:11:11 PM
Apology in this case is meaningless BS.  They knowingly put out a crap product, and hoped that no one would get too upset.  They severely miscalculated how many people use and like Google Maps, despite its occassional flaws.

I have deliberately not loaded IOS 6 on my IPad, or my Wifes phone due to this issue.  10% of my total usage of this -ipad- device is mapping.  I cant afford Apples ineptitude and overt lying.

Why don't you actually try the Apple maps app before ripping it apart? While it is in no way as robust and detailed as Google maps (and I agree, it should've been more refined before releasing it), it is not nearly as bad as most people are making it out to be. I used the turn-by-turn directions on a trip from Vermont to New Jersey last weekend, and it worked great. I was also talking to a couple friends last night who have the 5 and they also said the Maps app has worked fine for them. Despite it's shortcomings, I find it quicker and easier to get and directions than the old Google maps app.

This is getting ridiculous.  Are you in total denial?  They screwed up, denying reality won't change it.  If it's not that bad, why the public apology? 

How long did you wait in line for your iphone?
Title: Re: AAPL - Apple Inc.
Post by: DCG on September 29, 2012, 05:15:25 PM
Did you even read my posts? I did not deny it has clearly has issues. All I have said (repeatedly) is that it is not as bad as people are making it out to be. Nearly everyone who has actually used the app will tell you this.
Title: Re: AAPL - Apple Inc.
Post by: Dash on October 01, 2012, 06:56:41 PM
I agree with DCG.. I used the app for the last week and the interface and usability is far far superior to google maps. Once the
they fix the problems people will switch back. It's accurate throughout Southern California and I've had no problems with it.  I would never go back to google maps.
The phone itself is fantastic and I'm not surprised it's selling well.
Title: Re: AAPL - Apple Inc.
Post by: Ross812 on October 01, 2012, 08:37:24 PM
I have talked to several of my friends who downloaded ios6. Not one of them has complained about the mapping application. One of my friends who has a nexus 7 said Google's mapping app was better but the Apple app worked flawlessly. On a side note, out of the four people I talked to who had iPhones, two said they were switching to Android for their next phone. One said he was only continuing with the iPhone because of his grandfathered at & t unlimited plan. A very small sampling but telling none the least. Not one of them said they were particularly angry about any iPhone problems, they just wanted a change and some of the features (especially the huge screens) android phones offer appealed to them. I asked every one of them if they were worried about losing their paid apps; it was a non issue in every case.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 02, 2012, 01:37:03 AM
I have talked to several of my friends who downloaded ios6. Not one of them has complained about the mapping application. One of my friends who has a nexus 7 said Google's mapping app was better but the Apple app worked flawlessly. On a side note, out of the four people I talked to who had iPhones, two said they were switching to Android for their next phone. One said he was only continuing with the iPhone because of his grandfathered at & t unlimited plan. A very small sampling but telling none the least. Not one of them said they were particularly angry about any iPhone problems, they just wanted a change and some of the features (especially the huge screens) android phones offer appealed to them. I asked every one of them if they were worried about losing their paid apps; it was a non issue in every case.

Surprisingly, consumer reports seems to agree:

http://news.consumerreports.org/cars/2012/09/smart-phone-navigation-showdown-apple-ios6-vs-google-android.html
Title: Re: AAPL - Apple Inc.
Post by: mysticdrew on October 03, 2012, 08:08:14 AM
One said he was only continuing with the iPhone because of his grandfathered at & t unlimited plan.

Someone should tell your friend he doesn't need to stay on Iphone to continue to be grandfathered into the at&t unlimited plan.  You can switch to any other smartphone and keep the unlimited.
Title: Re: AAPL - Apple Inc.
Post by: Ross812 on October 03, 2012, 09:38:26 AM
One said he was only continuing with the iPhone because of his grandfathered at & t unlimited plan.

Someone should tell your friend he doesn't need to stay on Iphone to continue to be grandfathered into the at&t unlimited plan.  You can switch to any other smartphone and keep the unlimited.

I'll let him know. He is under the impression he is under the 4-5 year old iPhone data plan which includes unlimited data.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 03, 2012, 11:54:30 AM
Going for vector graphics was a good idea. Wouldn't be surprised if google switched too at some point (they didn't start that way because it wasn't as big a deal on the desktop browser, but with mobile data rates, it matters more ).

http://arstechnica.com/apple/2012/10/report-ios-6-maps-is-data-efficient-compared-to-predecessor/
Title: Re: AAPL - Apple Inc.
Post by: rkbabang on October 03, 2012, 12:27:59 PM
Going for vector graphics was a good idea. Wouldn't be surprised if google switched too at some point (they didn't start that way because it wasn't as big a deal on the desktop browser, but with mobile data rates, it matters more ).

http://arstechnica.com/apple/2012/10/report-ios-6-maps-is-data-efficient-compared-to-predecessor/

That might matter right now, but in the future as cost for bandwidth becomes cheaper and network speeds increase it will matter less and less.  That said, I just got my first tablet this week, an iPad 3, and I have to say I'm impressed so far.  The first thing I did was upgrade it to ios6 so I have no experience with ios5 to compare it to, but with less than one weeks use I don't see the problem with the maps app or see any big difference from using google maps on a browser.  The display really is impressive.  I've tried an iPad 2 before for an hour or so and you really can tell the difference in the display.
Title: Re: AAPL - Apple Inc.
Post by: Liberty on October 03, 2012, 12:59:02 PM
That might matter right now, but in the future as cost for bandwidth becomes cheaper and network speeds increase it will matter less and less.

Yes and no. Bandwidth for smartphones will be tight because there's just so much radio frequency open right now and the number of smartphones is going up rapidly and the data-transfer usage per phone is also going up fast. So savings are important.

On the desktop it matters a lot less.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 05, 2012, 04:06:31 PM
They're beginning to fix it pretty quickly:

http://venturebeat.com/2012/10/05/apple-improves-maps-new-york-city/

This was what I was hoping to see.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 05, 2012, 04:07:36 PM
Going for vector graphics was a good idea. Wouldn't be surprised if google switched too at some point (they didn't start that way because it wasn't as big a deal on the desktop browser, but with mobile data rates, it matters more ).

http://arstechnica.com/apple/2012/10/report-ios-6-maps-is-data-efficient-compared-to-predecessor/

That might matter right now, but in the future as cost for bandwidth becomes cheaper and network speeds increase it will matter less and less.  That said, I just got my first tablet this week, an iPad 3, and I have to say I'm impressed so far.  The first thing I did was upgrade it to ios6 so I have no experience with ios5 to compare it to, but with less than one weeks use I don't see the problem with the maps app or see any big difference from using google maps on a browser.  The display really is impressive.  I've tried an iPad 2 before for an hour or so and you really can tell the difference in the display.

Operators are slowly forcing customers off unlimited plans. The cost of bandwidth will probably matter more than it has in the past.
Title: Re: AAPL - Apple Inc.
Post by: beerbaron on October 05, 2012, 05:06:12 PM
Going for vector graphics was a good idea. Wouldn't be surprised if google switched too at some point (they didn't start that way because it wasn't as big a deal on the desktop browser, but with mobile data rates, it matters more ).

http://arstechnica.com/apple/2012/10/report-ios-6-maps-is-data-efficient-compared-to-predecessor/

That might matter right now, but in the future as cost for bandwidth becomes cheaper and network speeds increase it will matter less and less.  That said, I just got my first tablet this week, an iPad 3, and I have to say I'm impressed so far.  The first thing I did was upgrade it to ios6 so I have no experience with ios5 to compare it to, but with less than one weeks use I don't see the problem with the maps app or see any big difference from using google maps on a browser.  The display really is impressive.  I've tried an iPad 2 before for an hour or so and you really can tell the difference in the display.

Operators are slowly forcing customers off unlimited plans. The cost of bandwidth will probably matter more than it has in the past.

Funny, about a year ago people were saying RIM made a strategic mistake in investing so much in compression. Sooner or later carriers will be happy to see that compression come back!

BeerBaron
Title: Re: AAPL - Apple Inc.
Post by: jjsto on October 05, 2012, 05:33:29 PM
I asked every one of them if they were worried about losing their paid apps; it was a non issue in every case.

My problem is I have been stuck in the apple ecosystem for a while now.  Losing my paid apps wouldnt be a big deal by itself on the cell phone side, but it is integrated with my ipad, macbook, mac mini, and desktop at work.  The hassle of just switching the cell phone wouldnt be worth the marginal benefit of a larger screen, plus having to migrate everything to android.   
Title: Re: AAPL - Apple Inc.
Post by: Ross812 on October 05, 2012, 09:44:14 PM
I can see your point. Two of the three were engineers who use windows for everything at work. The overall switched ng cost wouldn't be that unmanagable for them. It seems like apples moat is increased by the number of apple devices in the users hand and not really the ecosystem. Device integration across the os is Apple's real moat. I wonder if they could sacrifice a portion of their margin in the future and offer discounts on an additional advice with purchase. Say buy an iPad and get $200 off and power book....
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 06, 2012, 10:06:17 AM
I can see your point. Two of the three were engineers who use windows for everything at work. The overall switched ng cost wouldn't be that unmanagable for them. It seems like apples moat is increased by the number of apple devices in the users hand and not really the ecosystem. Device integration across the os is Apple's real moat. I wonder if they could sacrifice a portion of their margin in the future and offer discounts on an additional advice with purchase. Say buy an iPad and get $200 off and power book....

I have made this point. You can see them strengthening this moat: iCloud, passbook, photos, Game Center, iMessage, tighter integration between devices, focus on building platforms, etc. Most of their new features are directed towards this.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 06, 2012, 10:09:39 AM
Going for vector graphics was a good idea. Wouldn't be surprised if google switched too at some point (they didn't start that way because it wasn't as big a deal on the desktop browser, but with mobile data rates, it matters more ).

http://arstechnica.com/apple/2012/10/report-ios-6-maps-is-data-efficient-compared-to-predecessor/

That might matter right now, but in the future as cost for bandwidth becomes cheaper and network speeds increase it will matter less and less.  That said, I just got my first tablet this week, an iPad 3, and I have to say I'm impressed so far.  The first thing I did was upgrade it to ios6 so I have no experience with ios5 to compare it to, but with less than one weeks use I don't see the problem with the maps app or see any big difference from using google maps on a browser.  The display really is impressive.  I've tried an iPad 2 before for an hour or so and you really can tell the difference in the display.

Operators are slowly forcing customers off unlimited plans. The cost of bandwidth will probably matter more than it has in the past.

Funny, about a year ago people were saying RIM made a strategic mistake in investing so much in compression. Sooner or later carriers will be happy to see that compression come back!

BeerBaron

1, There are many options for compression that are not device specific. See http://www.onavo.com
2, In the age of unlimited plans, they wanted compression. Now with pay-for-use plans, they want you to use more data so that they ca charge you more. When data plan adoption saturates, their revenue growth will come form increased usage. That is why they are so desperate to move people off unlimited plans.
Title: Re: AAPL - Apple Inc.
Post by: VAL9000 on October 18, 2012, 05:42:41 PM
valueInv,  this one's for you.

Bad news for Apple's famed secrecy:
http://www.theregister.co.uk/2012/10/18/apple_iphone_market_share_koh/

Looks like that investment in Apple's legal team isn't working out:
http://www.theregister.co.uk/2012/10/18/apple_loses_uk_appeal_ipad/

I guess as CEO Tim Cook no longer has enough time to also manage the supply chain:
http://www.tomshardware.com/news/iPhone-5-Apple-Supply-Revenue,18463.html

Next time maybe they will invent a simpler phone:
http://thenextweb.com/apple/2012/10/17/iphone-5-production-foxconn/

;)
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 23, 2012, 11:14:25 PM
I had the same experience Schiller described with the Nexus 7. Most were stretched out smartphone apps, not tablet apps.

http://techcrunch.com/2012/10/23/phil-schiller-trash-talks-android-tablets-at-ipad-mini-event/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 23, 2012, 11:17:04 PM
Apple seems to be working harder under Cook:

http://venturebeat.com/2012/10/23/apple-pulled-out-all-the-stops-today-in-one-of-the-biggest-apple-events-ever/


They already refreshed the iPhone and the iPods just a month ago. Curiously, the iPad has been refreshed in just 6 months.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 23, 2012, 11:31:21 PM
valueInv,  this one's for you.

Bad news for Apple's famed secrecy:
http://www.theregister.co.uk/2012/10/18/apple_iphone_market_share_koh/

Looks like that investment in Apple's legal team isn't working out:
http://www.theregister.co.uk/2012/10/18/apple_loses_uk_appeal_ipad/

I guess as CEO Tim Cook no longer has enough time to also manage the supply chain:
http://www.tomshardware.com/news/iPhone-5-Apple-Supply-Revenue,18463.html

Next time maybe they will invent a simpler phone:
http://thenextweb.com/apple/2012/10/17/iphone-5-production-foxconn/

;)
I am hoping this causes Apple to miss earnings this quarter and a buying opportunity. A short-term solvable problem as Buffet says.
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 24, 2012, 04:28:01 AM
When analysts were expecting the iPad mini to be priced at $250-$299, they all complained that Apple's margin's would be too small at that price level. They price it at $329 and analysts say it's too expensive. Analysts are idiots.

I'm not expecing a great quarter, as the iPhone supply problems are real, and you still can't get the 5 anywhere. Demand still appears to be strong though.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on October 25, 2012, 09:17:00 AM
the pundits verdict? don't buy a mini yet until it becomes a much better value proposition for customers. apple put a 2 year old screen on it and gave it a premium price. typical I guess.

http://bgr.com/2012/10/24/apple-ipad-mini-criticism-price-too-high/
Title: Re: AAPL - Apple Inc.
Post by: racemize on October 25, 2012, 09:36:15 AM
yeah, I wouldn't mind downsizing size for reading (mostly what I use the ipad for now), but it not being retina makes me think it won't be for me (I find retina to be extremely important for my reading, almost as good as eink). 
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 25, 2012, 10:09:18 AM
the pundits verdict? don't buy a mini yet until it becomes a much better value proposition for customers. apple put a 2 year old screen on it and gave it a premium price. typical I guess.

http://bgr.com/2012/10/24/apple-ipad-mini-criticism-price-too-high/

Except that you have a screen that is 50% larger.
Title: Re: AAPL - Apple Inc.
Post by: VAL9000 on October 25, 2012, 10:17:03 AM
the pundits verdict? don't buy a mini yet until it becomes a much better value proposition for customers. apple put a 2 year old screen on it and gave it a premium price. typical I guess.

http://bgr.com/2012/10/24/apple-ipad-mini-criticism-price-too-high/

I agree that the price is too high for the value proposition.. but I wouldn't say that Apple putting old technology into their products is typical of their business.  Apple has consistently been a leader in product innovation and technology, and their components are more typically market leading than lagging.  There are exceptions, but I dispute the idea that Apple has gained its position by addressing the market with old technology, pretty package, and high price.

My question for the board is, if the iPad mini turns out to be an unsuccessful product, does it mark the beginning of the end of Apple's product dominance?

This is a bold question, but it stems from recent product concerns:
 - iPhone 5 appears to be wonderful, but suffers from quality control issues that i would consider "obvious"
 - the new nano is hideous
 - the iPad mini is a reactive product

Slicing off just these elements of the Apple product mix, my interpretation is that Apple is having trouble delivering without Steve Jobs.  I know that's a cliche thing to say, but here are my thoughts:
 - iPhone 5 overall concept is excellent (Steve involved in concept/development), actual hardware/software quality are not at standard (Steve not involved)
 - iPod nano (clearly Steve not involved)
 - iPad mini (product that Steve argued against, probably not involved)

This isn't quite a trend, but if the iPad mini doesn't make the grade, then I say that it does make a trend.  Hence my question.
Title: Re: AAPL - Apple Inc.
Post by: Palantir on October 25, 2012, 10:32:15 AM
Disagree....I think the iPod nano is really nice. The iPad mini is decent but probably not priced well enough to make a difference. Why not just spend 70 more and get an iPad...
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on October 25, 2012, 10:41:52 AM
some of their new commercials are simply cringe worthy. and the new google chromebook commercial is fantastic.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 25, 2012, 10:55:25 AM

 - iPad mini (product that Steve argued against, probably not involved)

This isn't quite a trend, but if the iPad mini doesn't make the grade, then I say that it does make a trend.  Hence my question.

Steve agreed with the iPad mini:
http://allthingsd.com/20120803/apples-eddy-cue-saw-market-for-7-inch-tablet-in-2011-said-should-do-one/

 If the iPad mini is a reactive product then so it the iPod, iPhone and iPad since mp3 players, smartphones and iPads existed before Apple entered the market.

I agree on the iPod nano thought. I don't think it should have been refreshed. The last version was good enough, it is not a growing market. I wish they would have put those resources on other products.

I think Apple is beginning to have too many products. They need to clean up their product lines and start some cutting.

Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 25, 2012, 10:56:46 AM
some of their new commercials are simply cringe worthy. and the new google chromebook commercial is fantastic.

You mean the new commercial where you don't know what they are talking about until the very end?
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on October 25, 2012, 11:03:15 AM
https://www.youtube.com/watch?feature=player_embedded&v=S95J5BowMmk
Title: Re: AAPL - Apple Inc.
Post by: racemize on October 25, 2012, 11:08:06 AM
I gotta say, that commercial was annoying.  Also, would it even work in the back seat of the car?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 25, 2012, 11:13:34 AM
https://www.youtube.com/watch?feature=player_embedded&v=S95J5BowMmk
Its funny how everyone is trying to copy Apple's feel-good, aspirational, family relationship style of ads now just as Apple moves on to the next thing.

Typical.



Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on October 25, 2012, 11:15:36 AM
that wasn't annoying. that was pure success. This is annoying.
https://www.youtube.com/watch?v=jgJp9KvVfXY

https://www.youtube.com/watch?v=FaKhdRl4rR8&feature=related
Title: Re: AAPL - Apple Inc.
Post by: cayale on October 25, 2012, 11:41:07 AM
This HP ad makes we want to stab my ears.  Starts at 0:08

https://www.youtube.com/watch?v=oZ-joq0JPWU
Title: Re: AAPL - Apple Inc.
Post by: Palantir on October 25, 2012, 12:28:14 PM

 - iPad mini (product that Steve argued against, probably not involved)

This isn't quite a trend, but if the iPad mini doesn't make the grade, then I say that it does make a trend.  Hence my question.

Steve agreed with the iPad mini:
http://allthingsd.com/20120803/apples-eddy-cue-saw-market-for-7-inch-tablet-in-2011-said-should-do-one/

 If the iPad mini is a reactive product then so it the iPod, iPhone and iPad since mp3 players, smartphones and iPads existed before Apple entered the market.

I agree on the iPod nano thought. I don't think it should have been refreshed. The last version was good enough, it is not a growing market. I wish they would have put those resources on other products.

I think Apple is beginning to have too many products. They need to clean up their product lines and start some cutting.

I thought the article says that Steve was a big opponent of a smaller iPad.
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 25, 2012, 12:56:59 PM
I think Apple is beginning to have too many products. They need to clean up their product lines and start some cutting.

Agreed.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 25, 2012, 01:17:20 PM

 - iPad mini (product that Steve argued against, probably not involved)

This isn't quite a trend, but if the iPad mini doesn't make the grade, then I say that it does make a trend.  Hence my question.

Steve agreed with the iPad mini:
http://allthingsd.com/20120803/apples-eddy-cue-saw-market-for-7-inch-tablet-in-2011-said-should-do-one/

 If the iPad mini is a reactive product then so it the iPod, iPhone and iPad since mp3 players, smartphones and iPads existed before Apple entered the market.

I agree on the iPod nano thought. I don't think it should have been refreshed. The last version was good enough, it is not a growing market. I wish they would have put those resources on other products.

I think Apple is beginning to have too many products. They need to clean up their product lines and start some cutting.

I thought the article says that Steve was a big opponent of a smaller iPad.

Read the email at the bottom. Also, they were thinking about iPad mini since Nov 2010.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 25, 2012, 02:33:41 PM
valueInv,  this one's for you.

Bad news for Apple's famed secrecy:
http://www.theregister.co.uk/2012/10/18/apple_iphone_market_share_koh/

Looks like that investment in Apple's legal team isn't working out:
http://www.theregister.co.uk/2012/10/18/apple_loses_uk_appeal_ipad/

I guess as CEO Tim Cook no longer has enough time to also manage the supply chain:
http://www.tomshardware.com/news/iPhone-5-Apple-Supply-Revenue,18463.html

Next time maybe they will invent a simpler phone:
http://thenextweb.com/apple/2012/10/17/iphone-5-production-foxconn/

;)
I am hoping this causes Apple to miss earnings this quarter and a buying opportunity. A short-term solvable problem as Buffet says.

Dammnit, down just 0.5% after hours. Let's hope for a bigger price drop in the coming weeks.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on October 25, 2012, 03:56:00 PM
yeah, I wouldn't mind downsizing size for reading (mostly what I use the ipad for now), but it not being retina makes me think it won't be for me (I find retina to be extremely important for my reading, almost as good as eink).

I think what you just wrote is the reason why AAPL didn't come out with a retina screen iPad Mini. 

Because I think a lot of people would have downsized and, further, many more 10" iPad sales would be cannibalized by a retina screen Mini.  They're not fools over at AAPL.

I do wonder why they updated their iPad so quickly.  Maybe in anticipation of the rumored 10" Google tablet with a higher res?
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 25, 2012, 06:20:46 PM
I do wonder why they updated their iPad so quickly.  Maybe in anticipation of the rumored 10" Google tablet with a higher res?

My thought/guess (& I've thought this would be a good idea for a while) is they might be trying to reverse the iPad and iPhone release cycle. It makes more sense to release the updated iPad in the Fall before the holiday season, and release the new iPhone in the spring. So I wouldn't be surprised if an iPhone 5S is released in the spring, and there's no new iPad in the Spring. The iPad 4th gen updates are pretty small. If they announced those changes in a stand-alone event, people would be let down. So they added it to the iPad mini event.

This is just a guess though. Who knows.
Title: Re: AAPL - Apple Inc.
Post by: EdWatchesBoxing on October 25, 2012, 07:15:07 PM
That Chromebook commercial was awful. So were the Apple genius ones.

The ones that make me laugh are the Samsung sII and sIII commercials.

http://www.youtube.com/watch?v=bJafiCKliA8 (http://www.youtube.com/watch?v=bJafiCKliA8) "Yeah, but they make the coolest adapters!" LOL
Title: Re: AAPL - Apple Inc.
Post by: ItsAValueTrap on October 25, 2012, 07:19:27 PM
Quote
My question for the board is, if the iPad mini turns out to be an unsuccessful product, does it mark the beginning of the end of Apple's product dominance?

Every tech company has a lot of unsuccessful products.

Apple:  Newton, G4 Cube, Bandai Pippin, etc.  On the software side, they bought Shake and Color (Final Touch) only to kill off those products.

Cisco:  Flip consumer camera... bought it and killed it.

Yahoo:  Geocities... bought it and killed it instead of selling it.

Anyways... every tech company has a lot of flops.
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 26, 2012, 06:08:37 AM
I guess I don't really see the need for the iPad mini. And with releasing the 4th gen iPad, I assume that's going to push the 3rd gen down to only $399? Will the iPad 2 continue to be available for even less than that (especially on the secondary market)? Why would most people buy the mini at $329 when they can get the iPad 3 for $399?

The $329 price point would make sense if they were only selling the iPad 4, but not when you can get the 3, or even the 2 for just a bit more.
Title: Re: AAPL - Apple Inc.
Post by: PLynchJr on October 26, 2012, 06:39:05 AM
Well to state the obvious...someone would buy the mini because they want a smaller tablet.  Not everyone wants or needs the full sized iPad.
Title: Re: AAPL - Apple Inc.
Post by: rkbabang on October 26, 2012, 07:22:14 AM
I'll say what I've said before - its bad as a perception problem. It gives competitors and bloggers ammunition which, as I predicted, they took full advantage of. Apple has not been able to manage perceptions very well - a marketing problem. This is an "arrogant" company whose CEO has apologized and referred customers to competitors. Yet, "humble" companies like Google somehow never apologize for crappy products.


There is a big difference between when you experience a bug in a Google product and an apple product.  I've never paid Google a dime to use any of the many Google products I use on a daily basis.  Whereas myself and my family have probably paid Apple thousands.   When you try out some nifty thing Google puts on the web for free you are willing to excuse them a bug or three.  When you pay $500+ for an iPad only to find that they have substituted a useful feature which worked well for one that has bugs, all because of some childish battle they are waging with a competitor at the expense of the user experience of their own customers, you feel justified in your anger.  That said, in a month of use I haven't ran into any Apple map bugs personally.  Although I've certainly read about them online.
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 26, 2012, 09:47:01 AM
Well to state the obvious...someone would buy the mini because they want a smaller tablet.  Not everyone wants or needs the full sized iPad.

Right, but the question is whether there is enough people looking for a smaller iPad to justify it.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on October 26, 2012, 10:13:27 AM
The decline of Apple's dominance is inevitable.  All of the things a few of us have been mentioning for over a year on various Apple threads are now happening.  So far:

1) supplier revolts - foxconn, and now Samsung.  Samsung is supplying their own units at the expense of Apple, and outselling them at the same time.

2) Product buzz: No one actually gave much of a  damn about Apples upgrades this week.  The consumer is a fickle beast.

3) Competition: which has caught up/exceeded Apple in many ways. 

To come:

1) price wars and discounting.
2) further supplier pushback
3) carrier pushback

Which will lead to:

Industry normalized profit margins

Which will lead to:

Tanking stock price
Panic spending at Apple eating up the cash hoard

They are being hit on all sides and it isn't going to slow down.  Everyone in the entire industry smells blood. 

Valueinv, be careful what you wish for in terms of buying opportunities. 

Title: Re: AAPL - Apple Inc.
Post by: Palantir on October 26, 2012, 10:27:10 AM
I love how Apple, Google, and Microsoft all face simultaneous skepticism about their future prospects....
Title: Re: AAPL - Apple Inc.
Post by: rmitz on October 26, 2012, 10:35:14 AM
yeah, I wouldn't mind downsizing size for reading (mostly what I use the ipad for now), but it not being retina makes me think it won't be for me (I find retina to be extremely important for my reading, almost as good as eink).

I think what you just wrote is the reason why AAPL didn't come out with a retina screen iPad Mini. 

Because I think a lot of people would have downsized and, further, many more 10" iPad sales would be cannibalized by a retina screen Mini.  They're not fools over at AAPL.

I do wonder why they updated their iPad so quickly.  Maybe in anticipation of the rumored 10" Google tablet with a higher res?

Eh, this is barely a new version.  They had a faster CPU basically ready from the iphone 5, and the new connector, so they just put the package together--not to say this is trivial, it's still a bunch of work, but there was little reason not to release it as part of a package of updates.  I would suspect they're working on other things in parallel.  I don't really see it as a whole new generation; unless you have some very niche use case, I can't see someone who would upgrade from the 3rd to the 4th.  I could see someone with a 1st or 2nd certainly do so, though.
Title: Re: AAPL - Apple Inc.
Post by: rmitz on October 26, 2012, 10:36:50 AM
I guess I don't really see the need for the iPad mini. And with releasing the 4th gen iPad, I assume that's going to push the 3rd gen down to only $399? Will the iPad 2 continue to be available for even less than that (especially on the secondary market)? Why would most people buy the mini at $329 when they can get the iPad 3 for $399?

The $329 price point would make sense if they were only selling the iPad 4, but not when you can get the 3, or even the 2 for just a bit more.

