How Apple's Market Share Will Propel Stock to $500, Part 1 107 comments
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Microsoft (MSFT) CEO Steve Ballmer gave us a glimpse into Apple’s (AAPL) future with a statement he made at the Windows 7 release. When asked by CNBC’s Jim Goldman to respond to the threat of competition from Apple, Ballmer remarked,
It's amazing: people say Apple sells 10 million PCs. There will be 300 million Windows PCs sold in the same time frame. So it is interesting to me that people spend so much time talking about the 3 percent of the market in that case...I wouldn't trade our 300 million new users a year for their 10 million. I just wouldn't do it. I kind of like what we're doing and the way we're serving the market.
The trend of the 2010 decade appears to be one of Apple gaining market share and Microsoft losing market share. There is no question that Microsoft is king of the hill but investors are never concerned with the current king, we are always trying to forecast who’s next. Broadpoint AmTech analyst Brian Marshall actually thinks the Windows 7 launch will boost Mac sales. He wrote,
We have concluded that no negative correlation exists on Apple’s hardware sales when Microsoft launches a new OS. Ironically, we believe new OS launches from Microsoft may have even acted as a ‘delayed accelerant’ to Apple’s computing sales.
When looking at Apple’s future you need to comprehend what kind of market share numbers we’re talking about. The global PC market is so large that if Apple were to control only 10% of it, the earnings could drive the stock up significantly. According to IDC, Apple now claims 9.4% of the U.S. computer market in the US, and NPD reports that Mac revenue market share of the premium price segment over $1000 is at an astonishing 91%; To give you some perspective on how quickly Apple is gaining, back in January of 2008 Mac’s revenue share was only 66%. It takes years to create a trend in the PC market because of the rigid barriers to entry and Apple has clearly done so with the Mac lineup.
On Apple's most recent quarterly conference call (see earnings call transcript here) they reported that revenue in Europe was up 45% year over year in the region, Apple Japan was up 36%, and the Asia Pacific was up 39%. It looks like they are well on their way to 10% global market share. If they were to sell 30 million Macs in 2011 (which could include the Tablet released sometime in 2010) this stock will eclipse $500 based on the fundamentals. It's about as far fetched as Bank of America (BAC) to $20 sounded back in March 2009 and oil to $30 sounded back in August 2008. Most impressive for Apple is that computers only make up one tier of their business. Hence, this article is merely part one of a series mapping out Apple's market share rise by 2011.
One of my readers, Mikesan, made the following comment: ‘I once read that at product design sessions Steve Jobs encourages people to start sentences with ‘wouldn’t it be great if...’ and they go on from there. Compare this to Microsoft which is more like ‘isn’t it great we can still do this’. Two companies headed in different directions. Ballmer might want to be careful next time he touts Windows 7 on 300 million computers. The trend is not his friend.
Disclosure: long aapl
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This article has 107 comments:
I respect Mr. Ballmer capacities (which in my point of view are shown in the brilliant iniciatives he support as private investor) in Microsoft he is in a wave that is difficult to reorient ...but he will.
The risk with Apple is that most of the success is around Mr. Jobs himself, he is everything in there....(let God keep him many years), $500 stock value is possible if he is around.
Regards.
What are the margins on those 300 million users and what are the margins on 10 million users? Would you rather be selling computers that cost over 1000 bucks or under 1000 bucks?
LOL, I own both platforms, mainly because of legacy software.
At some point people gravitate toward quality, even when it costs more. Apple now has the successful image of a luxury brand.
On Oct 23 10:02 AM John Galt wrote:
> > It's amazing: people say Apple sells 10 million PCs. There will
> be 300 million Windows PCs sold in the same time frame. So it is
> interesting to me that people spend so much time talking about the
> 3 percent of the market in that case...I wouldn't trade our 300 million
> new users a year for their 10 million. I just wouldn't do it. I kind
> of like what we're doing and the way we're serving the market.<br/>
>
> What are the margins on those 300 million users and what are the
> margins on 10 million users? Would you rather be selling computers
> that cost over 1000 bucks or under 1000 bucks?
Instead of knowing what it wants to do and deciding on how to get there, Microsoft sees what others do and simply copies or buys.
Apple takes something in existence (MP3, cell phones, PC) and applies innovations and hard work to make it significantly better. From personal computer operating system to pro-sumer software suites (iLife, iWork) to iPod and iPhone.
Microsoft sees what others are doing and then tries to copy and do the same. From Windows to Zune to Bing to Windows 7 to its clapping new stores. Copying or buying to do the same things are not interesting to most people. So people talk about the 3% innovator while tolerating the 97% behemoth.
