Deleted
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Post by Deleted on Jul 29, 2013 9:04:53 GMT -8
Food for thought: Have you incorporated this into you FQ4/2013 and FQ1/2014 Revenue and Earnings estimates? I don't recall seeing that you posted one. No, I'm the first to admit that's far, far beyond my competency. It would be futile for me to try to extrapolate the financial impact of such things. I can only speculate on what the hardware engineering minds inside Apple might be thinking about (from my own industry experience) and how that might map into future product line decisions. A very honest response. My hat is off to you. My comments today are driven by the lack of financial analysis that accompanies the product speculation. Its easy to play mental games of woulda, shoulda, coulda, without discussing reasoned financial impact, THAT CAN BE EXPECTED TO OCCUR. All of my earnings forecasts are based on what Apple has announced, and my own interpretation of management's guidance (the ONLY people that really know). Speculating about product type and mix has nothing to do with Apple's actual results. Apple guides Revenue, it does not guide product sales. I missed Revenue by $100,000,000 (1.89% from Actual). Several were closer than that, but nobody came close to iPhone unit sales, Mac sales, iPad sales AND Revenue. Of the 4, Revenue is the one that counts. "How many iPhones did you sell?...That's nice, but how much Revenue did you generate/keep?"
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bud777
fire starter
Posts: 1,352
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Post by bud777 on Jul 29, 2013 9:11:49 GMT -8
I am more than happy to kick my iPhone go pet name to the curb if Apple makes an aggressive play like the 5C. The A6 is a performance monster. Make it a touch more energy efficient and keep LTE, and you have the world's best $0/99 phone hands down. Mercedes could cut the price of its latest/greatest in half and they'd outsell Fiat. So? To continue the car analogy, I sometimes think that the smartphone market today is like the automotive market about 100 years ago. A revolutionary product was changing the world and no one really could foresee the true consequences. While people did not know how the automobile would change their life, then knew they wanted one. I look at what Henry Ford did back then. When the first Model T came out, I think it sold for about $1400. Ford then relentlessly improved his production process to lower the manufacturing cost. He went from 4 colors to one. He rebuilt entire factories to gain a few hours in production time. Every time he made an improvement, he took the savings off the purchase price. In several years, he was able to sell the same car for $800 and still make the same profit. Apple could follow the same strategy. Make one great phone, sell the older models, maintain margins and profit and drive down the purchase price through improvements in manufacturing. Doing this, combined with the continued evolution of IOS and the app ecosystem would create insurmountable barriers to competition. This is the hard path where each move forward is the result of the difficult job of refining and improving every aspect of the product and the manufacturing process. It's not as flashy as adding a bigger camera or yet another screen size, but in the long run, I think it is the path Apple has chosen.
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Post by tuffett on Jul 29, 2013 9:12:14 GMT -8
Apple's valuable IP is getting invalidated left, right and centre while Samesung is getting import bans on the back of FRAND patents. What a fucking joke. Samsung gets a boost with USPTO's 'final' rejection of Apple's pinch-to-zoom pat... goo.gl/XRIL2e
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Post by BillH on Jul 29, 2013 9:15:25 GMT -8
What's wrong with Apple product discussion? You don't see any edge in discussing the early exit of the 4S? It's tremendously relevant to Apple's GM for the entirety of next fiscal year. No. What is relevant is what Apple is actually shipping. Everything else is barbecue chatter that takes our attention away from the things that count: Apple's 10Qs and conference call statements. I think you confuse relevancy with more fun. Depends on whether one is a long term holder or a short term trader doesn't it? If your ISM factor is as important as you've previously stated then rumored future product plans might also play a role in that. And...,it's more fun. ;D I see the C's potential role as twofold. Lower cost and more differentiation from the higher priced spread. Just my nickels worth.
