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Post by adamthompson32 on Jan 27, 2013 15:47:36 GMT -8
Unclear what effect this will have on AAPL (the news broke a little after market close), but yeah, DOOOOOOOMM - er, helpful. What effect this will have on AAPL? iPad Mini is almost meaningless to AAPL at this point.
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Post by adamthompson32 on Jan 27, 2013 15:50:51 GMT -8
Institutional ownership is up from 66.88 to 67 according to CNBC app. It has been mentioned that retail and hedge funds have been dumping for the last 4 months. Money is coming in but not fast enough yet. We may turn things around faster then we expect. From 66.88% to 67.00%? I hope you're kidding. This is not a material change.
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Post by adamthompson32 on Jan 27, 2013 15:58:22 GMT -8
"Revenue and share price is just a by-product of Apples efforts." This is almost an embarrassing statement. It's like "hi ho hi ho, it's off to work we go...'cause $ is just a by product of having fun doing work". I think TC is doing a great job being pro active for his employees. And giving to charity. And advocating for worker's rights . And getting all the wonderful devices to the retail and on line customers albeit some more efficiently than others. And the Apple employees? They, too , are share holders. My guess is the company will attend to the well being of the stock. And hopefully TC can stop really inane statements about a higher purpose. As for whoever it was here who was talking about the small stuff...iPad covers, white plugs and earpods w/black phones...one only has to go on line to the help sites at Apple to realize a lotta small stuff is ignored by the company. My favorite is the wireless keyboard on a Mac...works great until it doesn't. The universal fix has become a piece of aluminum foil (left over from our tin foil hats , no doubt) to re establish a contact so the damned thing will work again. In Europe the fix is a piece of steel wool...didn't even know that existed in this century, but that works , too. When my keyboard first ceased to function I called Apple Help...they had never heard of the problem. Lots of other glitchy things, too, which I'm sure you have all experienced. But all in all? Great products, great company and like I said, hopefully the needs of stock holders will be addressed in a pro active way very soon. There is no question TC is really really soft when it comes to employee happiness and things of that nature. It's almost embarrassing from the accounts I've read. I actually hope a lot of it isn't true. You actually don't want your retail employees to be TOO happy. They are RETAIL employees. The alternatives for them are pretty damn bad so there's no need to bend over backwards for them. This is just common business sense here. Sure, make them happy, but just barely happier than they'd be elsewhere.
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Post by adamthompson32 on Jan 27, 2013 15:59:30 GMT -8
If manufacturing problems led to 0.5 million less Mac sales (or whatever the number is) and $1 billion less in revenue, then Apple should be able to make them up this quarter after their supply stabilizes. Apple needs to get out there and make this absolutely clear in the media. Maybe then then the AAPL buyers would come back? All the institutions, hedge funds, and short term traders are dumping the stock. Most long term holders aren't buying because they already have the shares. Not enough buyers in the market means the share price drops like a rock. Apple's fundamentals are still good but investor sentiment has suddenly turned negative. They need to do something to turn it around. Mac is mostly irrelevant for Apple. Has been for a long time.
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Post by adamthompson32 on Jan 27, 2013 16:03:27 GMT -8
The h265 video codec finally got settled and approved today. Should allow for HD video at half the data rate of H264. Should see codec software & embedded chips by the end of the year. Perhaps even a missing piece needed for launching a good solid streaming video platform... H264 is way too big for downloading from torrents streaming legally from the iTunes store. I can't believe I'm saying this but here is an article form a CNBC staffer - Jon Fortt - that is basically 99% accurate and positive. www.cnbc.com/id/100405309(Apologies if this was posted earlier today). Fortt has his moments, but he can go off the reservation. I was following him on Twitter while back, but he pissed me off for some reason (imagine that). Good article, and Fortt even mentions Apple's reticence problem. This is a good article. But he doesn't see the weakness in iPhone share that others have reported. I know, I know. I'm a broken record on this. But it's the only record that matters as it relates to AAPL and the record is broken so to speak. I hope this Q iPhone gains share because if iPhone loses share this quarter AAPL is going to fall much harder and much faster than it has already.