Jobs and Woz worked with their fingers and created the machine and the software to start their business. Gates bought DOS from IBM and went from there. Apple founders actually built their first product and business from scratch, much like the pioneers of H-P. Gates took DOS off IBM's hands and was just doing business. Big differences in how they started and the corporate culture and strategy show this history clearly to this day.
Yes, we look to Apple for innovation now because Microsoft has spent years jamming whatever it wishes down our throats. We still cater to and must support Windows because it still has the 97% market share and thus the purchasing power that feeds our company's sales. We are also now developing products for the 3% Apple and begin to focus our innovative energy on the Apple version. Who won't?
In the past, they were reticent to compete. They were cute and did what they did. (I bought my 1st Apple computer in the early/mid 1980's.)
Now, they are competing.
I love it, but....What happened?
> a ‘delayed accelerant’ to Apple’s computing sales.
I saw that chart -- I think the numbers are kind of skewed based on some Microsoft fiascoes (Windows ME, Vista).
Windows 95 was strong, for its day.
Windows 2000 was an excellent release.
Windows XP was an incremental improvement that was received well over time.
Windows 7 is a true next-gen OS for Windows users -- what Vista should have been.
If nothing else, only a small fraction of businesses ever migrated to Vista over the past few years -- almost all of them will migrate to Windows 7 in the next 1-2 years.
Low margins or not, the sales volume will be enormous.
Don't you think that an extremely large increase in their user base wouldn't require a drop in prices? I really like Apple Macs and despite the fact that I view the premium paid as totally worth it, some people cannot and never will get beyond the higher price tag.
at a market share of <10% the room for growth is enormous.
Windows 7 and all previous windows for that matter is just aping the mac OS
On Oct 23 11:07 AM mrxg4 wrote:
> This is getting ridiculous. As much of an Apple fan I am, I cannot
> envision Apple expanding their market share enough to justify a $500
> price tag on the stock and a market valuation of over half a trillion
> dollars (let's assume for a second that we mean $500 in today's dollars)
>
>
> Don't you think that an extremely large increase in their user base
> wouldn't require a drop in prices? I really like Apple Macs and despite
> the fact that I view the premium paid as totally worth it, some people
> cannot and never will get beyond the higher price tag.
Also can't blame Microsoft for opening retail stores that clone Apple. It's what they do, with the success Apple has had they should have done it years ago. But still, Ballmer should at least have a little pride and come up with something on his own, shouldn't he?
A poster asks a good question regarding Apple's focus on high-end market. How can Apple possibly grow beyond 10% or 20% of the market? I do not believe that market share numbers are more important than sustainable profitable growth. There is a difference. I also do not believe Apple is focusing on the "high end" because it already sells machines costing $999 a piece.
Apple's strategy is not about focusing on high-end. Apple's strategy is to avoid competing on price alone. It wants to add significant value to its offering. That is the key difference. Apple trickles its technologies and innovation through its product line over time but one pays for such technologies, it is not for free.
Other corporations use whatever Microsoft offers and slaps together a box to sell based on price. They do not focus enough on value-added offering. PC's are now a dime a dozen and it is a noisy field. Hard to differentiate and garner attention.
On Oct 23 10:11 AM tripleblack wrote:
> In one case you have a generic, disposable commodity market, driven
> by price, and on the other side you have an affordable product in
> a brand market driven by innovation and ease-of-use.
>
> LOL, I own both platforms, mainly because of legacy software.
>
> At some point people gravitate toward quality, even when it costs
> more. Apple now has the successful image of a luxury brand.
On Oct 23 11:28 AM BladRnr wrote:
> I agree, but it's happening none the less. Apple's latest quarterly
> earnings defied logic. Defied logic! Three million Macs in a severe
> recession. Maybe, just maybe, people would rather spend more on something
> that works, doesn't have viruses, is design-oriented and is seen
> as a complement to their iPhone or iPod. I can't explain it any other
> way. In this recession Apple should be doing poorly. All the pundits
> thought so last spring. But Apple just had their best quarter ever.
> I don't think it will take much to get them to 10% market share here
> in the States. It's not out of the question.
I've been extremely bullish on AAPL and still am. However, $500 a share would put AAPL's market cap at $451 billion, eclipsing even XOM which is the leader in cap at $357 billion. Still quite a stretch regardless of gaining 10% market share.
THe MSFT fans could really see no reason it would not double again.
They ran the numbers they talked the talk about world markets , profits
Dont make the mistake of not locking in some profits along the ride.
Forget about 3% share or 97% share, it is going to get harder and harder for apple to move the dial any econ 101 student could figure it out.
But Jason has every reason to pump AAPL, With each and every cheerleadering story Jason discloses that he is in fact long AAPL.
I sure hope he discloses when he goes short,
You talk about a 9.4% market share as immense room for growth... and then comlietely contradict yourself and say they already have 91% of the luxury market as if that's a good thing!
