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David Room

 
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  • Apple's Secret Weapon Will Yield All-Time Highs [View article]
    I agree an iWatch will be a great addition to the iOS family. Where I cannot agree is on the author's conclusion:

    "you have the most fundamentally sound company in the history of the world trading about 40% off of its all time highs in the midst of a extremely bullish market. We now have almost definitive proof that Apple is going to be tapping into an untouched revenue source. The biggest company in the world is about to get even bigger, and this investor remains extremely bullish on Apple."

    You cannot extrapolate a stock price retracing to all time highs from unconfirmed rumours of a new product. Talk of a return to $700 at this point is fantasy land I am afraid. vbbv has it spot on: "even if the iWatch nets AAPL 6 billion annually at high margins, that's only 2-3% of annual revenue."

    I strongly disagree that Apple is the most fundamentally sound company in the world right now. Perhaps 6 months ago it was. But with the iPhone they are facing very serious competition and a rapidly saturating target market. Margins are under pressure. Citi are forecasting a YoY decline in iPhone sales. I expect iPhone sales to fall rapidly unless a 5S is announced sooner than the normal refresh cycle along with a China mobile deal.

    IF iPhone sales hold up and IF Apple can push into China Mobile this year, then perhaps an iWatch can be an additional catalyst that turns the stock around. HOWEVER, an iWatch on its own is never going to bring in anywhere near the revenue of the iPhone (regardless of great margins).

    The stock is sinking due to concerns over iPhone. iPhone took a product that everybody owned and made it better such that we all wanted one. iWatch will have to start from a base where wearing a watch is no longer commonplace or even desirable. iWatch may replace the iPod Nano but even if we all buy one, it is NOT going to replace revenue from iPhone.

    One final thought - in 2007 competition was taken off guard. Things are different now. Don't expect Samsung to make the same mistake twice. If iWatch is real, there will be a Galaxy Watch before the year is out and competitive advantage will be much harder to achieve than before. Where before competitors did not have the ecosystem to compete, today a competing product can interface into the Android ecosystem with no barriers to entry.
    Mar 6 01:54 PM | Likes Like |Link to Comment
  • View Apple By Seasons, Not By Quarters [View article]
    +1

    The 'Amateurs' have lagged the 'Pros' in recent quarters and Robert's final sentence is rather evasive on the all important EPS growth in the face of declining margins. Amateur estimates will need to come down for the December quarter.
    Oct 29 02:43 PM | Likes Like |Link to Comment
  • View Apple By Seasons, Not By Quarters [View article]
    Are you adjusting your published price target based on the disappointing results? Where do you think apple shares will be in January? Thx
    Oct 29 02:36 PM | Likes Like |Link to Comment
  • View Apple By Seasons, Not By Quarters [View article]
    Andy Zaky tweeted "the Microsoft Surface is the first real competitor to the iPad...pretty blown away by the Microsoft Surface. This thing is pretty damn amazing. The smart cover is nothing short of incredible...gets nothing less than an A+"

    So I take it you disagree?
    Oct 29 02:33 PM | Likes Like |Link to Comment
  • Apple Is Trading At 60-75% Premium To Its Sum Of Parts Valuation [View article]
    This is the most ridiculous article on Apple I have ever seen. Period.

    Desktop and notebook 'PE' less than Dell? iPhone 'segment' PE less than Nokia?

    It's a joke of an analysis, and how I wish there was an ignore button in SA to stop accidentally opening articles by this guy. It actually makes me feel ill to think I have in some small way contributed to his earnings from this site.
    Oct 9 06:24 AM | 11 Likes Like |Link to Comment
  • Apple: Say Hello To Risk And Uncertainty [View article]
    Wow, we have hit a new low if the author of this drivel is rated 1 in 3 categories!

    Amongst the 'highlights' of the piece:

    "The reviews are in and the company has failed on both innovation and reliability."
    "There was a suspicion that the iPhone 5 would be lackluster, but no one even dreamed that it would have bugs and errors."
    "To fully understand the iPhone 5 letdown...,"
    "This roll-out is already facing problems, for instance, the problems with the company's factories in China."
    "The company missed initial targets of 10 million sales by September end. Whether it was due to stock out or less demand, it's a red flag for investors either way.

    And saving the best till last....

    "We believe the biggest threat to iPad is from Microsoft (MSFT)'s upcoming Surface tablet."

    I'm not going to bother to critique these astonishingly ill-informed remarks; dannydyn gave it a good go but really if you are worried about these issues sell all Apple stock right now to better informed investors.

    Let's revisit these points in January and determine if Qinetq still deserves his or her accolades. Remember, he who writes the most articles gets to the top of the rankings but they are not going to care what happens to your investments in the meantime.
    Oct 2 09:45 AM | 8 Likes Like |Link to Comment
  • The iPhone 5: Apple's Last Hurrah [View article]
    One of the better articles on Apple to come out of SA recently....
    Aug 28 06:08 PM | 1 Like Like |Link to Comment
  • Apple Bulls Are Wearing Shades, But Is The Future Really That Bright? [View article]
    Hmmmm just one day after your last article and a substantive amount of duplicated material. I'm not sure that this adds anything that wasn't said in yesterday's article?
    Jun 27 06:27 PM | 2 Likes Like |Link to Comment
  • The Myth Of iPhone Seasonality [View article]
    In my view 38m iPhones is far too high for Q3 and any investors modelling for such a scenario are setting themselves up for a major disappointment.