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Post by mbeauch on Jan 27, 2013 16:05:57 GMT -8
I am pretty stunned by the recent days. The last couple of days I have realized that Apple really just ignores the market. I always knew SJ did not get a crap, but I held out hope that TC would be more investor friendly. Lets not forget that most of the execs carry few AAPL shares. It is no wonder, they take their money and run. I have also thought about something else and this should be confirmed within the next week or so. In the mad dash for everyone to jump ship, the MM's are accumulating shares. (somebody's gotta buy them) The MM's are the most influential players in the game. I figure there will be a point when they have enough and put a stop to the madness. Don't take this as any kind of optimism, just trying to think of scenarios. The MM's only want to have enough to move the market, they are becoming net long. The question is, is it by design?
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Post by phoebear611 on Jan 27, 2013 16:08:33 GMT -8
Heads up - Yahoo Finance running a story on AAPL - more FUD - won't post a link but if you feel like finding it, the title is: In Asia's trend-setting cities, iPhone fatigue sets in
Here is an excerpt: "IPhones are like Louis Vuitton handbags," said marketing manager Narisara Konglua in Bangkok, who uses a Galaxy SIII. "It's become so commonplace to see people with iPads and iPhones so you lose your cool edge having one."
Here's the insane part - if Samsung is so huge and is ubiquitous in that part of the world...why are these articles saying that everyone has an iPhone. People will say and print anything. Truth is not part of the criteria. The whole thing is frustrating as I'm sure it is for most of you...article after article coming out contradicting the previous one. AAPL still can't catch a break.
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Post by phoebear611 on Jan 27, 2013 16:11:44 GMT -8
I am pretty stunned by the recent days. The last couple of days I have realized that Apple really just ignores the market. I always knew SJ did not get a crap, but I held out hope that TC would be more investor friendly. Lets not forget that most of the execs carry few AAPL shares. It is no wonder, they take their money and run. I have also thought about something else and this should be confirmed within the next week or so. In the mad dash for everyone to jump ship, the MM's are accumulating shares. (somebody's gotta buy them) The MM's are the most influential players in the game. I figure there will be a point when they have enough and put a stop to the madness. Don't take this as any kind of optimism, just trying to think of scenarios. The MM's only want to have enough to move the market, they are becoming net long. The question is, is it by design? I have my fingers crossed at the 420 level...Good luck, MB
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Post by Deleted on Jan 27, 2013 16:23:21 GMT -8
APPLE IS CHANGING HOW VALUATION OF ITSELF AND COMPETITORS IS DETERMINED.
Since discovering, about 20 minutes before Wednesday's conference call began (and about 9 months late) that Apple has changed its guidance practices, I've been poring over conference call transcripts and my own spreadsheets (doing a lot of regression analysis on what I believe I have found).
This is what I have discovered (I will be using these discoveries for all of my future earnings analysis): Firstly, if you don't believe in the value of management's guidance, don't bother reading any further, go back to your lemonade stand, and restrict your investments to mutual funds (I am not going to attempt to broaden your knowledge by answering a myriad of questions you should already know the answers to). Is that harsh? No, its this class of investor that is a major cause of AAPL's wild swings. They don't know why they buy (someone recommended it), and they don't know why they sell (they read a rumor).
When you analyze Apple's performance against its guidance, arbitrarily using the period FQ2/2010 through FQ2/2012 as the "historical" method, and the period FQ3/2012 through FQ1/2013 as the "new" method, you see some surprising results.
Analysis: Average Delta (of all quarters in the period FQ2/2010 through FQ2/2012) Revenue Guidance to Actual Results is 18.22%. If you focus on the quarters that Apple clearly exceeded expectations, the Delta is 22.64%. From that I derived a factor that I believe Apple used to provide guidance of 20%. Andy Zaky performed the same exercise and arrived at a factor of 15%. Andy's factor is lower than mine because he did not eliminate those quarters I believe Apple missed its internal forecasts. Eliminating missed quarters establishes a high/low range which generated my 20% factor used by management.
I did the same analysis for FQ3/2012, FQ4/2012 and FQ1/2013. For this period I find Apple has tightened its guidance by reducing the Revenue factor from 20% to 5%. Apple tightened the factors used in each guidance line item all the way down The amount of reduction varied but was consistent for each quarter in the period.
