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I don't think the future of apple is tied to idea like a new flexible display that no one can match. A lot of people think it is which is why they wonder if they will be able to innovate and stay ahead. Obviously if this tech becomes very functional it will be important to have in any high end phone but coming out with a huge technology like this isn't really something I think apple has a track history of doing or that I can bet on. I'm sure it would be buggy and gimmicky at first. They need to just leverage their ecosystem and brand loyalty while producing high quality products. My main point is that apple's innovation isn't some amazing new technology that they will invent but a leveraging of their ecosystem to make a product that Samsung or Motorola hardware wise could easily make but would be able to pull off the whole package. Because they have this massive development ecosystem, and a brand loyalty strong enough to get mass adoption they will produce something that no one else could. Examples of "innovation" A 250-300 cell phone with 40% GM that runs smoothly with the newest iOS 5' Screen iphone as a choice A set top box that functions like TIVO but adds in iOS, itunes, gaming, and acting as a hub for iOS devices to control. Big difference between this and current apple TVs is the TIVO aspect. This could even be subsidized by cable companies. Honestly if apple bought Tivo for 2 billion I would be very happy. I think any of the above is doable by major tech corp without a genius or Jobs type "visionary". However, I think that only apple would have a decent shot at a blockbuster with any of the above ideas. My point is it doesn't have to be revolutionary tech, just a good-great product. Then the ecosystem and brand loyalty will drive it towards success.
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Apr 23, 2013 00:51
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jayd42 posted:When I find myself getting caught up in the Apple hype, I ask myself this question. What? No wait you answered your own question you have no clue.
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Apr 23, 2013 00:55
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jayd42 posted:When I find myself getting caught up in the Apple hype, I ask myself this question. I would agree and I don't think it is a Buffett stock for that reasons stated in your post. But that doesn't mean its not a great company at a great price with the ability to go much higher and a somewhat limited downside by cash. It would probably be a Graham stock at like 250 billion cause the cash flows can't stop instantly but for a 5+ year future who knows if they can maintain making successful products (its not nearly as clear as a whether a railroad still shipping goods). Bigntasty fucked around with this message at 01:00 on Apr 23, 2013 |
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Apr 23, 2013 00:58
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jayd42 posted:What will Apple be selling in 2-5 years? Answer: I have no loving clue. What specific devices will they be selling? Who knows. But it's hard to imagine them not continuing to be the company carrying the torch of the Xerox PARC tradition of democratizing computing by fusing it with design. It's not a Buffett stock but it's certainly in the tradition of Graham to interpret the value philosophy of finding stocks where you can buy large amounts of free cash flow and assets for (relatively) cheap today without having to make solid predictions about the future. (Graham had little to say about economic moats and all that, that's all Buffett.) The uncertainty about future products is really the driving force here on this selloff, I think the concern about Samsung eating away margins is just an excuse for analysts to look like they are analysts. Apple has always had this problem that until people see what they are working on they worry they are not working on anything. You're not going to find the cigar butts and haven't been able to for decades. And in this market, you're not going to find the cheap blue chips that Buffett salivates for. The best you can do is hope for Mr. Market to drive the price of a company down to the point where there is a pretty solid margin of safety along several dimensions. (Or you can sit in cash and hope for a crash.) Generally speaking this means dumpster diving but Apple stands out as an exception of a high quality business trading at garbage bin prices. It's not a perfect stock but I'd rather pay for an amazing company at a fair price than a good company at a high price, which describes most U.S. equities these days who continue to miss earnings estimates while their P/E's etc rise. nebby fucked around with this message at 01:50 on Apr 23, 2013 |
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Apr 23, 2013 01:44
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nebby posted:Apple will be selling the same thing they've always sold. They dabbled in the MBA approach to business ("They need to make a cheaper phone to increase market share!") when Steve left and I'm pretty sure they learned that lesson for good. For the record, they did not 'dabble' in a cheaper phone. They took advantage of lowered manufacturing costs to push the older models down the value chain while maintaining margins.
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Apr 23, 2013 01:54
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evilwaldo posted:For the record, they did not 'dabble' in a cheaper phone. They took advantage of lowered manufacturing costs to push the older models down the value chain while maintaining margins.
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Apr 23, 2013 01:59
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Pretty amusing how, after one quarter of explainably slow earnings growth and no further news, the “narrative” has gone downhill from slowing or stagnant growth to people in this thread implying that they won't even be selling products in 5 years. Not sure precisely what the causes are but it's interesting to watch.
