Donald Johnson

The End of Exclusive: How Apple Plans to Grow Market Share

AT&T needs to deal with its iPhone debacle. It needs to run TV and print ads that explain its bandwidth problems. And it needs to start charging for the use of services that clog its networks.

Read the comments that follow stories in the NYT and Denver Post about AT&T's iPhone problems, and you'll see that people are furious and frustrated, and they don't understand how they are the problem as much as AT&T and iPhone are.

AT&T needs to give up its exclusive contract with Apple, allow customers to shift to other carriers so that it can reduce the burden on its networks and change its business model.

The company's big problem is that it is a utility in Apple's world, and its culture is incapable of dealing with rapidly changing technology and markets.

Candidates to Replace GM, Citigroup in the Dow

Well,

AAPL, NUE, USB and MON didn't make it. It was fun to speculate about which companies would be picked. Thanks for all the comments.

Why Google Won't Replace GM in the Dow

Very good piece.

That all Dow companies pay dividends is interesting. That some of those dividends are nominal at best may mean this criteria will be dropped. The weighting problem also is important for the high-priced, volatile stocks.

CAT has been in the Dow for a long time. I can't see adding more retailers other than, perhaps, AutoNation (AN), an auto dealer, nor another soft drink company. KO already is in the Dow.

Candidates to Replace GM, Citigroup in the Dow

I've purchased more than 100 Macs for my business and myself since 1986. Apple is a consumer electronics company, and all consumer electronics, including PCs, have relatively short life cycles and are faddish, in my opinion. Apple's been especially good at anticipating and creating fads in very competitive markets.

At the moment, it's market share is growing in a troubled economy. I think it should be in the DOW because its revenues and profits depend on everyone from teens to presidential candidates, corporations and old folks like me.

As for GOOG, it's selling for 22 times cash flow, it's PE is a relatively high 30 given that its sales are growing only 6% a year, and it depends on advertising revenue. It's PEG is a relatively cheapt 1.07, according to data on YAHOO. The company doesn't provide guidance to investors, and its governance structure is rigged to deny voting rights to shareholders, which, I happen to think is wrong. At some point it will go the way of MSFT.


On May 30 05:20 AM Timeline Strategy Consulting wrote:

> Apple's products 'faddish'? My definition of 'faddish' would be GM,
> cranking out endless undesirable combinations of models that require
> heavy discounts and incentives to sell, all to meet the cost accountant's
> model of 100% factory capacity utilization.
>
> Remember that Apple pioneered desktop computing and operating systems.
> It was the logical successor to the Silicon Valley garage ideal in
> the vein of Hewlett and Packard.
>
> Apple had hard hard times, but unlike GM, revitalized itself by adapting
> its business model to reflect the changing way that customers consume
> media. In doing so, it created a second act that rivals any in business.
> And, this second act also has allowed Apple to return to its first
> act, which is computing and software for the masses.
>
> And now it has completely revolutionized mobile computing.
>
> Maybe you should ask your grandkids.

Market Headed to Retest Lows?

Point and figure charts for $indu have a bearish price objective of 7200 for the DJI, which is 12.2% below Wednesday's close.

Apple's Steve Jobs Isn't Sick - Argus

I don't know about Steve. Until he makes an appearance where we can see how he's doing, I'm betting on the worst, which is one reason why I sold the stock a couple of weeks ago. The other reason is that despite the busy Apple store I saw a couple of times before Christmas, I think consumer spending will be weak enough to hurt AAPL, regardless of any new products.

iPhone Rumors Confirmed: Coming to a Wal-Mart Near You

Having just bought two iPhones and another MacBook Pro, I think analysts are missing a key point, the same point they often miss when they complain Mac prices are higher than the prices of other computers.

That is, the apps available for free and nominal prices on iPhones and the software that comes with Macs makes the Apple products cheaper than any of their competitors. And they work. They're slick and fun to use. A friend just bought a competing product and is having problems with it. I just traded up from a brand new Treo from Sprint, which I got for free when an older one failed. (Sprint mishandled a refund problem. So I owe them nothing.) I've used Treos since they were first introduced.

So Apple need not give price concessions.

