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Post by Red Shirted Ensign on Jan 5, 2013 16:00:08 GMT -8
You are spot on, Mav. I keep questioning the demand part of the iPhone question. Was it really there, to the extent believed..even taken by faith by many of us.
Horace and others have reminded us of the huge Capex commitment now rumbling in the Apple production machine. In such a mammoth transition quarter could that Capex be the proof we all need? It's hiding in plain sight.
Why would mainland China have the massive first weekend of sales it had if demand was not explosive....because Hong Kong had already rolled out weeks before and the grey market is so well established by now it could be expected to take the frosting off the China cake. And yet, huge first weekend sales in December.
So, production is massive, now efficient, demand remains strong....52-53 million iPhones gives us the quarter.
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Mav
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Post by Mav on Jan 5, 2013 16:15:57 GMT -8
Demand is there, but "smartphone" doesn't mean what it used to. Or, maybe it does, but it encompasses a wide variety of phones that many users today would find marginally acceptable or worse. Apple does have most of the bases covered (other than prepaid), which is a big help.
Apple's iPhone business is fine. Unit sales grew over 73% YOY (fiscal) (72.29M >> 125.04M, thank you Interwebs). We're just dealing with a new sales curve per year, and it's tricky to adjust to particularly with a redesigned iPhone. Demand might be more sustained than the 4S, but the sales curve won't be anything like iPhone 4. And market saturation can't be denied. Frustrating.
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Post by Tetrachloride on Jan 5, 2013 16:29:08 GMT -8
The Capex issue was hypothesized in November to largely be a financing of Sharp Electronics. Apple is ensuring "something" will be delivered to assemblers. Horace updates us in December. Link: Asymco Dec 12
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Post by Tetrachloride on Jan 5, 2013 16:56:51 GMT -8
The math is tenuous. Gregg and Mav have volunteered to cross first. The view is great. Don't look down.iPad activations in December examined with the Flurry data again. I would take grains of salt along each step of the math. That said, even a third of 25 million is good. Seeking Alpha
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Post by Mav on Jan 5, 2013 18:02:54 GMT -8
Sorry Cl4, I have trouble following when you get a little abstract And I didn't volunteer for anything! Hey! re: Sharp, I get that angle, but at the same time, it's also a kind of supply agreement if you get what I mean. So it's not necessarily much different than CapEx for dedicated capacity/supply/capital build-out to facilitate supply.
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Post by Tetrachloride on Jan 5, 2013 18:10:42 GMT -8
The Seeking Alpha thread is saying that iPad activations could be as high as 25 M in December.
The tenuous math involves depending on the "first tweet ratio" of iPads vs the others. iPads were certainly oversampled in this Flurry activations by a lot. Nevertheless....
Its a long weekend of posts. I expect heavy doses of tech news in the next 3 days.
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Mav
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Post by Mav on Jan 5, 2013 18:37:37 GMT -8
Yeah. Definitely others going first on that one. I'll stick to YOY growth, it's all I think I kind of know.
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Post by Tetrachloride on Jan 5, 2013 20:20:26 GMT -8
Guidance going forward for Q2. First estimate of the New Year: $ 40 B and $ 9.00, Revenue and EPS, or higher
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Post by prazan on Jan 5, 2013 20:25:39 GMT -8
Mav, I just started reading the thread from page one, and caught your attempt to carve a detailed projection based on guidance. Really smart thing to do, something it never occurred to me to try. Maybe the best way to begin making projections. If the numbers are unbelievable, well, that's a good start to seeing where else the numbers might lead.
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Post by Mav on Jan 5, 2013 20:41:53 GMT -8
Glad you caught it. It was so damn TL;DR, it was hard not to. I've been at this for at least 3 quarters now (started in that "other" forum), I think. If nothing else, it forces me to generate a reasonable first estimate for myself. Working from Oppenheimer's base numbers is a more convenient way to clean-sheet estimates, because it's as guaranteed as it gets in life that Oppenheimer won't guide OVER actual results. ;D
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Post by mbeauch on Jan 5, 2013 20:47:11 GMT -8
MB - so you haven't gone Retina yet for iPad? It's a sharpness revelation. I'd say wait and see if iPad mini Retina might work for you too (I figure it should be on the way) I agree that for "sit down" tasks iPad regular is king. But it's the on-the-go factor that's seriously making me lean towards iPad mini retina rather than iPad 5/6. My iPad 3 is just a little too heavy to comfortably use with a case on, though it shines as a travel computer (on a table). Mav, I have an ipad 3, Tammy has the 1 and her son the 2. What I was saying is that I will get Tammy a retina mini for Christmas this year.