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Apr 23, 2013 02:03
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jawbroken posted:Pretty amusing how, after one quarter of explainably slow earnings growth and no further news, the “narrative” has gone downhill from slowing or stagnant growth to people in this thread implying that they won't even be selling products in 5 years. Not sure precisely what the causes are but it's interesting to watch. A negative news cycle and analysts constantly spewing gloom and doom.
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Apr 23, 2013 02:24
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jawbroken posted:Pretty amusing how, after one quarter of explainably slow earnings growth and no further news, the “narrative” has gone downhill from slowing or stagnant growth to people in this thread implying that they won't even be selling products in 5 years. Not sure precisely what the causes are but it's interesting to watch. I should have been clearer that the only current product that I'm sure will still be around in 5 years will be itunes/app store. The other products they will be selling in 5 years are complete unknowns at this point. This is typical of the tech sector, so I'm sure people who already own tech stocks are fine with not knowing what they will be selling in the future, but I was responding specifically to Nebby's comment about Graham value investing.
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Apr 23, 2013 02:45
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jayd42 posted:I was responding specifically to Nebby's comment about Graham value investing. Apple hits on all these notes but obviously is not Buffett's flavor of company due to their products not being in the same class as toilet paper and insurance in terms of basic, understandable, fundamental human needs. But I don't think he chooses these types of companies in order to increase certainty of the future per se, but because it gives him a stronger handle on the intrinsic value *today*. He says himself he does not try to predict the future. His insurance against uncertainty is their economic moat, not the nature of what they sell; that is just to make for easier valuation. If Buffett had the ability to come up with a good "cost to reproduce" number for Apple I'm sure he'd be buying it if it still looked cheap. But he is not in the business of understanding component supply chains and the costs of developing software so he cannot value Apple's intrinsic value today accurately. Edit: Basically what I'm saying is I think Apple passes the "moat test" by Buffett's standards due to the strength of their brand, ecosystem, and management's track record, and the reason he still stays away is simply because he cannot value their present reproduction costs to understand if the stock is mispriced relative to intrinsic value. nebby fucked around with this message at 03:17 on Apr 23, 2013 |
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Apr 23, 2013 03:10
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jawbroken posted:Pretty amusing how, after one quarter of explainably slow earnings growth and no further news, the “narrative” has gone downhill from slowing or stagnant growth to people in this thread implying that they won't even be selling products in 5 years. Not sure precisely what the causes are but it's interesting to watch. This was meant as a stab at the tech sector in general and the fickleness of consumers in this area and is kind of a tenet of Buffett investing. I KNOW what KO, CNI, WMT, PG are going to be selling in 5 years and if they keep the status quo I have minimal doubt they will continue to be major players in their market. It's hard to apply that assumption to the consumer electronic industry. Look at Sony for portable music players or Blackberry for phones. There are many more disruptive forces/companies/technologies in this market than in the consumer beverage industry. nebby posted:
Graham was in a bit of a simpler time in terms of valuing companies. A time when the enterprise value of the company could be near zero if calculated with the appropriate metrics, he was less about a sustainable moat (Buffett) and more about what the company was worth at the present when looking at their assets, liabilities, and near term earnings/costs. Bigntasty fucked around with this message at 03:15 on Apr 23, 2013 |
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Apr 23, 2013 03:10
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nebby posted:No what I meant is that when Steve was gone they dabbled in trying to increase market share by licensing the mac to clone manufacturers, among other things that were textbook MBA-style moves that went against Apple's core competencies and approach to profits. The clamoring today for them to release a commodity phone to compete with Androids echoes the clamoring then for them to basically get in there and compete with windows PCs. I'll sell off my position if they start doing stupid poo poo like that. As long as there are people at the top that were there during Jobs that probably won't happen. I think this is a lot different than making mac clones. I don't think I have heard of a single person suggest that they should license iOS to HTC or the like. This is about producing a cheaper phone that is still very functional but lacks some of the luxuries of the standard iphone that are expensive. You could conceivably make a phone with a A4, 512 ram, nonretina display, cheaper camera, no LTE,with a cheaper frame and sell it for 250-300 and have the same margins as the iphone 4 which goes for 450. It's not about making a lovely product its about making the best product for that market as long as it is still a great product. They can only release it in india and China if they want but it would increase the value of the ecosystem and they could provide a great product to less affluent people. This would not hurt the brand people know the difference between a company's high end offering and low end. Bigntasty fucked around with this message at 03:53 on Apr 23, 2013 |
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Apr 23, 2013 03:50
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Bigntasty posted:This is about producing a cheaper phone that is still very functional but lacks some of the luxuries of the standard iphone that are expensive. You could conceivably make a phone with a A4, 512 ram, nonretina display, cheaper camera, no LTE,with a cheaper frame and sell it for 250-300 and have the same margins as the iphone 4 which goes for 450. Isn't this literally a non retina iPhone 4? As far back as october 2011 the display for an iphone 4S cost (23 for the screen and 14 for the touch assembly)- so potentially saving $10/15 off of the cost by going non-retina and making developers continue having to ensure compatibility with an outdated useless resolution--assuming that the displays cost exactly the same amount, which isn't likely.