    Some of the posters here have commented on the channel fill during Q2 and the fact that 40 carriers were added back in Q2 2011 which helped produce a blow out number.

    If it wasn't for that channel fill last quarter the iPhone number would have been 'good' but not 'blowout' but investors concentrated on the headline and majorly gapped the stock up on the report. As has been said the product is more or less in balance and and expecting Q on Q growth at this stage is very optimistic.

    Nobody here has factored in the rise of Samsung in the last 12 months and where last year iPhone contract renewals had little in the way of competition, this year we have a major major threat in the form of the Galaxy SIII. As a worldwide product selling millions of units at launch, which for the first time makes 4S look long-in-the-tooth, this is one major factor that has the potential to dent Q3 growth yet further.

    If we don't get a 'pre-earnings run' then a gap up on a high number can't be ruled out but I strongly feel that a number in the low 30s is more realistic, and on that scenario investors are likely to feel reassured at best and majorly disappointed at worst.

    What will be particularly crucial this time around is Apple guidance for Q4 as that will be a serious test of 4S residual demand in the face of the SIII and an October launch for the '5'. It is not beyond the boundaries of feasibility that Q4 guidance vs recent history will be extremely weak due to greater than expected drop-off in iPhone demand ahead of the refresh. Samsung have deliberately targeted the former iPhone launch window in an attempt to encourage people to switch during a vulnerable stage of the product lifecycle and there is evidence that they are getting results.
    Jun 27 08:23 AM | 1 Like Like |Link to Comment
  • A Trader's Value Guide To Ancestry.com [View article]
    " At last check, going into the close Friday, shares were trading at $26.35, up over 5% on the session."

    "If you believe Ancestry.com shares are undervalued at current levels, today's sell-off may present a long-term opportunity."

    So which is it?

    After all the history presented, it's a shame the author doesn't have an opinion to share other than buy if you believe the story and sell if you don't.
    Jun 8 04:54 PM | Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    Thanks for the reply, I look forward to your detailed quarter estimates Robert. Also interested in any thoughts on the 4G debate as I do feel this will limit appeal of the 5 outside the US, for lack of any other 'killer' features.
    May 21 06:27 PM | 1 Like Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    Take your point and I'm sure there is ongoing mileage in the 4S but my main point was that folks are overly focused on the US where LTE is already here. In the UK the government has yet to even auction the spectrum, and when it does it's still likely it will be incompatible with the new iPad and hence probably iPhone 5 as well.

    I'm sure the 5 will be a huge seller in the US but they won't be able to market it as 4G elsewhere and that will surely limit the appeal of this feature. Hopefully there are a few surprises in the closet to wow us as they really need to blow away the competition this time.
    May 21 06:25 PM | Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    As competition fades? Have you checked out the specs of the Galaxy S III and the alleged 9M pre-orders compared to 3M initial sales for the 4S?
    May 20 08:03 PM | Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    All the talk of 4G LTE being a primary driver of increased sales of an iPhone 5 concerns me.

    Re. sfphoto's comment "Although I agree with you that in the developed markets, consumers might hold off on buying the iPhone 4S in anticipation of the iPhone 5, this is not true in emerging markets because the mobile operators there have yet to build their 4G LTE networks."

    It's not just emerging markets that have yet to build LTE networks. Why all the fuss about the advertising for the new iPad in UK, Australia etc etc? The new iPad's LTE is useless there and will be even when they introduce LTE due to different non-compatible frequencies.

    So will this apply with the new iPhone 5? Because if it does, where is the incentive for all the 4S owners outside the US to upgrade to the 5? We already have a retina display so there isn't the same catalyst as iPad 2 to new iPad. Will they be tempted by a 3.5 to 4' screen upgrade? I seriously hope there are better reasons than a new form factor and bigger screen, but struggling to think what they might be that will be sufficiently compelling. The 4S does everything pretty well already.

    Finally, Robert based on your article, 30M iPhone sales in June quarter seems rather ambitious. If we were at c. 32.4M without the inventory boost in last quarter, including launch of the handset in China in the quarter, where are the sales going to come from in June quarter? If China follows the pattern of the US and sales decline by 20 - 40% from launch quarter, that would suggest a number way below 30M? Do you expect such a softening in China?

    Also, are you concerned about the alleged 9M pre orders for the Galaxy S III? I think we should be, as the technical hardware gap between Samsung and Apple has never been wider and the new iPhone launch cycle is exposing the gap like never before. I think it is hard to argue that Apple should be pushing a new phone out right now and not in 4 months time. Samsung has single-handedly ensured that Apple will now be behind the curve for all future handset launches.

    If things continue as they are, and we come in way below $12.20, what are your expectations for stock price performance from now to September? Are you surprised by the size of this decline relative to your $790 price target?
    May 20 07:56 PM | Likes Like |Link to Comment
  • A Major Pitfall All Investors Must Avoid [View article]
    Rocco

    Re" In the April $500 example, of the $118.48 premium with AAPL trading at, say, $617.70 (the prices changed as I was writing this), $117.70 is intrinsic value, while just $0.78 represents extrinsic value. On the OTM call, it's all time premium"

    Can you explain why for the same April expiration, a $500 call only has $0.78 time premium whereas the $650 call (all time premium) has $6.50 time premium.

    Are we oversimplifying and ignoring the other Greeks or am I missing something?

    Thanks
    Mar 28 05:44 PM | 1 Like Like |Link to Comment
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