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Post by jdubuc on Jul 29, 2013 9:16:57 GMT -8
A very honest response. My hat is off to you. My comments today are driven by the lack of financial analysis that accompanies the product speculation. Its easy to play mental games of woulda, shoulda, coulda, without discussing reasoned financial impact, THAT CAN BE EXPECTED TO OCCUR. All of my earnings forecasts are based on what Apple has announced, and my own interpretation of management's guidance (the ONLY people that really know). Speculating about product type and mix has nothing to do with Apple's actual results. Apple guides Revenue, it does not guide product sales. I missed Revenue by $100,000,000 (1.89% from Actual). Several were closer than that, but nobody came close to iPhone unit sales, Mac sales, iPad sales AND Revenue. Of the 4, Revenue is the one that counts. "How many iPhones did you sell?...That's nice, but how much Revenue did you generate/keep?" Agreed, and thanks. I think it's extremely important to stay grounded in facts and focus on the guidance for the type of forecasting that you do (and to fantastic results -- congrats!). Hypothesizing about future product decisions as far as components and bill-of-materials gives me a much more vague and long-term sense for the financial prospects of the company than the work you do. Simply put, when I look at the possibility of a new phone at a price point similar to (or lower than) that of iPhone 4, with the potential for a lower floor on the cost curve and higher gross margin, I get very excited again about how things look for this company in 2 years' time.
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Post by Red Shirted Ensign on Jul 29, 2013 9:20:44 GMT -8
I keep hearing arguments that Apple already has a low cost Iphone...meaning the 4s, 4 (or maybe soon the 5 and 4s).
But these models aren't low cost without subsidies, correct? If I am in one of the 85 countries where carrier subsidies are minimal or don't exist, I am still faced with paying a huge amount for a (now low end) Iphone 4...
Isn't this the key pont the new 5c is going to solve, by moving that price point in the unsubsidized world down to some market research determined magic point?
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Deleted
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Post by Deleted on Jul 29, 2013 9:20:54 GMT -8
No. What is relevant is what Apple is actually shipping. Everything else is barbecue chatter that takes our attention away from the things that count: Apple's 10Qs and conference call statements. I think you confuse relevancy with more fun. The rumored (at the time) iPad mini had far more effect on Apples Gross margin percentage falling for FY2013 than anything you could have gleamed from apples 10Qs at this time last year. Rumored future products, whether coming this quarter or next year, are far more important to apples future performance than anything you will find in apples 10Q, which is mostly a reflection of things that have already happened. I'm not saying that apples financial reports aren't worth reading (on the contrary, I agree that every investor should read them) - but dismissing future product discussion as useless is incorrect. This is an investment forum, not a product design round table, or at least it shouldn't be. How much did product speculation benefit your investment decisions of the past 12 months? Didn't help me either, but it did take away from examining Apple's 10Q in depth. Recently, looking for something else, my spreadsheets revealed a set up to what I believe caused the institutions to flee AAPL. GM compares was just a part of it. An in depth evaluation of Apple's 10Q probably wouldn't have prevented initial losses, but certainly would have prevented the losses of the following 9 months. Understanding why the Institution fled AAPL would have changed everyone's investment strategies (profits instead of losses). There isn't a rumored/potential/maybe product discussion in the world that can do that. I'm looking for a forum that examines Apple's filings in depth. If anyone knows of one please advise.
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Post by tuffett on Jul 29, 2013 9:29:24 GMT -8
There will be no cheaper iPhone. There will be no iWatch. There will be no overhaul of the living room. Apple will continue to sell only iterations of iPhones, iPads, and Macs for eternity. I have this opinion despite the fact that not even a week ago, CEO Tim Cook said that new products are a key part of growth going forward.
Back to plugging my ears, putting on my blinders and delving into the 10Q.
P.S. Gregg, I don't think it's your place to lecture people here given your track record both on products and on financials. No doubt, you provide some unique and valuable insights, but there is nothing wrong with future product discussion on these boards. Please don't make generalizations on people's knowledge when not too long ago you didn't understand the meaning and impact of a simple stock buyback.
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Post by nathanstevens on Jul 29, 2013 9:31:15 GMT -8
Ios7 beta 3 runs a bit clunky on my 4s. I expect this to improve for the public release but there are features that won't work on the older hardware.
I propose that a good percentage of the 4's and 4s's sold to date will be upgraded in the next 3-6 months when new hardware is released. That keeps the great majority of hardware in the wild in the 2-3 year old range.
If apple continues to offer the 4s in the fall then a huge number of people would be purchasing brand new, 2 year old hardware with the intent of using it for the next 2-3 years. That would greatly increase the number of phones in the wild using 4-5 year old hardware. I don't think that is in apples best interest to let that happen as iOS 8,9,10 would be severely crippled.
RIP 3.5" screen and 30pin connector.