Clearly the luxury market is theirs. And you have to remember that 9% represents high powered PCs that Mac can't really compete with on a performance basis and isn't their market anyways.
If I told you Porsche's accounted for 90% of cars sold over $60,000 but only 10% of all cars sold, would you really be interpreting that as room for growth?
FYI-I have absolutely no love affair with Apple, I wouldn't hesitate to go short if that's what was warranted. But I believe at this time, Apple offers a fundamental play for the ages.
91% of retail sales over $1,000 figure.
You must be aware that retail sales EXCLUDE the largest part of the market, ie corp. And corp buys most of the $1,000 plus laptops and desktops every day.
Spouting skewed and false data is lazy at best.
You even failed to link the the NPD data but instead linked to a cheerleader. Had you linked to any of the real tech sites, they all laughed at the data and I am sure you know it.
Please Jason if you have a link to real data, post it or retract.
market seg POST it.
Otherwise you should remove misleading false claims, it weakens you as a credible source of information
For analysts and many bloggers lacking the necessary technical background, it is difficult to understand Apple. They think an OS is an OS, right? PalmOS (Linux) can multi-task and iPhone OS (Unix) cannot, right? They mix UI with OS capabilities. They think Word and Excel are as good as everything can possibly get. They think that Windows 7 is the best and everything is "saturated" and "old" and what else is possible? They have been so enamored and so well trained on existing technologies, everything else looks strange. How can a 3% or 9% compete against 97% or 91%? Why buy Apple when a cheap Windows PC will suffice? Some even claim that Cloud Computing will make OS obsolete? Wow! That is the expertise of an analyst.
They are playing at numbers and not understanding how consumers are, and will be, using technologies. They do not understand how advances in CPU power, size and speed and advances in software can carry consumer and business technologies forward. They do not know that software and OS as they are today are actually quite old. They do not know that over the next 5 to 15 years, small companies and hopefully some larger corporations, will have opportunities to make quantum leaps on computing capabilities that can solve even more real world problems down to the individual consumer level.
If those screaming the loudest do not understand the "products" or the "solutions", and they do not understand the limitations of today, how can they clearly understand or appreciate strategies put forth by Apple or Nokia or Microsoft or RIM? How will they know what changes are meaningful and to foresee what is possible in the future? Where is the vision? So they write what they know and people pay to invest with such advice.
The bet is not just on Apple or Microsoft. The bet is also not on the next 24 months or even 48 months. The bet is on who is expending the resources now on the right research to put together the right set of integrated solutions that will take all of us into a new age of personal computing 60 months from now. Who has the integration, the mutually supportive and interlocking components, the ecosystem, if you will, that will carry all of us smoothly into this new future. Whoever does this is going to dominate the mind share of consumers and will in turn be dominant in sales.
My bet, for now, is on Apple because it is hungry, its footprint is tiny and it is fearless when it comes to innovation and it has a war chest to back up its research. Most importantly, its research often turns into real products that solve real problems for real people.
What this comes down to is Microsoft licenses all their software and Mac doesn't. Ever heard of BetaMax? (Superior product, but lost to VHS due to licensing.) How about McDonald's? Do they have the best burger? No, but they make a lot of them cheaply.
Or, they need to come out with another breakthrough piece of hardware, that revolutionizes an industry. That would also have a huge affect.
Jason, be careful with these numbers from the Apple data release. They represent total Apple revenue increases in that region. Japan Mac units sales are flat yoy at 78k and 79k. Japan 2009 Q4 Rev was $434M. Divide the two and you get $5493/unit. Why so high? iPhone and iPod, etc. sales are included in the revenue number.
Stefan
Apple has all the advantage. They view 90% of the market as theirs for the taking. If they only snatch another 5% of that market, they could certainly be at the $500 level you are speaking of.
The general point is that Apple does very well in the high end and there is room to take share if they decide to offer a Tablet or even a MacBook at a lower price point.
If I am correct their server farm has a part to play in the future plans of Apple as a total computer, communication and entertainment platform.
In my mind Apple with its innovation (Iphone, Macbook, and the upcomming tablet) share a common theme with GOOG, which is they both encompass enormous trends that are forming a new technological landscape. If you ask me, I think in 5 years, we will look back and think $500 was at the low end of the range.
www.betanews.com/joewi...
I must apologize first. My stupidest moment on SA was to mock your $20 call on BAC when the stock was $6. Of course the massive market rally lifted many stocks to 100%+ gains. You mentioned at the time that you were playing BAC with at the money LEAPS.
At the moment, AAPL is overbought and the market is pulling back. Any options on AAPL strike you as a good way to play?