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Apr 23, 2013 04:02
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Bigntasty posted:I think this is a lot different than making mac clones. I don't think I have heard of a single person suggest that they should license iOS to HTC or the like. This is about producing a cheaper phone that is still very functional but lacks some of the luxuries of the standard iphone that are expensive. By giving consumers the options of getting last years iPhone cheap Apple has its cake and eats it too: the latest iPhone is highly desirable (provided it's good) and retains its status as the Mercedes of phones, but price sensitive consumers can see themselves as savvy consumers buying a high quality item discounted not because it sucks but simply because it is out of date. nebby fucked around with this message at 04:35 on Apr 23, 2013 |
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Apr 23, 2013 04:28
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Shmoogy posted:Isn't this literally a non retina iPhone 4? As far back as october 2011 the display for an iphone 4S cost (23 for the screen and 14 for the touch assembly)- so potentially saving $10/15 off of the cost by going non-retina and making developers continue having to ensure compatibility with an outdated useless resolution--assuming that the displays cost exactly the same amount, which isn't likely. Maybe the retina display is minimal to the cost and in that case keep it (I picked that as an example because it is typically what is targeted by apple when they want to cut cost ie ipad mini). But the iphone4 is in general is expensive to make. The cost break downs they give are ridiculously low because the don't assume real world costs. They quote the iphone 5 at around 200 which would be a 69%GM. Also they mention the display costing $44 or about 22% of the build price. Decent smart phones are made for these price points and the meat of the phone (ram, CPU, logic board) needed to run iOS is not the major expense.
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Apr 23, 2013 04:32
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nebby posted:Yeah, I agree this makes sense and is essentially what Apple has done by aggressively cutting down the price point of previous models. But the main thrust of my beef with analysts talking about Apple trying to forge out a lower end "line" of phones is the motive they give: panicked fear of losing precious market share to Samsung and Google. These idiots would have Apple go the Amazon route of ignoring margins and try to make a land grab for people whose primary driver when purchasing electronics is price sensitivity. It's a reasonable strategy sure, if you have zero historical context of why Apple has made truckloads of money and where they have tried and failed before. The concern is focusing on this part of the market with a dedicated phone/product line would muddy the waters as to what Apple products actually *are*: are they high quality luxury goods you save up and blow your paycheck on because they are just something you want or are they just another device that you compare based upon features and price and make a "rational" purchase around. Its not the amazon route of making zero margins, I expect them to maintain them at 35-40 and the iphone would still be a luxury product at that price because I can promise there are smartphones that are 150-200. But its about providing a great product at that price. The brand will be able to withstand some poor people having an apple product. Last years model is a great model for the lineup they have but I think they will have difficulty expanding it to the 300 range because of the cost of materials. But good phones can be made for that price and because of the closed nature of the software they can have better control to make sure it will run well with its reduced specs. Including another price point isn't about being scared it's about getting a great product to people who couldn't afford it and expanding the ecosystem to allow the whole market to access it while maintaining gross margins. Being available at most price points would allow their ecosystem to continue to grow which adds value to the brand as a whole. I think the lower priced phone would cannibalize their high end line less than the current strategy of selling last years models. Not that it should replace that strategy just supplement it. Bigntasty fucked around with this message at 04:52 on Apr 23, 2013 |
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Apr 23, 2013 04:44
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Bigntasty posted:Its not the amazon route of making zero margins, I expect them to maintain them at 35-40 and the iphone would still be a luxury product at that price because I can promise there are smartphones that are 150-200.