I am fairly certain that other than selling remaining stock, the 3rd gen is dead.  You certainly can't buy it on the online store.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 26, 2012, 10:39:52 AM
The decline of Apple's dominance is inevitable.  All of the things a few of us have been mentioning for over a year on various Apple threads are now happening.  So far:

1) supplier revolts - foxconn, and now Samsung.  Samsung is supplying their own units at the expense of Apple, and outselling them at the same time.

2) Product buzz: No one actually gave much of a  damn about Apples upgrades this week.  The consumer is a fickle beast.

3) Competition: which has caught up/exceeded Apple in many ways. 

To come:

1) price wars and discounting.
2) further supplier pushback
3) carrier pushback

Which will lead to:

Industry normalized profit margins

Which will lead to:

Tanking stock price
Panic spending at Apple eating up the cash hoard

They are being hit on all sides and it isn't going to slow down.  Everyone in the entire industry smells blood. 

Valueinv, be careful what you wish for in terms of buying opportunities.
Uccmal, one would think you would learn from being wrong on Apple in the past. But, no.

As always, my bet is still open.

Also, get your facts right.
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 26, 2012, 01:01:21 PM
I guess I don't really see the need for the iPad mini. And with releasing the 4th gen iPad, I assume that's going to push the 3rd gen down to only $399? Will the iPad 2 continue to be available for even less than that (especially on the secondary market)? Why would most people buy the mini at $329 when they can get the iPad 3 for $399?

The $329 price point would make sense if they were only selling the iPad 4, but not when you can get the 3, or even the 2 for just a bit more.

I am fairly certain that other than selling remaining stock, the 3rd gen is dead.  You certainly can't buy it on the online store.

ok..that makes more sense then.
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 26, 2012, 01:11:53 PM

2) Product buzz: No one actually gave much of a  damn about Apples upgrades this week.  The consumer is a fickle beast.


I think part of it is that everyone knew about nearly everything that was announced for several months. The company's size and amount of partners/manufacturers/distributors etc they now have makes it very difficult for them to keep things secret.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on October 26, 2012, 01:20:33 PM
The decline of Apple's dominance is inevitable.  All of the things a few of us have been mentioning for over a year on various Apple threads are now happening.  So far:

1) supplier revolts - foxconn, and now Samsung.  Samsung is supplying their own units at the expense of Apple, and outselling them at the same time.

2) Product buzz: No one actually gave much of a  damn about Apples upgrades this week.  The consumer is a fickle beast.

3) Competition: which has caught up/exceeded Apple in many ways. 

To come:

1) price wars and discounting.
2) further supplier pushback
3) carrier pushback

Which will lead to:

Industry normalized profit margins

Which will lead to:

Tanking stock price
Panic spending at Apple eating up the cash hoard

They are being hit on all sides and it isn't going to slow down.  Everyone in the entire industry smells blood. 

Valueinv, be careful what you wish for in terms of buying opportunities.
Uccmal, one would think you would learn from being wrong on Apple in the past. But, no.

As always, my bet is still open.

Also, get your facts right.

Its funny how you answered Valueinv.  Try looking at the reality for once.  You always attack me rather than my "thesis". 

The competition is not just nipping at Apples heels, they are here, and they are coming on faster, and faster.  This was so predicatable. 

You still dont get human nature, do you? 

The masses are getting bored with Apple and its tedious closed ecosystem. 
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 26, 2012, 02:29:23 PM

1) supplier revolts - foxconn, and now Samsung.  Samsung is supplying their own units at the expense of Apple, and outselling them at the same time.


What revolt are you talking about?
Foxconn is still joined at the hip with Apple. In fact, another Foxconn subsidiary has shifted from manufacturing for competitors to Apple products:

http://www.pcworld.idg.com.au/article/438886/apple_sign_up_another_foxconn_factory_manufacture_iphone/
http://www.bbc.co.uk/news/business-19394322

I'm guessing you mean the strikes. Do I really need to explain why a strike at a company does not mean the company is revolting?
BTW, that shall be a thing of the past soon:

http://abcnews.go.com/Technology/foxconn-chinese-computer-giant-plans-million-robots-years/story?id=14204282#.UIr5xbR0XfY

Samsung has been selling competing phones since the first day of the iPhone. Nothing as changed If you are referring to the reports that they are not going to be manufacturing displays:
http://www.siliconrepublic.com/business/item/29858-samsung-denies-reports-it-w

BTW, it is Apple moving production away, not the other way round.

2) Product buzz: No one actually gave much of a  damn about Apples upgrades this week.  The consumer is a fickle beast.
Here are the number of Google results for
iPad Mini: About 1,100,000,000 results (0.21 seconds)
Microsoft Surface: About 459,000,000 results (0.19 seconds)

Surface was the biggest launch in decades for Microsoft. The iPad min was an add-on release for Apple on the same day they released new Macs,iPad and a month after they released iPhone 5 and iPods.

I mean, have you been on the Internet that last month? There have been so much leaks and coverage that even I am getting sick of it.

3) Competition: which has caught up/exceeded Apple in many ways. 
Yeah right:

http://techcrunch.com/2012/10/26/not-so-quietly-troubling-htc-sales-down-48-to-2-4b-expects-even-weaker-q4-of-2b/
http://venturebeat.com/2012/10/26/nokia-biggest-loser/

Check the RIM and Google threads to get how Blackberry and Motorola are doing.

[/quote]

1) price wars and discounting.

Let me see, Apple is not able to keep up with demand for its flagship phone about a month after releasing it despite its "high price". And it is yet to be released in the worlds largest mobile market.

It priced its mini tablet 65% above its competition and still sold out.

Ucmmal, do you read the news?

2) further supplier pushback

Find evidence of initial supplier pushback first.

3) carrier pushback

http://www.thestreet.com/story/11741398/1/verizon-proves-iphone-5-skeptics-wrong.html

Again, keep yourself informed.

You wanted me to attack your thesis, right?  ;)
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on October 26, 2012, 04:19:44 PM
lol, you might want to drag yourself into the real world and out of your tech bubble once in awhile.    Anyway:

Foxconn: 1 million robots - bullshit.  Yes, I read that weeks ago.   You dont understand the real world of labour treaties, government incentives for factory location at all.  Its all about employment, not robots. 

The strikes are caused directly by Apple demands for instantaneous, cheap, perfect product! without appropriate compensation.  What will it cost Apple for labour peace?

Apple moving production away from Samsung... yeah right.  And Samsung is not thrilled to deliberately screw Apple at every corner.

Product buzz: google hits aside.  I am not seeing it, and not hearing it.  Fewer and fewer care.  That is the way of the world.  Again, you may want to study the real world occasionally.

Competition: They are there and they are dangerous, and Apple's closed ecosystem is going to get trimmed just like the Macintosh in the 80s.

Showing that Nokia, and Motorola, and Rimm, are weak competitors does not change the fact that Apple does not outsell Androids.  They are all there still, including Amazon, Google, and Microsoft, and none were in the tablet space 2.5 years ago.  Sure as shooting, margins at Apple will get crushed.  Call  it business reality check.  Even the badly beaten RIM sells one third the number of phones as Apple, minus any new product for a year.

Sorry, the mini- tablet sold out, When was that?  What, did they produce two?

No one knows what's going on with the Iphone 5 since the 5 million weekend.  You wont know how Well they are selling for some time yet.

I have never stated Apple would go out of business.  I just see them getting normalized, just like MSFT did, and everyone else, ALWAYS has.  With normalization, comes a normailzed stock price.

You would do well to take a more balanced mature approach to your favourite topic.

Your facts are mostly not facts, at all, just conjecture, and news articles based on anecdote.

I will be taking a leave of absence from this thread until the next set of usage results are released.

 ;)












Title: Re: AAPL - Apple Inc.
Post by: jeffmori7 on October 26, 2012, 04:26:41 PM
Al, even as a shareholder (for now), I quite agree with you...but there is one thing...at the current level, Apple is not really overvalued. About 11-12 times next year earnings, even less without the cash. And while we see a slowdown, it is still growing faster than market. We could say the valuation has already normalized.
Title: Re: AAPL - Apple Inc.
Post by: polangevin on October 26, 2012, 07:08:29 PM

I have never stated Apple would go out of business.  I just see them getting normalized, just like MSFT did, and everyone else, ALWAYS has.  With normalization, comes a normailzed stock price.


Apple is trading at about 10 times past earnings ex cash. You're right, this is not a normalized price... Valuation should be much higher!
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 27, 2012, 06:34:16 AM
I guess I don't really see the need for the iPad mini. And with releasing the 4th gen iPad, I assume that's going to push the 3rd gen down to only $399? Will the iPad 2 continue to be available for even less than that (especially on the secondary market)? Why would most people buy the mini at $329 when they can get the iPad 3 for $399?

The $329 price point would make sense if they were only selling the iPad 4, but not when you can get the 3, or even the 2 for just a bit more.

After some more thought, I guess I can see the need for a smaller iPad. There are some things, such as watching movies, using some music apps, etc, that I love having the large screen on my iPad for, but I can see typing being easier on the mini, and it'll probably be nice to be able to hold it in one hand. I should reall use one if these in person before writing it off.

Side note, and I've said this many times, Android and Microsft tablets continue to take the wrong approach with their tablet dimensions and focusing on using the tablet in landscape view, The iPad dimensions suit viewing in portrait view, which is how I use it probably 90% of the time.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on October 28, 2012, 08:39:58 PM
Interesting article:
http://www.zdnet.com/samsungs-exynos-arm-chip-googles-android-tablet-messiah-7000006482/

The end result of all of this is that Google, by virtue of its partnership with Samsung now has the ability to compete with Apple (and also other Android OEMs as well as Amazon) on price, making the overall package much more compelling and providing a level of vertical integration previously unseen with full-size Android tablets.

However:

Android tablets still have other issues, such as overall inferior applications, poorer manufacturer support and infrequent(or non-existent) software updates which still are likely to give Apple a huge lead over Google's mobile platform for some time to come.

Now what would really be interesting is if Google were to unveil a newly redesigned Google Play where there are more apps optimized for their tablets.
Title: Re: AAPL - Apple Inc.
Post by: bargainman on October 28, 2012, 10:25:40 PM
Interesting article:
http://www.zdnet.com/samsungs-exynos-arm-chip-googles-android-tablet-messiah-7000006482/

The end result of all of this is that Google, by virtue of its partnership with Samsung now has the ability to compete with Apple (and also other Android OEMs as well as Amazon) on price, making the overall package much more compelling and providing a level of vertical integration previously unseen with full-size Android tablets.

However:

Android tablets still have other issues, such as overall inferior applications, poorer manufacturer support and infrequent(or non-existent) software updates which still are likely to give Apple a huge lead over Google's mobile platform for some time to come.

Now what would really be interesting is if Google were to unveil a newly redesigned Google Play where there are more apps optimized for their tablets.

What I've heard from a friend who is the CTO at a company that makes software for mobile (currently iPhone/iPad) is that everytime they look at making Android software they decide it's not worth it.  He says that everyone else he knows in the industry sees it the same way.  People on the android platform do not pay for apps anywhere near as much as in the iOS world.  That was looking at phones.  Now consider tablets.  There's apparently still very little incentive for app makers who actually want to make a living at apps to build for android.  (different of course for companies that just want to produce an app to use a greater product or service).
Title: Re: AAPL - Apple Inc.
Post by: Palantir on October 29, 2012, 09:36:29 AM
I hear a lot of analysis from people that virtual desktops/app virtualization is going to severely harm microsoft in the future. Has anyone though about how that will hurt apple? Apple's business model has been so far to sell expensive hardware and cheap software....but if the desktop is virtualized, then hardware in theory will be a "dumb" box...and not worth paying a premium for right?
Title: Re: AAPL - Apple Inc.
Post by: Ross812 on October 29, 2012, 10:00:45 AM
As I have said in past posts. Apple needs to continue to produce block buster after block buster or they are going to take a huge hit. The iPad mini was troubling because aside from an aluminum body, it is inferior in every way to the Google Nexus 7 which came to market 5 months ago. If Google prices the Nexus 10 at $400 (or to deliberately go after Apple $329) Google has then established a clear lead over apple in the tablet space. The iPad 3 only had one thing going for it and that was the 'Retina' display. Google produced a display with 15% higher pixel density than Apple's retina and will likely sell it for at a 40-50% discount to Apple.

Apple may not have to cut margins. They may continue to price their devices at a premium and grow much more slowly if at all. Microsoft's Windows 8 is going to cut away at the iPad's business users as they go with 'real' tablet computers, and Android is stealing the casual tablet computing customer. Unless Apple gets back out in front with another hot product, they will be back to a business model similar to their pre-iPod days. Producing very nice expensive hardware at high margins and low revenue.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on October 29, 2012, 10:52:50 AM
competitive landscape changes:

https://www.youtube.com/watch?feature=player_embedded&v=66-4uMQqerA#!
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 29, 2012, 12:38:34 PM
As I have said in past posts. Apple needs to continue to produce block buster after block buster or they are going to take a huge hit. The iPad mini was troubling because aside from an aluminum body, it is inferior in every way to the Google Nexus 7 which came to market 5 months ago. If Google prices the Nexus 10 at $400 (or to deliberately go after Apple $329) Google has then established a clear lead over apple in the tablet space. The iPad 3 only had one thing going for it and that was the 'Retina' display. Google produced a display with 15% higher pixel density than Apple's retina and will likely sell it for at a 40-50% discount to Apple.

Apple may not have to cut margins. They may continue to price their devices at a premium and grow much more slowly if at all. Microsoft's Windows 8 is going to cut away at the iPad's business users as they go with 'real' tablet computers, and Android is stealing the casual tablet computing customer. Unless Apple gets back out in front with another hot product, they will be back to a business model similar to their pre-iPod days. Producing very nice expensive hardware at high margins and low revenue.
Here's a more complete comparison for you:
http://www.imore.com/copy-editing-amazons-kindle-fire-vs-ipad-mini-ad

A lot of those points apply to the Nexus 7 too. You are looking at a much bigger screen and not really the same product.

With Nexus 7 you get a stretched out smartphone with smartphone apps. With the iPad mini, you get a smaller tablet with tablet apps.

Big difference.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 29, 2012, 12:41:14 PM
Here's some other info for ya:

http://store.apple.com/us/buy/home/shop_ipad/family/ipad_mini

All Wifi models are sold out before the first device has been shipped. A new category product for Apple. Very few people have even had a chance to play with it and see what its all about. And its sold out.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on October 29, 2012, 12:48:09 PM
apple selling out a product is no longer a "leading" indicator. the markets have wised up to that finally.
Title: Re: AAPL - Apple Inc.
Post by: tombgrt on October 29, 2012, 02:36:38 PM
Apple iPhone software and retail chiefs to leave company

http://www.reuters.com/article/2012/10/29/us-apple-changes-idUSBRE89S18H20121029
Title: Re: AAPL - Apple Inc.
Post by: benchmark on October 29, 2012, 02:52:26 PM
As I have said in past posts. Apple needs to continue to produce block buster after block buster or they are going to take a huge hit. The iPad mini was troubling because aside from an aluminum body, it is inferior in every way to the Google Nexus 7 which came to market 5 months ago. If Google prices the Nexus 10 at $400 (or to deliberately go after Apple $329) Google has then established a clear lead over apple in the tablet space. The iPad 3 only had one thing going for it and that was the 'Retina' display. Google produced a display with 15% higher pixel density than Apple's retina and will likely sell it for at a 40-50% discount to Apple.

Apple may not have to cut margins. They may continue to price their devices at a premium and grow much more slowly if at all. Microsoft's Windows 8 is going to cut away at the iPad's business users as they go with 'real' tablet computers, and Android is stealing the casual tablet computing customer. Unless Apple gets back out in front with another hot product, they will be back to a business model similar to their pre-iPod days. Producing very nice expensive hardware at high margins and low revenue.

+1.

I don't think apple can sustain the margin/growth rate. Maybe it's time to short apple?
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on October 29, 2012, 03:02:12 PM
Apple iPhone software and retail chiefs to leave company

http://www.reuters.com/article/2012/10/29/us-apple-changes-idUSBRE89S18H20121029

guess we know who is taking the fall for the maps debacle.
Title: Re: AAPL - Apple Inc.
Post by: racemize on October 29, 2012, 03:47:01 PM
Apple may not have to cut margins. They may continue to price their devices at a premium and grow much more slowly if at all. Microsoft's Windows 8 is going to cut away at the iPad's business users as they go with 'real' tablet computers, and Android is stealing the casual tablet computing customer. Unless Apple gets back out in front with another hot product, they will be back to a business model similar to their pre-iPod days. Producing very nice expensive hardware at high margins and low revenue.

So, I agree that Apple does not have to cut margins and that the competition will likely decrease their market share over time; however, even in those cases, the entire tablet/smart phone market is still growing at a decent clip.  It seems to me that as long as the overall growth in the market is greater than the amount of loss of market share, Apple still does fine. 

Moreover, since you mention iPod, didn't they do pretty well with that with high margins even though there were tons of other devices? 
Title: Re: AAPL - Apple Inc.
Post by: Palantir on October 29, 2012, 04:45:34 PM
Apple iPhone software and retail chiefs to leave company

http://www.reuters.com/article/2012/10/29/us-apple-changes-idUSBRE89S18H20121029

guess we know who is taking the fall for the maps debacle.

That's a mistake to assume that. Forstall was a very powerful executive at Apple, and it is very surprising he's going, he was a very successful commander of an important division who had Steve Jobs' blessing. It's unlikely to be an issue of maps alone.

IMO this is a shocker. We knew that Forstall was difficult to get along with, and he and Jony Ive couldn't even be in the same room together. This likely makes Jony Ive and obviously Eddy Cue stronger. Cue has been the primary dealmaker in Jobs' absence.
Title: Re: AAPL - Apple Inc.
Post by: Palantir on October 29, 2012, 04:57:53 PM
If you look at Apple's release one line stands out:

Quote
Jony Ive will provide leadership and direction for Human Interface (HI) across the company in addition to his role as the leader of Industrial Design. His incredible design aesthetic has been the driving force behind the look and feel of Apple’s products for more than a decade.

There was conflict between Ive and Forstall about design principles, detailed here :
http://www.fastcodesign.com/1670760/will-apples-tacky-software-design-philosophy-cause-a-revolt
This resolves that, and gives Ive control of the user experience.

Quote
Craig Federighi will lead both iOS and OS X®. Apple has the most advanced mobile and desktop operating systems, and this move brings together the OS teams to make it even easier to deliver the best technology and user experience innovations to both platforms.

Federighi gets iOS in addition to his current domain - OS X. This basically separates operating systems and user end software away from services provided over the internet.

Quote
Bob Mansfield will lead a new group, Technologies, which combines all of Apple’s wireless teams across the company in one organization, fostering innovation in this area at an even higher level. This organization will also include the semiconductor teams, who have ambitious plans for the future.

Mansfield had left earlier in the year and was hired back via a big pay package. Weird if you think about it, it sounds like a think tank or skunkworks.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on October 29, 2012, 05:56:36 PM
http://www.latimes.com/business/technology/la-fi-tn-apple-maps-siri-forstall-out-20121029,0,1946365.story
http://allthingsd.com/20121029/apple-software-chief-refused-to-sign-maps-apology/?mod=tweet
Title: Re: AAPL - Apple Inc.
Post by: bargainman on October 29, 2012, 09:29:03 PM
Just saw this in a linked article on wsj:

"The 43-year-old Mr. Forstall recently told people that there is no "decider" now that Mr. Jobs is gone, according to a person briefed on the conversation."

That to me is the biggest risk for Apple going forward.  Their culture has been built around Jobs as the 'one ring to rule them all'.  Without him there I wonder what will happen in the long term.  People at Apple are incredibly passionate, and without one final decider it could eventually start to decay, slowly, but very possibly.
Title: Re: AAPL - Apple Inc.
Post by: bathtime on October 30, 2012, 12:53:41 AM
Aesthetically, I'd definitely pick Team Ives over Team Forstall. I thought Game Center on the iPhone both looked bad and was an annoyingly designed user interface.
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 30, 2012, 06:39:03 AM
Sounds like getting rid of these guys is probably a good thing.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 30, 2012, 01:54:56 PM
Does this look familiar?

http://slashdot.org/story/01/10/23/1816257/apple-releases-ipod

Same old song and dance.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 30, 2012, 02:14:33 PM
Sounds like getting rid of these guys is probably a good thing.

I am not surprised. Forstall had to go. He failed with Maps, it took Siri 3 releases to reach usability. I have also noticed small things slip through the cracks with iCloud. He also took skeumorphism too far. While it has a purpose, there is a limit on how much you want to add.
But probably the worst thing is his work style. Most of Apple did not like to work with him. For a company that is tightly integrated, this is a big problem. I often wondered why Jobs hadn't fired him.

OTOH, Forstall had technological vision. He was always pushing the envelope, just like Jobs. Cook will have to find someone to fill that role now. Forstall was smart but caused too many problems and had flawed execution, something that has big costs for a company like Apple.

I am absolutely ecstatic to see Ive took over all design to Apple's products. This is the best thing to happen to Apple this year.

I have mixed feelings about Cue taking over Maps, Siri, etc. Cue has a lot on his plate now. I would have preferred to see the large scale web services/backends split out and handed to someone with experience in it (hire from Google, Amazon, Facebook). Maybe Cue is just dealing with the consumer facing aspects of the services?

Cook has again proven himself capable of doing the right thing.
Title: Re: AAPL - Apple Inc.
Post by: DCG on October 30, 2012, 03:34:09 PM
I just hope Sir Jony stays with the company. He's made a ton if money, and the rumors that came out a couple years ago that said he was looking to retire and move back to England still worry me.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 30, 2012, 04:15:19 PM
I just hope Sir Jony stays with the company. He's made a ton if money, and the rumors that came out a couple years ago that said he was looking to retire and move back to England still worry me.
I don't think he's in it for the money. If he had plans to leave, Cook wouldn't have increased his responsibilities.
Further, he just bought a $20M house here in San Francisco last month.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on October 30, 2012, 04:17:49 PM
Here you go Uccmal, on the question of coverage of iPad Mini:

http://www.wired.com/gadgetlab/2012/10/live-blog-data-apple-vs-microsoft/

iPad mini had 7x the viewers of Surface.
Title: Re: AAPL - Apple Inc.
Post by: racemize on October 31, 2012, 10:45:03 AM
Daring Fireball's review of the mini:

http://daringfireball.net/2012/10/ipad_mini

I think he sums it up pretty nicely.  I, on the other hand, will not switch to the mini until the retina comes out.  Probably will switch then, but not totally sure.
Title: Re: AAPL - Apple Inc.
Post by: rkbabang on November 02, 2012, 08:08:00 AM
"Combined, Apple and Samsung took 106 percent of handset profits in the third quarter, down slightly from 108 percent in the second quarter, according to Walkley. The percentage is greater than 100 to offset for operating losses incurred by struggling vendors like Research in Motion, Nokia and Motorola."

Apple, Samsung still hogging all handset profits (http://cdn.eetimes.com/electronics-blogs/other/4400412/Apple--Samsung-still-hogging-all-handset-profits)
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 02, 2012, 09:34:43 AM
 http://www.phonearena.com/news/Apple-has-lost-their-legal-claim-to-the-iPhone-name-in-Mexico_id36199 (http://www.phonearena.com/news/Apple-has-lost-their-legal-claim-to-the-iPhone-name-in-Mexico_id36199)

Quote
Apple may have solved their trademark problems in China, but it appears they may have a bigger problem on its hands south of the U.S. border, as a court in Mexico City has denied an injunction that would have allowed Apple to continue to sell under the iPhone brand because it violates the trademarks of iFone, a Mexican telecommunications company. The ruling could have a major impact on Apple’s phone sales in Mexico, as well as affecting the marketing and sales plans of several wireless service providers in the country, some of which were gearing up to offer the iPhone 5 to customers this weekend.

It’s not actually clear what Apple was thinking this time around – the iFone trademark was filed in Mexico in 2003, a full four years before Apple filed to trademark the iPhone. Despite the rather obvious priority issue, Apple decided to sue iFone in 2009 in an attempt to invalidate the company’s name for being too similar to the iPhone. The predictable response was a countersuit by iFone, and the court battles have been swinging in iFone’s favor ever since.

The move could prove costly to Apple in more ways than one. In addition to losing the ability to sell devices under the iPhone trademark in Mexico, iFone is also suing for damages for past infringement, asking for a minimum of 40% of all iPhone sales to date in the Mexican market. While those numbers aren’t nearly as large as they are in the U.S., it still would represent a substantial payment. It's not yet clear whether the embargo on using the iPhone name will go into effect before sales of the iPhone 5 start on Friday, or if this will trigger Apple to loosen the purse strings to negotiate a settlement with iFone, but given the circumstances it would seem that Apple has precious little leverage this time around.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 02, 2012, 12:03:48 PM
Incredible:

http://www.bloomberg.com/news/2012-11-02/apple-new-york-stores-sell-out-ipad-minis-after-sandy-hit.html

No transportation, no electricity.
Title: Re: AAPL - Apple Inc.
Post by: tombgrt on November 02, 2012, 12:21:02 PM
Incredible:

http://www.bloomberg.com/news/2012-11-02/apple-new-york-stores-sell-out-ipad-minis-after-sandy-hit.html

No transportation, no electricity.

No offence valueInv, but you find everything about Apple incredible.  ;D I just don't see it this time. Biased post imo.

http://www.reuters.com/article/2012/11/02/us-apple-ipad-mini-idUSBRE8A101X20121102
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on November 02, 2012, 12:36:38 PM
yawn. more apple created hysteria because of planned scarcity. People waiting in line to get a two year old screen on a tablet.
Title: Re: AAPL - Apple Inc.
Post by: Smazz on November 02, 2012, 02:27:46 PM
http://www.theglobeandmail.com/technology/apple-rolls-out-ipad-mini-in-asia-to-shorter-lines/article4852196/

Damn, down 20% in a month. Luckily they were able to build up all that cash but like MSFT they may not end up knowing what to do with it.

Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 02, 2012, 05:06:58 PM
yawn. more apple created hysteria because of planned scarcity. People waiting in line to get a two year old screen on a tablet.
Maybe because they want a lightweight tablet instead of a stretched out smartphone. Maybe they actually want to use tablet apps since they are buying one.

And maybe, just maybe, they know its not a "two year old screen":

http://techcrunch.com/2012/11/02/ipad-mini-display-under-the-microscope-not-as-good-as-ipad-4th-gen-but-much-better-than-ipad-2/

#facts.
Title: Re: AAPL - Apple Inc.
Post by: bargainman on November 02, 2012, 08:33:42 PM
One reason for the reduced screen resolution is battery life:

http://reviews.cnet.com/8301-31747_7-57537541-243/ipad-mini-vs-google-nexus-7-vs-amazon-kindle-fire-hd/

iPad mini is 10 hours.  Kindle fire has 5 hours, Nexus is also 10 hours, but, it's heavier and a reasonable amount thicker.  Plus the screen is actually smaller.

I remember when they went from the iPad 2 to the 3rd generation they actually increased the thickness because the retina display requires more power and they wanted to keep the battery life the same as before.
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 03, 2012, 07:49:26 AM
iPad mini commercial (is there really not a way to embed youTube videos on here?) : http://www.youtube.com/watch?feature=player_embedded&v=vM9U70HgLsQ

Well done.
Title: Re: AAPL - Apple Inc.
Post by: Smazz on November 03, 2012, 08:49:30 PM
 I honestly thought you were going to post this one:

http://www.youtube.com/watch?v=KS_s96CJnf4

2x more popular vid and 10x more entertaining!! ;D
Title: Re: AAPL - Apple Inc.
Post by: benchmark on November 03, 2012, 09:43:11 PM
Incredible:

http://www.bloomberg.com/news/2012-11-02/apple-new-york-stores-sell-out-ipad-minis-after-sandy-hit.html

No transportation, no electricity.

