|
Post by Tetrachloride on Dec 14, 2012 16:43:19 GMT -8
In the other thread on Walmart, I tend to believe these are loss-leaders / promotions. Get people into the store to buy other things.
Still, it does speak to the fact that supplies are fairly ample. In the early days of iPhone and iPad, there was zero discounting.
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 14, 2012 16:44:57 GMT -8
I'm not ready to lower GM yet - Wal-Mart and Radio Shack and Best Buy are not the world - but I wonder just a little.
|
|
|
Post by Tetrachloride on Dec 14, 2012 16:54:59 GMT -8
The odds are that these phones were purchased already by Walmart and are booked at the regular wholesale price.
|
|
|
Post by mbeauch on Dec 14, 2012 23:20:50 GMT -8
Hmm... If I see _enough_ promotions going on, I might have to adjust GM down from the 40% I have it at. I mean, it's not like retailers are willingly losing $50, $70ish, $100 on Apple devices just to get people in the door. Could this be a small part of what Oppenheimer meant? Apple is taking part of the drop in price, who knows how much? The drop in ipad is for the ipad3 which is just to get rid of inventory. The iphone drop is a surprise and is in response to SS's aggressive promotions.
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 14, 2012 23:25:14 GMT -8
iPad 3 on sale makes perfect sense. MacRumors had it wrong.
This will take the next CC (someone WS analyst be sure to ask about it, OK?) or a surprise response by an Apple exec beforehand to sort out.
Many possibilities. Could be greater permissiveness by new management to run these promos. It could be a component (of unknown size) in terms of burning a little GM for share. Could be adjusting to demand. It's too early to say.
If I see Costco carrying doorbuster iPad 4s and iPhone 5s...then I'll worry a bit more.
|
|
|
Post by machouse on Dec 15, 2012 6:50:55 GMT -8
By my own estimates, the revenue from iPhone will be the highest % of total revenue ever, meaning GM% could beat by more than expected.I think people have vastly underestimated the iPad Mini to iPad 10" sales ratio. From day 1 of preorders I have no doubt the iPad mini became the biggest selling model. Q42011 iphone was 39% of total revenue Q42012 iphone was 48 % of total revenue Gross Margin was basically flat
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 15, 2012 12:04:14 GMT -8
That would still get us where we need to be margin-wise.
Apple's GM decline YOY is inevitable. "How much" is the puzzle.
|
|
|
Post by Tetrachloride on Dec 15, 2012 20:08:43 GMT -8
I suspect in quarters ahead that Apple will try to not launch so many products in a single quarter if this has a strong effect on gross margins. At the www.applestore.com iPad gets the main feature. Clicking to "shop ipad", the iPad mini gets the main feature at the moment. Apple Store says "limited quantities available." Meanwhile, iPad Retina is available in all models with no such warning. Kudos to web design team. The red lettering is festive and clear.
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 15, 2012 20:38:59 GMT -8
This was "necessary". iPad mini was ready for prime time, iPad 4 needed an A6-something, Macs needed refreshing, iPhone is still fighting its way back to a June/July release (maybe?). Real Artists Ship(tm) in both Steve and Tim's world. And when it comes to shipping timeframes anyway, the perfect is the enemy of the good.
Casual observers see tumult, I see chaos managed about as well as any company could possibly do it, as well as forward-lookingness (iPad 4 iterating quickly).
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 16, 2012 17:36:36 GMT -8
Well! +2M iPhone 5s for China in 3 days isn't too shabby with a few more shipping days to go and on-demand supply everywhere.
Better still: There's meeting supply/demand balance, and then there's meeting targets for channel inventory. Now that iPhone 5 channel inventory can be buffered (though whether it'll end up within Apple's stated target range, we'll have to wait and see), that should help the iPhone numbers for fiscal Q1.
|
|
|
Post by mbeauch on Dec 16, 2012 17:42:15 GMT -8
Well! +2M iPhone 5s for China in 3 days isn't too shabby with a few more shipping days to go and on-demand supply everywhere. Better still: There's meeting supply/demand balance, and then there's meeting targets for channel inventory. Now that iPhone 5 channel inventory can be buffered (though whether it'll end up within Apple's stated target range, we'll have to wait and see), that should help the iPhone numbers for fiscal Q1. That number is higher than I expected. Very promising considering there are 13 more days left in the quarter.