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Apr 23, 2013 05:04
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poo poo I thought they reported this morning. Goddamn it.
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Apr 23, 2013 14:11
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Watching last night's Fast Money, they're saying people want 5" and 6" tabletphones? Someone even suggested they should turn the iPad mini into a phone so "people can have one device in their pocket." Do people really want a 7" device to be with them all the time? I mean, I get that almost nobody uses a smartphone as a phone anymore but still... that sounds crazy.
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Apr 23, 2013 14:58
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Josh Lyman posted:Watching last night's Fast Money, they're saying people want 5" and 6" tabletphones? Someone even suggested they should turn the iPad mini into a phone so "people can have one device in their pocket." Different people want different things- as evidenced by the popularity of the iPhone 5, Galaxy S3, and Note. I personally am considering getting rid of my iphone and getting by with a cellular iPad/mini (and possibly a prepaid dumb phone). I rarely make phone calls, but when I do it's generally just returning calls to my girlfriend or mom. I pretty exclusively text friends otherwise. For most things I use my tablet over phone. I also carry a messenger bag or camera bag with me everywhere, so carrying a tablet isn't a problem.
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Apr 23, 2013 15:18
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I remember this time last year analysts were saying that Apple was going to have a terrible quarter. The stock was tanking and everyone was bailing out, then like usual it turned out that the analysts were all full of poo poo and Apple posted a record quarter and the stock soared until September. I wonder if we're going to see a repeat of that tonight.
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Apr 23, 2013 15:19
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Dolphin posted:I remember this time last year analysts were saying that Apple was going to have a terrible quarter. The stock was tanking and everyone was bailing out, then like usual it turned out that the analysts were all full of poo poo and Apple posted a record quarter and the stock soared until September. It did have a nice pop after earnings last year (red arrow), but it fell back pretty quickly. 
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Apr 23, 2013 15:31
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Jesus christ, IV for ATM May AAPL calls is 42% and for puts it's 45%. If only I had the balls to write some options, I could make buku bucks.
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Apr 23, 2013 16:12
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Regardless of how AAPL's earnings go, it's hard to deny that the stock is no longer the darling of tech investors it once was. One could argue that its run up and enormous valuation was the result of basically having the lucrative consumer electronics market to itself for nearly half a decade. Since that's no longer the case, the stock has been in decline for the greater part of a year as investor expectations for growth become more reasonable. It's hard to envision another game changing device that won't be immediately aped by Samsung/Google which makes me think a return to $600 is not going to happen. I would also question just how innovative Apple still is; I think by all definitions the iPhone is outdated, both in form factor and in device capabilities. As more consumers start using their phones as personal computing devices and less as phones, they'll start demanding a more advanced OS in larger form factors. At the very least it means that Android can put pressure on Apple's design decisions by offering consumers capabilities that Apple demurs in favor of simplicity. I don't have any predictions for how this call is going to go, but I think it's fair to say that AAPL's heyday is over.
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Apr 23, 2013 17:29
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guntpuncher posted:As more consumers start using their phones as personal computing devices and less as phones, they'll start demanding a more advanced OS in larger form factors. At the very least it means that Android can put pressure on Apple's design decisions by offering consumers capabilities that Apple demurs in favor of simplicity. I feel the opposite on this. Every usage statistic (web browsing share, app usage time, “enterprise” adoption) currently points the opposite way on this "personal computing device" vs "phone" question. iOS still seem to attract the top developers and iOS-only or iOS-first still seems the dominant strategy for successful apps. The economics for apps on the Google Play Store don't seem to be as healthy. Android tablet apps are still nearly non-existent, comparatively. In my mind the pressure is really on for Google and Android device makers to improve their products to the point where they have comparable usage and can attract app developers. What people can theoretically do is nowhere near as important as what they measurably do in practice.
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Apr 23, 2013 17:57
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drat that fake AP tweet really shows the power of Twitter algos on the market. That was unbelievable.
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Apr 23, 2013 18:13
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It's hard to compete with free, and that's exactly what Apple has been forced to do by Android. I agree that the quality of the Android ecosystem is abysmal, but developers have been practically forced to release apps in both ecosystems as Android continues to dominate market share. Android users are much less likely to pay for..well, anything. It affects the broader consumer mentality towards paying for content and puts further pressure on Apple's ecosystem. Google wants mobile ad CPC to rise to a level where app developers can make decent money off of it alone. If that happens there will be a deluge of free apps which might mean the difference between getting it for free on Android versus paying $3.99 on the App store. The question is what's more likely: Mobile ad revenue increasing to that level or the low quality of Android's app ecosystem inhibiting adoption.