Here is the reality check in sunny california

http://www.mercurynews.com/60-second-business-break/ci_21915689/biz-break-no-sales-frenzy-ipad-mini-wall
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 07, 2012, 02:40:47 PM
Now at around 12x trailing earnings.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on November 07, 2012, 03:02:45 PM
shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 07, 2012, 03:04:25 PM
shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

right...because this makes sense.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 07, 2012, 04:12:36 PM
shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

Ummmm, they just started paying a dividend and also have announced $10B in buybacks.

Do you ever bother with the facts?
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 07, 2012, 04:33:12 PM
And even if they returned the entire $101B to shareholders, the stock would still be at 12x earnings.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 07, 2012, 04:54:26 PM
shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

Ummmm, they just started paying a dividend and also have announced $10B in buybacks.

Do you ever bother with the facts?

Some facts for you:

http://www.bloomberg.com/news/2012-11-07/apple-drops-20-percent-from-intraday-record-san-francisco-mover.html

ummm announced buybacks isn't buybacks.  10 B at several times book on a 500 B company is just BS.  I would be really impressed if they got clearance and announced 50 or 100 B in dividends and/or buybacks. 

BTW Smazz, great video.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on November 07, 2012, 06:02:26 PM
shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

Ummmm, they just started paying a dividend and also have announced $10B in buybacks.

Do you ever bother with the facts?

lol. they are only going to be returning a fraction of the cash flow they earn over the next three years, let alone a single dime out of the mountain of excess cash that is sitting there earning zero.
http://www.mercurynews.com/business/ci_21916488/apple-mini-lines-mini-ipad-store-low-sales-turnout
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 08, 2012, 12:20:36 AM
shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

Ummmm, they just started paying a dividend and also have announced $10B in buybacks.

Do you ever bother with the facts?

lol. they are only going to be returning a fraction of the cash flow they earn over the next three years, let alone a single dime out of the mountain of excess cash that is sitting there earning zero.
http://www.mercurynews.com/business/ci_21916488/apple-mini-lines-mini-ipad-store-low-sales-turnout

http://www.reuters.com/article/2012/03/19/us-apple-idUSBRE82F03N20120319

They are returning $45B over the next three years. So what fraction do you think that is? 10%?   ;D
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 08, 2012, 12:29:07 AM
shows no inclination to return any of the $100b+ in cash to shareholders. not surprising it gets a low multiple.

Ummmm, they just started paying a dividend and also have announced $10B in buybacks.

Do you ever bother with the facts?

Some facts for you:

http://www.bloomberg.com/news/2012-11-07/apple-drops-20-percent-from-intraday-record-san-francisco-mover.html

ummm announced buybacks isn't buybacks.  10 B at several times book on a 500 B company is just BS.  I would be really impressed if they got clearance and announced 50 or 100 B in dividends and/or buybacks. 

BTW Smazz, great video.
Yeah, I noticed the stock price and have been adding. 10B buybacks at 12 times earnings for a company that grew 25% on a missed quarter is pretty good. The buybacks are in addition to their dividend.

Obviously, they are not going to return $100B when the cash they have is $120B.

Since you're back on the thread, here's a fact for you:

http://bgr.com/2012/11/05/ipad-mini-sales-opening-weekend/

No bad for a product that received "no coverage" and had no advertising. How many companies you know that can release a product in "secret" and move 3M in the opening weekend?

Here's another fact for you:
http://www.reuters.com/article/2012/11/01/us-apple-ipad-components-idUSBRE8A017220121101

#facts.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 08, 2012, 03:49:56 AM
Valueinv,

Take another 50 B off the market cap - brings it to about 350 B ex. cash, and Apple would make a fine GARP play.  I wouldn't buy it, but that's more due to my style.

Title: Re: AAPL - Apple Inc.
Post by: Olmsted on November 08, 2012, 05:31:44 AM
Aren't you guys concerned about competition?  Unless Apple stays ahead of anyone else on the innovation front, they will either be challenged on margins or on volume as imitators make better and better tablets/phones and start picking off the marginal Apple consumer.  Apple can either hold firm on pricing, keeping the hardcore Apple buyers but likely losing business on the low end, or hold firm on volume - which means lowering prices so the low-end buyer sees less of a price gap between the Apple products he really wants and the others.  Neither is a good scenario, and that 12x trailing PE will rapidly become a higher forward multiple ($100b cash notwithstanding).

The antidote is innovation and to stay one step ahead of everyone else.  Buying Apple today absolutely is a bet on future innovation, not their current product lineup. 
Title: Re: AAPL - Apple Inc.
Post by: racemize on November 08, 2012, 05:48:39 AM
Aren't you guys concerned about competition?  Unless Apple stays ahead of anyone else on the innovation front, they will either be challenged on margins or on volume as imitators make better and better tablets/phones and start picking off the marginal Apple consumer.  Apple can either hold firm on pricing, keeping the hardcore Apple buyers but likely losing business on the low end, or hold firm on volume - which means lowering prices so the low-end buyer sees less of a price gap between the Apple products he really wants and the others.  Neither is a good scenario, and that 12x trailing PE will rapidly become a higher forward multiple ($100b cash notwithstanding).

The antidote is innovation and to stay one step ahead of everyone else.  Buying Apple today absolutely is a bet on future innovation, not their current product lineup.

Unless the overall growth in the tablet/smartphone market offsets market share loss.
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 08, 2012, 06:09:36 AM
Aren't you guys concerned about competition?  Unless Apple stays ahead of anyone else on the innovation front, they will either be challenged on margins or on volume as imitators make better and better tablets/phones and start picking off the marginal Apple consumer.  Apple can either hold firm on pricing, keeping the hardcore Apple buyers but likely losing business on the low end, or hold firm on volume - which means lowering prices so the low-end buyer sees less of a price gap between the Apple products he really wants and the others.  Neither is a good scenario, and that 12x trailing PE will rapidly become a higher forward multiple ($100b cash notwithstanding).

The antidote is innovation and to stay one step ahead of everyone else.  Buying Apple today absolutely is a bet on future innovation, not their current product lineup.

At the moment, I'm more concerned with their continued supply issues than competition.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 08, 2012, 07:53:38 AM
Valueinv,

Take another 50 B off the market cap - brings it to about 350 B ex. cash, and Apple would make a fine GARP play.  I wouldn't buy it, but that's more due to my style.

If I were you, I wouldn't buy it at any price. This company is waaaay outside your circle of competence.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 08, 2012, 08:03:28 AM
Aren't you guys concerned about competition?  Unless Apple stays ahead of anyone else on the innovation front, they will either be challenged on margins or on volume as imitators make better and better tablets/phones and start picking off the marginal Apple consumer.  Apple can either hold firm on pricing, keeping the hardcore Apple buyers but likely losing business on the low end, or hold firm on volume - which means lowering prices so the low-end buyer sees less of a price gap between the Apple products he really wants and the others.  Neither is a good scenario, and that 12x trailing PE will rapidly become a higher forward multiple ($100b cash notwithstanding).

The antidote is innovation and to stay one step ahead of everyone else.  Buying Apple today absolutely is a bet on future innovation, not their current product lineup.

At the moment, I'm more concerned with their continued supply issues than competition.

+1. Particularly concerning if we don't see wait times decline by Black Friday.

Every time I bought Apple, it was when they released a new product and the world crapped on them.
Essentially, I handicapped products, not the stock.

With all the attention and expectations surrounding them, I was resigned to the fact the I would never get a buying opportunity again. I thought that everyone figured out how to read the company and my advantage was lost. Boy, was I wrong!

The funny thing is I am a contrarian within a contrarian board :-)
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on November 08, 2012, 09:29:17 AM

http://www.reuters.com/article/2012/03/19/us-apple-idUSBRE82F03N20120319

They are returning $45B over the next three years. So what fraction do you think that is? 10%?   ;D

exactly. they will be taking in over $150b (if all your rosy projections come true) and will be returning $45b without so much as touching a dime of the $120b of Net Cash on the balance sheet (around 22% of market cap). Is it any wonder that it is selling for less than 11 times f2013 estimates?
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 08, 2012, 09:37:23 AM

http://www.reuters.com/article/2012/03/19/us-apple-idUSBRE82F03N20120319

They are returning $45B over the next three years. So what fraction do you think that is? 10%?   ;D

exactly. they will be taking in over $150b (if all your rosy projections come true) and will be returning $45b without so much as touching a dime of the $120b of Net Cash on the balance sheet (around 20% of market cap). Is it any wonder that it is selling for less than 11 times f2013 estimates?

They are selling at a low price because of concerns over supply and competition, NOT because they're not giving away their cash. Are you complaining that Berkshire isn't doing anything with their $48B of cash right now?
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 08, 2012, 09:38:20 AM
Article on Barrons today - just for you RIMM Never Sleeps (how much cash is RIMM returning to shareholders, by the way?):

Apple's Dividend Set to Surge

Apple stock has quietly sagged to valuation levels more commonly associated with slower-growth companies like Microsoft (MSFT). That's an opportunity for investors, but not ones who are looking for quick price gains. Rather, Apple (ticker: AAPL) should appeal to those who wish to turn savings into healthy and rising income.

This past summer, cash-rich Apple joined the ranks of companies that pay quarterly dividends to stockholders. Its first payment of $2.65 a share, made on Aug. 16, worked out to annualized yields of just under 1.7% when calculated by the share price at the time. But as share prices fall, yields rise. Apple stock is down 12% since that first dividend payment. The $2.65 payment set to go out on Nov. 15 makes for an annualized yield of 1.9%.

That's not an especially impressive number -- yet. The 10-year Treasury note yields 1.6% and the broad Standard & Poor's 500 stock index, 2%. The key for income investors, however, is that Apple's payment is likely to rise relatively quickly. Those who buy shares today could see their dividends double within three years.

There are three reasons. First, with bond yields at historic lows, investors are chasing after stock dividends, lifting valuations for companies that traditionally pay them, like utilities, consumer staples makers and real-estate investment trusts. That has made other companies keen to meet investor demand for dividends.

The number of S&P 500 companies that pay dividends recently hit 403, the highest since 1999. Analysts reckon third-quarter dividend payments for the S&P 500 rose 20% from a year earlier even though earnings didn't grow.

Dividend demand will be a major investment trend for years to come as baby boomers look to generate more investment income for retirement and find bond yields too stingy, according to Savita Subramanian, the top stock strategist at Bank of America Merrill Lynch. S&P 500 companies look capable of paying more; their current dividends cost about 30% of earnings, versus a historical average of more than 50%.

Apple, however, started paying dividends at a much lower rate than other big tech firms -- 20% of projected earnings, versus 32% for Microsoft and 29% for Cisco (CSCO). It's common for new dividend-payers to start small, but Apple is likely to make its payments more competitive in coming years. Cisco, for example, has more than doubled its quarterly payments since it began making them last year. That's the second reason Apple's payments are likely to rise quickly.

The third reason is that, although Apple's growth is slowing, it's not yet slow. Wall Street expects its earnings to jump 15% in its current fiscal year, which runs through September 2013. That's more than twice as fast as Microsoft or Cisco. Apple already sits on cash and investments worth $128 per share, or about 23% of its stock price (although much of that is held overseas for tax purposes, meaning it won't be paid as dividends for now). Judging by Wall Street forecasts, it should reel in another $175 per share in free cash over the next three years.

Apple stock isn't without risk. Part of the reason for its recent decline is that iPhone supplies are running low due to production problems. In the short term, that could cause Apple to miss earnings forecasts, which in turn could drag its stock price lower. And of course, Apple has plenty of competition for smartphones and tablet computers.

That aside, Apple's slide gives stock buyers a way to get a 4% yield on their initial investment without delving into low-quality companies. Simply buy Apple stock yielding 1.9%, and wait.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on November 08, 2012, 09:41:29 AM
i agree 100% that competition is a huge problem for apple right now. as for berkshire, if current apple ceo had a glorious 60 year record of capital allocation that current Berkshire ceo has had, I would not be concerned at all about that $120b+. I can assure you that balance sheet is going to be an increasing area of focus now that apple is reverting to the mean as a business.
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 08, 2012, 09:46:36 AM
i agree 100% that competition is a huge problem for apple right now.

I didn't say that I thought competition is a huge problem. I said it's part of the reason the stock has declined recently, as analysts think that. There's always going to be competition.

Part of the decline is also due to people looking to lock in profits for taxes. Beside from you, I've yet to hear from 1 other person who thinks their dividend amount is the reason the stock has declined. The stock had a huge run. Stocks don't go straight up.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 08, 2012, 09:47:54 AM
Valueinv,

Take another 50 B off the market cap - brings it to about 350 B ex. cash, and Apple would make a fine GARP play.  I wouldn't buy it, but that's more due to my style.

If I were you, I wouldn't buy it at any price. This company is waaaay outside your circle of competence.

oh, and its in yours.  Edited.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on November 08, 2012, 09:48:47 AM
I never said their "dividend amount" was the reason for the decline. please if you plan to quote me do it correctly and precisely.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 08, 2012, 10:03:28 AM
Valueinv,

Take another 50 B off the market cap - brings it to about 350 B ex. cash, and Apple would make a fine GARP play.  I wouldn't buy it, but that's more due to my style.

If I were you, I wouldn't buy it at any price. This company is waaaay outside your circle of competence.

oh, and its in yours.  You have to be the stupidest person to ever post on this board, bar none.

Considering that I have been in the tech industry and Silicon Valley for almost 15 years, I would think it is.  ;)

Thanks for the complement.  ;D ;D ;D
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 08, 2012, 10:21:44 AM
Sorry Valueinv, part of my comment wasn't appropriate or accurate. 

However, I do think you over rate your competence in tech. and silicon valley.  Its too diffcult to assess with any degree of anything other than vague estimates.  Things change with stunning rapidness.  To claim competence is dangerous.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 08, 2012, 10:54:57 AM
Sorry Valueinv, part of my comment wasn't appropriate or accurate. 

However, I do think you over rate your competence in tech. and silicon valley.  Its too diffcult to assess with any degree of anything other than vague estimates.  Things change with stunning rapidness.  To claim competence is dangerous.

I'll respond to your post in full when I have more time. In the meantime, take note:

http://www.blackenterprise.com/technology/apple-rumors-ipad-mini-2/

Coverage of iPad Mini 2 has already begun - a full year in advance.
Title: Re: AAPL - Apple Inc.
Post by: Palantir on November 08, 2012, 11:08:05 AM
Uhm, let's get back to discussing what really drives Apple's value - its product lineup rather than its dividends blah blah that no one cares about.


I heard Walter Isaacson signed a one year "keep quiet" agreement, has he commented on anything yet regarding new products?
Title: Re: AAPL - Apple Inc.
Post by: PlanMaestro on November 08, 2012, 12:34:32 PM
What is going on here? I heard about their own microprocessor and their datacenter investments but this is crazy.

(http://farm8.staticflickr.com/7265/8167643257_521ba83804.jpg)
Title: Re: AAPL - Apple Inc.
Post by: tengen on November 08, 2012, 01:09:06 PM
Someone is speculating that Apple bailed out Sharp to the tune of $2 billion.

http://www.asymco.com/2012/11/07/recapex-the-curious-case-of-apples-2012-and-2013-capital-expenditures/
Title: Re: AAPL - Apple Inc.
Post by: Ross812 on November 08, 2012, 01:33:05 PM
What is going on here? I heard about their own microprocessor and their datacenter investments but this is crazy.

(http://farm8.staticflickr.com/7265/8167643257_521ba83804.jpg)

Maybe if you can't get someone else to build it for you and you have $120 Billion you build it yourself?
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 08, 2012, 02:34:46 PM
What's their % of capex vs profit?

That chart is really no different than saying that Apple spends more money than your local pizza joint.
Title: Re: AAPL - Apple Inc.
Post by: hardincap on November 08, 2012, 05:18:48 PM
AAPL is trading at 8x '13 earnings ex-cash, has a very captive customer base, a stellar management team, and is in an industry that will continue to grow. Seems like a layup to me. What am I missing?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 08, 2012, 07:35:03 PM
AAPL is trading at 8x '13 earnings ex-cash, has a very captive customer base, a stellar management team, and is in an industry that will continue to grow. Seems like a layup to me. What am I missing?
Irrational bias.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 09, 2012, 03:25:33 AM
Valueinv,

The market is telling a different story than yours.  And the market is right most of the time.  Apple is getting headwinds across the world and this is being recognized in the stock price.

Part 2: Working in Silicon value in IT for 15 years has given you too much confidence in your own abilities.  No one, not Tim Cook, Michael Dell, Bill Gates has ever been able to predict the future from their roosts in the IT sector.  In fact at some point they are always spectacularly wrong.  This is your blind spot.  A trip to Asia and Europe to see how many people actually use Apple products would be a worthy investment on your part. 

I was in Toronto when Windows95 was released and a banner was slung down the side of the CN Tower.  People lined up just the same as Apple for W95.  You just dont get it.  Once a fad passes it is gone forever.  Apple is just another company in a very crowded market with great products, but no moat.

No one can claim to have a circle of competence that includes Consumer IT. You can know all about IT, networking tech, which you obviously do, but you cannot reasonably predict the cash flows of Apple, or where their business wil be in even a couple of years.  This is why Buffett stays away from consumer IT but invests in Insurers, Banks, Manufacturers, retail, shipping, and consumer expendables.







Title: Re: AAPL - Apple Inc.
Post by: DCG on November 09, 2012, 04:09:01 AM
Since when is the market mostly right? Was the market right when Apple went down to around $88 a few years ago?

If you really think the market is mostly right, you have no credibility as a value investor. Sounds like you should be on a efficient market forum.

Nobody is arguing that they're not facing some near term headwinds (it's far from the first time). The market is vey short sited. And maybe you haven't noticed this, but nearly every stock has been selling off recently (obviously some more than others).
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 09, 2012, 04:58:52 AM
The market is right mostof the time.  Millions of people following Apple are obviously concerned that the stock is over valued. 

Save your sarcasm for elsewhere. 
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 09, 2012, 05:08:29 AM
So under your logic, the market was also right when Apole was priced at $700 a month or so ago.
Title: Re: AAPL - Apple Inc.
Post by: hardincap on November 09, 2012, 05:26:12 AM
And this is how we make money! And people with lemmings mentality don't.

And calling ipad, iphone and macs fads is the most ridiculous thing i've heard
 
The market is telling a different story than yours.   
Title: Re: AAPL - Apple Inc.
Post by: Ross812 on November 09, 2012, 05:29:03 AM
I was talking to a friend who works for a mutual fund company about Apple recently. He made a really good point. He said when he looks at Apple the fundamentals look great, but it has reached critical mass. Apple is one of the most widely owned stocks in the market. A lot of mutual fund companies buy it for its window dressing effect as much as its fundamentals. He said many mutual fund companies have 5%+ allocated to AAPL and where do they go from there? Do they increase to 7%? At some point you run out of buyers. On an even more macro side think about all the index funds out there. There is a huge amount of fixed buying and selling that goes on to match the index; an index in which Apple is the largest component. Apple may have the fundamentals but who is going to buy it? There was another run in the stock price after they initiated a dividend and AAPL was available to more restricted mutual funds, but what can they do now? Maybe its not all about the company and has a lot to do with finance as well. What happens when you are only allowed to hold 5% of a stock and it grows larger than that in your portfolio? You are forced to sell to others, many of who are at 5% or selling already.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 09, 2012, 05:30:07 AM
hardincap, go ahead and make your 20% on Apple.

My long term record speaks for itself.

Long Bac, ffh, aig, wfc, ssw, rbs.pr.p

Short nothing
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 09, 2012, 05:31:49 AM
I was talking to a friend who works for a mutual fund company about Apple recently. He made a really good point. He said when he looks at Apple the fundamentals look great, but it has reached critical mass. Apple is one of the most widely owned stocks in the market. A lot of mutual fund companies buy it for its window dressing effect as much as its fundamentals. He said many mutual fund companies have 5%+ allocated to AAPL and where do they go from there? Do they increase to 7%? At some point you run out of buyers. On an even more macro side think about all the index funds out there. There is a huge amount of fixed buying and selling that goes on to match the index; an index in which Apple is the largest component. Apple may have the fundamentals but who is going to buy it? There was another run in the stock price after they initiated a dividend and AAPL was available to more restricted mutual funds, but what can they do now? Maybe its not all about the company and has a lot to do with finance as well. What happens when you are only allowed to hold 5% of a stock and it grows larger than that in your portfolio? You are forced to sell to others, many of who are at 5% or selling already.

Good post.  These other guys dont understand.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 09, 2012, 05:39:20 AM
So under your logic, the market was also right when Apole was priced at $700 a month or so ago.

I did say Most, no?
Title: Re: AAPL - Apple Inc.
Post by: hardincap on November 09, 2012, 05:42:57 AM
Funds are actually underweight AAPL relative to hits weighting in the S&P

I was talking to a friend who works for a mutual fund company about Apple recently. He made a really good point. He said when he looks at Apple the fundamentals look great, but it has reached critical mass. Apple is one of the most widely owned stocks in the market. A lot of mutual fund companies buy it for its window dressing effect as much as its fundamentals. He said many mutual fund companies have 5%+ allocated to AAPL and where do they go from there? Do they increase to 7%? At some point you run out of buyers. On an even more macro side think about all the index funds out there. There is a huge amount of fixed buying and selling that goes on to match the index; an index in which Apple is the largest component. Apple may have the fundamentals but who is going to buy it? There was another run in the stock price after they initiated a dividend and AAPL was available to more restricted mutual funds, but what can they do now? Maybe its not all about the company and has a lot to do with finance as well. What happens when you are only allowed to hold 5% of a stock and it grows larger than that in your portfolio? You are forced to sell to others, many of who are at 5% or selling already.

Good post.  These other guys dont understand.
Title: Re: AAPL - Apple Inc.
Post by: hardincap on November 09, 2012, 05:45:19 AM
so when was the market correct "most" of the time on AAPL?

AAPL it has been trading at pe of 15 or more for the last decade, with the exception of the past 1-2 years. Yet its profit margins have consistently increased, and are almost triple what it was in 2005

So under your logic, the market was also right when Apole was priced at $700 a month or so ago.

I did say Most, no?
Title: Re: AAPL - Apple Inc.
Post by: Kraven on November 09, 2012, 05:49:03 AM
hardincap, go ahead and make your 20% on Apple.

My long term record speaks for itself.

Long Bac, ffh, aig, wfc, ssw, rbs.pr.p

Short nothing

Al, you make good points.  I'm about as far from a tech guy as one could find.  I don't understand it and don't pretend to.  But you made a good point about being there when Windows 95 came out.  I think the problem is one of history.  Many on the board are not old enough to have a sense of history.  They came of age when Apple was king and Steve Jobs shit golden nuggets.  Apples products are phenomenal.  They are fantastic consumer products.  But there was a time, not so long ago, although too long for many on the board, when Apple was a punchline.  They almost went under.  So when the Iphone 53 and Ipad 48 runs its course, what comes next?  Who will develop that next great consumer product?  Do people remember Colecovision?  The Commodore 64?  The Motorola Razr?  I remember being at work in the 90s at some point and a guy pulled out a new Razr flip phone.  It was like God delivering the 10 commandments to Moses.  It was one of the best things that anyone had ever seen.  Things in the consumer world change quickly.  Time will tell if Apple is up to the challenge.  I can't think of anyone yet that has been, but that doesn't mean they won't.
Title: Re: AAPL - Apple Inc.
Post by: jeffmori7 on November 09, 2012, 05:49:21 AM
Good point Ross.

I was long Apple, but started to get uncomfortable at 700$, wanted to reduced my position, but unfortunately, I waited a bit too long and I finally didn't sell any. Anyway, I think the valuation is quite more reasonable today than two months ago (obviously..-20%!), even undervalued now. But at 700$, it was becoming a risky stock to get a 20%..I should have sold at least partially, my bad.

Anyway, I wanted to say to valueInv that is becoming very annoying your post about Apple and about other stocks. While I appreciate your insight on Apple and IT in general, you are now showing an irrational bias toward Apple..never fall in love with one stock. On the other hand, what annoyed me most I think is that you dismiss all negative comments that should help you confront your investment thesis about Apple, in the same time you are all over the board pointing any tiny little flaw about any other IT stock. What is true for other investments stay true for Apple, you can not try to demolish anything with arguments about insignificant details except for Apple where you argue against everyone with support from any little details like local newspaper story on one big lineup or stuff like that.

Anyway, it's nothing against you, but please, just keep some respect for the people you argue with, talk about facts, like you prefer, and stay away form personal attack! But don't be insulted by my comments, I just want you to keep posting here about everything, but in a way that we will all benefit from it and from your knowledge.

Ok..back to Apple, valueInv, what could lead you to think you should start to sell Apple instead of buying?
Title: Re: AAPL - Apple Inc.
Post by: hardincap on November 09, 2012, 05:50:27 AM
Apple was struggling in the early 2000s. I think most people on this board are old enough to remember that :)

hardincap, go ahead and make your 20% on Apple.

My long term record speaks for itself.

Long Bac, ffh, aig, wfc, ssw, rbs.pr.p

Short nothing

Al, you make good points.  I'm about as far from a tech guy as one could find.  I don't understand it and don't pretend to.  But you made a good point about being there when Windows 95 came out.  I think the problem is one of history.  Many on the board are not old enough to have a sense of history.  They came of age when Apple was king and Steve Jobs shit golden nuggets.  Apples products are phenomenal.  They are fantastic consumer products.  But there was a time, not so long ago, although too long for many on the board, when Apple was a punchline.  They almost went under.  So when the Iphone 53 and Ipad 48 runs its course, what comes next?  Who will develop that next great consumer product?  Do people remember Colecovision?  The Commodore 64?  The Motorola Razr?  I remember being at work in the 90s at some point and a guy pulled out a new Razr flip phone.  It was like God delivering the 10 commandments to Moses.  It was one of the best things that anyone had ever seen.  Things in the consumer world change quickly.  Time will tell if Apple is up to the challenge.  I can't think of anyone yet that has been, but that doesn't mean they won't.
Title: Re: AAPL - Apple Inc.
Post by: hyten1 on November 09, 2012, 05:54:23 AM
all this apple talk is interesting

i was just pondering, what if MSFT gets some of that vertical integrated action that AAPL gets

AAPL is enourmously profitable

MSFT is profitable, if they can do what aapl did, even if at 90% successful (surface profit margin and similar devices, ie. xbox surface) msft will be very compelling.

hy
Title: Re: AAPL - Apple Inc.
Post by: Kraven on November 09, 2012, 06:00:27 AM
Apple was struggling in the early 2000s. I think most people on this board are old enough to remember that :)

It would appear not.  There is a difference between technically being old enough to have lived through it and to have actually been old enough to understand and appreciate it.  From the uber bullish Apple posts on the board it would seem as if a history lesson will need to be taught.  Perhaps that day will be delayed, but if it isn't, it would be the first that I can think of.  Someone name a consumer product and/or consumer product company that has been at the tippy top of the market for over a decade. 
Title: Re: AAPL - Apple Inc.
Post by: kevin4u2 on November 09, 2012, 06:54:17 AM
Good point Ross.