What does this mean:
It means that expectations based on historical Guidance to Results patterns failed us terribly for FQ3/2012, FQ4/2012 and FQ1/2013. Oppenheimer addressed this disconnect directly during the most recent conference call.
Example: FQ3/2012 Revenue using historical guidance practices resulted in expectations of ~$40 Billion. Apple reported results of $35 Billion. On the surface it appears that Apple missed numbers by a wide margin (14.1%). However, if you used the revised factors Apple did not miss Revenue expectations by nearly as much (1.9%). The changes in Apples guidance factors shows up even more dramatically in EPS. EPS expectations vs results, using the historical factors, produced a miss of 23.3%. Using the revised, tighter factors reduced that miss to 2.4%.
Using the new guidance practice Apple exceeded its internal expectations for both the September and December quarters. I have already posted my estimates for the March quarter using the new methodology, but will be refining it shortly.
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Post by mbeauch on Jan 27, 2013 16:29:48 GMT -8
Phoebes, 420,440, does it really matter? Just a heads up. VXAPL actually went up on Friday on another down day when it should have continued collapsing. I still think 395 is a big target. I looked at the DOW chart, overbought for sure. I do not know how far they can extend it. It has momentum, who knows?
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Mav
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Post by Mav on Jan 27, 2013 16:32:01 GMT -8
FUDsters gonna FUD. You should've been here during the iPod days! We all know how that turned out for iPod. (Unless you want to accentuate King of a Dying World or something...) And what about that "Louis Vuitton", Ms. Marketing Manager from Bangkok? Who are they these days anyway? So played out, so passe, so out of fashion Oh, they're...apparently doing quite well ;D en.wikipedia.org/wiki/Louis_VuittonWho knew "faddish" fashion brands could survive since 1854? Dear Ms. Konglua: Don't quit your day job. When you've heard enough FUD to write your own FUDlines...don't pay overmuch attention to the negativity. This is truly nothing new (see below). Don't worry, the FUDsters will find enough of an audience on their own.
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Post by phoebear611 on Jan 27, 2013 16:37:54 GMT -8
FUDsters gonna FUD. You should've been here during the iPod days! We all know how that turned out for iPod. (Unless you want to accentuate King of a Dying World or something...) And what about that "Louis Vuitton", Ms. Marketing Manager from Bangkok? Who are they these days anyway? So played out, so passe, so out of fashion Oh, they're...apparently doing quite well ;D en.wikipedia.org/wiki/Louis_VuittonWho knew "faddish" fashion brands could survive since 1854? Dear Ms. Konglua: Don't quit your day job. When you've heard enough FUD to write your own FUDlines...don't pay overmuch attention to the negativity. This is truly nothing new (see below). Don't worry, the FUDsters will find enough of an audience on their own. Completely agree - it's just ENOUGH already. They've decimated the stock - let it be - give it a chance to come up for air already. I guess we'll see what the week brings. Good luck to all
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Post by Deleted on Jan 27, 2013 16:41:44 GMT -8
APPLE IS CHANGING HOW VALUATION OF ITSELF AND COMPETITORS IS DETERMINED, PART 2.
Now, Apple did not provide EPS guidance for the upcoming March quarter, this is because I believe management does not want its results to be measured by this one metric (which is the only metric a broad sector of the investing public focuses on). I also believe that management, in statements during the conference call, wants Apple performance to be judged differently that it has been in the past.
WS clearly has a hardware bias in judging the value of products and competitor strength. I think, because of the realigning of revenue categories within Apple's Income Statement, that management wants the performance issue defined by two factors: hardware and software.
In study after study, the iPhone dominates in online usage and app consumption (by both units purchased and dollars spent). Those are usage value added considerations addressed by software, that drives consumer buying decisions. Apple has the largest library of proprietary mobile software applications that consumers are spending their dollars on. More third party developers are writing for iOS and receiving far more compensation than they are from Android.