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Post by mbeauch on Jan 5, 2013 20:52:09 GMT -8
Guidance going forward for Q2. First estimate of the New Year: $ 40 B and $ 9.00, Revenue and EPS, or higher That would be dreadful guidance, kind of like Q1. Actually worse. $9 to a $12.30 compare. yikes. Anything less than $10 will make me very uneasy. The GM's should move up. Not to last years ridiculous 47, but back over 40.
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Mav
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Post by Mav on Jan 5, 2013 20:53:24 GMT -8
Gotcha, gotcha.
I totally get the benefits of the bigger screen, being a fellow Limited Edition(tm) iPad 3 owner (I suspect the iPad 4 owners will join our ranks sooner than later). But it's not as good for lounging or early-morning pre-market quote checking, etc. And iPad mini is big-pocket portable!
Unless the A7X is crazy, crazy fast, and iPad 5 is magically a bunch thinner (in terms of weight), I might be able to live with an A6-based iPad mini retina.
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Post by Deleted on Jan 5, 2013 20:55:35 GMT -8
Total device comparisons:
Apples fiscal Q12012: 73 million devices at an ASP of $584.00
Apples fiscal Q12013: 90 million+ devices at a similar ASP (this is my conservative prediction).
Regardless of GM contraction, anyone who thinks we are coming in under $14 EPS this quarter needs to lay off the crack pipe.
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Post by Tetrachloride on Jan 5, 2013 21:04:05 GMT -8
Guidance going forward for Q2. First estimate of the New Year: $ 40 B and $ 9.00, Revenue and EPS, or higher That would be dreadful guidance, kind of like Q1. Actually worse. $9 to a $12.30 compare. yikes. Anything less than $10 will make me very uneasy. The GM's should move up. Not to last years ridiculous 47, but back over 40. I dialed it down for now. I was hovering at 9.50. I calculated the "true result" and worked backward from there. I had GM at 41 % on the "true" model. Guidance ... 38 GM ?
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Post by Mav on Jan 5, 2013 22:01:46 GMT -8
Why can't we be thinking high $10, even $11 guys? Remember the compare and the freshness of all core product. May even have a few Mac Pros adding a couple hundred million to the mix. ;D Margins should stabilize or uptick. And honestly if they go further down - I think I'll love it. There's two main reasons for margin hits IMHO - both of them good. Guidance over $11.75 = PARTY TIME. But I gotta look at some projections to see how likely that is.
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Post by mbeauch on Jan 5, 2013 22:50:13 GMT -8
Total device comparisons: Apples fiscal Q12012: 73 million devices at an ASP of $584.00 Apples fiscal Q12013: 90 million+ devices at a similar ASP (this is my conservative prediction). Regardless of GM contraction, anyone who thinks we are coming in under $14 EPS this quarter needs to lay off the crack pipe. The impact of a 5% GM drop is huge. I am just barely over $14 EPS. Using raw numbers like total devices makes no sense. The phone is constant, but the mini impacts your ASP number. As for laying off the crack pipe, look back to the last 2 quarters and you will see most independents were way off the mark. Luke and Chas were very close from the indies. The 14 week quarter and GM make this the most difficult quarter in years to get a handle on.
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Post by Mav on Jan 5, 2013 22:58:31 GMT -8
burgess is young(er than me, IIRC). Give it time. (I think sub-$14 is unlikely, personally.) The 14-week quarter part is pretty easy to get around, once you get around to normalizing. You can't be exact but you can be reasonably close to getting a more apples-to-apples comparison (yeah, pun pretty much intended ). We've all normalized, of course. I'm worried about everyone else (which is why I'm still thinking about sending PED a note about it just in case). Yup, GM is a big, but intriguing, challenge. I love Apple's decision to "sacrifice" margin points the way it is.