But the real factor is that PCs, as we know them today, is not a growth market, but a replacement market. The refresh cycle has already grown longer (and will grow longer still), and globally, businesses and consumers have started shifting to more mobile devices (and fewer second or even first PCs). That is the sweet spot and the iPhone and rumored-to-be-coming tablet are both aimed there.
I thought MS understood this when they spent so much effort and burned bridges (with PlaysforSure partners) to bring out the Zune, but their failure to create a single mobile platform combining the Zune with Windows Mobile is a real disappointment.
Jobs knows that the "look and feel" of a product is critical. Of course consumers expect breakthrough innovation from Apple.
But is the "experience" of the product that builds the brand loyalty.
Consumers learn to trust Apple, to take the leap to a new offering, and rather than be disappointed, the consumer is usually seen to be rapidly trading up as Apple follows on the initial product launch with improvements.
Steve Jobs has in many ways returned to the industrial design roots of the thirties and mid fifties, taking the "edges" off of the computer boxes, the Ipods,the Iphones and laptops.
Who ,three years ago, would have ever thought that Apple, with no experience in the cell phone business, could create a product superior to most phones built by the titans such as Nokia?
So who knows what the future price will be, and who cares. The reality is that Apple has learned from failures such as the Lisa computer and the Newton, built upon them, and tests boundaries.
That will lead to a long growth curve, and moreover, if you look at the laptops the young people are carrying, with Ipods plugged in to earphones, the future of Apple is very secure in all economic cycles.
On Oct 23 02:30 PM Adonis wrote:
> If AAPL can break into the corporate market, then they may be able
> to hit $500. They can continue to sell to the college kids all day
> long, but that won't increase their market share. Businesses need
> to jump on board to take AAPL to $500.
>
> Or, they need to come out with another breakthrough piece of hardware,
> that revolutionizes an industry. That would also have a huge affect.
Regards.
On Oct 23 04:05 PM Rohan C. Pease wrote:
> Hat Tip to Jason for making myself alot of money with his bold calls.
> Thank you for you exciting and insighful analysis.
And, oh yeah, I never get investment advice from Econ 101 students.
On Oct 23 12:11 PM jack dee wrote:
> THis is exactly the kind of story that floated around in the late
> 1990s but alll about MSFT.
>
> THe MSFT fans could really see no reason it would not double again.
>
> They ran the numbers they talked the talk about world markets , profits
>
>
>
> Dont make the mistake of not locking in some profits along the ride.
>
>
> Forget about 3% share or 97% share, it is going to get harder and
> harder for apple to move the dial any econ 101 student could figure
> it out.
Yes, I realize that MSFT sells more than Windows but guruji referred to the "97%" number. Many copies of WIndows are sold for directly to the PC manufacturers for relatively little (compared to the retail price).
On Oct 23 10:57 PM guruji wrote:
> Get real AAPL cheerleaders. 500$ per share translates to nearly half
> trillion market cap. Nearly one and half times the Microsoft's value
> which is currently commanding 97 percent of the market share.
With Apple it's all about an experience and a loyalty that no other manufacturer generates. I am 71 years old and have had Macs since 1987, I have never had a PC so they are still a mystery to me, I have converted all of my family and we are connected worldwide through iChat, I live in Hong Kong and can see my grandchildren in two other countries any time I want to. I am sure this can be done with PCs but not as easily, I have anecdotal evidence of this from many of my frustrated friends.
I was in the iPhone service centre today (the first time I have ever sought service for an Apple product) the camera on my wife's phone ceased to function. Whilst there a grey haired gentleman and a younger man came in, they were father and son, both had iPhones dad was carrying a MacBook pro 15in and his son had a MacBook Pro 13in, it was fun to watch them and share their joy in all things Apple.
This is what Steve has done he has created a community of people who whatever the circumstances will continue to buy the products he develops and builds, if ever there was proof of this then this years performance was it.
When MS start to build computers and not just suspect software I will give them some thought but until then I'll go with the Jobster.
Others make things cheaper, Apple makes things better.
If you looking for a computer to do music, videos, graphics and other multi media projects then you will probably buy the Apple.
People have a tendency to buy a computer like the one they use at work or one like their friends have, in which case it is the PC.
The crowd that buys the apple products are the same ones that wore shirts with alligators and polo ponies....lol
Apple will hit $500 a share when the dollar is worth 10c.
On Oct 24 09:55 AM Etoile Brilliant wrote:
> Apple may well become a $500 stock but it won't be linked to its
> performance in the $1000+ laptop market. The future has been and
> will be low priced netbooks.
Apple. There is a lot going on under the hood. K-Mart did not think WalMart was a threat either. I am not Dr.Teknicle but there will be big changes in this arena in the next few years.