Lastly, Apple is breaking out China as a separate geographic market. I think the issue here is that North America's, Europe's and Asia's (excepting China) market for premium handsets is bumping its head against a carrier technology ceiling. I'm referring to the rollout of LTE networks. LTE enhances the value of software and apps, without LTE the value of higher performing handsets are diminished in relation to lesser handsets not requiring LTE. This creates an impression that consumer prefer the lower priced handsets, resulting in market share growth in that sector. Certainly there is a segment that can't afford a premium handset. First blush is that Apple should release a lower cost iPhone for these emerging, non-LTE markets. But that low price market does not buy experience enhancing softwares/apps, an area that Apple clearly dominates and makes the iPhone more attractive (aspire to). The worldwide rollout of LTE (which makes those software products more usable) is in its infancy. As that rollout progresses, the market for premium handsets grows.
I'm going to stop here, because my brain is almost fried.
Bottom line is that I believe WS will set more reasonable expectations, and this will reset investor confidence. Whereas I felt Apple required 2 or more consecutive quarters in which it exceeded expectation to "redeem" itself, I now think April's report, combined with the history of July's, October's and January's reports (when looked at under management's revised guidance practices) will be enough.
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Post by Deleted on Jan 27, 2013 16:49:17 GMT -8
Unclear what effect this will have on AAPL (the news broke a little after market close), but yeah, DOOOOOOOMM - er, helpful. What effect this will have on AAPL? iPad Mini is almost meaningless to AAPL at this point. FINVIZ continues to show 66.88%. I wouldn't expect a material change in that metric until after the end of the month/quarter (when ownership reports are filed). I'm looking for the changes that show up in February and April. But a change of .12% so shortly after Apple's earnings report/conference call is encouraging.
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Post by fas550 on Jan 27, 2013 16:54:50 GMT -8
Here we Fing go again. As soon as things calm down we get shit like this with a headline like this " In Asia's Trend-Setting Cities, iPhone Fatigue Sets In". www.cnbc.com/id/100410770. Key takeaway sentence: "Apple is still viewed as a prestigious brand, but there are just so many other cool smartphones out there now that the competition is just much stiffer," said Tom Clayton, chief executive of Singapore-based Bubble Motion , which develops a popular regional social media app called Bubbly" Who the F is Bubbly? This is just relentless. I am so Fing pissed.
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Post by fas550 on Jan 27, 2013 17:01:22 GMT -8
APPLE IS CHANGING HOW VALUATION OF ITSELF AND COMPETITORS IS DETERMINED, PART 2. Now, Apple did not provide EPS guidance for the upcoming March quarter, this is because I believe management does not want its results to be measured by this one metric . Give me a break. Apple and any other company is going to to be judged be the top line and/or the bottom line. Anything else is just noise. What a bunch of BS.
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Post by adamthompson32 on Jan 27, 2013 17:07:18 GMT -8
Using the new guidance practice Apple exceeded its internal expectations for both the September and December quarters. I have already posted my estimates for the March quarter using the new methodology, but will be refining it shortly. Apple beat its internal numbers the last two quarters and the stock went down? Impossible!
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Post by adamthompson32 on Jan 27, 2013 17:09:18 GMT -8
What effect this will have on AAPL? iPad Mini is almost meaningless to AAPL at this point. FINVIZ continues to show 66.88%. I wouldn't expect a material change in that metric until after the end of the month/quarter (when ownership reports are filed). I'm looking for the changes that show up in February and April. But a change of .12% so shortly after Apple's earnings report/conference call is encouraging. I hope you're kidding. You realize that a 12 basis point change is basically no change, right?
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Post by mbeauch on Jan 27, 2013 17:14:36 GMT -8
APPLE IS CHANGING HOW VALUATION OF ITSELF AND COMPETITORS IS DETERMINED, PART 2. Now, Apple did not provide EPS guidance for the upcoming March quarter, this is because I believe management does not want its results to be measured by this one metric . Give me a break. Apple and any other company is going to to be judged be the top line and/or the bottom line. Anything else is just noise. What a bunch of BS. +100 I will say, the arrogance of Apple to think it could change how the market values a company would not surprise me. They do not call it the bottom line for nothing. The single most important guide there is. We have been crushed because of the margins. Q1 at 44/Q2 at 47. The Q2 guide really sucks because the margins should go up, why the lower guide?
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Mav
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Post by Mav on Jan 27, 2013 17:29:26 GMT -8
How many times must I go over this? (Answer choices: As many times as I have to, ad infinitum, until I get tired of it.)