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Apr 23, 2013 18:21
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Heyday as a wild free money ride, maybe. But stock market aside I don't see it shrinking anytime soon.
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Apr 23, 2013 18:22
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Shmoogy posted:Different people want different things- as evidenced by the popularity of the iPhone 5, Galaxy S3, and Note. I have done that for similar and different reasons. Most of my phone calls are to Canada and the mobile companies want me to pay for an International Plan so that they can ream me for minutes. It is easier and more efficient for me to have a prepaid phone and a tablet using Skype to return phone calls. guntpuncher posted:It's hard to compete with free, and that's exactly what Apple has been forced to do by Android. Their ecosystem is garbage but that is for a different reason. Google Play and Google Books are an absolute mess to navigate from the side of someone wanting to put content on the platform. Everything is outsourced to India and they designed everything to make sense for their Indian office and nowhere else in the world. Google HQ could care less as long as they get ad data. Quick example of how messed up Google Books is from an author's standpoint. When you upload your file it creates the metadata for you. I asked if I could see the metadata for my book. Google responded (weeks later because this is how the Indian sub operates) that author cannot because Google outsourced the creation of the metadata to a third party firm. evilwaldo fucked around with this message at 18:36 on Apr 23, 2013 |
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Apr 23, 2013 18:29
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Well that was a neat little mini flash crash! http://www.nanex.net/aqck2/4176.html Now we know what a black swan will do in the current market: equities down (duh), oil down, yen up, treasuries up, and gold...not a whole lot.
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Apr 23, 2013 19:05
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Amun posted:Well that was a neat little mini flash crash!
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Apr 23, 2013 19:26
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guntpuncher posted:It's hard to compete with free, and that's exactly what Apple has been forced to do by Android. They don't compete with free, they compete with Android device makers, and the only fundamental disadvantage they have is the cost of developing their own OS and online services. As for the rest, okay sure, but I never said that it would lead to financial or market success for Apple. I was just pointing out that your claim that people who really want to get some personal computing done will choose Android because it's “a more advanced OS” doesn't seem to be supported by fact. If people do actually care deeply about using their phone as a computer then it seems like Apple is currently better positioned to serve that need currently, for whatever reason.
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Apr 23, 2013 19:27
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Alright time to load up on AAPL calls bitches  Amun posted:Well that was a neat little mini flash crash! Yeah gld was interesting...
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Apr 23, 2013 21:09
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The AT&T miss worries me a bit. I think I still have too much AAPL.
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Apr 23, 2013 21:11
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I'm hoping for an on-target hit and another irrational selloff once the press picks up one metric that could be spun bearish.
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Apr 23, 2013 21:18
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And they beat. Not by much but wahoo!
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Apr 23, 2013 21:31
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This is perfect so far so now we know a selloff is unjustified. Lets see where the hype train leads. I am really hoping it gets cheaper now. edit: buyback program is doubled. this will be the lede in the financial press I bet (along with "met expectations") and the stock will pop since now Cook's back has broke wrt returning capital to investors. Einhorn got a bit of a victory. It makes me nervous that this could mean one of two things: caving to investor pressure, or they don't know what else to do with the money. Either not good. Hopefully Tim clarifies on the call. nebby fucked around with this message at 21:36 on Apr 23, 2013 |
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Apr 23, 2013 21:33
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The revenue guidance isn't particular impressive. * gross margin between 36 percent and 37 percent * revenue between $33.5 billion and $35.5 billion 3Q2012 revenue was $35.0 with a 42.8% gross margin.
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Apr 23, 2013 21:49
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Even with the buyback and dividend increase, that's an average of $30b a year over the three years of the program (August 2012 to December 2015). Fiscal 2012 earnings were $40b+ so I imagine they're planning to still be adding to their pile, not giving it all back.
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Apr 23, 2013 21:53
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jawbroken posted:Even with the buyback and dividend increase, that's an average of $30b a year over the three years of the program (August 2012 to December 2015). Fiscal 2012 earnings were $40b+ so I imagine they're planning to still be adding to their pile, not giving it all back. edit: Ah the panic sets in. back to close price, amazing. nebby fucked around with this message at 22:46 on Apr 23, 2013 |
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Apr 23, 2013 21:55
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