That 97% represents MS's share of the PC OS market, yes. But to keep things in perspective, what's MS's share of the PC *hardware* market? ZERO. It doesn't sell PCs.
Similarly, several PC hardware makers can boast of hardware shares that beat Apple's, but what's the PC *OS* share of all those makers *combined*? ZERO. They don't make an OS (other than, in some cases, a Linux variant with still-negligible share).
Apple does have something special going on: it holds a comfortable, profitable, and growing position in both PCs and OSs, something its competitors don't do (and IMO don't have the competence to do). Which, by itself, doesn't tell us Apple's going to $500 or even $250. But always put words by the bombastic Ballmer in perspective: He may prefer his 300 million OS customers to Jobs' 10 million OS customers, but he does NOT prefer his ZERO PC customers to Jobs' 10 million PC customers. Ballmer just "forgets" to mention that.
On Oct 24 10:24 AM Mac'em X wrote:
> Ballmer's comments, as always, are misleading. Whenever someone carelessly
> tosses off "Apple 3% share vs Microsoft 97% share" (or whatever the
> actual numbers are), remember:
>
> That 97% represents MS's share of the PC OS market, yes. But to keep
> things in perspective, what's MS's share of the PC *hardware* market?
> ZERO. It doesn't sell PCs.
>
> Similarly, several PC hardware makers can boast of hardware shares
> that beat Apple's, but what's the PC *OS* share of all those makers
> *combined*? ZERO. They don't make an OS (other than, in some cases,
> a Linux variant with still-negligible share).
>
> Apple does have something special going on: it holds a comfortable,
> profitable, and growing position in both PCs and OSs, something its
> competitors don't do (and IMO don't have the competence to do). Which,
> by itself, doesn't tell us Apple's going to $500 or even $250. But
> always put words by the bombastic Ballmer in perspective: He may
> prefer his 300 million OS customers to Jobs' 10 million OS customers,
> but he does NOT prefer his ZERO PC customers to Jobs' 10 million
> PC customers. Ballmer just "forgets" to mention that.
MS is in the market of commodity computer uses and ideas.
Apple is in the market of "Cool lifestyle."
These are not the same market.
Now, I hope Apple goes to 500. I own shares.
And that it 'might' be worth more than MS, is irrelevant to what might happen. A lot of things happen that 'shouldn't' happen.
Let me predict. The stock will continue to outpace the general market as long as Steve Jobs is alive. When Steve Jobs dies, the stock will fall horrifically...very fast.
What happens next is based on his successor.
On Oct 23 10:48 PM Dialectical Materialist wrote:
> Microsoft was not releasing an ever expanding product line that changed
> the way we live. Oh yeah, they talked about how the OS of the future
> would be voice activated, but that never actually materialized.
> They kept adding more and more complex and buggy "features" to a
> word processor and a spreadsheet. They updated a slideshow program
> (that admittedly runs corporate America). But they stalled. They
> thought adding transparent layers was an important part of a new
> OS (why?). They said that we would be doing more and more on the
> web and then proceeded to bloat a bad browser with "features", but
> we actually did more and more on the web because of Google and Adobe,
> not Microsoft. They took every opportunity to tell us they had the
> future in their hands and every opportunity to show us they had no
> way forward. Comparing MS in the 1990's to Apple now is just silly.
> There is an actual reason to think Apple will expand and grow --
> it is releasing substantially new and/or better products every couple
> of years. It is gaining market share and makes a killing with each
> sale. MSFT was suffering from consumer boredom and shrinking margins
> in the 1990's. Different story, different stock, different trajectory.
>
>
> And, oh yeah, I never get investment advice from Econ 101 students.
>
The future is about wi-fi is used to the max, cloud computing used to the max.
Understanding that and investing properly will make you a lot of money. Apple understands that to spades and has and will position themselves to be in that sweet spot. Jobs is a visionary and sees that and is working towards that sweet spot.
Please don't confuse the history of 'computer-use' with the future of it's use. In this case the past and the future don't rhyme.
You're getting stuck on the word computer in the phrase "computer-use.". Think computer-use focusing on use.
Apple is about use, not computer.
On Oct 24 10:21 AM FloridaBoy2 wrote:
> I don't know about the $500 price target but *I* would not bet against
>
> Apple. There is a lot going on under the hood. K-Mart did not think
> WalMart was a threat either. I am not Dr.Teknicle but there will
> be big changes in this arena in the next few years.
On Oct 23 10:02 AM John Galt wrote:
> > It's amazing: people say Apple sells 10 million PCs. There will
> be 300 million Windows PCs sold in the same time frame. So it is
> interesting to me that people spend so much time talking about the
> 3 percent of the market in that case...I wouldn't trade our 300 million
> new users a year for their 10 million. I just wouldn't do it. I kind
> of like what we're doing and the way we're serving the market.<br/>
>
> What are the margins on those 300 million users and what are the
> margins on 10 million users? Would you rather be selling computers
> that cost over 1000 bucks or under 1000 bucks?