As for WMT vs Best Buy, maybe WMT did little time and productivity study at the Apple store and an AT&T outlet. What they probably found is that it takes a knowledgeable person to activate an iPhone buyer who's new to both the phone and AT&T. It took an Apple store guy an hour to activate us and sell some accessories.

Walmart's hours are long. How many employes will each of its stores need to train to sell and activate the iPhone. What will it pay these employes? How long will they be on duty? (Will you buy iPones at Walmart between 2 and 6 on Saturdays?) How will WMT keep tits iPhoners from going to the competition?

To me, it appears WMT's competitive advantage will be that it will be more convenient to go to one of its stores than to competitors' stores. It will serve a different demographic than its competitors. And it intends to make money selling iPhones.

Question: Will WMT's iPhone customers get better deals from AT&T?

Apple's Greatest Idea Yet

AAPL is $83.64. PE is 15.57 and forward pe, for what it's worth, is 12.3, which means the very unreliable PEG is a very cheap 0.6. Relative strength on daily charts shows stock is oversold and has been since early Oct. Trading below 50- and 200-dma. Negative sar and macd. Bollinger band width still rising, which is bearish. Point and figure price price objective is $60

Annual AT&T cost is, what, $1,200? How many out-of-work Apple enthusiasts will spend $1,200 on iPhone, another $1,200 on cable, Dish, etc. and $12,000 to $30,000 on housing, plus transportation, etc. Priorities?

In this economy, the fundamentals are impossible to forecast. Thus, uncertainty could keep the stock in a trading range for some time, and price momentum is bearish.

Morningstar estimates AAPL's fair value is $169, but M* has been very slow in lowering its fair value estimates. Stock is selling for only 2.3 times sales per share and for a relatively low 7.78 times cash flow? Why is the market pricing the stock this way?

Again, uncertainty. I own some AAPL, but I won't buy more until the daily, weekly and point and figure charts are bullish.

Post-Labor Day Strategy for Apple Traders

Great piece. Best I've seen on spreading options. Very educational and tactical. You show possible rewards vs risks, which is important. I'm going to review your site and other articles.

Why do such a narrow spread? Why not 160/195?

Apple's Biggest Rumor: iPod or Jobs?

Good, relevant article. I wouldn't buy the stock because of uncertainty about Jobs' health. But he seemed to resolve that uncertainty with his leak to the NYT that he's ok. Some people aren't sure they should believe him, and that question will have to be resolved by each individual speculator.

Apple's Problems - Bad to the Core?

Good article. I've bought a couple of hundred macs and Apple products since 1986, and they've always been problematic in one way or another, but never the disasters you get with WinTel.

I'm having problems with my Treo 700 on Sprint and looking to switch to iPhone, but until it's clear that Apple has fixed the 3G iPhone, I'll sit tight.

The .Mac to MeMobile transistion has been a fiasco. Fortunately, I've been able to work around it, but MeMobile is much more difficult to use as a backup drive, because it has problems transferring several files at a time. I also think its documentation is shallow and, generally, unhelpful. When my seldom-used $400 iPod died, I didn't replace it.

I'm waiting for the next generation of iMacs and MacBook Pros before I replace my 5-yr-old iMacs. My 18-mo-old HP Pavillion laptop is ok, but I prefer my wife's MacBook Pro when we're on the road.

5 Reasons Not to Upgrade to the New iPhone 3G

I think I'll still dump Sprint and my Palm Treo for the new iPhone.

How Steve Jobs Leaked That He Doesn't Have Cancer

With people like Al Gore on Apple's board, how could you predict what the company would do without Jobs?

Apple: How Big Is the Potential iPhone Market?

Apple just released a very buggy upgrade to its operating system. OS 10.5.3 released Friday is causing major problems for many Mac users.

Wonder when analysts and the media will force Apple to address the problems and fix them. See Apple's support forums.

Apple: Is All This Angst Really Warranted?

Fundamentals are important, but so is price action, which tells you what the market thinks about a company's prospects. Obviously, the market is worried about consumer and business spending declines and their potential impact on Apple. Apple has a much broader market than it used to, and it will be more subject to fads and economic cycles than ever before. In a way, AAPL is an interesting leading indicator for the economy, don't you think?

Don't fall in love with a stock.