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Post by Deleted on Dec 28, 2013 12:18:54 GMT -8
But is it more to do with 5S being better-appreciated, Touch ID and other features getting attention while a lot of the Android world is being seen as more gimmicky, nothing really new aside from ridiculously unwieldy size, more malware and the occasional OS update Yes. It's called differentiation, and copiers can only differentiate as fast as the suppliers of their technology are able to advance. Critical suppliers to other handset manufacturers: ProcessorsIntel Operating SystemsGoogle Microsoft Fingerprint IDWho knows Maps/Location TechnologyGoogle Microsoft Manufacturing Technology/ProcessesMyriad of subcontractors In each of these examples, Apple controls its destiny, while the destiny of all other handset manufacturers are in the hands of the above.
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Post by Deleted on Dec 28, 2013 12:19:12 GMT -8
iPads are the bigger wild card for me. Not much for unit sales growth (10%, me thinks), but higher ASP ($490 - $500) will be the difference. If we get an extra Xmas gift from Tim in the way of revised guidance, it will be due to iPads.
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Mav
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Post by Mav on Dec 28, 2013 12:26:55 GMT -8
Well, we totally agree on the wild card. 10% just seems so "lousy" though, doesn't it? I never thought I'd see quarters of iPad unit growth "lagging" iPhone this soon. And iPad, the Post PC harbinger hitting a growth wall sooner than iPod?
I don't think it's too crazy to see iPad growing another 20% YOY for FY '14 even without much of an assist for China Mobile (WITH China Mobile, a lot more is possible). Unless there's real supply constraints though, "low" growth in the December quarter would be a little concerning. Not so much for iPad, but for the tablet market in general.
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Mav
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Post by Mav on Dec 28, 2013 12:29:02 GMT -8
Processors: Intel? You mean Qualcomm, NVIDIA, and Samsung (...if they actually use Exynos a bunch in their own products...), right?
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Post by Deleted on Dec 28, 2013 12:30:18 GMT -8
Yeah, 62M iPhones is probably too high. We might well need a guidance revision from Oppenheimer for that to be possible. iPad is the bigger question for me. Is the iPad category really gonna put in as "poor" a showing as my WAG estimates suggest? Subject to change, total non-expert etc. etc. but a "high end" scenario I have puts iPad at something like 15% YOY growth. I mean, really? iPad mini retina doesn't look to be the limiting factor, supply improved much more quickly than it did for iPad mini 1. So...is iPad mini retina not as popular? Is iPad Air more constrained? Will ASP sharply reverse at the "expense" of less units than we're thinking? Is the tablet market around Apple's price range just not as fast growing as the world thought it was? Mav, while I'm in agreement with your YoY iPad growth rate, none of your other statements/questions matter. Management has told us, with a nominal margin of error built in, what they are going to do. In discussing TC's compensation, management revealed that Apple exceeded F2012s internal target by a mere $910 million. I trust management's ability to accurately forecast demand, and its resultant Guidance. How we get there is inconsequential, as long as we do.
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Post by Deleted on Dec 28, 2013 12:42:01 GMT -8
Well, we totally agree on the wild card. 10% just seems so "lousy" though, doesn't it? I never thought I'd see quarters of iPad unit growth "lagging" iPhone this soon. And iPad, the Post PC harbinger hitting a growth wall sooner than iPod? You have to put each product's addressable market into perspective. Total worldwide market for all computers is about 350 million units. iPad owns about a quarter of that, while the worldwide handset market is about 1.2 billion units, and growing. iPad is nearing saturation due to the size of its addressable market. The iPhone is not. As an aside I ignore market share reports because of the products IDC et al include in the category. Easily 60% of the products IDC includes as tablets, are products that are not designed (or meant) to replace computers.
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Post by Deleted on Dec 28, 2013 12:42:44 GMT -8
Processors: Intel? You mean Qualcomm, NVIDIA, and Samsung (...if they actually use Exynos a bunch in their own products...), right? My point was processor design. Of the firms you listed only Intel and Samsung design and manufacture. Samsung has been a long time contract manufacturer, with Intel just recently doing the same. As design studios, Apple is able to work with Qualcomm and Nvidia, to incorporate and optimize their designs into Apple designed chip sets, thus making Qualcomm and Nvidia technology proprietary to Apple.