In addition they have the iPod franchise which MS attacked with Zune and the iPhone, which MS is watching with no clue how to respond.
Windows 7 is the big news from Seattle? Good luck with that.
It really started competing when it dropped the name Apple Computer.
As Jason has suggested in his ebook, Apple succeeds spectacularly because its contrarian CLOSED ECOSYSTEM approach (integrating a full line of hardware devices to its Snow Leopard and App Store) makes life a pleasure for the markets it targets.
It succeeds because it does not ship buggy software. Microsoft boasts 8 million beta testers for every release, but stupid is stupid, and so the the stupids are rewarded year after year with buggy products and broken promises.
Which they deserve.
Open ecosystems (read: PCs) and the high worship of choice and unlimited customization in trivial matters (read: Linux) cannot produce profit or consistent delivery of quality over the long term.
MS doesn't have to build PC's and Apple does. Wouldn't that cut into profit margins leaving the better margins to MS?
On Oct 23 10:46 AM who wrote:
> All good and well, one important point is that Apple targets high
> end segment and with 91%, there isn't much room to grow. How will
> Apple compete with Windows at the low end of spectrum if it choose
> do so? Will entry into low end machines threaten its dominance
> in the high end market.
How many experts predicted that the iPod would rule the portable music playing market over Sony and others? How many experts predicted that the iPhone would so quickly put cell phone companies in its' rear view mirror so quickly? Now, the portable game playing makers are worrying about iTouches. Naturally, all of these feed the desire to get a Mac; but everything is part of the whole.
What separates Apple from just about every other company is their philosophy: Control the whole design and make it work for the end user. Apple is at war with the business philosophy that segments the design of the whole product among companies with varying goals. That war is the same one Steve Jobs has been waging since his garage days. Stop pitting Apple against Microsoft. Apple's target is a lot bigger than that. The difference between Apple Computer and Apple Inc. is not in philosophy. The difference is in the scope of applying that philosophy.
That's four hundred billion dollars, it would seem Jason is watching too many govenment interviews where they through around numbers like that as if it were pocket change.
My advice is watch your investment carefully, don't get greedy, and get out when this momentum fades.
As a professional in the investment business for more than 37 years, I can tell you the enthusiasm for this stock will not last for ever and Jason is like all the analysts predicting the stock will go to the sky, this is a self serving prediction, just be careful.
Techtrader has good points...clean the rose colored glasses once in a while and don't get intoxicated with AAPL. It's just a stock. Stay 'eyes wide open'.
On Oct 24 02:03 PM billybubb wrote:
> A friend of mine has been using Windows 7 for several months now.
> He got an early version from the tech job that he has. He is a long
> time LInux user (and sometimes Mac) and one of the harshest critics
> of MS but he has nothing but praise for Windows 7. He showed some
> of its features to me and I must say...wow.
> MS doesn't have to build PC's and Apple does. Wouldn't that cut into
> profit margins leaving the better margins to MS?
On Oct 24 03:01 PM Techtrader10 wrote:
> Jason Schwartz is not doing the investing public any favors. To
> say that the stock will be worth $500 per share is illogical. Do
> the math $500 per share times 800,000,000 shares if you don't have
> a calculator that can handle that may 0's it's $400,000,000,000.00
>
>
> That's four hundred billion dollars, it would seem Jason is watching
> too many govenment interviews where they through around numbers like
> that as if it were pocket change.
>
> My advice is watch your investment carefully, don't get greedy, and
> get out when this momentum fades.
>
> As a professional in the investment business for more than 37 years,
> I can tell you the enthusiasm for this stock will not last for ever
> and Jason is like all the analysts predicting the stock will go to
> the sky, this is a self serving prediction, just be careful.
On Oct 24 11:15 PM martyg wrote:
> advice on $400,000,000 or so revenues from somebody with 17 years
> experience, who doesn't know the difference between "throw" and "through"
> is very suspect.
Then, after the dust settles, sure, it can go up to $500 as there is no other computer on the face of the planet as good as an apple. PERIOD. The planet is their market. Msoft had the planet and as soon as old billionaire got complacent, they crashed and burned as well.
Gap up exhaustion tops are all over in the market, all you have to do is look around. Then, trace back the chart a month or so and you will always find an improperly formed downward slopping w patter that has broken out into the exhaustion gap and those will all fail. They always do.