I was long Apple, but started to get uncomfortable at 700$, wanted to reduced my position, but unfortunately, I waited a bit too long and I finally didn't sell any. Anyway, I think the valuation is quite more reasonable today than two months ago (obviously..-20%!), even undervalued now. But at 700$, it was becoming a risky stock to get a 20%..I should have sold at least partially, my bad.

Anyway, I wanted to say to valueInv that is becoming very annoying your post about Apple and about other stocks. While I appreciate your insight on Apple and IT in general, you are now showing an irrational bias toward Apple..never fall in love with one stock. On the other hand, what annoyed me most I think is that you dismiss all negative comments that should help you confront your investment thesis about Apple, in the same time you are all over the board pointing any tiny little flaw about any other IT stock. What is true for other investments stay true for Apple, you can not try to demolish anything with arguments about insignificant details except for Apple where you argue against everyone with support from any little details like local newspaper story on one big lineup or stuff like that.

Anyway, it's nothing against you, but please, just keep some respect for the people you argue with, talk about facts, like you prefer, and stay away form personal attack! But don't be insulted by my comments, I just want you to keep posting here about everything, but in a way that we will all benefit from it and from your knowledge.

Ok..back to Apple, valueInv, what could lead you to think you should start to sell Apple instead of buying?

Jeff, the blinders are on and they don't come off until there is an appreciation for intellectual honesty and humility.  Humility is the ability to see reality as it really is, to follow the facts where ever they go.  Most importantly humility includes accepting the possibility of being wrong, and quickly admitting mistakes when they are made.  Human beings are naturally egocentric wanting to see things from their own narrow point of view.  We will do anything to protect ourselves from threats.   

Some learn this the hard way, while some never learn it at all.  If you cannot think of a time when you had an error in your thinking you should ask yourself why?
Title: Re: AAPL - Apple Inc.
Post by: bobp on November 09, 2012, 07:11:47 AM
"humility includes accepting the possibility of being wrong" Yes! Exactly what's wrong with America today. If I am right about everything, there's no reason for me to even listen to you because you're obviously wrong.

Sorry I'm off topic here. Back to Apple.

Title: Re: AAPL - Apple Inc.
Post by: rmitz on November 09, 2012, 07:31:44 AM
Apple was struggling in the early 2000s. I think most people on this board are old enough to remember that :)

It would appear not.  There is a difference between technically being old enough to have lived through it and to have actually been old enough to understand and appreciate it.  From the uber bullish Apple posts on the board it would seem as if a history lesson will need to be taught.  Perhaps that day will be delayed, but if it isn't, it would be the first that I can think of.  Someone name a consumer product and/or consumer product company that has been at the tippy top of the market for over a decade.

I've mostly stayed quiet on this.  I'm certainly old enough to remember and was quite involved at that time, though I was neither a Microsoft nor Apple fan by that point.  The reaction here that seems to be "uberbullish" is to one of "uberbearish".  The truth, I believe, is somewhere in between, at least for quite a while.  Microsoft has raked in the cash under Ballmer, and I think Tim Cook is at least as good.  Apple does not have a sky-high valuation.  Are there risks?  Sure, but it certainly looks like they're priced in. 

On the long term, who knows?  Over 100 years I wouldn't even bet 100% on BRK.  Things do change faster in technology, but Apple has it's own strengths.  Is Tim Cook another Jobs?  Absolutely not, but that isn't required to make a lot of money for an extended period.
Title: Re: AAPL - Apple Inc.
Post by: hardincap on November 09, 2012, 07:44:27 AM
.
Title: Re: AAPL - Apple Inc.
Post by: Kraven on November 09, 2012, 07:45:12 AM
Apple was struggling in the early 2000s. I think most people on this board are old enough to remember that :)

It would appear not.  There is a difference between technically being old enough to have lived through it and to have actually been old enough to understand and appreciate it.  From the uber bullish Apple posts on the board it would seem as if a history lesson will need to be taught.  Perhaps that day will be delayed, but if it isn't, it would be the first that I can think of.  Someone name a consumer product and/or consumer product company that has been at the tippy top of the market for over a decade.

I've mostly stayed quiet on this.  I'm certainly old enough to remember and was quite involved at that time, though I was neither a Microsoft nor Apple fan by that point.  The reaction here that seems to be "uberbullish" is to one of "uberbearish".  The truth, I believe, is somewhere in between, at least for quite a while.  Microsoft has raked in the cash under Ballmer, and I think Tim Cook is at least as good.  Apple does not have a sky-high valuation.  Are there risks?  Sure, but it certainly looks like they're priced in. 

On the long term, who knows?  Over 100 years I wouldn't even bet 100% on BRK.  Things do change faster in technology, but Apple has it's own strengths.  Is Tim Cook another Jobs?  Absolutely not, but that isn't required to make a lot of money for an extended period.

Ha ha, no uberbearishness on my part.  I couldn't care less.  Just engaging in a lively debate and pointing out the flawed thinking of some.  It's all in fun.  It's like being in NY and telling someone the Yankees suck.  No matter what is going on, no matter that the average age of the team is close to social security and that they have contracts that could weigh down the Treasury, the Yankees are the best team.  It's the same with Apple fans.  They can and never will do any wrong.
Title: Re: AAPL - Apple Inc.
Post by: jeffmori7 on November 09, 2012, 08:10:33 AM
iPhone 5 in China this year :

http://www.macrumors.com/2012/11/09/iphone-5-coming-to-china-in-late-november-or-early-december/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 09, 2012, 08:37:34 AM
Good point Ross.

I was long Apple, but started to get uncomfortable at 700$, wanted to reduced my position, but unfortunately, I waited a bit too long and I finally didn't sell any. Anyway, I think the valuation is quite more reasonable today than two months ago (obviously..-20%!), even undervalued now. But at 700$, it was becoming a risky stock to get a 20%..I should have sold at least partially, my bad.

Anyway, I wanted to say to valueInv that is becoming very annoying your post about Apple and about other stocks. While I appreciate your insight on Apple and IT in general, you are now showing an irrational bias toward Apple..never fall in love with one stock. On the other hand, what annoyed me most I think is that you dismiss all negative comments that should help you confront your investment thesis about Apple, in the same time you are all over the board pointing any tiny little flaw about any other IT stock. What is true for other investments stay true for Apple, you can not try to demolish anything with arguments about insignificant details except for Apple where you argue against everyone with support from any little details like local newspaper story on one big lineup or stuff like that.

Anyway, it's nothing against you, but please, just keep some respect for the people you argue with, talk about facts, like you prefer, and stay away form personal attack! But don't be insulted by my comments, I just want you to keep posting here about everything, but in a way that we will all benefit from it and from your knowledge.

Ok..back to Apple, valueInv, what could lead you to think you should start to sell Apple instead of buying?

Let me ask you a question. Suppose I posted something the following on this board:

"Prem is losing it. Look at his investments in RIM, Dell, Sandridge. I mean is this guy even a value investor? He's making a lot of macro bets. Value investors don't make macro bets. And Buffet. He's going senile. He paid a crazy price for a capex intensive railroad. Buffet would have never made such a stupid investment in his younger days. His investment returns are going to go down. He can't keep getting lucky forever."

Do you think the criticism would be swift and merciless? Now you can see why I react the way I do.

Would people be biased to attack me? Or does it show how little I know about those companies? Does it show I am talking out of my ass about some very smart people of whom I understand very little?

I react when I see posts that are factually on analytically wrong. Its my pet peeve. I have over 150 blogs in my RSS feed, most of them tech. Do you think I have a good idea of whether the iPad mini got coverage? Or whether Apple is returning money to shareholders? Or Foxconn is lying about deploying a million robots? I live, breathe and eat the tech industry. I doesn't take much for me to tell when someone is talking out of their ___.

Go back an analyze the thread I post in. Count the % of my posts that have some datapoint or link substantiating the claim I am making. Now look at posts of the others. Do they bother to substantiate? Actually go even further, classify my links or data points as subjective or factual (as it relates to the claim I am making). What do you see? Who is likely to be more biased - someone who bothers to backup what they are saying or someone who makes unsubstantiated claims.

I am critical about Apple when they do screw up. When they released Maps, I was the one who called it a "crisis". Others said I was going too for. Well, Steve Jobs' heir apparent got fired over it. Crisis? I've criticized the iPod nano and Apple building its own chips. I was wrong about chips (which I admitted multiple times). I have called Redhat at the company with one of the widest moats in tech. I have also said that Windows Phone and Nokia are doing great work and I would like to see them succeed.

Look, I hold more in AIG, BAC, Berk, FFH, LUK than I do in Apple. I don't comment of those threads because there are people here that know far more than more on those and are way smarter about those stocks. I read what they post, learn and ask questions. I welcome posts that question my analysis, but do the research, educate yourself if you are going to talk crap about Apple, because I will challenge you. Saying Apple can't out innovate competition forever is like saying Buffet can't beat the market forever. It implies that both are getting lucky and shows a complete lack of understanding of how the companies operate.

I have previously posted about the risks/threats to Apple and am happy to do so again. Apple is not without both and yes, I control my sizing to account for the fact that I could be wrong. To answer your question about when will I sell Apple:

When I see a permanent impairment of the business. Like Buffet, my preferred holding period is forever, though its is not likely in the case of Apple. I have always invested in Apple by handicapping products using my industry knowledge. When I see them repeatedly release crappy products, I will sell.

Apple has always been a contrarian investment for me. Its funny when I was in business school, we were doing a valuation case study of Apple. I was in a team with some smart finance guys and they did a DCF to value it at about $65, it was trading around $80. They called it overvalued. Apple had just announced the iPhone but hadn't started selling it. They included 0 smartphone revenues. I asked them why. They said "Apple has no experience in making phones, they make mp3 players. They are not going to be able to compete against Motorola or Nokia". I argued that Apple was the best design/consumer electronics device company and the smartphone was a device. I lost the argument. We went with $65::)

 I have always bought Apple when the world crapped on it, when everyone was talking about how Apple was going to fail "this time". I go back, revisit my analysis and assumptions and buy if I disagree with the market. Now is one of those times. And I am happily adding.
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 09, 2012, 08:52:10 AM
I had sold about 30-40% of my position between $670-$690. Bought some shares back yesterday and today.
Title: Re: AAPL - Apple Inc.
Post by: PlanMaestro on November 09, 2012, 08:53:47 AM
I will not take a position in a discussion that is starting to look like a politics/religion thread. Especially when I have no clue of what will happen. But let me add why I have no clue of what will happen. In other words, why I'm agnostic.

In 2008, when Jobs temporarily stepped down, and the iPhone was showing early signs of being a success, the stock plunged I bought. However, I sold way, way too soon. The reason is that I read a lot.

Who is this entrepreneur?

[XXXX] often got up onstage, deploying every bit of his considerable magnetism, and put the company’s net big thing through its paces, sometimes backed by a slideshow to fill in the details, other times with live music between segments. A generation later, Jobs did the same thing, in a black turtleneck and jeans. Both men were college dropouts; both became as rich as anyone could ever wish to be; and both insisted that their inventions would change the fundamental nature of human communication.

http://www.brainpickings.org/index.php/2012/09/27/instant-the-story-of-polaroid/

Now, in the IT business sometimes you can be smart/lucky and build switching costs or service/software platforms that outlive the device. But all devices end up as toasters. The balance between those two trends is tough to predict, changes happen fast, and end in bipolar outcomes.

Ain't it better to simply say that we don't know?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 09, 2012, 09:07:11 AM
If you want to see an intelligent criticism of what Apple gets wrong, read this:

http://counternotions.com/2012/11/05/sirjony/
Title: Re: AAPL - Apple Inc.
Post by: jeffmori7 on November 09, 2012, 09:24:59 AM
Good point Ross.

I was long Apple, but started to get uncomfortable at 700$, wanted to reduced my position, but unfortunately, I waited a bit too long and I finally didn't sell any. Anyway, I think the valuation is quite more reasonable today than two months ago (obviously..-20%!), even undervalued now. But at 700$, it was becoming a risky stock to get a 20%..I should have sold at least partially, my bad.

Anyway, I wanted to say to valueInv that is becoming very annoying your post about Apple and about other stocks. While I appreciate your insight on Apple and IT in general, you are now showing an irrational bias toward Apple..never fall in love with one stock. On the other hand, what annoyed me most I think is that you dismiss all negative comments that should help you confront your investment thesis about Apple, in the same time you are all over the board pointing any tiny little flaw about any other IT stock. What is true for other investments stay true for Apple, you can not try to demolish anything with arguments about insignificant details except for Apple where you argue against everyone with support from any little details like local newspaper story on one big lineup or stuff like that.

Anyway, it's nothing against you, but please, just keep some respect for the people you argue with, talk about facts, like you prefer, and stay away form personal attack! But don't be insulted by my comments, I just want you to keep posting here about everything, but in a way that we will all benefit from it and from your knowledge.

Ok..back to Apple, valueInv, what could lead you to think you should start to sell Apple instead of buying?

Let me ask you a question. Suppose I posted something the following on this board:

"Prem is losing it. Look at his investments in RIM, Dell, Sandridge. I mean is this guy even a value investor? He's making a lot of macro bets. Value investors don't make macro bets. And Buffet. He's going senile. He paid a crazy price for a capex intensive railroad. Buffet would have never made such a stupid investment in his younger days. His investment returns are going to go down. He can't keep getting lucky forever."

Do you think the criticism would be swift and merciless? Now you can see why I react the way I do.

Would people be biased to attack me? Or does it show how little I know about those companies? Does it show I am talking out of my ass about some very smart people of whom I understand very little?

I react when I see posts that are factually on analytically wrong. Its my pet peeve. I have over 150 blogs in my RSS feed, most of them tech. Do you think I have a good idea of whether the iPad mini got coverage? Or whether Apple is returning money to shareholders? Or Foxconn is lying about deploying a million robots? I live, breathe and eat the tech industry. I doesn't take much for me to tell when someone is talking out of their ___.

Go back an analyze the thread I post in. Count the % of my posts that have some datapoint or link substantiating the claim I am making. Now look at posts of the others. Do they bother to substantiate? Actually go even further, classify my links or data points as subjective or factual (as it relates to the claim I am making). What do you see? Who is likely to be more biased - someone who bothers to backup what they are saying or someone who makes unsubstantiated claims.

I am critical about Apple when they do screw up. When they released Maps, I was the one who called it a "crisis". Others said I was going too for. Well, Steve Jobs' heir apparent got fired over it. Crisis? I've criticized the iPod nano and Apple building its own chips. I was wrong about chips (which I admitted multiple times). I have called Redhat at the company with one of the widest moats in tech. I have also said that Windows Phone and Nokia are doing great work and I would like to see them succeed.

Look, I hold more in AIG, BAC, Berk, FFH, LUK than I do in Apple. I don't comment of those threads because there are people here that know far more than more on those and are way smarter about those stocks. I read what they post, learn and ask questions. I welcome posts that question my analysis, but do the research, educate yourself if you are going to talk crap about Apple, because I will challenge you. Saying Apple can't out innovate competition forever is like saying Buffet can't beat the market forever. It implies that both are getting lucky and shows a complete lack of understanding of how the companies operate.

I have previously posted about the risks/threats to Apple and am happy to do so again. Apple is not without both and yes, I control my sizing to account for the fact that I could be wrong. To answer your question about when will I sell Apple:

When I see a permanent impairment of the business. Like Buffet, my preferred holding period is forever, though its is not likely in the case of Apple. I have always invested in Apple by handicapping products using my industry knowledge. When I see them repeatedly release crappy products, I will sell.

Apple has always been a contrarian investment for me. Its funny when I was in business school, we were doing a valuation case study of Apple. I was in a team with some smart finance guys and they did a DCF to value it at about $65, it was trading around $80. They called it overvalued. Apple had just announced the iPhone but hadn't started selling it. They included 0 smartphone revenues. I asked them why. They said "Apple has no experience in making phones, they make mp3 players. They are not going to be able to compete against Motorola or Nokia". I argued that Apple was the best design/consumer electronics device company and the smartphone was a device. I lost the argument. We went with $65::)

 I have always bought Apple when the world crapped on it, when everyone was talking about how Apple was going to fail "this time". I go back, revisit my analysis and assumptions and buy if I disagree with the market. Now is one of those times. And I am happily adding.

Thanks for your answer! You see, maybe it's sometimes just the way you say something that can annoyed someone, more than what you say. So this time, you took the time to explain your view instead of a laconic answer like you often do. It's not a competition about who know the most!

About facts, I would just point that all facts are not meaningful, so we can not debate just by pointing facts, but we have to support them and use them as arguments.

I'm happy to be on board with you on BAC, AIG and BRK as well as Apple. We do not agree on everything and that's for the best, but we will leave religion behind and get back to investment!
Title: Re: AAPL - Apple Inc.
Post by: hardincap on November 09, 2012, 09:28:41 AM
Apple is a company that is extremely dependent on management, just like hedge funds or insurance. If Jony leaves, I would be selling my stock.

If you want to see an intelligent criticism of what Apple gets wrong, read this:

http://counternotions.com/2012/11/05/sirjony/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 09, 2012, 09:39:39 AM
Now, in the IT business sometimes you can be smart/lucky and build switching costs or service/software platforms that outlive the device. But all devices end up as toasters. The balance between those two trends is tough to predict, changes happen fast, and end in bipolar outcomes.

Ain't it better to simply say that we don't know?
Many people make the same argument about the stock - the EMTs. They view the stocks are unpredictable and random. But we don't agree, do we? Ben Graham and Phil Fisher used analysis, research and observation to come up with a somewhat rigorous underlying mental model on how to approach investing and get superior returns. That does not mean that you can't go wrong following their principles, just that the probability is lower. We diversify to protect against that possibility.

What I am doing with Apple and the tech industry is no different. I have studied the best thinkers out there, I have studied its history, looked for patterns, dots I can connect and much more. I did this because I need this for my day job. It turns out that I can also use that knowledge for investing in tech. Thats exactly what I do. So it does not appear random to me. I was not surprised by polaroid, by RIMM and I am not likely to be surprised by Google or Apple when the time comes. I could be wrong but I diversify to protect against that.

If you want to learn about the tech industry read Clayton Christenson, Geoffrey Moore, Theodore Leavitt, William Davidow, Alan Cooper, Jef Raskin and many others. Educate yourself by reading the blogs of smart people in tech. Read everything on Apple and look for patterns. Why do they do the things they do? Why do people buy their products? How do people make buying decisions? What is a "good" product? What is each companies' core strategy?

Once you start to piece things together, it will look less unpredictable. You're absolutely right, it is better to say you don't know - if you actually don't. And that is my core problem with many of the posts I respond to - they don't really know or understand.
Title: Re: AAPL - Apple Inc.
Post by: Palantir on November 09, 2012, 12:38:14 PM
ValueInv - do you have any insight into how Apple will deal with a transition to VDI or do you believe that is not in the cards?
Title: Re: AAPL - Apple Inc.
Post by: gokou3 on November 09, 2012, 01:29:55 PM
I know people shouldn't swipe diagonally across their phone screen  ;), but a new problem surfaces for some iphone 5 users:


http://mobilesyrup.com/2012/11/09/iphone-5-owners-complaining-of-horizontal-line-problems/#comment-332254
iPhone 5 owners complaining of screen issues when swiping diagonally
Title: Re: AAPL - Apple Inc.
Post by: VAL9000 on November 09, 2012, 02:48:23 PM
I have over 150 blogs in my RSS feed, most of them tech.

Well now you've answered the question of how you're able to constantly spam all of the tech threads on this board with positive news about Apple and negative news about their competitors.  Someone mentioned laconic earlier and I think it is a fitting description of at least half of your posts.  I have consistently urged you to provide more substance when you post.

Obviously you don't have to listen to me, but if you are looking to contribute, influence, or promote a healthy debate, then I will reiterate that your posts should be more verbose and contain more analysis and thinking.  Your approach of "paste a link, jot a pithy comment" is so low value. I did it once to make fun, but I don't think the message hit home.  If you think it is a challenge to do that, I will go you one for one on a thread dedicated to one liners (after I get back from vacation).

Before I sign off, I want to point out that the reason I spend time here is for analysis and insights.  It is very rare that I come across individual news articles that I haven't already read or wouldn't read shortly.  What interests me is the business analysis of any given piece of news. How does it impact the business model, probability of success, chances for fortune, etc?  Think of it as the comment section for blogs/news but filtered by investment related comments only.  This to me is the core advantage to working on a message board - collaboration, confrontation with a common goal.  I believe that because you offer so little analysis with each post, you appear significantly more biased than you may actually be.  But I can't tell because you don't show us otherwise.  All I see is that you love Apple and dismiss not Apple.  And that gets annoying and makes it difficult to take you seriously.  My personal opinion though. Maybe others disagree with me - but at least I stuck with my principles and offered analysis with that opinion :)
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 09, 2012, 03:59:48 PM
I have over 150 blogs in my RSS feed, most of them tech.

Well now you've answered the question of how you're able to constantly spam all of the tech threads on this board with positive news about Apple and negative news about their competitors.  Someone mentioned laconic earlier and I think it is a fitting description of at least half of your posts.  I have consistently urged you to provide more substance when you post.

Obviously you don't have to listen to me, but if you are looking to contribute, influence, or promote a healthy debate, then I will reiterate that your posts should be more verbose and contain more analysis and thinking.  Your approach of "paste a link, jot a pithy comment" is so low value. I did it once to make fun, but I don't think the message hit home.  If you think it is a challenge to do that, I will go you one for one on a thread dedicated to one liners (after I get back from vacation).

Before I sign off, I want to point out that the reason I spend time here is for analysis and insights.  It is very rare that I come across individual news articles that I haven't already read or wouldn't read shortly.  What interests me is the business analysis of any given piece of news. How does it impact the business model, probability of success, chances for fortune, etc?  Think of it as the comment section for blogs/news but filtered by investment related comments only.  This to me is the core advantage to working on a message board - collaboration, confrontation with a common goal.  I believe that because you offer so little analysis with each post, you appear significantly more biased than you may actually be.  But I can't tell because you don't show us otherwise.  All I see is that you love Apple and dismiss not Apple.  And that gets annoying and makes it difficult to take you seriously.  My personal opinion though. Maybe others disagree with me - but at least I stuck with my principles and offered analysis with that opinion :)

Analysis needs to start with facts or assumptions and use induction or deduction to reach a conclusion. It implies a level of rigor. If you are using assumptions, you need to state what they are and the likelihood that they will come true. If you use facts, point to them so that other people can verify your analysis.

I consider very little of what is posted by the usual suspects as "analysis". They are usually claims or assumptions being passed off as conclusions. I have deconstructed some posts previously to show this.

I post links to make what I say verifiable and to also keep my biases in check. I feel the burden of proof for every claim I make. I don't reach a conclusion in a vacuum, it is based on a piece of information - that is what I post. So if I say Foxconn is not revolting against Apple,
then I should have some basis of saying that - that is what I post. A good rule of thumb of thumb for a bias is when you can't substantiate what you are claiming. When you expose the information you base your decision on, you expose yourself to being proven wrong and that will decrease the likelihood of bias. Not the other way round. I have pushed for analysis on the Dell thread and you can see people being evasive.   

BTW, I have posted analysis of both Apple and Google. And as what the analysis predicted came true, I post the links to show it. A while back I called Motorola a mistake for Google. Check the Google thread for data points that verify that claim.

That is why I started using #facts, to point out that a particular claim does not rely on or agree with the facts. Go back and read this thread, read RIMM, read FTP. Did what the consensus say come true? If not, why not? Where did people go wrong?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 09, 2012, 04:00:30 PM
Apple is a company that is extremely dependent on management, just like hedge funds or insurance. If Jony leaves, I would be selling my stock.

If you want to see an intelligent criticism of what Apple gets wrong, read this:

http://counternotions.com/2012/11/05/sirjony/

I would probably sell too.
Title: Re: AAPL - Apple Inc.
Post by: ItsAValueTrap on November 09, 2012, 04:12:25 PM
Here's how I see it:

You have to predict the future market share in smartphones and tablets, which is Apple's bread and butter now.  Tech often gravitates towards one or two companies dominating market share.  If Android dominates the market and takes away Apple's market share, then it would be really bad for Apple.  Because I am not confident that this will not happen, I am no longer long Apple (though I'd still rather be long Apple than short it... no question about that).

I see the software ecosystems being the moat of all the smartphone companies.  Whoever has the best software ecosystem will make the most money.  I don't think that the hardware vendors will make that much money and I don't think vertical integration matters.  Some of the SoC companies like Qualcomm, Intel, or TSMC may also make good profits.

I see Android as being the best software ecosystem a few years from now... I could definitely be wrong though!  It was only several years ago when Blackberry was the leader in smartphones.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 09, 2012, 04:17:17 PM
Thanks for your answer! You see, maybe it's sometimes just the way you say something that can annoyed someone, more than what you say. So this time, you took the time to explain your view instead of a laconic answer like you often do. It's not a competition about who know the most!
You are absolutely right, I get snarky. For whatever reason, I find people pretending to be experts on topics they are not to be very offensive. People who know me know that I explode whenever I see people talking out of their ___. To me, it is a form of lying. I am well aware of my behavior. You will also notice a completely different tone of voice in non-tech threads.

Another note on biases: If you go back and read my posts you will see me use words like "likely", "probably", "may", etc a lot. That reflects the way I think - probablistically. That means also that I believe there is a probability I can be wrong. That protects against biases. A biased person will have a lot more confidence in their claims to use words like that.

If I believed that my thesis on Apple had 100% probability of coming true, I wouldn't be reading this board. I would put 100% of my money in Apple and retire. The only reason for me to be here is to protect against my own mistakes. The only reason for me to diversify is to protect against mistakes. That is why I started looking at Berk, BAC, AIG, etc.

Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 09, 2012, 04:23:18 PM
ValueInv - do you have any insight into how Apple will deal with a transition to VDI or do you believe that is not in the cards?
I don't think they will support it for two reasons:

1, VDI is an enterprise-centric technology. Apple does not cater to that market. To them it is a redheaded stepchild. VDI introduces complexity to users, something that is anathema to Apple.
2, Many of the benefits of VDI can be provided using a combination of mobile devices and cloud-based applications. It is likely that the latter two will obsolete the former.
Title: Re: AAPL - Apple Inc.
Post by: ubuy2wron on November 09, 2012, 05:27:13 PM
For all the aaple bears, snapshot of local store in local mall taken 1 hour ago the store was VERY busy.
Title: Re: AAPL - Apple Inc.
Post by: Palantir on November 09, 2012, 08:24:38 PM

I don't think they will support it for two reasons:

1, VDI is an enterprise-centric technology. Apple does not cater to that market. To them it is a redheaded stepchild. VDI introduces complexity to users, something that is anathema to Apple.
2, Many of the benefits of VDI can be provided using a combination of mobile devices and cloud-based applications. It is likely that the latter two will obsolete the former.

VDI was the wrong term perhaps, what I mean is software offered remotely to mobile devices. App virtualization? What I was getting at though was when more services are offered over the internet, the hardware piece they're using is less important right? So when  a service is offered over the web, it is not really important what version of the iPad the user has, hence it lessens the necessity to upgrade to new pieces of hardware. How will Apple sustain these huge margins then?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 09, 2012, 08:54:12 PM
For all the aaple bears, snapshot of local store in local mall taken 1 hour ago the store was VERY busy.
Biased!!!!
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 10, 2012, 05:31:31 AM

I don't think they will support it for two reasons:

1, VDI is an enterprise-centric technology. Apple does not cater to that market. To them it is a redheaded stepchild. VDI introduces complexity to users, something that is anathema to Apple.
2, Many of the benefits of VDI can be provided using a combination of mobile devices and cloud-based applications. It is likely that the latter two will obsolete the former.