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 16, 2012 17:55:37 GMT -8
I don't even know what number is supposed to be good. No one does, but it sounds good to me! I do know China had ZERO iPhones headed its way last fiscal Q1. Any iPhone 5 number in the 49-51M range would be fine and I do think we'll get there.
|
|
|
Post by alice on Dec 16, 2012 18:00:12 GMT -8
How does 49-51M translate to eps?
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 16, 2012 18:01:25 GMT -8
See the first page for one person's humble opinion.
|
|
|
Post by mbeauch on Dec 16, 2012 18:25:40 GMT -8
I don't even know what number is supposed to be good. No one does, but it sounds good to me! I do know China had ZERO iPhones headed its way last fiscal Q1. Any iPhone 5 number in the 49-51M range would be fine and I do think we'll get there. OK, I will try to break it down on how my simple mind came to the conclusion that it is a very good number. The phone launched in 11 countries across numerous carriers to the tune of 5 million units in 3 days. The 5 launched in one country on 2 carriers (the small one's) and sold 2 mil. Yes I see a 40% compare as being staggering honestly. These units were not in FQ1 last year. I can see China doing 5 mil units by itself now. Encouraging.
|
|
|
Post by Tetrachloride on Dec 16, 2012 18:35:02 GMT -8
How does 49-51M translate to eps? My current numbers at 49 M, 39.7 gross margin and all other data say $ 14.10 EPS. Going up to 51 M at 40.0 gross margin say $ 14.60 (rounding down a couple pennies). Attachments:
|
|
|
Post by nathanstevens on Dec 16, 2012 19:06:25 GMT -8
Well! +2M iPhone 5s for China in 3 days isn't too shabby with a few more shipping days to go and on-demand supply everywhere. Better still: There's meeting supply/demand balance, and then there's meeting targets for channel inventory. Now that iPhone 5 channel inventory can be buffered (though whether it'll end up within Apple's stated target range, we'll have to wait and see), that should help the iPhone numbers for fiscal Q1. I've been thinking for awhile that Apple's conservative guidance may not have included any iPhone 5 sales in China. Keep in mind that the outcomes of the US presidential election and new Chinese leadership were not confirmed at the time of the last conference call when guidance was announced. With all of the harsh rhetoric on US trade policies with China being thrown around during the campaigns and the fact that most of the major telecoms in China have substantial government ownership, I think that it would have been reasonable for Apple to anticipate some regulatory hurdles to gain approval for the iPhone 5 in China prior to the January 20th US presidential inauguration. Apple had to anticipate that the approval of one of their products for sale in China could have been a major negotiating point for a new Chinese leadership with a new US Pres. if necessary. Maybe I'm being way too optimistic, but being an engineer myself, I know how conservative engineers can be. 2M iPhone 5 sales in three days with 13 days to go. Assuming sales drop off by 50% versus the opening weekend rate that would still mean more than 6M IPhone 5 sales in China during this quarter. That's $3.6B in revenues that might not have been included in a super conservative guidance scenario. A 13% revenue beat plus $3.6B equals $62.36B. Here's to wishful thinking.
|
|
|
Post by Tetrachloride on Dec 16, 2012 19:19:41 GMT -8
Intriguing concept that iPhone would not be included in guidance. My screenshot above is for a 4.8 % revenue sandbag. Historically, a revenue sandbag of 13 % is near the average.
Going backwards in time, sandbag percentages are 17.6 3.2 20.6 21.6 13.1 22.6 12.1 16.3 13 18.9 20.5
The trend of sandbagging may be downward. Either Apple is not meeting their internal expectations or Apple is changing guidance for less sandbagging.
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 16, 2012 19:22:58 GMT -8
Welcome back Gregg and all that, but please, let's not go there with those unaccountable "internal estimates".
Apple is definitely changing guidance for a little less sandbagging. Consider the new CEO and the changes going on in Apple culture (more transparency, a bit more data - like today!). That said, turning over so many products all at once introduces all kinds of uncertainty. It was smart for Oppenheimer to be cautious. And yet, we have $52B revs guidance. Makes you stop and take notice.
|
|
|
Post by mbeauch on Dec 16, 2012 19:26:01 GMT -8
The last 2 quarters have been a lot closer than what we are use to. I expect this to get even closer. I still look at last year and view Apple's guidance as being very good. An 8 billion guide above last years revenue is pretty darn strong to me considering the extra week last year. I was at 56 bil back in Sept, I am still there and won't go above. The only area I can see a surprise is in the Mini.