Look at options on MZZ, there are absolutely none being traded yet the small caps and the mid caps and every other long etf have broken down on the week. IBD double inverted in the top 200. We are correcting folks. My own business can not sell anything suddenly this past week. Swine flu will crush the remainder of the economy.
Look for apple and others to quickly announce stock splits to justify the gap up exhaustion. That will justify the concept of $500. They only get there on a stock split now and after the recovery post swine flu. Brian
Personally I think this is will be a very short lived phenomena. I own both Vista and Windows 7 machines, and as a software developer I understand both of them quite well.
Vista rightly got a bad reputation when it was released with clumsy security features and some performance issues. Pretty much all of these issues have been corrected and if you configure it right it is a pretty decent, stable OS.
Windows 7 from a user perspective is really no better than Vista SP3, with the right configuration options selected. And Windows 7 still has to go through the teething pains that any new MS OS does - it will really not be something you would give to a user population until at least the first service pack comes out a year from now.
In that year the blush will come off the rose and people will realize that as usual that Microsoft is really a marketing company at this point in its life cycle. If Microsoft was really an innovative company there would be just one version of Windows 7, and it would be the 64 bit platform.
At best this is a non-event for Apple, and it could easily turn into a catalyst for Apple growth when people once again realize that Windows 7 is nothing special.
On Oct 23 10:39 AM D_Virginia wrote:
> > believe new OS launches from Microsoft may have even acted as
Another thing to consider is, I fully expect a correction of at least 22%...and I mean the market in general, not just apple.
On Oct 24 01:26 AM John Petersen wrote:
> The problem with comparing Apple and Windows is that Apple sells
> a seamlessly integrated bundle that includes both the OS and a very
> high-end box while all Microsoft cares about is the OS. As a result,
> every point in market share is a much bigger gain for Apple. Jobs'
> strategy to reduce the price just enough to move the decision point
> a little farther to the left bell curve is pure genius. If a single
> company could garner a 10% share of both the OS market and the hardware
> market, it could well justify a half-trillion market cap.
If you rent a car in Miami to get it in Paris, you will pay lets say 65 usd, if I rent it in Spain to get the same car in Paris I´ll pay 65 €, now made your FX work...
Regards.
On Oct 24 05:16 PM Fabien Hug wrote:
> Since I live in the US, I bought an Imac. It's a superb machine and
> I truly like it. Bit more expensive than a PC but well worth the
> difference imo (it runs Windows Office great). Back in Switzerland
> in January my mom wanted to buy her first PC with me teaching her.
> I told her get a Mac and you'll be running smoothly in 1 one day.
> The prices were crazy. Not worth it. The cheapest Mac laptop was
> selling for $1,400 vs $ 850 in the US! I don't understand how they
> can increase market share with such prices.
Apple is a hardware company without a monopoly.
Investing is about estimating the size and probability of future returns.
Steve Jobs is a awesome but that still doesn
PC's are so screwed up that most users update to the latest version in hopes of getting a better operating system. Case in point, Windows Vista was supposed to be the greatest updated version and it failed completely. Within what? 2 years and a new version is released with hopes of correcting the prior OS.
Mac users update to the latest version because they know the improvements actually "improve" what they already have! Apple doesn't change everything with hopes of improving. They only make changes that actually make my Mac even better than before.
On Oct 23 10:12 AM boobobadoo wrote:
> The funny thing too is that people are buying Macs, so they can install
> Windows 7 and dual boot the system.
My second question has to do with the high margins the Iphone currently enjoys. How long can Apple continue to enjoy upwards of 60% margin on these devices? As we've seen, the competition in smart phones is intense, and the newer devices put out by the competition are getting closer to rivaling the IPhone. I feel that this will inevitably force Apple to accept lower margins on their phones. A good example of this is the China Unicom deal. Apple is only receiving 300$ per phone with China Unicom, whereas in the deal with AT&T its estimated that they get about 600$. With an estimated cost to produce of ~180$ as you can see, their margins go from about 70% to a more modest 40%, and the profit per phone goes from 420$ to 120$. They have to sell 3x as many Iphones in China to make the same profit as in the US! I expect this trend to continue, especially if they end exclusivity deals with carriers.
Apple is undoubtedly on top of their game right now, the question is, how long will they stay on top? Remember, they were left dead in the water only 8 years ago, before the launch of the IPod. Things can change quickly in the consumer electronics arena. Apple must continue to come up with better ideas than the competition and execute them better. Whether they'll be able to do this? Your guess is as good as mine.
Btw, I love the new magic mouse.
Let me rephrase that, Steve Jobs is SO important to the computer industry that even Microsoft stock dropped like a rock when he (Jobs) was sick!
Embarrassing ain't it!