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Post by Red Shirted Ensign on Dec 28, 2013 13:26:17 GMT -8
I had an aggressive diluted share count.....based on the info we've gained in the past 24 hours I think 898-900 is closer to what we will hear. But I'm still gonna be aggressive. I bid.....897 million!
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Post by nagrani on Dec 28, 2013 13:27:33 GMT -8
Gregg - welcome back. I thought we lost you but its nice to see you post multiple useless posts again - JK. Good to see u.
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Post by mace on Dec 28, 2013 13:33:11 GMT -8
Gregg - welcome back. I thought we lost you but its nice to see you post multiple useless posts again - JK. Good to see u. JK = JabKing?
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Mav
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Post by Mav on Dec 28, 2013 13:36:02 GMT -8
Gregg, real quickly, I'm gonna agree to disagree with you on the "none of your other statements/questions matter" part.
Are we on the same page on processor design? At a high level, ARM designs chips, sure, but it's still up to Qualcomm and Samsung to fab 'em and to put that design into actual working silicon. (Not counting TSMC or GlobalFoundries, since they seem to be "pure contract manufacturers" in this space while Qualcomm at least has SoC branding and all that.)
Apple works with Qualcomm but that's cellular radio stuff. As for NVIDIA...uh...are we still talking iOS?
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Post by rob_london on Dec 28, 2013 13:44:19 GMT -8
Yeah, 62M iPhones is probably too high. We might well need a guidance revision from Oppenheimer for that to be possible. iPad is the bigger question for me. Is the iPad category really gonna put in as "poor" a showing as my WAG estimates suggest? Subject to change, total non-expert etc. etc. but a "high end" scenario I have puts iPad at something like 15% YOY growth. I mean, really? iPad mini retina doesn't look to be the limiting factor, supply improved much more quickly than it did for iPad mini 1. So...is iPad mini retina not as popular? Is iPad Air more constrained? Will ASP sharply reverse at the "expense" of less units than we're thinking? Is the tablet market around Apple's price range just not as fast growing as the world thought it was? Mav, while I'm in agreement with your YoY iPad growth rate, none of your other statements/questions matter. Management has told us, with a nominal margin of error built in, what they are going to do. In discussing TC's compensation, management revealed that Apple exceeded F2012s internal target by a mere $910 million. I trust management's ability to accurately forecast demand, and its resultant Guidance. How we get there is inconsequential, as long as we do. It is interesting to look at the forecast data for the past five years to compare Apple management's target goals and actual performance. During this five year period, 2013 was the most accurately forecast for both revenue and operating income.
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Mav
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Post by Mav on Dec 28, 2013 13:52:19 GMT -8
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JDSoCal
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Post by JDSoCal on Dec 28, 2013 14:43:31 GMT -8
But is it more to do with 5S being better-appreciated, Touch ID and other features getting attention while a lot of the Android world is being seen as more gimmicky, nothing really new aside from ridiculously unwieldy size, more malware and the occasional OS update Yes. It's called differentiation, and copiers can only differentiate as fast as the suppliers of their technology are able to advance. Critical suppliers to other handset manufacturers: ProcessorsIntel Operating SystemsGoogle Microsoft Fingerprint IDWho knows Maps/Location TechnologyGoogle Microsoft Manufacturing Technology/ProcessesMyriad of subcontractors In each of these examples, Apple controls its destiny, while the destiny of all other handset manufacturers are in the hands of the above. Any discussion of this without mentioning that the Chief Copier is launching its own OS (Tizen) is incomplete. And of course Samesung is working hard on developing its own SoC's, especially after the Snapdragon debacle, and Apple's 64 bit shock. Lee Kun-hee goes to sleep at night dreaming of being Tim Cook. That's why Samsung's days using Android as its primary OS are numbered...