VDI was the wrong term perhaps, what I mean is software offered remotely to mobile devices. App virtualization? What I was getting at though was when more services are offered over the internet, the hardware piece they're using is less important right? So when  a service is offered over the web, it is not really important what version of the iPad the user has, hence it lessens the necessity to upgrade to new pieces of hardware. How will Apple sustain these huge margins then?

I've wondered about that as well - not so much people upgrading to new hardware, but the advantage Aplle has with the huge amount of apps can be reduced as more apps are offered online as web apps. With the way mobile browsers currently work, standalone apps do work better than web apps, but it'll be interesting to see if this changes in a few years.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 10, 2012, 08:07:00 AM

I don't think they will support it for two reasons:

1, VDI is an enterprise-centric technology. Apple does not cater to that market. To them it is a redheaded stepchild. VDI introduces complexity to users, something that is anathema to Apple.
2, Many of the benefits of VDI can be provided using a combination of mobile devices and cloud-based applications. It is likely that the latter two will obsolete the former.

VDI was the wrong term perhaps, what I mean is software offered remotely to mobile devices. App virtualization? What I was getting at though was when more services are offered over the internet, the hardware piece they're using is less important right? So when  a service is offered over the web, it is not really important what version of the iPad the user has, hence it lessens the necessity to upgrade to new pieces of hardware. How will Apple sustain these huge margins then?

Are we talking about the native vs HTML5 apps debate? Or is this a third option ?

Could you give me an example of a app virtualization platform?
Title: Re: AAPL - Apple Inc.
Post by: Palantir on November 10, 2012, 08:16:59 AM

I don't think they will support it for two reasons:

1, VDI is an enterprise-centric technology. Apple does not cater to that market. To them it is a redheaded stepchild. VDI introduces complexity to users, something that is anathema to Apple.
2, Many of the benefits of VDI can be provided using a combination of mobile devices and cloud-based applications. It is likely that the latter two will obsolete the former.

VDI was the wrong term perhaps, what I mean is software offered remotely to mobile devices. App virtualization? What I was getting at though was when more services are offered over the internet, the hardware piece they're using is less important right? So when  a service is offered over the web, it is not really important what version of the iPad the user has, hence it lessens the necessity to upgrade to new pieces of hardware. How will Apple sustain these huge margins then?

Are we talking about the native vs HTML5 apps debate? Or is this a third option ?

Could you give me an example of a app virtualization platform?

Leave alone app virtualization. Think broadly about apps and other software offered over the internet. Essentially, many of these devices like iPhone, iPad, iPadM, iMac are simply different form factors of the same internet device. How does Apple convince people to upgrade to new devices if the old iPad will also play new software? Essentially, in the future, instead of getting a new iPad, the customer will just upgrade to the next iOS version, and via iCloud, access all his old data and move it to the next operating system.

I'm not speaking about status quo, but looking a little ahead into the future.
Title: Re: AAPL - Apple Inc.
Post by: Grenville on November 10, 2012, 12:31:05 PM
Do you guys have any thoughts on all the issues people are having with the new retina display MacBooks? I was interested in getting one but there seems to be a lot of quality issues especially with the LG displays. I'm surprised Apple hasn't fixed this yet.

https://discussions.apple.com/thread/4034848?start=5505&tstart=0 (https://discussions.apple.com/thread/4034848?start=5505&tstart=0)
Title: Re: AAPL - Apple Inc.
Post by: ItsAValueTrap on November 10, 2012, 02:32:05 PM
In the history of computers a lot of the best manufacturers have had quality issues.

Intel CPUs - Pentium bug/flaw
Almost every motherboard manufacturer suffered from the leaky capacitors issue.  Many of the best companies suffered from it because they just didn't know.
Xbox/red ring of death

Stuff like this happens and I don't think you should be scared about the long-term prospects of a company based on bad luck.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 10, 2012, 09:15:43 PM
Leave alone app virtualization. Think broadly about apps and other software offered over the internet. Essentially, many of these devices like iPhone, iPad, iPadM, iMac are simply different form factors of the same internet device. How does Apple convince people to upgrade to new devices if the old iPad will also play new software? Essentially, in the future, instead of getting a new iPad, the customer will just upgrade to the next iOS version, and via iCloud, access all his old data and move it to the next operating system.

I'm not speaking about status quo, but looking a little ahead into the future.

Ok, there are multiple factors at play here. I'll address them one by one:

The Interface Question: Most apps today are offered over the Internet. When you fire up a native app, it connects over the Internet using http (just like a browser), downloads data and displays it. The difference is that it uses Apple's code to do the displaying instead of a web browser (in the case of HTML5). The difference here is simply in the technology used to display information. Currently, HTML5 is not as responsive or powerful as Apple's code but some people think it will catch up. I'm not sure it will. HTML5 is a standard run by a consortium filled with members with conflicting interests. It will be easy for Apple to keep ahead of HTML5 if they choose to do so.

Over the long term, apps may simply become less relevant. I think the most promising direction for the future is intelligent agents i.e. Siri.
Whenever you need something, you simply ask your phone and it figures out how to get you what you want. No downloading apps, switching between them, entering data, etc. This is a topic of a whole new post.

The hardware question: So what will keep people upgrading? You can think of a smartphone as consisting of two systems: A computing system that hosts apps and a sensor system. Each release improves the computing system, adds more sensors and makes them more powerful. Examples are camera, microphone,  GPS, compass, accelorometer, etc. So example, iPhone5 brought a better camera and three microphones (instead of two).The future may bring fingerprint readers, NFC, etc. Consumers upgrade for two reasons : a more powerful computing system and a more extensive or powerful sensor system. The sensor connect the phone to the world and make it that much more useful. So even if we were in a HTML5/Internet world with no need for a better computing system, Apple can keep innovating on the sensor system. There is also the other aspect of the wireless chip, antenna, screen, etc.

I expect the above trends to hold in the medium term. To  look at the long term, I use Clayton Christensen's disruptive innovation theory.
The market has a level of demands/needs of performance, etc. In the early stages of the technology, companies the best meet those demands win and command a premium. Over time, technology catches up to the demands and  competition drives companies to deliver more than what the market is demanding. In this phase, people stop paying for the premium and the lower priced competitors with the lower cost model will have an advantage. You are seeing that in the PC industry today. At some point, Apple will have to adjust its strategy/operations to this scenario or build a powerful moat that still allows them to get a premium. We are not in this phase yet, so Apple has time. I have no idea what they will do adjust but in the past they have dealt with the second phase of the market by creating a new market and cannibalizing themselves. For example, iPhones cannibalize iPods, iPads cannibalize Macs.

I think we are just at the beginning of the mobile revolution. There is still a lot of unmet demand. Our networks are not fast enough, batteries don't last long enough, etc. We haven't even gotten mobile payments going. There is a lot more change to come.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on November 11, 2012, 12:05:54 PM
What is going on here? I heard about their own microprocessor and their datacenter investments but this is crazy.

(http://farm8.staticflickr.com/7265/8167643257_521ba83804.jpg)

Maybe if you can't get someone else to build it for you and you have $120 Billion you build it yourself?

Interesting article from Technology Review on an increase in Apple R&D ratio:

http://www.technologyreview.com/news/506766/can-apple-still-innovate-on-a-shoestring/

I would note that the R&D ratio is a misleading number.  Apple's R&D is also acquired (seen in cash flow statement) and, in some sense, is licensed through capex.  That is, if a display manufacturer has some revolutionary new technology that that manufacturer has spent R&D dollars on, Apple contributes to that innovation through exclusive supply contracts (for a limited time) and paying part of the cost for the manufacturer to tool up. 

Bottom line is that one has to take into account R&D expenses, acquisitions, and capex when thinking about owner earnings for AAPL.

Incidentally, there is a theory out there that AAPL may have bailed out Sharp last quarter.  The guy who is really pushing this theory goes on this slush fund rant about AAPL, though, so who knows how valid it is.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 12, 2012, 03:52:17 PM
Finally catching up with demand:

http://news.cnet.com/8301-13579_3-57548688-37/iphone-5-ship-times-shorten-for-first-time/
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on November 12, 2012, 05:55:26 PM
siriously?

http://www.loopinsight.com/2012/11/05/google-voice-search-vs-siri/
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on November 12, 2012, 06:22:18 PM
http://gizmodo.com/5959770/is-the-ipad-mini-the-beginning-of-apples-decline

for the record, my own sense is that the mini is going to take over as the best selling ipad. perhaps wall street is adjusting their models to account for this prospect?
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 12, 2012, 07:11:07 PM
http://gizmodo.com/5959770/is-the-ipad-mini-the-beginning-of-apples-decline

for the record, my own sense is that the mini is going to take over as the best selling ipad. perhaps wall street is adjusting their models to account for this prospect?

He has some valid points, most people buying the mini are buying it as their only tablet, not in addition to an iPad 3 or 4.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 12, 2012, 11:16:01 PM
http://gizmodo.com/5959770/is-the-ipad-mini-the-beginning-of-apples-decline

for the record, my own sense is that the mini is going to take over as the best selling ipad. perhaps wall street is adjusting their models to account for this prospect?

Yeah, 'Steve would have never shipped it'. Steve would have never shipped a phone with no 3G and apps, too. Oh wait, he did.

Rimm, I agree with you, the iPad mini is going to be the lead tablet for Apple.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 13, 2012, 10:49:33 AM
You know you're doing something right when your competitors use your products as a gold standard in their own ads:

http://daringfireball.net/misc/2012/11/dell-xps.jpg
Title: Re: AAPL - Apple Inc.
Post by: Sunrider on November 13, 2012, 10:56:52 AM
You know you're doing something right when your competitors use your products as a gold standard in their own ads:

http://daringfireball.net/misc/2012/11/dell-xps.jpg

Classic. Just can't understand what dummy exec let the marketing company run this (apart from the obvious fact that it looks nothing like either and MBA or an iPad). :)
Title: Re: AAPL - Apple Inc.
Post by: Palantir on November 13, 2012, 10:59:57 AM
Are there black friday deals for apple? I know this is the wrong section but still...
Title: Re: AAPL - Apple Inc.
Post by: alertmeipp on November 13, 2012, 05:57:37 PM
so, any of the Apple fans actually try an Android phone. Iphone maybe sleek but does it really worth the premium. And I listen to the Tim Cook presentation on the recent product launch, he is just not Steve Jobs.
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 13, 2012, 06:50:36 PM
so, any of the Apple fans actually try an Android phone. Iphone maybe sleek but does it really worth the premium. And I listen to the Tim Cook presentation on the recent product launch, he is just not Steve Jobs.

Been over this before, but I had an Android phone for 2 years. Was ok for me first 9 months, until they stopped pushing out android updates for it. Then it was crap and apps (and the device) crashed very frequently. Android has improved since I owned the phone, but the fragmentation hasn't. We also have a couple android devices in our dept at work for troubleshooting, so I get to play around ith them a bit.

I don't dislike Android overall (and I own shares of both Apple & Google). I do think there is plenty of room for both iPhone and Android to be successful though (and have been saying that for several years). I own an iPhone, iPad and MacBook Pro and the integration between the devices (as well as iCloud.com) is outstanding, IMO. Having iTunes on my phone is another huge draw for me. As a big music fan, I love having access to the world's best music store on my phone. I use apps like Pandora and Spotify as well, but also still purchase music. While I often had to take the battery out of my Android phone as the only way to power it on after it crashed, my iPhone (4s) has literally not crashed on me one single time in the year I've had it. In my experience, most apps simply work much better on the iPhone. I had many of the same apps on my Android phone as my iPhone, and almost all of them function better on my iPhone (probably because most apps are built for iOS and then ported or recreated for android. That said, I'd like to own at leat one Andoid device, simply because I love playing with and learning how to use different technology and gadgets.

I talk to people about this type of thing all the time, and rarely find people who switch from Android to iPhone who regret their decision, where I can't say the same thing about people who switch to Android.

And yes, Cook is not as good of a presenter as Jobs. Not many people are.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 14, 2012, 10:19:04 AM
Good overview of the mobile industry:

http://www.asymco.com/2012/11/14/google-vs-samsung/
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on November 14, 2012, 12:05:20 PM
Good overview of the mobile industry:

http://www.asymco.com/2012/11/14/google-vs-samsung/

he also thought the rimm playbook would be the second best selling tablet after ipad. he also was very bearish on Samsung two years ago, believing the Chinese would eat their lunch.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 14, 2012, 12:19:18 PM
Good overview of the mobile industry:

http://www.asymco.com/2012/11/14/google-vs-samsung/

he also thought the rimm playbook would be the second best selling tablet after ipad. he also was very bearish on Samsung two years ago, believing the Chinese would eat their lunch.

So these numbers are wrong?
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on November 14, 2012, 12:56:43 PM
Good overview of the mobile industry:

http://www.asymco.com/2012/11/14/google-vs-samsung/

he also thought the rimm playbook would be the second best selling tablet after ipad. he also was very bearish on Samsung two years ago, believing the Chinese would eat their lunch.

So these numbers are wrong?

I know what his point of view is and I know what he is trying to sell his reader. that's why he was so wrong about Samsung, and Rimm. I stopped visiting his site once I figured out the agenda (apple uber alles).
Title: Re: AAPL - Apple Inc.
Post by: DukeCrow on November 16, 2012, 01:33:03 PM
Got down to $505 today. I have to believe this negativity is overblown. Still, it's hard to figure this industry out long-term. Fortunes can change in the matter of a few years and always seem to. Even though it seems pretty cheap, I might just end up putting this in the "too hard" pile. (Probably should have done the same with Dell, as well -- might still.)
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 16, 2012, 02:18:12 PM
Got down to $505 today.
Dammiitt, I missed it!
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 17, 2012, 07:14:19 AM
Valueinv, You're trying to bait me over on the Rim thread.  I am not biting but I will point out a few things you need to learn about investing over here:

1) Tim Cook telegraphed that there would be some margin compression at Apple.  Dont expect this to be the first time he says this.

2) Take a good long look at the behaviour of parabolic stocks AFTER they pass their peak.  I suggest NFlx, msft, nintendo, motorola, nokia, rim, cisco, dell, for starters.  I am sure a fellow as smart as you can dig out twenty or more names.  If you look at their stock behaviour, they reach their peak, pull back 40% or more, and take 20+ years to regain that peak, if ever.  Apple peaked on euphoria, and is now on the downtrend.  Once they start handing out the cash look for the stock to drop even further.

None of this is EMT.  It ties into what I, and others have been saying on this thread, about competition, supplier greed, consumer exhaustion, etc.  Tim Cook, Ive, and the gang at Apple know all this. You dont seem to comprehend it at all, despite your supposed mobile knowledge. 

Apple is beyond my circle of competence, as an investment for this reason: you cannot predict the future cash flows, Period.  No one can. 

When I refer to Apple being a fad, I am talking about the lineups for the products, the quick sells, and the ever increasing sales numbers.  This part is done now!  Apple will remain solidly profitable for years to come, but at a reduced rate. 

Of course you will disagree with me on all this, and insult my knowledge etc, and tout how you are the wireless expert who knows more than anyone else on the topic of wireless.  That all amounts to a hill of beans, since this is business, and psychology we are talking about, not wireless. 


Title: Re: AAPL - Apple Inc.
Post by: DCG on November 17, 2012, 08:35:53 AM

Apple is beyond my circle of competence

No offense Uccmal, but you admit Apple is beyond your circle of competence, yet have tons of posts in this thread telling other people that they're wrong.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 17, 2012, 10:02:32 AM

Apple is beyond my circle of competence

No offense Uccmal, but you admit Apple is beyond your circle of competence, yet have tons of posts in this thread telling other people that they're wrong.

That is correct DCG.  I'll elaborate for you.  As a value investor Apple is beyond my ability to predict its future reasonably.  I understand enough about business and psychology, and the thinking process of tech nerds, to understand overoptimism, and its effect on Apple's stock price.  Anyone who can claim that superior knowledge of tech and wireless gives them an advantage in this stock is absolutely, and completely delusional. 

Things that cannot be determined about Apple:
1) future cash flow
2) future margins
3) where the Apple killer is coming from
4) how they are going to piss away the cash horde
5) whether management starts to degenerate via power struggles, silo formation, bureaucracy, etc.

DCG, Can you tell me these things with even a modicum of competence?

Things I know about Apple:
1) historic margins were great, sales were awesome, competition was late, and hence cash flow was spectacular.
2) book value - patent value, break up value - which is far below market price for the stock.

I need only look at Dell, MSft, or worse, nokia, and rimm to see what Apples future May look like.

So, rather than saying Apple is out of my circle of competence, I will say its in the too hard pile.
Title: Re: AAPL - Apple Inc.
Post by: polangevin on November 17, 2012, 11:11:57 AM
Things that cannot be determined about Apple:
1) future cash flow
2) future margins
3) where the Apple killer is coming from
4) how they are going to piss away the cash horde
5) whether management starts to degenerate via power struggles, silo formation, bureaucracy, etc.

Maybe you can't predict future cash flow for more than a couple of years but you can definitly calculate the implicit growth needed to justify Apple actual stock price. Once you do this, you might come to the conclusion that the stock price is too low.

The penetration rate for smartphones is still less than 50% worldwide and according to multiple market analysis firms (ex. IDC, NPD Display) tablets are going to grow 20%+ per year for at least 4 to 5 years. That being said, Apple is the leader in profit margins and their customer tend to be really sticky. The Apple case is different than what we've seen with Nokia and RIM. Apple has an ecosystem that none of the previous one ever had...

Since you accept to rely on the past to say that Apple has had a great performance and that this is coming to an end, maybe you should also rely on the past to see how they used their cash horde so far and notice that they have not pissed it away like many tech companies have done before.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 17, 2012, 01:05:22 PM
polangevin,

Where is your margin of safety if things dont unfold as some seem to expect.  You may want to review the 65 pages of thread here.  All the arguments have already been made, on both sides.

Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 17, 2012, 02:13:19 PM
Valueinv, You're trying to bait me over on the Rim thread.  I am not biting but I will point out a few things you need to learn about investing over here:
You told me that I don't understand a company within the industry I work in. Who do you think is doing the baiting?


1) Tim Cook telegraphed that there would be some margin compression at Apple.  Dont expect this to be the first time he says this.
Would you mind telling us about the two ways in which margin compression occurs? What happens when manufacturing yield decreases?
What is Tim Cook say about margins going forward? Why did you leave that part out?
 
2) Take a good long look at the behaviour of parabolic stocks AFTER they pass their peak.  I suggest NFlx, msft, nintendo, motorola, nokia, rim, cisco, dell, for starters.  I am sure a fellow as smart as you can dig out twenty or more names.  If you look at their stock behaviour, they reach their peak, pull back 40% or more, and take 20+ years to regain that peak, if ever.  Apple peaked on euphoria, and is now on the downtrend.  Once they start handing out the cash look for the stock to drop even further.
It sounds like this is the extent of analysis you have done for Apple. Let me give you a brilliant insight:

All the stocks in your portfolio will one day cease to exist. Nothing lasts forever. So why don't you sell all stocks, put your money in treasuries and stop wasting your time reading this board?

Don't buy Wells Fargo, look at Bear Sterns. Don't buy PG&E, look at Enron.

You remind me of a stoner friend of mine from college. We were hanging out in his house one day and his roommate starts cleaning the windows. My friend goes, "Why are you cleaning the windows? Its only gonna get dirty again." I couldn't stop laughing.


None of this is EMT.  It ties into what I, and others have been saying on this thread, about competition, supplier greed, consumer exhaustion, etc.  Tim Cook, Ive, and the gang at Apple know all this. You dont seem to comprehend it at all, despite your supposed mobile knowledge. 
Of course, people who work within the industry and ship products  would know nothing about competition, suppliers, consumer behavior, etc right? They don't deal with any of these groups right?  That kind of advanced knowledge is only limited to value investors, correct? When companies decide what to include in their next release, they give no thought to any of those groups, right?

Apple is beyond my circle of competence, as an investment for this reason: you cannot predict the future cash flows, Period.  No one can. 
1, If you don't understand something, you cannot determine whether someone is wrong about it. This is a simple concept that has escaped your grasp.
2, Just because you don't understand something, doesn't mean that no one else can. This is the second simple concept that escapes you.

When I refer to Apple being a fad, I am talking about the lineups for the products, the quick sells, and the ever increasing sales numbers.  This part is done now!  Apple will remain solidly profitable for years to come, but at a reduced rate. 
So you don't understand Apple but you are confident about predicting doom and gloom? You think that people will lose money by paying 12x earnings for a company that even you say will remain solidly profitable? How much did Buffet pay for a solidly profitable tech company with no growth?

Of course you will disagree with me on all this, and insult my knowledge etc, and tout how you are the wireless expert who knows more than anyone else on the topic of wireless.  That all amounts to a hill of beans, since this is business, and psychology we are talking about, not wireless.
Wow, Uccmal. You have found the Holy Grail of investing!! No need to do any research or analysis, no need to understand a company. All you need are some universal rules of business and psychology and you can make Buffet look like Madoff.  :o :o

Dude, you need to spend some serious time understanding what circle of competence means and why value investors consider it important.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 17, 2012, 02:23:38 PM
I understand enough about business and psychology, and the thinking process of tech nerds, to understand overoptimism, and its effect on Apple's stock price.
No, you don't. Firstly, tech nerds are not the holders of Apple's stock. Its hedge and mutual funds. You should try to understand your own psychology and why drives you to call people wrong on a stock and industry you, by your own admission, don't understand.

Anyone who can claim that superior knowledge of tech and wireless gives them an advantage in this stock is absolutely, and completely delusional. 
You need to re-read this sentence and think about how much sense it makes.

Things that cannot be determined about Apple:
1) future cash flow
2) future margins
3) where the Apple killer is coming from
4) how they are going to piss away the cash horde
5) whether management starts to degenerate via power struggles, silo formation, bureaucracy, etc.

DCG, Can you tell me these things with even a modicum of competence?
Clearly, you can't but continue to tell everyone that they are going to be bad.


I need only look at Dell, MSft, or worse, nokia, and rimm to see what Apples future May look like.
Again, this Holy Grail of investing. No need for any analysis, let's just find similar stocks, we can predict the future. So easy. After all, as Buffet and Graham have taught us, the foundations of value investing is generalizations not analysis.

So, rather than saying Apple is out of my circle of competence, I will say its in the too hard pile.
Have you considered that it might be in a too hard pile for you because it is outside your circle of competence? If it is in a too hard pile, you cant make any predictions including negative ones? This is simple logic here, this is not rocket science.
Title: Re: AAPL - Apple Inc.
Post by: hardincap on November 17, 2012, 02:47:46 PM
ValueInv, I really get a kick of you obliterating Uccmal's specious arguments with sound facts and reasoning. Keep it up!  ;D
Title: Re: AAPL - Apple Inc.
Post by: hardincap on November 17, 2012, 02:53:34 PM
Alot of investors here seem to be mindlessly following Buffett's folksy mantras on putting tech into his "too hard pile". Do you guys realize that he invested 10% of BYD? BYD is trying to revolutionize electric vehicles; it is the ultimate tech company. As Buffett's CFO has repeatedly said, pay attention to what Buffett does, not what he says.
Title: Re: AAPL - Apple Inc.
Post by: DCG on November 17, 2012, 04:42:22 PM
& last time I checked IBM does not sell soda or candy.
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 17, 2012, 05:43:28 PM
Okay guys.  We will see.  Hardincap, He obilterated nothing because he is flat out wrong.  I am being proven right for the last month and a half.  This baby is going to hit a wall and the stock is going to tank.  Sorry, but it always happens that way.  You guys are all too young to have been investing during the limitless growth of the late 90s.  Cisco, MSft, Dell etc. were all going to grow until Kingdom come.  It was in the news every day, exactly as Apple was until the last few weeks. 

I wouldn't hitch my horse on valueinv's commentary.  He knows nothing about investing or growth stock behaviour.  You blindly siding with him makes you look even more naive. 

Take your shots... I am right and you three are wrong.  The difference is it isn't going to cost me a cent. 
Title: Re: AAPL - Apple Inc.
Post by: Palantir on November 17, 2012, 07:57:05 PM
I think Apple is definitely within the "too hard" pile. I think it will continue to do well in the future, but it's tough to see what their cash flows will look like. Apple is not a firm whose majority of customers have very high switching costs the way MSFT or Oracle or IBM do. It's essentially a producer and retailer of premium products within a relatively commoditized industry.

To those who are more knowledgeable - how will Apple respond to Android taking market share? Will they slash prices or be happy being a niche product?
Title: Re: AAPL - Apple Inc.
Post by: hellsten on November 18, 2012, 08:33:59 AM
My take on Apple's moat:

- Great products

Not a long-lived moat. Competition will adapt. See what Microsoft is doing.

- Network effect (iTunes, AppStore, iCloud, multiple devices that are synced with each other)

Not a moat in my case. Like most consumers?, I don't care if I loose my iOS apps or games. Most games are trivial and I loose interest in them in a couple of days or weeks. iTunes works on PCs.

What happened to Commodore, Nintendo and Atari (who all had the best content at the time) can happen to Apple.

http://www.onlineeconomy.org/how-strong-are-apple%E2%80%99s-iphone-network-effects

Apple has a narrow moat with developers (and designers) who like to develop for iOS because of various reasons. Developers can easily switch to another platform.

- Enterprise market

Nonexistent moat. People and enterprises care if they loose something like Adobe Photoshop, Microsoft Office, or all their corporate data. Microsoft is lightyears ahead of Apple in the enterprise market:
http://articles.businessinsider.com/2010-02-10/tech/29961217_1

Buffett should have bought MSFT instead of IBM.

- Design culture (Jonathan Ive and his design team)
http://www.businessinsider.com/meet-the-members-of-apples-elite-industrial-design-team-2012-8?op=1

Narrow moat, i.e. not a long-lived moat. See what Microsoft and Nokia are doing.

You could also argue Apple has copied great design ideas from others:
http://www.cultofmac.com/188753/the-braun-products-that-inspired-apples-iconic-designs-gallery/
http://simonphillips.com.au/apple-vs-braun

- Engineering culture
http://www.businessinsider.com/management-lessons-i-learned-working-at-apple-2010-7?op=1

Narrow moat. HP or DELL could never create iOS, an iPhone, or an iPad because of the internal bureaucracy and culture. However, Microsoft and Google can.

- Apple fans

Very narrow moat. People who like design would never own a DELL or HP computer.

- Unix

Very narrow moat. Engineers like OSX because it's Unix based. However, most users are not engineers. OSX can run the latest open source software, which is not always the case with MSFT.

Engineers can switch to whatever they like the most (Linux / Android). Switching is easy for an engineer.


To summarize, I don't see any long-lasting moat, just great products and momentum. This article pretty accurately reflects my thoughts on Apple, Microsoft and Google:
http://articles.businessinsider.com/2012-03-05/research/31123118_1_ios-android-platform/2

And yes, I own almost every Apple product that exists :) I'm just waiting for someone to design better hardware and software.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 18, 2012, 09:05:48 AM
I wouldn't hitch my horse on valueinv's commentary.  He knows nothing about investing or growth stock behaviour.  You blindly siding with him makes you look even more naive. 

Uccmal, majority of my portfolio looks just like yours and of other investors:
Long AIG, BAC, Berk, FFH, LUK, WFC, etc.

If I know nothing about investing, by association, neither do you  ;D ;D ;D

The choice you're offering to people is not between my analysis and yours but between analysis and generalizations. For some reason, you can't tell the difference between the two.