On Oct 25 01:29 PM LaChic wrote:
> I'm going to totally agree, apple's future wraps around the notion
> of Steve Jobs staying with apple, if anything happens to him, well,
> let's just look at what happened to apple's share price when the
> rumors were that steve jobs was so ill, that he was not going to
> be at the helm of apple anymore...so enjoy the stock price while
> it last.
>
> Another thing to consider is, I fully expect a correction of at least
> 22%...and I mean the market in general, not just apple.
So you can imagine that the MS dominance in corporate america is driven by a lack of MacOS IT staff. And surely corporations are more concerned about software than hardware, and has been previously mentioned and acknowledged by Apple, MS has won the OS war.
All that being said, I think AAPL has a bright future as it fills in the cell phone market and perhaps finds another niche with the rumoured tablet (but I personally have doubts about the tablet). Still a $500/share price target is a bit much. $300/share I could see in the next 2-3 years given the iphones growth globally and potential from the itablet. But someone mentioned dropping margins on the iphone already and that is another good point that could limit earnings growth.
That in and of itself will propel Apple in the future.
Look out for Google's Android platform, maybe Apple will be forced to integrate it in the future.
Apple is shiny hardware, Google is shiny software. Both will be working hand in hand in the future.
You people are missing the fact that virtually EVERYONE agrees now that the Mac is far better. It's not a question of relearning, just unlearning a lot of the windows stuff (they never got it right the first time.)
Long term, it's about more than just the computer, and this is where Microsoft is light years behind Apple. Apple makes the best of all products. And they are not really ANY more expensive if you can even FIND a comparable product. I'd argue that you can't.
On Oct 23 12:35 PM Shaftsinker wrote:
> This is absolute hysteria.
>
> You talk about a 9.4% market share as immense room for growth...
> and then comlietely contradict yourself and say they already have
> 91% of the luxury market as if that's a good thing!
>
> Clearly the luxury market is theirs. And you have to remember that
> 9% represents high powered PCs that Mac can't really compete with
> on a performance basis and isn't their market anyways.
>
> If I told you Porsche's accounted for 90% of cars sold over $60,000
> but only 10% of all cars sold, would you really be interpreting that
> as room for growth?
But the 91% over $1000 figure is twisted to fit the story. NPD is not a hard site to find, and the data is there to see.
metrics and data sources matter. You cant use a narrowly defined number and just cast it into the wild with out expecting some push back.
and linking to a site that links to a site that talked about a NPD press release without any terms of ref, is just nonsense.
Retail sales are not the whole market. nor are they even close, and once more , you clearly know the data is skewed to get press headlines and not the provide real information.
On Oct 23 03:28 PM Jason Schwarz wrote:
> There are multiple links to the 91% NPD report. Here's one: techreport.com/discuss...
> We can definitely retract that report if NPD is proven false. <br/>
>
> The general point is that Apple does very well in the high end and
> there is room to take share if they decide to offer a Tablet or even
> a MacBook at a lower price point.
Rgds
On Oct 26 10:14 AM goldbug101 wrote:
> Apple fanboys (and girls) will always be blinded by Apple loyalty.
>
>
> That in and of itself will propel Apple in the future.
>
> Look out for Google's Android platform, maybe Apple will be forced
> to integrate it in the future.
>
> Apple is shiny hardware, Google is shiny software. Both will be working
> hand in hand in the future.
Where is your disclosure?
On Oct 23 12:16 PM jack dee wrote:
> But Jason has every reason to pump AAPL, With each and every cheerleadering
> story Jason discloses that he is in fact long AAPL.
On Oct 24 03:01 PM Techtrader10 wrote:
> I can tell you the enthusiasm for this stock will not last for ever
On Oct 24 07:58 PM ManAboutDallas wrote:
> Apple is toast the minute Jobs croaks which, given the state of his
> health, is ".. any minute now".
> Jobs and Woz worked with their fingers and created the machine and
> the software to start their business. Gates bought DOS from IBM and
> went from there. Apple founders actually built their first product
> and business from scratch, much like the pioneers of H-P. Gates took
> DOS off IBM's hands and was just doing business. Big differences
> in how they started and the corporate culture and strategy show this
> history clearly to this day.
Correction: DOS did not come from IBM. Microsoft stole DOS, see this or just google "Microsft stole DOS":
www.eetimes.com/news/l...
Hit that bong again so you won't have to deal with reality today, either.
On Nov 05 03:31 PM JW.USC wrote:
> Typical wintard...classless.
>
> On Oct 24 07:58 PM ManAboutDallas wrote:
On Nov 08 12:44 PM ManAboutDallas wrote:
> Yeah, yeah, yeah... let's not have ANYTHING resembling brutal reality,
> it might hurt somebody's wittle feewings, mightn't it?
>
> Hit that bong again so you won't have to deal with reality today,
> either.