Once again: Question the shift, the timing, the optics, but Apple did not "drop" EPS guidance. All you need to do is solve for share count. Every other metric you need to get the net profit range (earnings, just not per share) has been provided.
Apparently, iPhone 4S was a product of such astronomical margin that we shall never see again. (Even though the basic structure - iPhone 4 - is still one of Apple's all-times greats in build quality, if not practicality.)
MB, half of the "why" for massively lowered gross margins is simply cost structure. Namely, iPhone 5 having an iPhone 4-type cost structure to start, but on a much, much bigger scale. The other smaller contributor is iPad mini, which Oppenheimer has stated at least twice to be significantly under the corporate average gross margin.
Since rev mix of iPhone is a few points higher (~56%) than Q1 2012 (~52%), you have your major culprit.
But near-1000 basis point drop Oppenheimer is suggesting on the low end? That's probably a smokescreen.
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Post by artman1033 on Jan 27, 2013 17:29:49 GMT -8
Gregg: Thank you for your last two posts. I FEAR you are correct about Apple management. ( I have ALWAYS said: Apple management does NOT care about the short term price of AAPL) But your supposition may be true and is almost frightening. here is the Friday close for this weeks weeklys. It will be interesting to watch the $425 AAPL Puts.
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Mav
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Post by Mav on Jan 27, 2013 17:34:35 GMT -8
Oh hey, Samsung called two days ago with some very interesting news: www.ft.com/cms/s/0/6da7f0aa-6691-11e2-919b-00144feab49a.html#axzz2JEJ4koHYYou can Google-access it: "Samsung warns of smartphones slowdown" And we have some BIG winners here (the entire article's a good read): None of this matters though. Not Samsung's CapEx. Not the change in operating profit trend. Certainly not its progress or lack thereof in China. No, because Apple is still DOOMED.
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JDSoCal
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Post by JDSoCal on Jan 27, 2013 17:37:09 GMT -8
H264 is way too big for downloading from torrents streaming legally from the iTunes store. Fortt has his moments, but he can go off the reservation. I was following him on Twitter while back, but he pissed me off for some reason (imagine that). Good article, and Fortt even mentions Apple's reticence problem. This is a good article. But he doesn't see the weakness in iPhone share that others have reported. I know, I know. I'm a broken record on this. A broken record that skips back the start before it plays the part where it offers some proof that iPhone's share is stagnating. If you're an investor, you didn't lose or win anything because of price fluctuation. Your claim to the company, Apple Inc, remains the same. If you're a trader, you're not a partial owner, are trading the ticker: AAPL and pitting against other traders. Tell that to people with 4 figures of AAPL common shares on margin.
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JDSoCal
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Post by JDSoCal on Jan 27, 2013 17:52:11 GMT -8
I have a design business and my mantra to my staff has always been that we provide good design first and because we do that we expect to be paid well. If we started out with the premises that our aim was to make a lot of money then I don't believe I would have succeeded. There are lots of people out there that can design and for me to be successful means that I have to differentiate from the rest of the market and the way I choose to do that is by providing the best service I can, consistently. If my main aim was to make as much money as possible then I would probably compromise on service and design quality. Apple stands alone in its sector, where all others commoditise their products and race to the bottom in the margin squeeze. Apple must stay focused on what it is that they do best and that is to provide their customers with the best experience they can. And revenue and share price is the resultant by product of that. Yes, it is true that at the moment there is a disconnect - I too have lost so much in the last few months, both real and paper value. But Apple is not totally responsible for AAPLs woes. Over the long run AAPL will be fine. No offense, but you don't run a Fortune 500 publicly-traded company with a fiduciary duty to shareholders. False dichotomy is false. Apple can make awesome products and chew gum/concern itself with shareholders at the same time. Jony Ive's job is to make great products. As the lone inside director on Apple's board, Tim Cook's job is to make Apple a profitable company and increase shareholder wealth (i.e, enrich my life). And when Apple streams an earnings call on its Investor Relations Web page, analysts and investors want to hear some confidence in Apple as an investment coming from Cook, not just that they will continue to make cool stuff. Instead, Cook got really quiet when Huberty asked that question about the stock drop. Instead of this "we are constantly assessing blah blah blah" by Oppenheimer, listeners wanted to hear some actual action being taken, or at the very least some new words of concern for shareholders than just the usual bullshit. Cook needs to do more than just talk about great products. He needs to tie that in to why it makes Apple a great investment. As much as I dislike Jim Cramer, I'd like to see Cook go on his show (and others) and evangelize why Apple and AAPL are an awesome bet, like other CEO's do. I mean seriously, "don't bet against us" is the best rhetorical flourish we've gotten from Cook? Repeat after me: "The purpose of a publicly-held corporation is to make profits and increase shareholder wealth."
