Since84
Moderator
To infinity and beyond!
Posts: 3,933
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Post by Since84 on Feb 22, 2018 3:15:42 GMT -8
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,432
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Post by chinacat on Feb 22, 2018 8:08:04 GMT -8
Nice solid start to the day. Let's just keep this going for the next week or so, and then take another shot at new ATH's. Neil Cybart has a clear-eyed view of the iPhone business as it reaches the inevitable plateau in The Goldilocks Era for iPhone Has Begun. The increase in ASP and expansion of services for the loyal user base are good offsets for the inevitable slowing of sales increases, but as we have already seen with the "iPhone X order cuts prove the end is near" story line, pundits will leap on any excuse to foresee disaster ahead. I remain sanguine as long Apple as continues to haul in as much profit as the rest of the industry put together.
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,432
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Post by chinacat on Feb 22, 2018 8:17:35 GMT -8
Following up on my previous post, Ben Thompson had a similar message in APPLE’S MIDDLE AGE a couple of weeks ago: Steve Jobs was the perfect CEO to bring the revolutionary iPhone to market; Tim Cook's task to augment it with complementary products, services, and installed base growth is just as important.
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bud777
fire starter
Posts: 1,353
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Post by bud777 on Feb 22, 2018 9:25:29 GMT -8
I post in the Braeburn group as DrBob. I just posted the following FWIW:
While higher ASPs certainly help profitability, I am not sure that I agree that they are strategically the best move. Kirk’s iPhone unit data seems to indicate that the S-curve for the adoption of mobile phones is past its upper inflection point. I realize that I am inferring total mobile phones from the iPhone data, but iPhone share has not changed that dramatically over the past 5 years. In addition and to make matters worse, China Mobile 4G subscribers have had their fastest growth (300 million to 700 million) during the years when iPhone units were essentially flat.
I have nothing against profits or carefully managed growth, but I think Apple is facing a challenge that is different from anything they have faced since 2001. I am firm believer in the logistic curve. Any system that grows (especially if it grows exponentially) eventually reaches a point where resources are exhausted and the growth slows and stops. Whether it is slime molds, the rate of patents for steam locomotives, or mobile phones, this pattern is an inherent part of any growing system. For Apple to continue to grow, it must begin a new logistic curve. This is exactly what it did in 2001 with the iPod. In my view, it was the iPod that is responsible for where we are now, the iPhone was a fortunate extension of the functionality.
So what is the new curve and how should Apple prepare for it? Maybe it is AR as Tim seems to think, maybe it is the Apple car or wearables. Maybe something we haven’t even heard of, but whatever it is, Apple’s strategic plan should be preparing for it. In my opinion, the best way to prepare for it is to expand the customer base as broadly and as quickly as possible.
One of the last times that we went through this kind of technological change was the introduction of the automobile. Henry Ford was in a similar position to Apple. He was a master of operations. He relentlessly refined the production process to lower the cost of production. But then he did something that was unheard of. Every dollar that he reduced the cost of building a car lowered the price to the consumer. The price of a Model T went from $850 to $300.
Lowering the price of iPhones dramatically to bring more people into the ecosystem strengthens the ability to move to the next big thing, and Apple must succeed with a next big thing. We have seen the potential of services to grow and endure economic fluctuations. I think that in the long term, reducing ASP to aggressively expand the number of Apple users is not only wise, it is essential.
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Post by hledgard on Feb 22, 2018 9:58:12 GMT -8
Superb post, bud777. Everyone on this board should read it ! !
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Post by Ken on Feb 22, 2018 10:17:42 GMT -8
BIG MISTAKE: I briefly put my AirPods loosely in my jacket pocket and not in my case and lost one.
FOREWARNED IS FOREARMED: Be sure to record and store the serial number that is printed on the inside of your AirPod case. This number is TINY and faint. You must have it in order to buy a replacement for a lost AirPod or case. Your replacement must be mailed from Apple. Takes two business days and costs $75.80 for one pod.
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,432
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Post by chinacat on Feb 22, 2018 10:26:44 GMT -8
... Lowering the price of iPhones dramatically to bring more people into the ecosystem strengthens the ability to move to the next big thing, and Apple must succeed with a next big thing. We have seen the potential of services to grow and endure economic fluctuations. I think that in the long term, reducing ASP to aggressively expand the number of Apple users is not only wise, it is essential. I agree that bringing more people into the ecosystem is a key factor in future success, but I am not sure that reducing the ASP necessarily means lowering prices in general. Apple's current strategy seems to be continuing to offer older iPhones at reduced prices, while maintaining premium pricing for the latest and greatest. The quality of the product enables some people to lengthen their upgrade cycles, and when they ARE ready to do so, the slightly older phones still offer excellent value. So far, the premium pricing of the iPhone X has more than offset increased length of ownership and the availability of cheaper options. Perhaps I will change my mind as the price/demand curve for the iPhone X (and its successors) plays out, but to me it seems like the perfect complement to the "cheaper, older phones" strategy, skimming the cream from those who are willing to pay for the latest and greatest, while maintaining more affordable options for those who are not. The most important factor is brand loyalty, IMHO, and Apple does quite well there, AFAIK. As long as the new customers continue to outnumber the dropouts, then I believe that they are on the right track, but time will tell.
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,432
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Post by chinacat on Feb 22, 2018 12:16:20 GMT -8
Man! This 3 PM thing is getting boring!
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Post by Luckychoices on Feb 22, 2018 14:58:00 GMT -8
Man! This 3 PM thing is getting boring! I very much agree with you, chinacat, but decided long ago that "I can hold AAPL longer than the market can remain irrational". ;-)
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Post by macster on Feb 22, 2018 16:22:42 GMT -8
Man! This 3 PM thing is getting boring! I very much agree with you, chinacat, but decided long ago that "I can hold AAPL longer than the market can remain irrational". ;-) Gamblers, gunslingers, bank hold-up’s and train robbers like the old west only softer but still shooting up the town if you want my opinion. Lol. Group sell calls and players need to make a living and pay off them Condo and boat loans. ;-)
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