My analysis could well be wrong or even subject to the impact of unpredictable events, but I believe that over the long term and over multiple investments, I will be better off than if I were using generalizations. Generalizations force you to use top down thinking, analysis allows for bottom up also. I prefer the latter.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 18, 2012, 09:34:49 AM
To those who are more knowledgeable - how will Apple respond to Android taking market share? Will they slash prices or be happy being a niche product?
They are more likely to be happy being a niche product. The entire company, business model and culture is built around creating premium products and charging a higher price for it. They are somewhat similar to BMW. Sure, Toyota sells more cars but BMW is playing a different game. One of the reasons why I hold Apple instead of HTC or Amazon is because of this very reason. They are not going to sell products at cost or subject themselves to destructive price wars.

There are more options to the market share question than meets the eye. Any market consists of multiple price segments. Typically, Apple enters the market at a high price segment. All the growth you see is within that segment, as that is the only segment being served. Competitors introduce "me too" products but Apple continues to dominate. Competitors start dropping prices and as a result, start addressing lower price segments which are much bigger than the higher price segments that Apple is addressing. Soon, Apple is looking bad from the market share perspective even though it is doing well in the price segments it competes in. The overall marketshare drop is not from Apple selling fewer devices but from competitors quickly addressing bigger price segments that Apple is not entering. If you look at the the US smartphone market, where Apple addresses more price segments ($0, $99, $200+) due to operator subsidies, Appel's marketshare actually increased slightly this year. However, in Europe operators don't subsidize phones to the same extent and even a 3GS costs more than 500 Euros in many countries. Combine that with more people moving to lower price segments due to the financial crisis, Apple's marketshare takes a bigger hit over there. A similar situation in highly populated emerging countries where the lower price segments are much, much larger than the higher price segments.

Apple has found ways around this in the past - they introduce new form factors and device tiers that address the lower price segments. For example, the classic iPod was supplemented by the mini, shuffle, etc. These address different use cases, so someone who owns a classic might also buy a nano for the gym - so it helps lower cannibalization, provide overall increase in profits and reduces the hit on gross margins.

This is the same strategy Apple is following with the iPad mini. The smaller device addresses many use cases better than the bigger one (Gaming, books, mobility, etc). Also, it allows Apple to compete in a new price segment without a massive hit on GMs(there is going some hit initially due to manufacturing yields).  Overall, they should make more money from iPads next year over this year.

There are rumors (from WSJ) that they will follow the same strategy with the iPhone.

Apple is not playing a marketshare/commoditization/price war game but a price segmentation game. This is what most people fail to get when they look at Apple's marketshare numbers.


P.S. Uccmal, this is an analysis.
Title: Re: AAPL - Apple Inc.
Post by: Palantir on November 18, 2012, 01:25:45 PM
The overall marketshare drop is not from Apple selling fewer devices but from competitors quickly addressing bigger price segments that Apple is not entering. If you look at the the US smartphone market, where Apple addresses more price segments ($0, $99, $200+) due to operator subsidies, Appel's marketshare actually increased slightly this year.

This is a very good point, and not something I thought about. So essentially it is only competing against the high end products from Android, like say the GS3, rather than the full range.

Even in the lower price range, they sell the premium product. (iPod Shuffle, which is twice the cost of comparable small MP3 players).
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 18, 2012, 01:27:17 PM
I wouldn't hitch my horse on valueinv's commentary.  He knows nothing about investing or growth stock behaviour.  You blindly siding with him makes you look even more naive. 

Uccmal, majority of my portfolio looks just like yours and of other investors:
Long AIG, BAC, Berk, FFH, LUK, WFC, etc.

If I know nothing about investing, by association, neither do you  ;D ;D ;D

The choice you're offering to people is not between my analysis and yours but between analysis and generalizations. For some reason, you can't tell the difference between the two.

My analysis could well be wrong or even subject to the impact of unpredictable events, but I believe that over the long term and over multiple investments, I will be better off than if I were using generalizations. Generalizations force you to use top down thinking, analysis allows for bottom up also. I prefer the latter.

lol, Valueinv, I have done in depth analysis to come up with normalized earnings on a BAc thread, old  FFh threads, SSW thread, and a few others posted here and on the old board.

Apple defies bottom up analysis as it requires too many flights of fancy.  Put another way, normalizing margins and earnings on Apple products, and perhaps the wireless industry as a whole doesn't paint a nice picture at all. 

And the majority of your portfolio (or mine) looks nothing like most retail investors, mutual funds, or etfs  ;)

Who else in the world holds 1/2 their portfolio in (formerly) disdained US financials?  lol.

Title: Re: AAPL - Apple Inc.
Post by: hellsten on November 19, 2012, 05:08:07 AM
Woz's latest comments on MSFT and AAPL:
http://techcrunch.com/2012/11/14/keen-on-steve-wozniak-why-woz-worries-microsoft-is-now-more-innovative-than-apple-tctv/

More comments by Woz on MSFT's consumer products:
http://www.huffingtonpost.com/2012/07/10/steve-wozniak-surface-tablet-microsoft_n_1661902.html
http://www.neowin.net/news/steve-wozniak-windows-phone-is-intuitive-and-beautiful
Title: Re: AAPL - Apple Inc.
Post by: hardincap on November 19, 2012, 06:10:26 AM
Uccmal, you sound very much like the guy who ridiculed Michael Burry online for buying Apple stock and other tech investments many years back.

It might also surprise you that Henry Singleton of Teledyne, whom Warren Buffett counts as one of the greatest investors and businessman of all time, also invested in Apple in a big way back in the day.

I wouldn't hitch my horse on valueinv's commentary.  He knows nothing about investing or growth stock behaviour.  You blindly siding with him makes you look even more naive. 

Uccmal, majority of my portfolio looks just like yours and of other investors:
Long AIG, BAC, Berk, FFH, LUK, WFC, etc.

If I know nothing about investing, by association, neither do you  ;D ;D ;D

The choice you're offering to people is not between my analysis and yours but between analysis and generalizations. For some reason, you can't tell the difference between the two.

My analysis could well be wrong or even subject to the impact of unpredictable events, but I believe that over the long term and over multiple investments, I will be better off than if I were using generalizations. Generalizations force you to use top down thinking, analysis allows for bottom up also. I prefer the latter.

lol, Valueinv, I have done in depth analysis to come up with normalized earnings on a BAc thread, old  FFh threads, SSW thread, and a few others posted here and on the old board.

Apple defies bottom up analysis as it requires too many flights of fancy.  Put another way, normalizing margins and earnings on Apple products, and perhaps the wireless industry as a whole doesn't paint a nice picture at all. 

And the majority of your portfolio (or mine) looks nothing like most retail investors, mutual funds, or etfs  ;)

Who else in the world holds 1/2 their portfolio in (formerly) disdained US financials?  lol.
Title: Re: AAPL - Apple Inc.
Post by: tooskinneejs on November 20, 2012, 07:29:29 AM
For those who think Apple will forever reign supreme, take a look at these phone and tablet devices being developed by a consortium of Japanese companies - the models are about as thick as a US dime (see video):

http://www.huffingtonpost.com/2012/11/19/japan-display-innovation-vehicles_n_2161224.html

Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on November 20, 2012, 07:55:47 AM
japan is known for incredible technology feats that fail miserably with consumers. japan inc. has totally missed the smartphone mega trend. as for apple, it's not an expensive stock. the expectations aren't that high for it. it just has to grow earnings at 5% to 10% rates per annum to justify the p/e, which is lower than a market multiple when you account for the cash. it's not some bubble stock. it's not a bubble concept stock. it does not have to "reign supreme" forever. it just has to basically do what most good companies do, grow earnings at close to 10% a year.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 26, 2012, 11:55:25 AM
Branding at its best:

http://techcrunch.com/2012/11/26/former-apple-retail-chief-details-apple-store-planning-and-philosophy-in-unaired-video/
Title: Re: AAPL - Apple Inc.
Post by: JAllen on November 28, 2012, 07:59:47 AM
http://thenextweb.com/asia/2012/11/28/apple-maintains-70-grip-on-chinas-tablet-market-as-industry-sales-jump-63-year-on-year/
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 29, 2012, 11:17:24 AM
Whoa, incredible when you compare the marketing spend:

http://www.asymco.com/2012/11/29/the-cost-of-selling-galaxies/

Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 30, 2012, 04:12:36 AM
Uccmal, you sound very much like the guy who ridiculed Michael Burry online for buying Apple stock and other tech investments many years back.

It might also surprise you that Henry Singleton of Teledyne, whom Warren Buffett counts as one of the greatest investors and businessman of all time, also invested in Apple in a big way back in the day.



Oh please, Hardincap.  I'll ask you a few simple questions?  Not to be answered by Valueinv.

Whay do you project Apples earnings to be next year, and in three years?
What do you project their margins to be next year, in three years?
Decribe their competitors relative postions today, and in three years?
Decribe to me how mobile data will be handled in TWO years?

I can do all these things will relative ease for BAC, SSW, and FFH, and be Mostly in the ballpark. 
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 30, 2012, 06:55:17 AM
You guys should be getting a big dividend in the coming weeks!
Title: Re: AAPL - Apple Inc.
Post by: hardincap on November 30, 2012, 08:30:02 AM
do you think WB knows what BYD will be earning in three years? or even next year?

he's betting on management, company culture, and the industry. different kind of investment than bac, yes, but no less legitimate way to make money

Uccmal, you sound very much like the guy who ridiculed Michael Burry online for buying Apple stock and other tech investments many years back.

It might also surprise you that Henry Singleton of Teledyne, whom Warren Buffett counts as one of the greatest investors and businessman of all time, also invested in Apple in a big way back in the day.



Oh please, Hardincap.  I'll ask you a few simple questions?  Not to be answered by Valueinv.

Whay do you project Apples earnings to be next year, and in three years?
What do you project their margins to be next year, in three years?
Decribe their competitors relative postions today, and in three years?
Decribe to me how mobile data will be handled in TWO years?

I can do all these things will relative ease for BAC, SSW, and FFH, and be Mostly in the ballpark.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 30, 2012, 09:09:33 AM
Uccmal, you sound very much like the guy who ridiculed Michael Burry online for buying Apple stock and other tech investments many years back.

It might also surprise you that Henry Singleton of Teledyne, whom Warren Buffett counts as one of the greatest investors and businessman of all time, also invested in Apple in a big way back in the day.



Oh please, Hardincap.  I'll ask you a few simple questions?  Not to be answered by Valueinv.

Whay do you project Apples earnings to be next year, and in three years?
What do you project their margins to be next year, in three years?
Decribe their competitors relative postions today, and in three years?
Decribe to me how mobile data will be handled in TWO years?

I can do all these things will relative ease for BAC, SSW, and FFH, and be Mostly in the ballpark.

You don't need to project any of those at current valuations. You just need a lower bound.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on November 30, 2012, 04:45:44 PM
Doesn't look like Apple is shooting for marketshare:

http://www.telecoms.com/54319/apple-vetting-operators-on-lte-network-performance/
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on November 30, 2012, 07:08:36 PM
do you think WB knows what BYD will be earning in three years? or even next year?

he's betting on management, company culture, and the industry. different kind of investment than bac, yes, but no less legitimate way to make money

Uccmal, you sound very much like the guy who ridiculed Michael Burry online for buying Apple stock and other tech investments many years back.

It might also surprise you that Henry Singleton of Teledyne, whom Warren Buffett counts as one of the greatest investors and businessman of all time, also invested in Apple in a big way back in the day.



Oh please, Hardincap.  I'll ask you a few simple questions?  Not to be answered by Valueinv.

Whay do you project Apples earnings to be next year, and in three years?
What do you project their margins to be next year, in three years?
Decribe their competitors relative postions today, and in three years?
Decribe to me how mobile data will be handled in TWO years?

I can do all these things will relative ease for BAC, SSW, and FFH, and be Mostly in the ballpark.

I dont think Byd is a good example of what your trying to illustrate.  It is a combination of things but certainly not a conventional value investment.  It allows Berk. which owns a slew of environmentally dubious companies to say they are part of the solution.  It is more like venture capital.  Its tiny in relation to Berk., likely a fraction the size of your Apple investment versus total capital. 

It allows Berk. to claim carbon offsets in the burgeoning carbon trade market. 

I do get what you are demonstrating with the example.  But, Apple lacks a conventional margin of safety so we have to look to earnings potential as the only way to value it.  So, one needs to be able to come up with a conservative estimate of what Apple can make on a perpetual (a few years) basis. 

To do that one needs to work out how much business will go to the competition, how much will go to Apple, and if it is sustainable.  I maintain the business, and therefore cash flow, is sustainable, but at a much lower level than 2011/2012.  You maintain that the cash flow will grow indefinitely, otherwise you would not be invested.  I cant place numbers on Apples cash flow that in any way justify the stock price.  I can only roughly say that I think it is overvalued much the way Buffett can say a guy is fat.
Title: Re: AAPL - Apple Inc.
Post by: DCG on December 05, 2012, 10:36:14 AM
So the stock sells off 5% because an analyst thinks their tablet market share might drop below 50% in 2016? That's logical.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on December 05, 2012, 01:47:52 PM
So the stock sells off 5% because an analyst thinks their tablet market share might drop below 50% in 2016? That's logical.

Nice little drop today, could get interesting again.
Title: Re: AAPL - Apple Inc.
Post by: BargainValueHunter on December 05, 2012, 05:06:31 PM
AAPL's price to free cash flow ratio could get very interesting soon if it continues to fall.

What is the consensus for the next quarter's net revenue?
Title: Re: AAPL - Apple Inc.
Post by: abcd on December 05, 2012, 05:39:23 PM
So the stock sells off 5% because an analyst thinks their tablet market share might drop below 50% in 2016? That's logical.

Here are more frivolous explanations for your comfort.

Quote
Shares of Apple ($551.09, -$24.76, -4.30%) sank Wednesday, leaving observers grasping for a clear reason. StreetInsider.com pointed to clearing firms raising the margin requirement for clients seeking to buy shares to 60% from 30%. Forbes suggested traders may be reading into AT&T Inc.'s (T, $34.23, +$0.31, +0.91%) comments about smartphone sales. CNNMoney.com advanced a theory that investors are disappointed that Apple isn't paying out a special dividend, as are other companies, ahead of a potential dividend tax hike in the new year.

Title: Re: AAPL - Apple Inc.
Post by: Olmsted on December 05, 2012, 06:54:39 PM
Didn't margin requirements on AAPL just rise for a lot of professional money?  Imagine that is a likely contributor.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on December 06, 2012, 08:07:48 AM
Tim Cook interview in BusinessWeek:

http://www.businessweek.com/articles/2012-12-06/tim-cooks-freshman-year-the-apple-ceo-speaks
Title: Re: AAPL - Apple Inc.
Post by: DCG on December 07, 2012, 07:22:30 AM
Tim Cook interview in BusinessWeek:

http://www.businessweek.com/articles/2012-12-06/tim-cooks-freshman-year-the-apple-ceo-speaks

That is fantastic. Thanks for posting. Best CEO interview I've read in a long time.
Title: Re: AAPL - Apple Inc.
Post by: bobp on December 07, 2012, 07:24:29 AM
My daughter's mac-book crashed this week. In the middle of exam week it wouldn't boot up. Phone support tried to help but it didn't work. She brought it to the apple store where they told her they'd have an answer in two days. In two hours they called and had fixed it. They'd taken it apart and reattached a cable to the hard drive. It's three years old but she'd had another problem(water related but shhhh) eight months ago and they had replaced it and rewarrantied it for a year.

If my wife's Dell stops working, what do I do - bring it to Best-Buy? These Apple's are expensive but the support that comes with a retail store is worth a lot.

Never an Apple fan, and still not completely sold, we now have two Macbooks (one mine), a desktop, four iphones, an Ipad, and a bunch of old ipods. My kids buy music at itunes; I still think Itunes is horrible, but I use it.

After using the macbook for a few months I still prefer windows, but it may be the old dog - new tricks problem.

And btw, seeing as this is an investment board, I like the stock.

Title: Re: AAPL - Apple Inc.
Post by: valueInv on December 07, 2012, 08:24:55 AM
Something tells me NTT is gonna have the iPhone before long:


http://venturebeat.com/2012/12/07/without-iphone-japans-biggest-mobile-carrier-is-losing-subscribers-at-a-record-rate/


Title: Re: AAPL - Apple Inc.
Post by: txlaw on December 07, 2012, 09:36:28 AM
Tim Cook interview in BusinessWeek:

http://www.businessweek.com/articles/2012-12-06/tim-cooks-freshman-year-the-apple-ceo-speaks

That is fantastic. Thanks for posting. Best CEO interview I've read in a long time.

AAPL appears to be in good hands with Tim Cook.  He's very savvy.
Title: Re: AAPL - Apple Inc.
Post by: Palantir on December 07, 2012, 09:47:05 AM
Yeah, I'm pretty impressed with all of them. Now that Forstall is gone, it seems to be that we have a happy team in place with Cook as first among equals.
Title: Re: AAPL - Apple Inc.
Post by: DCG on December 13, 2012, 07:13:25 AM
Google Maps is now available in the App Store.
Title: Re: AAPL - Apple Inc.
Post by: txlaw on December 13, 2012, 07:48:22 AM
Google Maps is now available in the App Store.

Thank God!
Title: Re: AAPL - Apple Inc.
Post by: jeffmori7 on December 13, 2012, 05:52:29 PM
Google Maps is now available in the App Store.

Thank God!

Haha, someone implying Apple Maps was the way for Apple to force Google update its Google Maps on iOS :)

http://www.macrumors.com/2012/12/13/did-apple-get-exactly-what-it-wanted-for-users-in-google-maps-spat/
Title: Re: AAPL - Apple Inc.
Post by: txlaw on December 13, 2012, 09:13:21 PM
Google Maps is now available in the App Store.

Thank God!

Haha, someone implying Apple Maps was the way for Apple to force Google update its Google Maps on iOS :)

http://www.macrumors.com/2012/12/13/did-apple-get-exactly-what-it-wanted-for-users-in-google-maps-spat/

Haha, hilarious.  Apple fanboys are the best.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on December 13, 2012, 11:50:43 PM
Google Maps is now available in the App Store.

Thank God!

Haha, someone implying Apple Maps was the way for Apple to force Google update its Google Maps on iOS :)

http://www.macrumors.com/2012/12/13/did-apple-get-exactly-what-it-wanted-for-users-in-google-maps-spat/

Haha, hilarious.  Apple fanboys are the best.

Must be this guy  ;):
http://gizmodo.com/5968089/samsungs-chief-strategy-officer-prefers-to-use-apple-at-home
Title: Re: AAPL - Apple Inc.
Post by: kevin4u2 on December 14, 2012, 10:37:02 AM
Apple bulls on the run? 

http://business.financialpost.com/2012/12/14/ubs-slashes-apple-price-target/ (http://business.financialpost.com/2012/12/14/ubs-slashes-apple-price-target/)

http://www.theglobeandmail.com/globe-investor/inside-the-market/apple-shares-trapped-in-the-death-cross-sink-further/article6358823/ (http://www.theglobeandmail.com/globe-investor/inside-the-market/apple-shares-trapped-in-the-death-cross-sink-further/article6358823/)

http://www.theglobeandmail.com/report-on-business/video/video-iphone-5-arrives-in-china-but-market-is-moving-on/article6351743/ (http://www.theglobeandmail.com/report-on-business/video/video-iphone-5-arrives-in-china-but-market-is-moving-on/article6351743/)

http://www.theglobeandmail.com/globe-investor/inside-the-market/apple-bulls-on-the-run-analysts-take-a-hard-second-look/article6364327/ (http://www.theglobeandmail.com/globe-investor/inside-the-market/apple-bulls-on-the-run-analysts-take-a-hard-second-look/article6364327/)

I always inquire about smartphone sales whenever I'm out an about, and lately I've notice a shift away from the iphone.  Definitely isn't the top seller anymore, Samsung way out in front.  Now these consumer fads are hard to predict till after the shift has occured.  Apple definitely has a lot more competition today than in the past. 

Some other reports are suggesting the ipad mini is cannibalizing ipad sales, that's not good for sales or margins either. 

Title: Re: AAPL - Apple Inc.
Post by: valueInv on December 14, 2012, 11:08:36 AM
Apple bulls on the run? 

http://business.financialpost.com/2012/12/14/ubs-slashes-apple-price-target/ (http://business.financialpost.com/2012/12/14/ubs-slashes-apple-price-target/)

http://www.theglobeandmail.com/globe-investor/inside-the-market/apple-shares-trapped-in-the-death-cross-sink-further/article6358823/ (http://www.theglobeandmail.com/globe-investor/inside-the-market/apple-shares-trapped-in-the-death-cross-sink-further/article6358823/)

http://www.theglobeandmail.com/report-on-business/video/video-iphone-5-arrives-in-china-but-market-is-moving-on/article6351743/ (http://www.theglobeandmail.com/report-on-business/video/video-iphone-5-arrives-in-china-but-market-is-moving-on/article6351743/)

http://www.theglobeandmail.com/globe-investor/inside-the-market/apple-bulls-on-the-run-analysts-take-a-hard-second-look/article6364327/ (http://www.theglobeandmail.com/globe-investor/inside-the-market/apple-bulls-on-the-run-analysts-take-a-hard-second-look/article6364327/)

I always inquire about smartphone sales whenever I'm out an about, and lately I've notice a shift away from the iphone.  Definitely isn't the top seller anymore, Samsung way out in front.  Now these consumer fads are hard to predict till after the shift has occured.  Apple definitely has a lot more competition today than in the past. 

Some other reports are suggesting the ipad mini is cannibalizing ipad sales, that's not good for sales or margins either.

Got an open buy order for 500
Title: Re: AAPL - Apple Inc.
Post by: Parsad on December 16, 2012, 01:13:09 PM
Walmart slashes iPhone 5 and iPad prices.  Cheers!

http://www.cnbc.com/id/100317764
Title: Re: AAPL - Apple Inc.
Post by: racemize on December 16, 2012, 02:25:31 PM
Walmart slashes iPhone 5 and iPad prices.  Cheers!

http://www.cnbc.com/id/100317764

wow, seems nuts!
Title: Re: AAPL - Apple Inc.
Post by: Parsad on December 16, 2012, 02:47:18 PM
Walmart slashes iPhone 5 and iPad prices.  Cheers!

http://www.cnbc.com/id/100317764

wow, seems nuts!

They'll squeeze margins, but they may sell hell of alot more increasing revenues and earnings regardless.  We'll have to wait and see.  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: txlaw on December 17, 2012, 08:21:52 AM
Walmart slashes iPhone 5 and iPad prices.  Cheers!

http://www.cnbc.com/id/100317764

wow, seems nuts!

They'll squeeze margins, but they may sell hell of alot more increasing revenues and earnings regardless.  We'll have to wait and see.  Cheers!

Makes sense if the goal is to get their products into the hands of everyone they can.  Although AAPL could see gross margin declines, as Sanjeev says, they could make up for this with increased sales. 

Because there is no question that tons of people would go with AAPL products over others if the price points were closer to those offered by GOOG and AMZN.

It will be very interesting to see what happens going forward.
Title: Re: AAPL - Apple Inc.
Post by: Palantir on December 17, 2012, 08:57:16 AM
Yeah I agree with that - I think it will drive more sales. I think it's the right strategy, it's hard to be superpremium in this field, just being regular premium will be very profitable. That being said, hopefully they will not go too low. They know what they are doing though.
Title: Re: AAPL - Apple Inc.
Post by: rimm_never_sleeps on December 17, 2012, 09:03:36 AM
this seems to be a temporary promotion by wal-mart to clear inventory. the real issue is that appl is giving up the entire low and mid range to Android. I am talking the $150-$350 phone market globally, which is where most of the unit growth is coming from. apple has chosen not to have an offering there. and now they have a legit threat in galaxy and note at the high end.
Title: Re: AAPL - Apple Inc.
Post by: Parsad on December 22, 2012, 06:31:07 PM
this seems to be a temporary promotion by wal-mart to clear inventory. the real issue is that appl is giving up the entire low and mid range to Android. I am talking the $150-$350 phone market globally, which is where most of the unit growth is coming from. apple has chosen not to have an offering there. and now they have a legit threat in galaxy and note at the high end.

Yeah I agree with that - I think it will drive more sales. I think it's the right strategy, it's hard to be superpremium in this field, just being regular premium will be very profitable. That being said, hopefully they will not go too low. They know what they are doing though.

I just bought a brand new 16GB black iPhone 5 through Telus for completely free on renewal of my 3-year contract!  So either Telus is subsidizing the cost, or Apple is going to eat it on the net margin side.  They were offering that deal at $79 after a special $100 Christmas for the iPhone 5, but I hardballed them into nothing, as well as unlimited text, incoming calls and national long-distance.   Very nice phone...just wish the screen was at least another 0.5" bigger.  Cheers! 
Title: Re: AAPL - Apple Inc.
Post by: libor.plus1 on December 23, 2012, 11:00:15 AM
People always want that extra half inch.
Title: Re: AAPL - Apple Inc.
Post by: valueinvesting101 on December 23, 2012, 11:17:59 AM
That what she said  ;D
Title: Re: AAPL - Apple Inc.
Post by: ubuy2wron on January 04, 2013, 11:41:01 AM
this seems to be a temporary promotion by wal-mart to clear inventory. the real issue is that appl is giving up the entire low and mid range to Android. I am talking the $150-$350 phone market globally, which is where most of the unit growth is coming from. apple has chosen not to have an offering there. and now they have a legit threat in galaxy and note at the high end.

Yeah I agree with that - I think it will drive more sales. I think it's the right strategy, it's hard to be superpremium in this field, just being regular premium will be very profitable. That being said, hopefully they will not go too low. They know what they are doing though.

I just bought a brand new 16GB black iPhone 5 through Telus for completely free on renewal of my 3-year contract!  So either Telus is subsidizing the cost, or Apple is going to eat it on the net margin side.  They were offering that deal at $79 after a special $100 Christmas for the iPhone 5, but I hardballed them into nothing, as well as unlimited text, incoming calls and national long-distance.   Very nice phone...just wish the screen was at least another 0.5" bigger.  Cheers!
  You negotiated ...played hard ball with the PHONE COMPANY on a renewal and one phone. MY goodness you be the man my friend did you offer them a recommendation of Telus on Corner of Berkshire.  LOL
Title: Re: AAPL - Apple Inc.
Post by: hellsten on January 07, 2013, 08:08:17 AM
Bruce Greenwald on Apple (and Amazon):
http://www.gurufocus.com/news/204202/professor-greenwald-thinks-apple-can-go-sonys-or-nokias-way
Title: Re: AAPL - Apple Inc.
Post by: libor.plus1 on January 07, 2013, 09:05:41 AM
http://www.morningstar.com/Cover/videoCenter.aspx?id=339575

he was saying the same thing back in 2010.
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 07, 2013, 09:12:40 AM
Bruce Greenwald on Apple (and Amazon):
http://www.gurufocus.com/news/204202/professor-greenwald-thinks-apple-can-go-sonys-or-nokias-way

comparing apple to sony or nokia proves that Greenwald doesn't know what he's talking about, and hasnt even bothered to do some research. Apple is fundamentally a software company; they have a sticky software ecosystem that they monetize through beautiful hardware. Sony and Nokia are hardware companies, just like RIM, and thus had/have no customer stickiness.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 10, 2013, 09:15:07 AM
Bruce Greenwald on Apple (and Amazon):
http://www.gurufocus.com/news/204202/professor-greenwald-thinks-apple-can-go-sonys-or-nokias-way

comparing apple to sony or nokia proves that Greenwald doesn't know what he's talking about, and hasnt even bothered to do some research. Apple is fundamentally a software company; they have a sticky software ecosystem that they monetize through beautiful hardware. Sony and Nokia are hardware companies, just like RIM, and thus had/have no customer stickiness.
Hmmm... where have we seen this before? When an hypothesis does not agree with facts, what do you do?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 10, 2013, 09:15:31 AM
Yeah, operators are "revolting":

http://venturebeat.com/2013/01/10/apple-needs-china-mobile-china-mobile-needs-apple/
Title: Re: AAPL - Apple Inc.
Post by: hyten1 on January 10, 2013, 09:36:46 AM
hardincap,

hmm, i am not sure if i agree with you. (still thinking about this)

look at appl vs msft

msft's ecosystem argueable is more establish than appl no? i think appl  has a higher risk of being hurt by a bad release, because their profit is so dependent on the next big thing. If the next thing they release bombs, their profitability takes a huge hit, which will make the valuation questionable.

you can also compare appl to nintendo

i just think appl's  has more of the characteristic of a hits driven company vs msft (getting less so if/when their ecosystem gets more entrench etc). msft's revenue/profit is not so dependent of the next big thing (more diversified to put it simply).