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Deleted
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Post by Deleted on Jul 29, 2013 9:32:17 GMT -8
I keep hearing arguments that Apple already has a low cost Iphone...meaning the 4s, 4 (or maybe soon the 5 and 4s). But these models aren't low cost without subsidies, correct? If I am in one of the 85 countries where carrier subsidies are minimal or don't exist, I am still faced with paying a huge amount for a (now low end) Iphone 4... Isn't this the key pont the new 5c is going to solve, by moving that price point in the unsubsidized world down to some market research determined magic point? Sure they are. They are up to $200 (~30%) lower than the first tier product. Apple knows where the competition is pricing, and apparently isn't bothered by it, at least not to the extent shown here.
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Post by Red Shirted Ensign on Jul 29, 2013 9:32:19 GMT -8
Back to the interday investing front, I am not bothered by light summer volume as long as we hold 446, as we have done about twelve times today....I look for a move to a new daily high about 2:20 P.M. Eastern Time.
(cough, cough)....
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Post by jdubuc on Jul 29, 2013 9:33:12 GMT -8
I'm looking for a forum that examines Apple's filings in depth. If anyone knows of one please advise. This forum seems to cater to all types of analysis, technical, fundamental, as well as future product & technical speculation. I think the diversity is a strength. Why not start a thread on AFB dedicated to analysis of the 10Q and other filings? I haven't been following them in detail as long as you have, but I'd be happy to participate in such a thread in my admittedly limited capacity, and to learn from what others have found.
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Post by Lstream on Jul 29, 2013 9:34:43 GMT -8
The rumored (at the time) iPad mini had far more effect on Apples Gross margin percentage falling for FY2013 than anything you could have gleamed from apples 10Qs at this time last year. Rumored future products, whether coming this quarter or next year, are far more important to apples future performance than anything you will find in apples 10Q, which is mostly a reflection of things that have already happened. I'm not saying that apples financial reports aren't worth reading (on the contrary, I agree that every investor should read them) - but dismissing future product discussion as useless is incorrect. This is an investment forum, not a product design round table, or at least it shouldn't be. How much did product speculation benefit your investment decisions of the past 12 months? Didn't help me either, but it did take away from examining Apple's 10Q in depth. Recently, looking for something else, my spreadsheets revealed a set up to what I believe caused the institutions to flee AAPL. GM compares was just a part of it. An in depth evaluation of Apple's 10Q probably wouldn't have prevented initial losses, but certainly would have prevented the losses of the following 9 months. Understanding why the Institution fled AAPL would have changed everyone's investment strategies (profits instead of losses). There isn't a rumored/potential/maybe product discussion in the world that can do that. I'm looking for a forum that examines Apple's filings in depth. If anyone knows of one please advise. This stopped being an investment forum a long time ago. It is a short-term trader forum for the most part. If this truly is or was an investment forum, it would deal with the future prospects of the company, which certainly must include product strategy. As far as the current debate goes with regard to the new phone, I find it highly speculative and of not much use, so I kind of fall in the middle between those that want to discuss it and Gregg's point of view. But I also see no point in trying to cut off discussion on a topic that several posters have an interest in. Also, the reason I invested in Apple many years ago, had little to do with what what I could find in a 10Q at the time. I was more concerned with visionary stuff and what the company could become, rather than short term results. Best judgement call I ever made in investing.
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Post by Red Shirted Ensign on Jul 29, 2013 9:35:08 GMT -8
I keep hearing arguments that Apple already has a low cost Iphone...meaning the 4s, 4 (or maybe soon the 5 and 4s). But these models aren't low cost without subsidies, correct? If I am in one of the 85 countries where carrier subsidies are minimal or don't exist, I am still faced with paying a huge amount for a (now low end) Iphone 4... Isn't this the key pont the new 5c is going to solve, by moving that price point in the unsubsidized world down to some market research determined magic point? Sure they are. They are up to $200 (~30%) lower than the first tier product. Apple knows where the competition is pricing, and apparently isn't bothered by it, at least not to the extent shown here. If they are not bothered by it, why are we developing the new 5c (and please don't say it isn't happening, Gregg...) $200 less than the first tier product is clearly not the "right" price point for third world saturation, which is what I think Apple wants to do.... "The ecosystem grows and every branch of the tree flowers" (I'm feeling poetic today)
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Post by jdubuc on Jul 29, 2013 9:37:37 GMT -8
If they are not bothered by it, why are we developing the new 5c (and please don't say it isn't happening, Gregg...) $200 less than the first tier product is clearly not the "right" price point for third world saturation, which is what I think Apple wants to do.... "The ecosystem grows and every branch of the tree flowers" (I'm feeling poetic today) iPhone 4 unsubsidized is $450 USD. Red, you bring up an interesting question -- what would Apple price this hypothetical product at? Is it unreasonable to think that it could replace both the iPhone 4 and 4S at that same $450 price point (or $0 subsidized)?