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Post by Deleted on Jan 5, 2013 23:43:15 GMT -8
My numbers are based on 50 million iPhones - with that number its very difficult to come in under $14.00
This is my conservative estimate.
ipads 2,500 $450.00 $11,250,000,000 iphones 5,000 $660.38 $33,019,000,000 macs 500 $1,344.00 $6,720,000,000 ipod 1,000 $150.00 $1,500,000,000 itunes $2,500,000,000 peripherals $850,000,000 software $900,000,000 Revenue $56,739,000,000 Gross Margin 38.50% $21,844,515,000 operating expenses $3,800,000,00 $18,044,515,000 OI&E $400,000,000 $18,444,515,000 Tax rate 25.00% NET PROFIT $13,833,386,250 Shares Outstanding 948186000. EPS: $14.59
(Trying to format in the proboards iPad app is hopeless - sorry)
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Post by Mav on Jan 5, 2013 23:48:07 GMT -8
iPad, to me, is the biggest unknown this quarter. 25M would be great - I don't know Apple ramped iPad (mini) quickly enough considering it didn't launch until Nov. 2 (and even then, only in stages.
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Post by Mav on Jan 6, 2013 0:01:31 GMT -8
Hmm...it's much too early, but I can see a fiscal Q2 with some pretty nice revenues. Over $50B doesn't seem out of the question, though of course Jan. 23 is when we start getting some real guidance.
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Post by mbeauch on Jan 6, 2013 6:24:26 GMT -8
660 seems awfully high on ASP for the iphone. Burgess, 14.59 is reasonable, but only a 4% margin of error. That is where Tetra/Prazan are and I expect a lot more to pile in there. This has officially become a group think analysis.
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Post by Tetrachloride on Jan 6, 2013 6:51:19 GMT -8
Upon further review, prudent guidance for Q2 is between $ 9.50 and $ 10. After that, its certainly possible, but I would not like to people to depend on that number. Q2 is based on 46 M iPhones, at 41 or 42 % GM (I forget... I'm turning off my spreadsheets for a few hours). Sandbag factors and iPhone sales are tricky. Not only that, I assigned a major hit to iPad 4. Found. The way to format text the way I want. Use the "pre" tag, short for preformatted. I used a lot of space bar to get the stuff below to line up. Packers over the Vikings Macs 4600 iPods 5000 iPhones 51000 iPads 23500
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Post by mbeauch on Jan 6, 2013 7:37:10 GMT -8
Upon further review, prudent guidance for Q2 is between $ 9.50 and $ 10. After that, its certainly possible, but I would not like to people to depend on that number. Q2 is based on 46 M iPhones, at 41 or 42 % GM (I forget... I'm turning off my spreadsheets for a few hours). Sandbag factors and iPhone sales are tricky. Not only that, I assigned a major hit to iPad 4. Guidance is going to suck, it always does.
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Post by mark on Jan 6, 2013 8:10:36 GMT -8
Upon further review, prudent guidance for Q2 is between $ 9.50 and $ 10. After that, its certainly possible, but I would not like to people to depend on that number. That would suck, wasn't last year $12.30?
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Post by Tetrachloride on Jan 6, 2013 9:05:00 GMT -8
Last year guidance of $ 32.5 B, 8.5 EPS, resulting in $ 39.2 and 12.30 (some rounding).
Q2 was the biggest sandbag of the past 6 quarters. YOY comparisons must not be used as the sole yardstick.
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Post by appledoc on Jan 6, 2013 10:00:22 GMT -8
I hope the Flurry December and Christmas activation statistics are correct, because I think you guys are coming in low across the board for iOS devices. I will hopefully get a chance this week to crunch some numbers. I appreciate the good material you all have provided.
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Post by Mav on Jan 6, 2013 10:30:06 GMT -8
Not my fault if we think similarly. . My estimates were tabula rasa, for what it's worth. It all depends on Q1/product line strength as always, but don't count $10+ guidance out.
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Post by qualitywte on Jan 6, 2013 10:30:37 GMT -8
Could anything be extrapolated from the report that Best Buy lost 56k in one day from matching Walmart's iPhone discount?
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Post by Tetrachloride on Jan 6, 2013 11:08:54 GMT -8
Call it one of 5 chance for $ 10 guidance for the usual suspicious reasons. A low guidance followed by high actual results and the sandbag stories will fly.
No idea on the Best Buy report.
Flurry data is suspect. The story is obvious clickbait for their paid full report. Nobody has spilled the beans on the report yet.
This Q1 is a big smear game. Reports everywhere. People have to watch their back and clean the slime off their news sources, not to mention double-checking one's own numbers.
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