I guess what i am getting at is appl on a scale vs msft. appl is closer to sony/nintendo/rim/nok than msft is. how much closer is debateable.

now what if msft can sell as many hardware as appl (msft just need a percentage of the PC/pc tablet etc market, not the entire market).

 

Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 10, 2013, 11:11:10 AM
hardincap,

hmm, i am not sure if i agree with you. (still thinking about this)

look at appl vs msft

msft's ecosystem argueable is more establish than appl no? i think appl  has a higher risk of being hurt by a bad release, because their profit is so dependent on the next big thing. If the next thing they release bombs, their profitability takes a huge hit, which will make the valuation questionable.

you can also compare appl to nintendo

i just think appl's  has more of the characteristic of a hits driven company vs msft (getting less so if/when their ecosystem gets more entrench etc). msft's revenue/profit is not so dependent of the next big thing (more diversified to put it simply).

I guess what i am getting at is appl on a scale vs msft. appl is closer to sony/nintendo/rim/nok than msft is. how much closer is debateable.

now what if msft can sell as many hardware as appl (msft just need a percentage of the PC/pc tablet etc market, not the entire market).

Apparently the iPhone 5 has been a bomb. Lets see how they do this quarter.
Title: Re: AAPL - Apple Inc.
Post by: hyten1 on January 10, 2013, 11:16:15 AM
valueInv

has iphone 5 been a bomb? i guess its all relative

EDIT: I am not saying apple will become nok or rimm. All i am saying is at this point in time AAPL on a scale is closer to nok/rimm vs a company like MSFT. The risk is higher than msft, that appl can become a nok/rimm.  I am not saying they will.

Title: Re: AAPL - Apple Inc.
Post by: Parsad on January 10, 2013, 12:07:36 PM
hardincap,

hmm, i am not sure if i agree with you. (still thinking about this)

look at appl vs msft

msft's ecosystem argueable is more establish than appl no? i think appl  has a higher risk of being hurt by a bad release, because their profit is so dependent on the next big thing. If the next thing they release bombs, their profitability takes a huge hit, which will make the valuation questionable.

you can also compare appl to nintendo

i just think appl's  has more of the characteristic of a hits driven company vs msft (getting less so if/when their ecosystem gets more entrench etc). msft's revenue/profit is not so dependent of the next big thing (more diversified to put it simply).

I guess what i am getting at is appl on a scale vs msft. appl is closer to sony/nintendo/rim/nok than msft is. how much closer is debateable.

now what if msft can sell as many hardware as appl (msft just need a percentage of the PC/pc tablet etc market, not the entire market).

Apparently the iPhone 5 has been a bomb. Lets see how they do this quarter.

I thought that they've sold 27M of the iPhone 5's.  Not a bomb. 

Very nice, fast phone.  The size and lightness of the phone does not bother me at all, unlike what many other buyers have said.  I think this is the best case design since the iPhone 3 came out.  Much nicer than the iPhone 4 design.  I wish the screen was a bit bigger, but at least the retina display makes it easier on my eyes when reading.  There is definitely room for improvement with the iPhones though, as their competitors are in overdrive chasing them down.  Cheers!   
Title: Re: AAPL - Apple Inc.
Post by: txlaw on January 10, 2013, 12:35:22 PM
Bruce Greenwald on Apple (and Amazon):
http://www.gurufocus.com/news/204202/professor-greenwald-thinks-apple-can-go-sonys-or-nokias-way

I watched these videos. 

Greenwald doesn't really seem to know what he's talking about, unfortunately.  For example, he mentioned that Amazon decided to go after Oracle and IBM and Google and so they released their AWS services.  But Amazon was one of the first movers in IaaS computing! 

I'm not sure how much homework he has done on these names he's opining on. 
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 10, 2013, 09:44:44 PM
Jobs is alive and well at Apple:

http://www.reuters.com/article/2013/01/10/us-apple-iphone-idUSBRE9091CR20130110
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 12, 2013, 01:56:50 PM
Jobs is alive and well at Apple:

http://www.reuters.com/article/2013/01/10/us-apple-iphone-idUSBRE9091CR20130110

apple retracted the statement - cheaper iphone (or iphone mini, whatever you want to call it) looks like its coming. i am all for it. $600 phones dont work in china and other emerging markets, and having <10% and declining marketshare is a dangerous position to be in.
Title: Re: AAPL - Apple Inc.
Post by: bargainman on January 12, 2013, 04:30:07 PM
Jobs is alive and well at Apple:


Yes of course he is!  didn't you all see this???

http://www.youtube.com/watch?v=GXr1kmuqGcU

http://www.youtube.com/watch?v=KS_s96CJnf4
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 13, 2013, 05:59:11 PM
Jobs is alive and well at Apple:

http://www.reuters.com/article/2013/01/10/us-apple-iphone-idUSBRE9091CR20130110

apple retracted the statement - cheaper iphone (or iphone mini, whatever you want to call it) looks like its coming. i am all for it. $600 phones dont work in china and other emerging markets, and having <10% and declining marketshare is a dangerous position to be in.

Its a lot more than $600:

http://blogs.wsj.com/digits/2013/01/09/the-iphones-global-price-expensive/
Title: Re: AAPL - Apple Inc.
Post by: VAL9000 on January 14, 2013, 03:28:38 AM
Apple Cuts Orders for iPhone Parts

http://online.wsj.com/article_email/SB10001424127887323596204578240440691304344-lMyQjAxMTAzMDEwMzExNDMyWj.html

Business Insider Summary in case that link stops working:

http://www.businessinsider.com/wsj-demand-for-the-iphone-is-weak-2013-1?op=1

Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 14, 2013, 04:40:27 AM
Apple Cuts Orders for iPhone Parts

http://online.wsj.com/article_email/SB10001424127887323596204578240440691304344-lMyQjAxMTAzMDEwMzExNDMyWj.html

Business Insider Summary in case that link stops working:

http://www.businessinsider.com/wsj-demand-for-the-iphone-is-weak-2013-1?op=1

same thing was reported last year, just before apple blew away analyst estimates.

it is being reported that they had originally ordered 65M screens. Did anyone really expect them to sell 65M iPhones? (this quarter is expected to be around 50 which is above analyst estimates of 47)
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 14, 2013, 06:27:36 AM
Apple Cuts Orders for iPhone Parts

http://online.wsj.com/article_email/SB10001424127887323596204578240440691304344-lMyQjAxMTAzMDEwMzExNDMyWj.html

Business Insider Summary in case that link stops working:

http://www.businessinsider.com/wsj-demand-for-the-iphone-is-weak-2013-1?op=1

same thing was reported last year, just before apple blew away analyst estimates.

it is being reported that they had originally ordered 65M screens. Did anyone really expect them to sell 65M iPhones? (this quarter is expected to be around 50 which is above analyst estimates of 47)

Its hard to say whats going on - the reports are conflicting. On one hand, their marketshare in the US is increasing. Tim Cook also just said that he expects China to overtake US, that would indicate China is doing well too. So the shortfall is coming from Europe,Japan?

There has been some major changes in manufacturing that make it hard to compare with previous years.
Title: Re: AAPL - Apple Inc.
Post by: Viking on January 15, 2013, 11:47:52 AM
Apple is trading at $485; it has $120/share in cash. It should earn about $45/share. In the past 4 months it has refreshed most product lines.

It looks to me that the market is assuming no further breakthrough innovation from the company.

$485 looks like a reasonable entry point to buy a world class company. More importantly, I expect they are not done with breakthrough innovation (TV is one such opportunity)...

With earnings coming the end of this month I expect lots of volatility (up or further down). :-)

PS: interesting that there has not been more discussion on the name given the size of the fall... perhaps a little Apple fatigue?
Title: Re: AAPL - Apple Inc.
Post by: racemize on January 15, 2013, 02:11:31 PM
PS: interesting that there has not been more discussion on the name given the size of the fall... perhaps a little Apple fatigue?

I think so.  Also, this thread sort of devolved a bit, and most people seem to have strong opinions that don't change that much on either side.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 15, 2013, 04:17:29 PM
PS: interesting that there has not been more discussion on the name given the size of the fall... perhaps a little Apple fatigue?

I think so.  Also, this thread sort of devolved a bit, and most people seem to have strong opinions that don't change that much on either side.

Because little has changed with the fundamentals of the company. You can't have much of a debate based on rumors.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 15, 2013, 04:26:21 PM
Besides I've been on vacation. ;D ;D
Title: Re: AAPL - Apple Inc.
Post by: Viking on January 15, 2013, 04:44:20 PM
valueInv, you have hit the nail on the head. Apple stock is getting creamed based on rumors of cut in display orders. Looking at the fundamentals, the stock is crazy cheap; you can buy the premier consumer electronics company, net of cash, for a PE of 8. 

I am not a conspiracy theory guy but Apple would be an ideal stock to drive lots of volatility; pump and ride it all the way up and then once it hits the stratosphere ($700 would count) dump it and make money all the way down. Rinse and repeat. 
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 15, 2013, 04:49:36 PM
valueInv, you have hit the nail on the head. Apple stock is getting creamed based on rumors of cut in display orders. Looking at the fundamentals, the stock is crazy cheap.

I am not a conspiracy theory guy but Apple would be an ideal stock to drive lots of volatility; pump and ride it all the way up and then once it hits the stratosphere ($700 would count) dump it and make money all the way down. Rinse and repeat.

I'm very happy to surf along. I'd never thought I would get an opportunity to buy Apple again.
Title: Re: AAPL - Apple Inc.
Post by: Viking on January 15, 2013, 05:22:55 PM
I find it interesting that both Apple and Microsoft are trading a such low valuations. MSFT is low because it is feared Apple will hurt its Windows sales. Apple is low because of fears that its business will be commodotized and overrun by competitors like MSFT. I actually like the idea of buying both. I have not followed Samsung at all but should that stock sell off an investor would have quite a nice opportunity to own some pretty amazing companies; all three should do well over the next couple of years, two should do very well and one should do exceptionally well (just not sure who to put where).
Title: Re: AAPL - Apple Inc.
Post by: ericd1 on January 15, 2013, 05:24:36 PM
Heck of a premium on the leaps...but stock is still interesting at this price...hummm
Title: Re: AAPL - Apple Inc.
Post by: Parsad on January 15, 2013, 06:22:50 PM
PS: interesting that there has not been more discussion on the name given the size of the fall... perhaps a little Apple fatigue?

I think so.  Also, this thread sort of devolved a bit, and most people seem to have strong opinions that don't change that much on either side.

Because little has changed with the fundamentals of the company. You can't have much of a debate based on rumors.

Well, I think it's also partly because some of the people who thought RIMM & DELL were better deals relative to the underlying assets have been proven right.  Apple is now getting back into the territory where it is starting to pique my interest, while the other two stocks are up 120% and 45% respectively.  If it gets any cheaper, I suspect this thread will start to get busy again.  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: PlanMaestro on January 15, 2013, 06:30:19 PM
Apple Lets Buyers on China Website Pay in Two-Year Installments.
http://www.bloomberg.com/news/2013-01-16/apple-lets-buyers-on-china-website-pay-in-two-year-installments.html
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 15, 2013, 07:35:09 PM
Apple Lets Buyers on China Website Pay in Two-Year Installments.
http://www.bloomberg.com/news/2013-01-16/apple-lets-buyers-on-china-website-pay-in-two-year-installments.html

Great! I've wanted them to something along these lines for a long time. Use their cash horde to finance their products and :
 - Earn a higher interest rate on their cash
 - Improve product penetration by alleviating the price barrier
 - Put their cash to use and get Wall Street to shut up.

I know T-Mobile is moving in that direction. I hope this becomes a trend.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 15, 2013, 11:25:59 PM
PS: interesting that there has not been more discussion on the name given the size of the fall... perhaps a little Apple fatigue?

I think so.  Also, this thread sort of devolved a bit, and most people seem to have strong opinions that don't change that much on either side.

Because little has changed with the fundamentals of the company. You can't have much of a debate based on rumors.

Well, I think it's also partly because some of the people who thought RIMM & DELL were better deals relative to the underlying assets have been proven right.  Apple is now getting back into the territory where it is starting to pique my interest, while the other two stocks are up 120% and 45% respectively.  If it gets any cheaper, I suspect this thread will start to get busy again.  Cheers!

Wait, what happened to - Apple cannot innovate since Jobs is dead, Apple will lose as Samoogle has caught up, Apple cannot maintain insane margins, yada, yada, yada?
Title: Re: AAPL - Apple Inc.
Post by: Parsad on January 15, 2013, 11:44:54 PM
PS: interesting that there has not been more discussion on the name given the size of the fall... perhaps a little Apple fatigue?

I think so.  Also, this thread sort of devolved a bit, and most people seem to have strong opinions that don't change that much on either side.

Because little has changed with the fundamentals of the company. You can't have much of a debate based on rumors.

Well, I think it's also partly because some of the people who thought RIMM & DELL were better deals relative to the underlying assets have been proven right.  Apple is now getting back into the territory where it is starting to pique my interest, while the other two stocks are up 120% and 45% respectively.  If it gets any cheaper, I suspect this thread will start to get busy again.  Cheers!

Wait, what happened to - Apple cannot innovate since Jobs is dead, Apple will lose as Samoogle has caught up, Apple cannot maintain insane margins, yada, yada, yada?

Apple can't innovate as persistently without Jobs.  Apple will lose as Samoogle catches up.  Apple cannot maintain insane margins.  Where in my statements did I say anything differently?

You are confusing what is a good business with what may be a good value.  Apple's business will not be as good as it was in the past.  Neither will Dell's, Microsoft's...nor RIMM's.  That doesn't mean at some point there may not be value in the investment. 

I didn't say I would buy Apple now.  I said if it continues to drop in price, it will pique my interest and at some point it may be of value.  It ain't there!  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 15, 2013, 11:45:33 PM
valueInv, you have hit the nail on the head. Apple stock is getting creamed based on rumors of cut in display orders. Looking at the fundamentals, the stock is crazy cheap; you can buy the premier consumer electronics company, net of cash, for a PE of 8. 

I am not a conspiracy theory guy but Apple would be an ideal stock to drive lots of volatility; pump and ride it all the way up and then once it hits the stratosphere ($700 would count) dump it and make money all the way down. Rinse and repeat.

Bloggers have always written crap on Apple as a  way to generate links. Read the title and then look at the data:

http://techcrunch.com/2013/01/15/demand-for-samsung-smartphones-jumps-to-23-for-early-2013-iphone-interest-down-21-points-from-last-quarter/

Apple is probably doing better than ever.

Another myth is that people are switching to Samsung Galaxy devices as they have better features. Here are the latest Galaxy numbers:
http://www.pcworld.com/article/2025188/samsung-ships-100-million-galaxy-s-android-phones.html

That is cumulative no of devices shipped since inception (not all sold)

No of iPhones Apple is expected to sell (not just ship) in 2012 alone: 150 Million.

If Samsung is beating Apple, it is not with its flagship devices, it is with low end devices in which Apple does not yet compete. In other words, its price, not features.

Another thing about competitors catching up. Take a look at marketing spend:
http://www.asymco.com/2012/11/29/the-cost-of-selling-galaxies/

How does that effect net margins? So is it superior features or is it 4X marketing spend driving sales?

What happens if Apple decides to ramp up marketing spend proportionally?


I have been seeing those clickbait articles for a while now. Gradually, the major publications started picking them up and then the financial community started parroting them.

One thing I have learned it that these stories get viral and drive investor money (including value investor money), not analysis or facts.


The problem for Apple is that if they don't do something, consumers start believe them and they become a self fulfilling prophecy. 
 

Title: Re: AAPL - Apple Inc.
Post by: kevin4u2 on January 16, 2013, 06:04:24 AM
Bloggers have always written crap on Apple as a  way to generate links. Read the title and then look at the data:

http://techcrunch.com/2013/01/15/demand-for-samsung-smartphones-jumps-to-23-for-early-2013-iphone-interest-down-21-points-from-last-quarter/

Apple is probably doing better than ever.

Another myth is that people are switching to Samsung Galaxy devices as they have better features. Here are the latest Galaxy numbers:
http://www.pcworld.com/article/2025188/samsung-ships-100-million-galaxy-s-android-phones.html

That is cumulative no of devices shipped since inception (not all sold)

No of iPhones Apple is expected to sell (not just ship) in 2012 alone: 150 Million.

If Samsung is beating Apple, it is not with its flagship devices, it is with low end devices in which Apple does not yet compete. In other words, its price, not features.

Another thing about competitors catching up. Take a look at marketing spend:
http://www.asymco.com/2012/11/29/the-cost-of-selling-galaxies/

How does that effect net margins? So is it superior features or is it 4X marketing spend driving sales?

What happens if Apple decides to ramp up marketing spend proportionally?

I have been seeing those clickbait articles for a while now. Gradually, the major publications started picking them up and then the financial community started parroting them.

One thing I have learned it that these stories get viral and drive investor money (including value investor money), not analysis or facts.

The problem for Apple is that if they don't do something, consumers start believe them and they become a self fulfilling prophecy.

Valueinv, do you actively look for facts and evidence that contradicts your position?  Here are some:

Over the xmas holidays I took every opportunity to inquire about smartphones sales whenever I was near a store.  The results indicated to me a shift away from iPhone.  Most places were 3-1 samsung to iphone, and I even had some stores tell me that it was 7-1 for samsung.  Not one store reported iPhones as the most popular phone.  The interesting thing was I would always inquire what type of phone the sales associate had and most had iPhones.  I was surprised to hear them say they would recommend the galaxy S3 over the iphone they had in their pocket.  The "cool" phone definitely isn't the iphone any longer.  Consumers are fickle, the tide may have shifted. 

Of course this isn't a scientific study but the results indicated to me a shift had taken place.  The news of apple cutting back orders from suppliers doesn't surprise me at all. 
Title: Re: AAPL - Apple Inc.
Post by: Uccmal on January 16, 2013, 06:31:25 AM
I think we wait until January 23rd for some more definitive news. 

The cash puts a floor under the stock, but the days as a fast grower are certainly coming to an end.
Title: Re: AAPL - Apple Inc.
Post by: DCG on January 16, 2013, 07:02:18 AM
Over the xmas holidays I took every opportunity to inquire about smartphones sales whenever I was near a store.  The results indicated to me a shift away from iPhone.  Most places were 3-1 samsung to iphone, and I even had some stores tell me that it was 7-1 for samsung.  Not one store reported iPhones as the most popular phone.  The interesting thing was I would always inquire what type of phone the sales associate had and most had iPhones.  I was surprised to hear them say they would recommend the galaxy S3 over the iphone they had in their pocket.  The "cool" phone definitely isn't the iphone any longer.  Consumers are fickle, the tide may have shifted. 

I think Samsung's advertising campaign for the S3 was pretty brilliant and probably hurt the 'coolness' of the iPhone among certain crowds. As an Apple product user, I'm ok with that - up until recently, Apple was always the underdog to Microsoft. I think/hope the increased competition will encourage more innovation. I'd been using mostly Apple products for probably the last 10-15 years, and seeing everyone and their grandparents and 3 year old walking around with iPhones/iPods was starting to feel a little weird. It had been sort of an outlier of a brand, and part of me is happy to see a bit of a return to that.

Am I worried as a shareholder? Maybe a little bit, but I don't think Apple needs to own 50% of the smartphone, tablet or computer market to be successful and grow.

I own 2 iOS devices and a Nexus 7 running Android Jelly Bean. I still feel like the iOS devices are superior, but I admit that the updates to Jelly Bean have narrowed the gap (as I mentioned in the tablet thread, I feel like Google accomplished this by making the current version of Android even more like iOS than ever before, and I think anyone that has used both operating systems over the last several years would agree with that). So people can now get a very comparable OS at often a lower cost. There are still aspects of Android I find clunky and odd, the OS still lags a bit, and the app ecosystem isn't as strong as Apple's, but overall, it's a pretty good experience.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 16, 2013, 07:35:57 AM
Bloggers have always written crap on Apple as a  way to generate links. Read the title and then look at the data:

http://techcrunch.com/2013/01/15/demand-for-samsung-smartphones-jumps-to-23-for-early-2013-iphone-interest-down-21-points-from-last-quarter/

Apple is probably doing better than ever.

Another myth is that people are switching to Samsung Galaxy devices as they have better features. Here are the latest Galaxy numbers:
http://www.pcworld.com/article/2025188/samsung-ships-100-million-galaxy-s-android-phones.html

That is cumulative no of devices shipped since inception (not all sold)

No of iPhones Apple is expected to sell (not just ship) in 2012 alone: 150 Million.

If Samsung is beating Apple, it is not with its flagship devices, it is with low end devices in which Apple does not yet compete. In other words, its price, not features.

Another thing about competitors catching up. Take a look at marketing spend:
http://www.asymco.com/2012/11/29/the-cost-of-selling-galaxies/

How does that effect net margins? So is it superior features or is it 4X marketing spend driving sales?

What happens if Apple decides to ramp up marketing spend proportionally?

I have been seeing those clickbait articles for a while now. Gradually, the major publications started picking them up and then the financial community started parroting them.

One thing I have learned it that these stories get viral and drive investor money (including value investor money), not analysis or facts.

The problem for Apple is that if they don't do something, consumers start believe them and they become a self fulfilling prophecy.

Valueinv, do you actively look for facts and evidence that contradicts your position?  Here are some:

Over the xmas holidays I took every opportunity to inquire about smartphones sales whenever I was near a store.  The results indicated to me a shift away from iPhone.  Most places were 3-1 samsung to iphone, and I even had some stores tell me that it was 7-1 for samsung.  Not one store reported iPhones as the most popular phone.  The interesting thing was I would always inquire what type of phone the sales associate had and most had iPhones.  I was surprised to hear them say they would recommend the galaxy S3 over the iphone they had in their pocket.  The "cool" phone definitely isn't the iphone any longer.  Consumers are fickle, the tide may have shifted. 

Of course this isn't a scientific study but the results indicated to me a shift had taken place.  The news of apple cutting back orders from suppliers doesn't surprise me at all.

"Valueinv, do you actively look for facts and evidence that contradicts your position?"

Maybe I should be asking you that question:

http://www.forbes.com/sites/ericsavitz/2013/01/09/verizon-wireless-says-9-8m-smartphone-activations-in-q4/
http://gigaom.com/2013/01/08/att-verizon-had-record-4th-quarters-thanks-to-the-smartphone/

Who should we rely on for an idea initial iPhone sales- ATT & Verizon or Kevin4u2? hhmmmm.....
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 07:37:12 AM
for the tenth time, jobs was not the innovator behind apple. it was ive & his team. DO YOUR RESEARCH!

PS: interesting that there has not been more discussion on the name given the size of the fall... perhaps a little Apple fatigue?

I think so.  Also, this thread sort of devolved a bit, and most people seem to have strong opinions that don't change that much on either side.

Because little has changed with the fundamentals of the company. You can't have much of a debate based on rumors.

Well, I think it's also partly because some of the people who thought RIMM & DELL were better deals relative to the underlying assets have been proven right.  Apple is now getting back into the territory where it is starting to pique my interest, while the other two stocks are up 120% and 45% respectively.  If it gets any cheaper, I suspect this thread will start to get busy again.  Cheers!

Wait, what happened to - Apple cannot innovate since Jobs is dead, Apple will lose as Samoogle has caught up, Apple cannot maintain insane margins, yada, yada, yada?
Title: Re: AAPL - Apple Inc.
Post by: Palantir on January 16, 2013, 07:56:48 AM
No, Jobs is the major innovator. Ive is responsible for industrial design. He did not think up the iPod, the iMac, the iPad, the iPhone, the original Mac or any of these products. Ive in a sense gives "shape" to these ideas, but he is not the source of ideas about product development and origination. I have a feeling it will be Phil Schiller and Eddy Cue.

Apple has a great executive team that are all really good at doing their jobs. But when people say "innovation" they're cryptically referring to the sourcing of new ideas, and even Jobs said that Cook "isn't a product guy", so their criticism is not unwarranted.

Personally, I have no opinion on how Apple will do. Just wait and see.
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 07:59:51 AM
are you sure about that? according to isaacson ipad/iphone were his inventions. ipod was faddell who left. mac of course was jobs but the beauty of the mac today is all ive.

No, Jobs is the major innovator. Ive is responsible for industrial design. He did not think up the iPod, the iMac, the iPad, the iPhone, the original Mac or any of these products. Ive in a sense gives "shape" to these ideas, but he is not the source of ideas about product development and origination.
Title: Re: AAPL - Apple Inc.
Post by: Palantir on January 16, 2013, 08:10:29 AM
 Ive of course, designed the product, but from what I remember, I don't believe the book suggests that it was his idea. But I could be wrong. I remember Jobs mentioning he was at a barbecue in 2003, and a MS engineer was bragging about a tablet with a stylus, which infuriated Jobs.

The Apple stores for example, were primarily Ron Johnson's idea. Putting iTunes on other computers was someone else's idea as well. So Jobs certainly would have made major mistakes without his team.

Now you might be right in a sense, Ive could take on that role.
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 08:42:24 AM
Ive of course, designed the product, but from what I remember, I don't believe the book suggests that it was his idea. But I could be wrong. I remember Jobs mentioning he was at a barbecue in 2003, and a MS engineer was bragging about a tablet with a stylus, which infuriated Jobs.

The Apple stores for example, were primarily Ron Johnson's idea. Putting iTunes on other computers was someone else's idea as well. So Jobs certainly would have made major mistakes without his team.

Now you might be right in a sense, Ive could take on that role.

i suggest reading the book again.
Title: Re: AAPL - Apple Inc.
Post by: PlanMaestro on January 16, 2013, 09:32:24 AM
Apple Cuts Orders for iPhone Parts
http://online.wsj.com/article_email/SB10001424127887323596204578240440691304344-lMyQjAxMTAzMDEwMzExNDMyWj.html

Why The WSJ Got The 'iPhone Demand Is Crashing' Story All Wrong
http://www.forbes.com/sites/markrogowsky/2013/01/15/did-the-wsj-get-punkd-on-apple-or-is-it-rotten-to-the-core/

Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 09:47:10 AM
Apple Cuts Orders for iPhone Parts
http://online.wsj.com/article_email/SB10001424127887323596204578240440691304344-lMyQjAxMTAzMDEwMzExNDMyWj.html

Why The WSJ Got The 'iPhone Demand Is Crashing' Story All Wrong
http://www.forbes.com/sites/markrogowsky/2013/01/15/did-the-wsj-get-punkd-on-apple-or-is-it-rotten-to-the-core/

why did WSJ remove the 65M figure?? and then confidently attribute order cuts to lower demand? its hard not to see this as manipulation.
Title: Re: AAPL - Apple Inc.
Post by: Parsad on January 16, 2013, 10:25:35 AM
Ive of course, designed the product, but from what I remember, I don't believe the book suggests that it was his idea. But I could be wrong. I remember Jobs mentioning he was at a barbecue in 2003, and a MS engineer was bragging about a tablet with a stylus, which infuriated Jobs.