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Deleted
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Post by Deleted on Jul 29, 2013 9:39:37 GMT -8
Ios7 beta 3 runs a bit clunky on my 4s. I expect this to improve for the public release but there are features that won't work on the older hardware. I propose that a good percentage of the 4's and 4s's sold to date will be upgraded in the next 3-6 months when new hardware is released. That keeps the great majority of hardware in the wild in the 2-3 year old range. If apple continues to offer the 4s in the fall then a huge number of people would be purchasing brand new, 2 year old hardware with the intent of using it for the next 2-3 years. That would greatly increase the number of phones in the wild using 4-5 year old hardware. I don't think that is in apples best interest to let that happen as iOS 8,9,10 would be severely crippled. RIP 3.5" screen and 30pin connector. iOS8, 9, or 10 would only be severely crippled if they didn't offer functionality worthy of a hardware upgrade. The fact that 3+ YO iPhones are still in use, in quantity, says tons about the value proposition of iPhone hardware and iOS. Give me the name of just one Android model with any resale value left in it, let alone one that comes close to the resale value of the same age iPhone.
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Deleted
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Post by Deleted on Jul 29, 2013 9:45:51 GMT -8
Why not start a thread on AFB dedicated to analysis of the 10Q and other filings? Thought about it, but dismissed the idea. Not a good fit for this group.
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Post by tuffett on Jul 29, 2013 9:46:59 GMT -8
Food for thought: Have you incorporated this into you FQ4/2013 and FQ1/2014 Revenue and Earnings estimates? I don't recall seeing that you posted one. No, I'm the first to admit that's far, far beyond my competency. It would be futile for me to try to extrapolate the financial impact of such things. I can only speculate on what the hardware engineering minds inside Apple might be thinking about (from my own industry experience) and how that might map into future product line decisions. Quite frankly, your insight is far more valuable than amateur analysts making up numbers pretending they know something everyone else doesn't.
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Post by bloodylongaapl on Jul 29, 2013 9:50:39 GMT -8
No, I'm the first to admit that's far, far beyond my competency. It would be futile for me to try to extrapolate the financial impact of such things. I can only speculate on what the hardware engineering minds inside Apple might be thinking about (from my own industry experience) and how that might map into future product line decisions. A very honest response. My hat is off to you. My comments today are driven by the lack of financial analysis that accompanies the product speculation. Its easy to play mental games of woulda, shoulda, coulda, without discussing reasoned financial impact, THAT CAN BE EXPECTED TO OCCUR. All of my earnings forecasts are based on what Apple has announced, and my own interpretation of management's guidance (the ONLY people that really know). Speculating about product type and mix has nothing to do with Apple's actual results. Apple guides Revenue, it does not guide product sales. I missed Revenue by $100,000,000 (1.89% from Actual). Several were closer than that, but nobody came close to iPhone unit sales, Mac sales, iPad sales AND Revenue. Of the 4, Revenue is the one that counts. "How many iPhones did you sell?...That's nice, but how much Revenue did you generate/keep?" I'd suggest that if you have no interest in anticipating the future, high beta tech is not an ideal stock type for you to be following. PS: Great that you spotted the institutional exodus after we ran from 700 to 400. An apt demonstration of the power of looking at current reality and not being tempted to look around the bend in the road. PPS: Sorry to everyone else this is cranky, not meaning to bring down the tone, but the self-righteousness is winding me up. Stock split maths anyone?