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Post by phoebear611 on Jan 27, 2013 18:21:38 GMT -8
I have a design business and my mantra to my staff has always been that we provide good design first and because we do that we expect to be paid well. If we started out with the premises that our aim was to make a lot of money then I don't believe I would have succeeded. There are lots of people out there that can design and for me to be successful means that I have to differentiate from the rest of the market and the way I choose to do that is by providing the best service I can, consistently. If my main aim was to make as much money as possible then I would probably compromise on service and design quality. Apple stands alone in its sector, where all others commoditise their products and race to the bottom in the margin squeeze. Apple must stay focused on what it is that they do best and that is to provide their customers with the best experience they can. And revenue and share price is the resultant by product of that. Yes, it is true that at the moment there is a disconnect - I too have lost so much in the last few months, both real and paper value. But Apple is not totally responsible for AAPLs woes. Over the long run AAPL will be fine. No offense, but you don't run a Fortune 500 publicly-traded company with a fiduciary duty to shareholders. False dichotomy is false. Apple can make awesome products and chew gum/concern itself with shareholders at the same time. Jony Ive's job is to make great products. As the lone inside director on Apple's board, Tim Cook's job is to make Apple a profitable company and increase shareholder wealth (i.e, enrich my life). And when Apple streams an earnings call on its Investor Relations Web page, analysts and investors want to hear some confidence in Apple as an investment coming from Cook, not just that they will continue to make cool stuff. Instead, Cook got really quiet when Huberty asked that question about the stock drop. Instead of this "we are constantly assessing blah blah blah" by Oppenheimer, listeners wanted to hear some actual action being taken, or at the very least some new words of concern for shareholders than just the usual bullshit. Cook needs to do more than just talk about great products. He needs to tie that in to why it makes Apple a great investment. As much as I dislike Jim Cramer, I'd like to see Cook go on his show (and others) and evangelize why Apple and AAPL are an awesome bet, like other CEO's do. I mean seriously, "don't bet against us" is the best rhetorical flourish we've gotten from Cook? Repeat after me" The purpose of a publicly-held corporation s to make profits and increase shareholder wealth." +1000
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JDSoCal
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Post by JDSoCal on Jan 27, 2013 18:25:24 GMT -8
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Post by adamthompson32 on Jan 27, 2013 18:35:33 GMT -8
This is a good article. But he doesn't see the weakness in iPhone share that others have reported. I know, I know. I'm a broken record on this. A broken record that skips back the start before it plays the part where it offers some proof that iPhone's share is stagnating. If you're an investor, you didn't lose or win anything because of price fluctuation. Your claim to the company, Apple Inc, remains the same. If you're a trader, you're not a partial owner, are trading the ticker: AAPL and pitting against other traders. Tell that to people with 4 figures of AAPL common shares on margin. Proof that Apple's share is stagnating? Did you listen to the call? TC himself said iPhone share was flat YoY. I'll take his word for it.