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Post by redinaustin on Dec 28, 2013 15:19:36 GMT -8
PED: "...Apple is playing in the big leagues and that it knows what it's doing better than any tweet-writing corporate raider who's just trying to increase the value of shares he's owned for less than a year." tech.fortune.cnn.com/category/apple-2-0/
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Post by Deleted on Dec 28, 2013 16:20:14 GMT -8
The gap between basic and diluted shares has narrowed considerably over the past few quarters. As of fiscal Q4 2013 it was just about 5M. Yep, I'm only extrapolating from a single data point, but my WAG is diluted shares outstanding are a bit under 900M now. I'll probably take a flyer and use 898M as my diluted share denominator. If I am correct, and one of the primary reasons for the buyback was to enable Apple to buy existing employee grants at a higher rate than market (see Apple's discussion of where buybacks occurred and at average prices), then the gap between Basic and Diluted share count would shrink, as Apple's true focus is buying employee grants (vs open market). Your 898M estimate has me tingling all over. I posted it here, or at Braeburn, not sure which, but I did an analysis of share buyback numbers based on remaining buyback funds, various share ASP's spread over 4 quarters, with that number reduced by the average quarterly share creep since F2005. Deducting that result (12.5 million) from reported share count at the end of the September quarter I get 896.631 million shares end of December quarter.
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Post by Deleted on Dec 28, 2013 16:32:23 GMT -8
Some even characterized FY 13 as a terrible year, which I think is absurd. I'm talking Apple, Inc., not AAPL How would you characterize performance that produced -11.25% Net Income growth (first negative since FY2005, when I started analyzing Apple's results)? I'm not talking minimal or flat growth here, I'm talking negative growth, serious negative growth.
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Post by Deleted on Dec 28, 2013 16:44:33 GMT -8
My point is, it will be unlikely for Apple to grow iPhone unit sales in this Dec quarter like it did a year ago. If it matched last years % increase YOY in the Dec. quarter, it would need 62M iPhones this time Just as it was very unlikely that iPhone units sold would increase during FQ1/2013, as it did in FQ1/2012 (128%). Percentage growth is an important metric, but not the only one. Actual unit growth will be about 10 million units of the highest ASP handsets in the industry. That's without China Mobile.
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Post by Deleted on Dec 28, 2013 16:50:14 GMT -8
Any discussion of this without mentioning that the Chief Copier is launching its own OS (Tizen) is incomplete. And of course Samesung is working hard on developing its own SoC's, especially after the Snapdragon debacle, and Apple's 64 bit shock. Lee Kun-hee goes to sleep at night dreaming of being Tim Cook. That's why Samsung's days using Android as its primary OS are numbered... I meant for my list to be illustrative, not definitive. Focusing on who I left out misses the point that nobody controls the technological advancement of their respective products as does Apple. Ergo, everyone else is copying Apple. The best copiers can do is #2.
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Post by Deleted on Dec 28, 2013 16:52:10 GMT -8
Some even characterized FY 13 as a terrible year, which I think is absurd. I'm talking Apple, Inc., not AAPL How would you characterize performance that produced -11.25% Net Income growth (first negative since FY2005, when I started analyzing Apple's results)? I'm not talking minimal or flat growth here, I'm talking negative growth, serious negative growth. That's margin, Gregg, not sales. If you trust WS to value according to fundamentals, please explain AMZN for us.
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Post by Deleted on Dec 28, 2013 16:53:01 GMT -8
PED: "...Apple is playing in the big leagues and that it knows what it's doing better than any tweet-writing corporate raider who's just trying to increase the value of shares he's owned for less than a year." tech.fortune.cnn.com/category/apple-2-0/You could extend PED's statement to include bloggers/posters that feel they know better than TC, PO, Apple BoD, Apple Marketing, etc, etc.
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Mav
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Post by Mav on Dec 28, 2013 16:54:22 GMT -8
Oh sure, it's a horrible year if you leave out how this was a (wish I'd known sooner) premeditated strategy by Apple to stay competitive.
Maybe the 47% iPhone 4S margin sugar rush wasn't intentional, but iPhone 5, iPad mini and the "tanking" gross margins to around 36%? Cold-blooded, not-a-blink move from Apple. Not communicated to shareholders/WS but doesn't change the strategy.