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Mav
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Post by Mav on Jul 29, 2013 10:10:45 GMT -8
I'm looking for a forum that examines Apple's filings in depth. If anyone knows of one please advise. This forum seems to cater to all types of analysis, technical, fundamental, as well as future product & technical speculation. I think the diversity is a strength. Why not start a thread on AFB dedicated to analysis of the 10Q and other filings? I haven't been following them in detail as long as you have, but I'd be happy to participate in such a thread in my admittedly limited capacity, and to learn from what others have found. I have a fiscal Q4 thread. I'm the only one's that's bothered to make fiscal threads, in fact. If you want an actual 10-Q research thread, there's nothing stopping you from doing so over at Apple Fundamentals...the sub-board needs some activity!
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Mav
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Post by Mav on Jul 29, 2013 10:14:18 GMT -8
AAPL >448 would be an interesting close, though I'm not thinking about a pure momo call play as of yet.
Sold the Sep 13 400/450/500s, exchanged for Oct 425/475/525s.
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bud777
fire starter
Posts: 1,352
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Post by bud777 on Jul 29, 2013 10:22:15 GMT -8
Update from the ledge....
I am about a month into this experiment in free money and so I thought I would let everyone know how it is working out. It seems like the more rocks I turn over, the more interesting this gets.
As you may remember, back at the end of April, I refinanced my house to raise money to buy Apple shares. I took out a $400,000 7/1 ARM at 2.375. The total cost of the loan was $407000 and I received $400,000. By the time I received the proceeds, Apple was at $435 so I bought 900 shares. I sold 9 July 20 calls at 475 and received $1595. If you remember, we plummeted to under 400 right after that so I bought the calls back for $200 and then sold 9 more July 20 calls at 440. These calls brought in $1522 and expired worthless.
This gave me a profit of around $3000 for the month. The first mortgage payment of $1522 is due August first. In that payment, about $800 is interest. The August dividends will pay $2745.
My goal in doing this exercise is to generate an additional $1500 a month. I had planned to do this by selling monthly options about 40 points above the current price but never lower than 40 points above the 435 I paid. Now I am rethinking this.
Because I live in the Peoples Republic of Oregon, taxes are an real consideration. Being called away and taking a short term gain of the profit would mean that about 44% of the gain (35 Fed, 9 State) would go to fund the retirement of DMV employees. I believe it will make more sense to sell Jan 17 2015 calls at 550. If called away, the $100,000 profit would then be a long term gain. The calls would bring in about $20,000 which would give me close to the desired monthly income until the options expire.
If they get called away, I will pay off the mortgage and use the $100,000 to fund the $1500 per month for a few years.
So, what do you think? Is it wise to sell the longer term calls to get a 15% tax rate instead of a potential 35%? Are there risks here that I am missing? There are many people in this board with sharper pencils than I. I welcome your insights.
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Post by Red Shirted Ensign on Jul 29, 2013 10:29:20 GMT -8
Back to the interday investing front, I am not bothered by light summer volume as long as we hold 446, as we have done about twelve times today....I look for a move to a new daily high about 2:20 P.M. Eastern Time. (cough, cough).... Missed it by three minutes....
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Post by aapl4kiki on Jul 29, 2013 10:29:45 GMT -8
Back to the interday investing front, I am not bothered by light summer volume as long as we hold 446, as we have done about twelve times today....I look for a move to a new daily high about 2:20 P.M. Eastern Time. (cough, cough).... Simply remarkable...
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Mav
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Post by Mav on Jul 29, 2013 10:35:42 GMT -8
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Post by archibaldtuttle on Jul 29, 2013 10:37:39 GMT -8
Today we overtook the 1/2 GOOG level... really hope we can get up to 1:1 GOOG again in the next year
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Post by podboy on Jul 29, 2013 10:39:01 GMT -8
FINGERPRINT SCANNER!!!!!
Gamechanger IMO
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Post by jdubuc on Jul 29, 2013 10:41:24 GMT -8
Back to the interday investing front, I am not bothered by light summer volume as long as we hold 446, as we have done about twelve times today....I look for a move to a new daily high about 2:20 P.M. Eastern Time. (cough, cough).... Missed it by three minutes.... Very impressive
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Post by tuffett on Jul 29, 2013 10:44:35 GMT -8
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Post by jdubuc on Jul 29, 2013 10:48:07 GMT -8
Unfortunately it will also be ripped off by competitors with zero consequence. The feature can (and will) be cloned, but I think it will be harder to clone Apple's partnerships and ability to get developers and companies to build services surrounding it. Could be another great differentiator that way.
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