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Post by adamthompson32 on Jan 27, 2013 18:38:16 GMT -8
I have a design business and my mantra to my staff has always been that we provide good design first and because we do that we expect to be paid well. If we started out with the premises that our aim was to make a lot of money then I don't believe I would have succeeded. There are lots of people out there that can design and for me to be successful means that I have to differentiate from the rest of the market and the way I choose to do that is by providing the best service I can, consistently. If my main aim was to make as much money as possible then I would probably compromise on service and design quality. Apple stands alone in its sector, where all others commoditise their products and race to the bottom in the margin squeeze. Apple must stay focused on what it is that they do best and that is to provide their customers with the best experience they can. And revenue and share price is the resultant by product of that. Yes, it is true that at the moment there is a disconnect - I too have lost so much in the last few months, both real and paper value. But Apple is not totally responsible for AAPLs woes. Over the long run AAPL will be fine. No offense, but you don't run a Fortune 500 publicly-traded company with a fiduciary duty to shareholders. False dichotomy is false. Apple can make awesome products and chew gum/concern itself with shareholders at the same time. Jony Ive's job is to make great products. As the lone inside director on Apple's board, Tim Cook's job is to make Apple a profitable company and increase shareholder wealth (i.e, enrich my life). And when Apple streams an earnings call on its Investor Relations Web page, analysts and investors want to hear some confidence in Apple as an investment coming from Cook, not just that they will continue to make cool stuff. Instead, Cook got really quiet when Huberty asked that question about the stock drop. Instead of this "we are constantly assessing blah blah blah" by Oppenheimer, listeners wanted to hear some actual action being taken, or at the very least some new words of concern for shareholders than just the usual bullshit. Cook needs to do more than just talk about great products. He needs to tie that in to why it makes Apple a great investment. As much as I dislike Jim Cramer, I'd like to see Cook go on his show (and others) and evangelize why Apple and AAPL are an awesome bet, like other CEO's do. I mean seriously, "don't bet against us" is the best rhetorical flourish we've gotten from Cook? Repeat after me: "The purpose of a publicly-held corporation is to make profits and increase shareholder wealth." Couldn't agree more. TC's intro on the call was embarrassing. Seriously embarrassing. Made me feel like I'm invested in a company with management that has no clue about how to manage a public company. It's the first time I was embarrassed to have ever recommended AAPL to anyone. TC was that bad on the call.
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Post by adamthompson32 on Jan 27, 2013 18:40:41 GMT -8
APPLE IS CHANGING HOW VALUATION OF ITSELF AND COMPETITORS IS DETERMINED, PART 2. Now, Apple did not provide EPS guidance for the upcoming March quarter, this is because I believe management does not want its results to be measured by this one metric (which is the only metric a broad sector of the investing public focuses on). I also believe that management, in statements during the conference call, wants Apple performance to be judged differently that it has been in the past. WS clearly has a hardware bias in judging the value of products and competitor strength. I think, because of the realigning of revenue categories within Apple's Income Statement, that management wants the performance issue defined by two factors: hardware and software. In study after study, the iPhone dominates in online usage and app consumption (by both units purchased and dollars spent). Those are usage value added considerations addressed by software, that drives consumer buying decisions. Apple has the largest library of proprietary mobile software applications that consumers are spending their dollars on. More third party developers are writing for iOS and receiving far more compensation than they are from Android. Lastly, Apple is breaking out China as a separate geographic market. I think the issue here is that North America's, Europe's and Asia's (excepting China) market for premium handsets is bumping its head against a carrier technology ceiling. I'm referring to the rollout of LTE networks. LTE enhances the value of software and apps, without LTE the value of higher performing handsets are diminished in relation to lesser handsets not requiring LTE. This creates an impression that consumer prefer the lower priced handsets, resulting in market share growth in that sector. Certainly there is a segment that can't afford a premium handset. First blush is that Apple should release a lower cost iPhone for these emerging, non-LTE markets. But that low price market does not buy experience enhancing softwares/apps, an area that Apple clearly dominates and makes the iPhone more attractive (aspire to). The worldwide rollout of LTE (which makes those software products more usable) is in its infancy. As that rollout progresses, the market for premium handsets grows. I'm going to stop here, because my brain is almost fried. Bottom line is that I believe WS will set more reasonable expectations, and this will reset investor confidence. Whereas I felt Apple required 2 or more consecutive quarters in which it exceeded expectation to "redeem" itself, I now think April's report, combined with the history of July's, October's and January's reports (when looked at under management's revised guidance practices) will be enough. I think LTE is basically meaningless. Most people don't know or care what it is.
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Mav
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Post by Mav on Jan 27, 2013 18:51:38 GMT -8
Nice article, JD.
What a perfect setup. Android in China is totally fragmented (or, utterly "forked" - get it); the strongest of the name brands is friggin' Lenovo trend-wise; Apple has iPhones that China Mobile desperately wants, despite the admirable tough front it's putting up in the face of being saddled with "homegrown" proprietary data standards.
We already see that Apple resonates with Greater China - the big test is Greater China YOY growth in Q2.
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