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Post by Deleted on Dec 28, 2013 17:05:39 GMT -8
How would you characterize performance that produced -11.25% Net Income growth (first negative since FY2005, when I started analyzing Apple's results)? I'm not talking minimal or flat growth here, I'm talking negative growth, serious negative growth. That margin, Gregg. Not sales. If you trust the WS to value according to fundamentals, please explain AMZN for us. I think we are missing the point with Amazon. Profits invite competitors. No profits deter competition. Amazon is sacrificing profits to build the preeminent online retail ecosystem. No startup has the resources to duplicate Amazon's breadth of product offerings and services. Without profits they can't generate the cash flow required to do so. At some point in the future, Amazon is going to raise prices a few percentage points, and charge for (or stop offering) current free services. When that happens profits are going to flow like water through a breached dam. In the meantime Amazon grows customers (its most important objective at this time) and revenue. As long as Amazon continues as it has, with regard to customers and revenue, WS will value Amazon on what it will be worth when it makes that transition.
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Post by Deleted on Dec 28, 2013 17:11:08 GMT -8
How would you characterize performance that produced -11.25% Net Income growth (first negative since FY2005, when I started analyzing Apple's results)? I'm not talking minimal or flat growth here, I'm talking negative growth, serious negative growth. That's margin, Gregg, not sales. Net Income is a Firm's life blood. Its what drives EPS (a favorite metric of many here).
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Mav
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Post by Mav on Dec 28, 2013 17:24:18 GMT -8
If you trust WS to value according to fundamentals, please explain AMZN for us. Can you even make a AAPL vs. AMZN P/E multiple coiled spring graph that doesn't look like it's comparing the height of a ham sandwich vs. a skyscraper? ;D
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Post by Deleted on Dec 28, 2013 18:10:15 GMT -8
That's margin, Gregg, not sales. Net Income is a Firm's life blood. Its what drives EPS (a favorite metric of many here). Tell that to WS. It takes 20 days for Apple to make in earnings what it has taken Amazon 19 years. You can't place faith in WS to value Apple and not in Amazon. And since when is $37B in net income for Apple's FY 2013 considered a "failure." Finally, Apple reported an increase in Sales for FY 2013, if that's important (seems to be for AMZN).
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Post by Deleted on Dec 28, 2013 18:11:38 GMT -8
If you trust WS to value according to fundamentals, please explain AMZN for us. Can you even make a AAPL vs. AMZN P/E multiple coiled spring graph that doesn't look like it's comparing the height of a ham sandwich vs. a skyscraper? ;D Now that AMZN has a P/E (hey, it's got EARNINGs), I might try that
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Post by Red Shirted Ensign on Dec 28, 2013 18:18:40 GMT -8
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Post by sponge on Dec 28, 2013 18:45:17 GMT -8
It was a funny commercial. My 12 year old liked it and my wife thought it was very creepy. When I was skiing in Utah, all I saw were iPhones and GoPros on the slopes. No way that watch can take those pictures and videos.
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Post by sponge on Dec 28, 2013 18:48:10 GMT -8
That margin, Gregg. Not sales. If you trust the WS to value according to fundamentals, please explain AMZN for us. I think we are missing the point with Amazon. Profits invite competitors. No profits deter competition. Amazon is sacrificing profits to build the preeminent online retail ecosystem. No startup has the resources to duplicate Amazon's breadth of product offerings and services. Without profits they can't generate the cash flow required to do so. At some point in the future, Amazon is going to raise prices a few percentage points, and charge for (or stop offering) current free services. When that happens profits are going to flow like water through a breached dam. In the meantime Amazon grows customers (its most important objective at this time) and revenue. As long as Amazon continues as it has, with regard to customers and revenue, WS will value Amazon on what it will be worth when it makes that transition. That sounds the Google/Android strategy. Some day profits will flow. The moment the public sees an increase in prices, they will leave Amazon in droves. There is nothing exciting about ordering on line. The internet has been doing that for a long time.
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