|
|
|
Post by mbeauch on Dec 16, 2012 19:27:43 GMT -8
Welcome back Gregg and all that, but please, let's not go there with those unaccountable "internal estimates". Apple is definitely changing guidance for a little less sandbagging. Consider the new CEO and the changes going on in Apple culture (more transparency, a bit more data - like today!). That said, turning over so many products all at once introduces all kinds of uncertainty. It was smart for Oppenheimer to be cautious. And yet, we have $52B revs guidance. Makes you stop and take notice. LOL, Mav, Tetra said that not Gregg. LOL
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 16, 2012 19:36:38 GMT -8
Fully aware of that, MB. As for guidance: It's $5.7B over last year's actual revs, but agreed. If you normalize using Apple's "all weeks are the same in fiscal Q1 2012" method (which I don't believe ), then it's a $9B guide over actual even before you start trying to adjust Oppenheimer's numbers. I like it.
|
|
|
Post by Tetrachloride on Dec 16, 2012 19:40:19 GMT -8
no problem, mb. Gregg and I are in the same camp for "internal numbers" theory.
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 16, 2012 19:42:03 GMT -8
Really? Well, I politely disagree, as I always have. Though not necessarily quietly.
|
|
|
Post by Tetrachloride on Dec 16, 2012 19:47:21 GMT -8
My view is that "adjusting Oppenheimer's numbers" is identical to "internal numbers" theory. I've been working on such extrapolation for about 10 quarters. Not long after, I started doing unit sales analysis, especially this past 3 months.
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 16, 2012 19:52:18 GMT -8
Wait wait wait wait WAIT.
Then we're not talking "internal estimates".
Gregg's theory is management sets goals. Well, yes, of course.
I expect Gregg to opine anytime now, so I might as well be clear: But no one could possibly know what the heck those numbers are except Apple!
So the idea that WS is punishing/rewarding AAPL based on "internal estimates" is akin to saying AAPL should be punished/rewarded for missing or exceeding stupid unaccountable whisper numbers.
What you and I try to do is make sense of Oppenheimer's guidance, and by that get baselines and other potentially useful financial models out of the exercise. Not the same.
|
|
|
Post by Tetrachloride on Dec 16, 2012 20:00:20 GMT -8
I agree with your 4th paragraph. Apple has goals which I call "internal numbers." Then Apple dials back a certain percentage. This is Oppenheimer's Guidance.
Regarding whisper numbers: Wall Street often copies the AFB and Braeburn, knocks off 20-50 cents and that's the whisper number. Recently however, some WS analysts are not knocking off any EPS. A few of them are publishing their true estimates.
Finally, the last 2 quarters and this one are about as fun as a concussion.
Abstractly, we are agreeing more than we are disagreeing.
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 16, 2012 20:03:57 GMT -8
Sounds like you may need a refresher on Gregg's internal estimates theory, because we're not disagreeing much at all here. % over guidance (which some call the "beat factor") isn't something I like to do, but that's just me. Many do and I'm fine with that. But grading Apple based on unaccountable whisper numbers/unknowable "management actual target goals" ignores, well, the more measurable reality of things. The business of judging the results and guidance on their own merits. Since I'm digressing, I'm not yet ready to move from my baseline estimates, which are very similar to your numbers Cl4.
|
|
|
Post by mbeauch on Dec 16, 2012 20:59:02 GMT -8
But no one could possibly know what the heck those numbers are except Apple!So the idea that WS is punishing/rewarding AAPL based on "internal estimates" is akin to saying AAPL should be punished/rewarded for missing or exceeding missing stupid unaccountable whisper numbers. Apple is a different breed of company. I used to work for a multi-billion dollar company and we always had targets. The dirty little secret was that each level had different targets. The bottom had targets that were unreachable. As the progression upward in the company the targets were lowered. Upper management never missed a target. I imagine this is more common than Apple's way. The thought of WS knowing what the C-level management expects is borderline criminal.
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,784
|
Post by Mav on Dec 16, 2012 21:03:01 GMT -8
The thought of WS knowing what the C-level management expects is borderline criminal. +1 I love a good conspiracy theory now and then, but it's exactly as you say! That's why I'll never agree with Gregg on invisible, subject-to-change-at-any-time bars of expectations. Quarter by quarter, you have to benchmark Apple on stuff you can actually quantify.
|
|