The Apple stores for example, were primarily Ron Johnson's idea. Putting iTunes on other computers was someone else's idea as well. So Jobs certainly would have made major mistakes without his team.

Now you might be right in a sense, Ive could take on that role.

i suggest reading the book again.

Reading the book will make no difference.  In most respects, the Surface is a good product that is pretty comparable to the iPad.  Yet, how was the execution at Microsoft in marketing this thing and perfecting it under Ballmer?  So far, it's been mediocre. 

Jobs greatest asset was his ability to perfect a product (his innovation or not), and then get people to pay 2 times more than it was worth relative to other products.  That cannot be taught.  Cook is not going to absorb that through his gills because he spent time around Jobs.  It's like saying that I'll be a great physicist by working with Stephen Hawkings! 

Jobs second greatest asset was his ability to get the most out of the talent around him.  He was a slave-driver that forced employees to get things right the first time...not on the second or third attempt.  And ironically, they loved him even more for it while they hated how hard they had to work.

That combination of drive, vision, competitiveness, marketing savvy, and understanding of technology in our daily lives is irreplaceable.  Apple will be a good company without Jobs, but it will not be a great company.  It's long-term existence will be similar to other technology companies.  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: Palantir on January 16, 2013, 10:55:02 AM
Instead of telling me to read the book again, why don't you actually point out the specific part of the book that says "Ive came up with the iPad", and then we'll take it from there.
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 16, 2013, 11:15:34 AM
Ive of course, designed the product, but from what I remember, I don't believe the book suggests that it was his idea. But I could be wrong. I remember Jobs mentioning he was at a barbecue in 2003, and a MS engineer was bragging about a tablet with a stylus, which infuriated Jobs.

The Apple stores for example, were primarily Ron Johnson's idea. Putting iTunes on other computers was someone else's idea as well. So Jobs certainly would have made major mistakes without his team.

Now you might be right in a sense, Ive could take on that role.

i suggest reading the book again.

Reading the book will make no difference.  In most respects, the Surface is a good product that is pretty comparable to the iPad.  Yet, how was the execution at Microsoft in marketing this thing and perfecting it under Ballmer?  So far, it's been mediocre. 

Jobs greatest asset was his ability to perfect a product (his innovation or not), and then get people to pay 2 times more than it was worth relative to other products.  That cannot be taught.  Cook is not going to absorb that through his gills because he spent time around Jobs.  It's like saying that I'll be a great physicist by working with Stephen Hawkings! 

Jobs second greatest asset was his ability to get the most out of the talent around him.  He was a slave-driver that forced employees to get things right the first time...not on the second or third attempt.  And ironically, they loved him even more for it while they hated how hard they had to work.

That combination of drive, vision, competitiveness, marketing savvy, and understanding of technology in our daily lives is irreplaceable.  Apple will be a good company without Jobs, but it will not be a great company.  It's long-term existence will be similar to other technology companies.  Cheers!

I would refer you to something called company DNA.

Apple does not need to be as good as under Jobs to maintain its lead. It just needs to be better than its competitors.

Btw, you think Cook is not a task master?
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 16, 2013, 11:26:27 AM
Instead of telling me to read the book again, why don't you actually point out the specific part of the book that says "Ive came up with the iPad", and then we'll take it from there.
Typically, Jobs decided that a device sucked and he wanted to build a better one. Then he asked his team to come up with better ways to build one. It's I'd mostly the teams ideas that shaped the device. For example, the touch interface that defined the interface was from Jony Ives team, the click wheel for the iPod was from Phil Schiller, etc.
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 11:32:01 AM
Instead of telling me to read the book again, why don't you actually point out the specific part of the book that says "Ive came up with the iPad", and then we'll take it from there.
Typically, Jobs decided that a device sucked and he wanted to build a better one. Then he asked his team to come up with better ways to build one. It's I'd mostly the teams ideas that shaped the device. For example, the touch interface that defined the interface was from Jony Ives team, the click wheel for the iPod was from Phil Schiller, etc.

do you want me to manage your portfolio too?
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 11:33:54 AM
do you really think the biggest difference between the ipad and the surface is marketing? let me guess, you have no engineering background. valueinv and i both do


Ive of course, designed the product, but from what I remember, I don't believe the book suggests that it was his idea. But I could be wrong. I remember Jobs mentioning he was at a barbecue in 2003, and a MS engineer was bragging about a tablet with a stylus, which infuriated Jobs.

The Apple stores for example, were primarily Ron Johnson's idea. Putting iTunes on other computers was someone else's idea as well. So Jobs certainly would have made major mistakes without his team.

Now you might be right in a sense, Ive could take on that role.

i suggest reading the book again.

Reading the book will make no difference.  In most respects, the Surface is a good product that is pretty comparable to the iPad.  Yet, how was the execution at Microsoft in marketing this thing and perfecting it under Ballmer?  So far, it's been mediocre. 

Jobs greatest asset was his ability to perfect a product (his innovation or not), and then get people to pay 2 times more than it was worth relative to other products.  That cannot be taught.  Cook is not going to absorb that through his gills because he spent time around Jobs.  It's like saying that I'll be a great physicist by working with Stephen Hawkings! 

Jobs second greatest asset was his ability to get the most out of the talent around him.  He was a slave-driver that forced employees to get things right the first time...not on the second or third attempt.  And ironically, they loved him even more for it while they hated how hard they had to work.

That combination of drive, vision, competitiveness, marketing savvy, and understanding of technology in our daily lives is irreplaceable.  Apple will be a good company without Jobs, but it will not be a great company.  It's long-term existence will be similar to other technology companies.  Cheers!

I would refer you to something called company DNA.

Apple does not need to be as good as under Jobs to maintain its lead. It just needs to be better than its competitors.

Btw, you think Cook is not a task master?
Title: Re: AAPL - Apple Inc.
Post by: Parsad on January 16, 2013, 11:37:21 AM
do you really think the biggest difference between the ipad and the surface is marketing? let me guess, you have no engineering background. valueinv and i both do


Ive of course, designed the product, but from what I remember, I don't believe the book suggests that it was his idea. But I could be wrong. I remember Jobs mentioning he was at a barbecue in 2003, and a MS engineer was bragging about a tablet with a stylus, which infuriated Jobs.

The Apple stores for example, were primarily Ron Johnson's idea. Putting iTunes on other computers was someone else's idea as well. So Jobs certainly would have made major mistakes without his team.

Now you might be right in a sense, Ive could take on that role.

i suggest reading the book again.

Reading the book will make no difference.  In most respects, the Surface is a good product that is pretty comparable to the iPad.  Yet, how was the execution at Microsoft in marketing this thing and perfecting it under Ballmer?  So far, it's been mediocre. 

Jobs greatest asset was his ability to perfect a product (his innovation or not), and then get people to pay 2 times more than it was worth relative to other products.  That cannot be taught.  Cook is not going to absorb that through his gills because he spent time around Jobs.  It's like saying that I'll be a great physicist by working with Stephen Hawkings! 

Jobs second greatest asset was his ability to get the most out of the talent around him.  He was a slave-driver that forced employees to get things right the first time...not on the second or third attempt.  And ironically, they loved him even more for it while they hated how hard they had to work.

That combination of drive, vision, competitiveness, marketing savvy, and understanding of technology in our daily lives is irreplaceable.  Apple will be a good company without Jobs, but it will not be a great company.  It's long-term existence will be similar to other technology companies.  Cheers!

I would refer you to something called company DNA.

Apple does not need to be as good as under Jobs to maintain its lead. It just needs to be better than its competitors.

Btw, you think Cook is not a task master?

Engineers make some of the worst investors and business people, because they look at everything through the eyes of an engineer.  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 11:37:32 AM
Instead of telling me to read the book again, why don't you actually point out the specific part of the book that says "Ive came up with the iPad", and then we'll take it from there.
Typically, Jobs decided that a device sucked and he wanted to build a better one. Then he asked his team to come up with better ways to build one. It's I'd mostly the teams ideas that shaped the device. For example, the touch interface that defined the interface was from Jony Ives team, the click wheel for the iPod was from Phil Schiller, etc.

id say the touch interface defined the whole product. hence i give him credit for inventing the products. of course jobs played an important role, but without ive apple would not have the ipad/iphone
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 11:39:11 AM
thats the craziest thing ive heard. engineers have fluency in the most reliable reality principles.. similar to physics and other hard sciences. hence charlie munger/li lu's attraction to physics.


do you really think the biggest difference between the ipad and the surface is marketing? let me guess, you have no engineering background. valueinv and i both do


Ive of course, designed the product, but from what I remember, I don't believe the book suggests that it was his idea. But I could be wrong. I remember Jobs mentioning he was at a barbecue in 2003, and a MS engineer was bragging about a tablet with a stylus, which infuriated Jobs.

The Apple stores for example, were primarily Ron Johnson's idea. Putting iTunes on other computers was someone else's idea as well. So Jobs certainly would have made major mistakes without his team.

Now you might be right in a sense, Ive could take on that role.

i suggest reading the book again.

Reading the book will make no difference.  In most respects, the Surface is a good product that is pretty comparable to the iPad.  Yet, how was the execution at Microsoft in marketing this thing and perfecting it under Ballmer?  So far, it's been mediocre. 

Jobs greatest asset was his ability to perfect a product (his innovation or not), and then get people to pay 2 times more than it was worth relative to other products.  That cannot be taught.  Cook is not going to absorb that through his gills because he spent time around Jobs.  It's like saying that I'll be a great physicist by working with Stephen Hawkings! 

Jobs second greatest asset was his ability to get the most out of the talent around him.  He was a slave-driver that forced employees to get things right the first time...not on the second or third attempt.  And ironically, they loved him even more for it while they hated how hard they had to work.

That combination of drive, vision, competitiveness, marketing savvy, and understanding of technology in our daily lives is irreplaceable.  Apple will be a good company without Jobs, but it will not be a great company.  It's long-term existence will be similar to other technology companies.  Cheers!

I would refer you to something called company DNA.

Apple does not need to be as good as under Jobs to maintain its lead. It just needs to be better than its competitors.

Btw, you think Cook is not a task master?

Engineers make some of the worst investors and business people, because they look at everything through the eyes of an engineer.  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 16, 2013, 11:42:54 AM
do you really think the biggest difference between the ipad and the surface is marketing? let me guess, you have no engineering background. valueinv and i both do


Ive of course, designed the product, but from what I remember, I don't believe the book suggests that it was his idea. But I could be wrong. I remember Jobs mentioning he was at a barbecue in 2003, and a MS engineer was bragging about a tablet with a stylus, which infuriated Jobs.

The Apple stores for example, were primarily Ron Johnson's idea. Putting iTunes on other computers was someone else's idea as well. So Jobs certainly would have made major mistakes without his team.

Now you might be right in a sense, Ive could take on that role.

i suggest reading the book again.

Reading the book will make no difference.  In most respects, the Surface is a good product that is pretty comparable to the iPad.  Yet, how was the execution at Microsoft in marketing this thing and perfecting it under Ballmer?  So far, it's been mediocre. 

Jobs greatest asset was his ability to perfect a product (his innovation or not), and then get people to pay 2 times more than it was worth relative to other products.  That cannot be taught.  Cook is not going to absorb that through his gills because he spent time around Jobs.  It's like saying that I'll be a great physicist by working with Stephen Hawkings! 

Jobs second greatest asset was his ability to get the most out of the talent around him.  He was a slave-driver that forced employees to get things right the first time...not on the second or third attempt.  And ironically, they loved him even more for it while they hated how hard they had to work.

That combination of drive, vision, competitiveness, marketing savvy, and understanding of technology in our daily lives is irreplaceable.  Apple will be a good company without Jobs, but it will not be a great company.  It's long-term existence will be similar to other technology companies.  Cheers!

I would refer you to something called company DNA.

Apple does not need to be as good as under Jobs to maintain its lead. It just needs to be better than its competitors.

Btw, you think Cook is not a task master?

Engineers make some of the worst investors and business people, because they look at everything through the eyes of an engineer.  Cheers!

 ;D ;D ;D. Funny, Google is run by engineers, so is FB and many if not most tech companies.

Also, what does Munger say about engineering mental models?
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 11:43:41 AM
do you really think the biggest difference between the ipad and the surface is marketing? let me guess, you have no engineering background. valueinv and i both do


Ive of course, designed the product, but from what I remember, I don't believe the book suggests that it was his idea. But I could be wrong. I remember Jobs mentioning he was at a barbecue in 2003, and a MS engineer was bragging about a tablet with a stylus, which infuriated Jobs.

The Apple stores for example, were primarily Ron Johnson's idea. Putting iTunes on other computers was someone else's idea as well. So Jobs certainly would have made major mistakes without his team.

Now you might be right in a sense, Ive could take on that role.

i suggest reading the book again.

Reading the book will make no difference.  In most respects, the Surface is a good product that is pretty comparable to the iPad.  Yet, how was the execution at Microsoft in marketing this thing and perfecting it under Ballmer?  So far, it's been mediocre. 

Jobs greatest asset was his ability to perfect a product (his innovation or not), and then get people to pay 2 times more than it was worth relative to other products.  That cannot be taught.  Cook is not going to absorb that through his gills because he spent time around Jobs.  It's like saying that I'll be a great physicist by working with Stephen Hawkings! 

Jobs second greatest asset was his ability to get the most out of the talent around him.  He was a slave-driver that forced employees to get things right the first time...not on the second or third attempt.  And ironically, they loved him even more for it while they hated how hard they had to work.

That combination of drive, vision, competitiveness, marketing savvy, and understanding of technology in our daily lives is irreplaceable.  Apple will be a good company without Jobs, but it will not be a great company.  It's long-term existence will be similar to other technology companies.  Cheers!

I would refer you to something called company DNA.

Apple does not need to be as good as under Jobs to maintain its lead. It just needs to be better than its competitors.

Btw, you think Cook is not a task master?

Engineers make some of the worst investors and business people, because they look at everything through the eyes of an engineer.  Cheers!

 ;D ;D ;D. Funny, Google is run by engineers, so is FB and many if not most tech companies.

Also, what does Munger say about engineering mental models?

i would laugh, if i didnt think it was a really sad comment
Title: Re: AAPL - Apple Inc.
Post by: Palantir on January 16, 2013, 11:44:19 AM
Instead of telling me to read the book again, why don't you actually point out the specific part of the book that says "Ive came up with the iPad", and then we'll take it from there.
Typically, Jobs decided that a device sucked and he wanted to build a better one. Then he asked his team to come up with better ways to build one. It's I'd mostly the teams ideas that shaped the device. For example, the touch interface that defined the interface was from Jony Ives team, the click wheel for the iPod was from Phil Schiller, etc.

You're right, and don't think anyone disagrees with the fact that a lot of very talented people were involved in all of these products. Ultimately however, Jobs had the final decision in determining whether the product was  "go" or "needs improvement". After spending a lot of time developing the iPhone, Jobs could tell Ive to start over again because it "didn't feel right", or that the iPad be redone because it just wasn't something one could "scoop off the table and start using".

 Even if you have very talented people working for you, in many cases they have very different ideas about what to do, and it was Jobs' role to ferret out the right decision to make regarding a product, which gave a lot of power to one man's decisions. What you have to keep in mind is that Jobs was essentially a "generalist" who was heading up a team of "specialists", and had the ability to grasp a range of different ideas from design to technology to retail to supply chains. We will now have a "specialist" take the "generalist" mantle. Does Tim Cook have the design chops to tell Ive whether something is "perfect" or whether the edges need more rounding :) ? Will he have the marketing nous to tell Schiller if his ads are terrible? Does he have the grasp of the consumer to come up with another great product? I think it's possible, but I have no idea.

I think him firing Forstall was a great decision as it shows that he was building more harmony within his team.

Title: Re: AAPL - Apple Inc.
Post by: Palantir on January 16, 2013, 11:45:23 AM
do you really think the biggest difference between the ipad and the surface is marketing? let me guess, you have no engineering background.


Neither did Steve Jobs....I hope he doesn't have an opinion on the iPad.
Title: Re: AAPL - Apple Inc.
Post by: Parsad on January 16, 2013, 11:46:16 AM
do you really think the biggest difference between the ipad and the surface is marketing? let me guess, you have no engineering background. valueinv and i both do


Ive of course, designed the product, but from what I remember, I don't believe the book suggests that it was his idea. But I could be wrong. I remember Jobs mentioning he was at a barbecue in 2003, and a MS engineer was bragging about a tablet with a stylus, which infuriated Jobs.

The Apple stores for example, were primarily Ron Johnson's idea. Putting iTunes on other computers was someone else's idea as well. So Jobs certainly would have made major mistakes without his team.

Now you might be right in a sense, Ive could take on that role.

i suggest reading the book again.

Reading the book will make no difference.  In most respects, the Surface is a good product that is pretty comparable to the iPad.  Yet, how was the execution at Microsoft in marketing this thing and perfecting it under Ballmer?  So far, it's been mediocre. 

Jobs greatest asset was his ability to perfect a product (his innovation or not), and then get people to pay 2 times more than it was worth relative to other products.  That cannot be taught.  Cook is not going to absorb that through his gills because he spent time around Jobs.  It's like saying that I'll be a great physicist by working with Stephen Hawkings! 

Jobs second greatest asset was his ability to get the most out of the talent around him.  He was a slave-driver that forced employees to get things right the first time...not on the second or third attempt.  And ironically, they loved him even more for it while they hated how hard they had to work.

That combination of drive, vision, competitiveness, marketing savvy, and understanding of technology in our daily lives is irreplaceable.  Apple will be a good company without Jobs, but it will not be a great company.  It's long-term existence will be similar to other technology companies.  Cheers!

I would refer you to something called company DNA.

Apple does not need to be as good as under Jobs to maintain its lead. It just needs to be better than its competitors.

Btw, you think Cook is not a task master?

Engineers make some of the worst investors and business people, because they look at everything through the eyes of an engineer.  Cheers!

 ;D ;D ;D. Funny, Google is run by engineers, so is FB and many if not most tech companies.

Also, what does Munger say about engineering mental models?

thats the craziest thing ive heard. engineers have fluency in the most reliable reality principles.. similar to physics and other hard sciences. hence charlie munger/li lu's attraction to physics.


do you really think the biggest difference between the ipad and the surface is marketing? let me guess, you have no engineering background. valueinv and i both do


Ive of course, designed the product, but from what I remember, I don't believe the book suggests that it was his idea. But I could be wrong. I remember Jobs mentioning he was at a barbecue in 2003, and a MS engineer was bragging about a tablet with a stylus, which infuriated Jobs.

The Apple stores for example, were primarily Ron Johnson's idea. Putting iTunes on other computers was someone else's idea as well. So Jobs certainly would have made major mistakes without his team.

Now you might be right in a sense, Ive could take on that role.

i suggest reading the book again.

Reading the book will make no difference.  In most respects, the Surface is a good product that is pretty comparable to the iPad.  Yet, how was the execution at Microsoft in marketing this thing and perfecting it under Ballmer?  So far, it's been mediocre. 

Jobs greatest asset was his ability to perfect a product (his innovation or not), and then get people to pay 2 times more than it was worth relative to other products.  That cannot be taught.  Cook is not going to absorb that through his gills because he spent time around Jobs.  It's like saying that I'll be a great physicist by working with Stephen Hawkings! 

Jobs second greatest asset was his ability to get the most out of the talent around him.  He was a slave-driver that forced employees to get things right the first time...not on the second or third attempt.  And ironically, they loved him even more for it while they hated how hard they had to work.

That combination of drive, vision, competitiveness, marketing savvy, and understanding of technology in our daily lives is irreplaceable.  Apple will be a good company without Jobs, but it will not be a great company.  It's long-term existence will be similar to other technology companies.  Cheers!

I would refer you to something called company DNA.

Apple does not need to be as good as under Jobs to maintain its lead. It just needs to be better than its competitors.

Btw, you think Cook is not a task master?

Engineers make some of the worst investors and business people, because they look at everything through the eyes of an engineer.  Cheers!

Yes, but they often become too analytical and exclude common sense.  Most analysts are terrible investors as well.  Investing often requires a simplified view, and not overly analytical.  You are welcome to call me simple! 

Did I say all engineers are bad investors?  Brin & Page obviously aren't any typical engineer.  Their business culture is modelled after Berkshire.  What about Paul Allen...the Woz?  Would you call them brilliant investors or good engineers who were fortunate they knew Steve Jobs and Bill Gates.  Cheers!   
Title: Re: AAPL - Apple Inc.
Post by: Parsad on January 16, 2013, 11:50:21 AM
do you really think the biggest difference between the ipad and the surface is marketing? let me guess, you have no engineering background.


Neither did Steve Jobs....I hope he doesn't have an opinion on the iPad.

LOL!  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 11:51:57 AM
So you think engineering and common sense don't mix. What a preposterous thing to say. Why don't you say that to Henry singleton
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 11:53:43 AM
Actually he built together frequency counters at 13. Melissa Mayer says he is extremely technical. So do friends I have who have worked with him personallu

do you really think the biggest difference between the ipad and the surface is marketing? let me guess, you have no engineering background.


Neither did Steve Jobs....I hope he doesn't have an opinion on the iPad.

LOL!  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: valueInv on January 16, 2013, 11:57:46 AM
Yes, but they often become too analytical and exclude common sense.  Most analysts are terrible investors as well.  Investing often requires a simplified view, and not overly analytical.  You are welcome to call me simple! 

Did I say all engineers are bad investors?  Brin & Page obviously aren't any typical engineer.  Their business culture is modelled after Berkshire.  What about Paul Allen...the Woz?  Would you call them brilliant investors or good engineers who were fortunate they knew Steve Jobs and Bill Gates.  Cheers!

You think Google's business culture is modeled after Berk?  ;D ;D ;D
Bill Gates was an engineer also.
Ajit Jain, Jack Welch, Prem Watsa,  etc, etc, etc

I can tell you one thing, engineers have a better grasp of facts, LOL.
Title: Re: AAPL - Apple Inc.
Post by: Parsad on January 16, 2013, 12:01:05 PM
So you think engineering and common sense don't mix. What a preposterous thing to say. Why don't you say that to Henry singleton

Yes, but they often become too analytical and exclude common sense.  Most analysts are terrible investors as well.  Investing often requires a simplified view, and not overly analytical.  You are welcome to call me simple! 

Did I say all engineers are bad investors?  Brin & Page obviously aren't any typical engineer.  Their business culture is modelled after Berkshire.  What about Paul Allen...the Woz?  Would you call them brilliant investors or good engineers who were fortunate they knew Steve Jobs and Bill Gates.  Cheers!

You think Google's business culture is modeled after Berk?  ;D ;D ;D
Bill Gates was an engineer also.
Ajit Jain, Jack Welch, Prem Watsa,  etc, etc, etc

I can tell you one thing, engineers have a better grasp of facts, LOL.

Again, did I say all engineers?  I said engineers make some of the worst businesspeople and investors because they are overly analytical.  I never said all engineers makes terrible businesspeople or investors. 

For engineers, I would have presumed you both would have read my sentence in more detail and understood that.  Apparently, you two fall into the exceptional category as well, and aren't that analytical after all.  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 12:01:38 PM
+1

facts and logical reasoning.

Yes, but they often become too analytical and exclude common sense.  Most analysts are terrible investors as well.  Investing often requires a simplified view, and not overly analytical.  You are welcome to call me simple! 

Did I say all engineers are bad investors?  Brin & Page obviously aren't any typical engineer.  Their business culture is modelled after Berkshire.  What about Paul Allen...the Woz?  Would you call them brilliant investors or good engineers who were fortunate they knew Steve Jobs and Bill Gates.  Cheers!

You think Google's business culture is modeled after Berk?  ;D ;D ;D
Bill Gates was an engineer also.
Ajit Jain, Jack Welch, Prem Watsa,  etc, etc, etc

I can tell you one thing, engineers have a better grasp of facts, LOL.
Title: Re: AAPL - Apple Inc.
Post by: Parsad on January 16, 2013, 12:05:25 PM

You think Google's business culture is modeled after Berk?  ;D ;D ;D


Knock yourself out.  Cheers!

http://investor.google.com/corporate/2004/ipo-founders-letter.html

http://money.cnn.com/2004/05/01/technology/google_buffett/

Title: Re: AAPL - Apple Inc.
Post by: hardincap on January 16, 2013, 12:06:51 PM
then you've made a pointless statement, because every profession has people who make bad investors/businessman for one reason or another. i woudl argue that engineers and scientists on the whole make much better investors/businessman than any other profession.

So you think engineering and common sense don't mix. What a preposterous thing to say. Why don't you say that to Henry singleton

Yes, but they often become too analytical and exclude common sense.  Most analysts are terrible investors as well.  Investing often requires a simplified view, and not overly analytical.  You are welcome to call me simple! 

Did I say all engineers are bad investors?  Brin & Page obviously aren't any typical engineer.  Their business culture is modelled after Berkshire.  What about Paul Allen...the Woz?  Would you call them brilliant investors or good engineers who were fortunate they knew Steve Jobs and Bill Gates.  Cheers!

You think Google's business culture is modeled after Berk?  ;D ;D ;D
Bill Gates was an engineer also.
Ajit Jain, Jack Welch, Prem Watsa,  etc, etc, etc

I can tell you one thing, engineers have a better grasp of facts, LOL.

Again, did I say all engineers?  I said engineers make some of the worst businesspeople and investors because they are overly analytical.  I never said all engineers makes terrible businesspeople or investors. 

For engineers, I would have presumed you both would have read my sentence in more detail and understood that.  Apparently, you two fall into the exceptional category as well, and aren't that analytical after all.  Cheers!
Title: Re: AAPL - Apple Inc.
Post by: hyten1 on January 16, 2013, 12:11:52 PM
all this talk about engineers etc etc

for me apple is very simple, its all about the absolute number (i know its simplistic, honestly i can't figure out what will happen with tech in the future, but the next 10 yrs i don't think will be as good as the last 10 yrs for apple, unless apple comes out with another break through product which is possible i.e the tv, or siri becomse more useful and you can monetize it but that is hard to handicap)

last 12 months apple made 40bil, if you grow that at 10% a yr compounded it will be 64bil  in 5 yrs if you grow that another 5 yrs it'll be $100bil

i just have a hard time seeing that happen. numbers this size is just hard to grow. i mean you can argue apple and still do it, sure its possible, but once apple is in every country in every carrier, it becomes harder and harder to do. in the past, apple was only in certain countries, or some carriers don't carry etc.

the competitors are better equip now, coming from all angels.

sure its possible that apple will continue to pump out 30 to 40bil a year at those numbers what should the company be worth and how they do with the cash is an issue for me.

also in my previous posts i think apple has a higher risk of getting hit hard due to their lack of product/revenue/profit diversification


EDIT: above is long term, short term anything can happen, a pop in this stock to 500 or 600 is definitely possible.

Title: Re: AAPL - Apple Inc.
Post by: Parsad on January 16, 2013, 12:20:50 PM
then you've made a pointless statement, because every profession has people who make bad investors/businessman for one reason or another. i woudl argue that engineers and scientists on the whole make much better investors/businessman than any other profession.

So you think engineering and common sense don't mix. What a preposterous thing to say. Why don't you say that to Henry singleton