Julian Ivan-Alexander

How Apple and iPhone Blew It in China

Chimin, I'd really like to hear how 3-4M iPhones sold at full retail price into China via the grey market from its own US stores at high margins represents a miserable failure.
A sale is a sale, official or unofficial. Retail channel or grey market. It doesn't matter. The iPhones sold into the Chinese (and other) markets via unlockers represent the highest-margin units Apple sells. They are generally sourced from Apple's own US stores rather than retail/carrier partners, cutting out the middleman, and have no warranty or support costs.
The Chinese networks only have themselves to blame for the dysfunctional nature of the official launch and subsequent slow sales. The fact that they went ahead and ordered the phone without WiFi (with what must have been an absolute commitment to a significant quanitity for Apple to agree) when they must have known the law was going to change to allow WiFi shortly thereafter shows the networks blinked first and realised they had to get moving, or lose out.
An iPhone bought in Hong Kong, New York, or Shanghai is still an iPhone sold. Frankly m'dear, I don't give a damn so long as Apple is being paid in full for each and every phone. Local chinese networks may have to ultimately discount these crippled phones by a massive margin to get rid of them as the WiFi-enabled version is rolled-out, but Apple will still receive the full value of the original agreed price. Its the networks which will take the hit, not Apple. In the meantime, savvy Chinese buyers will continue to buy grey market imports as they see fit, and the iPhone sales phenomenon will continue to grow exponentially as it has since its launch.
What's happened here is that the Chinese networks, so arrogant and confident at the outset of their negotiations with Apple, have been forced to eat humble pie. They blinked first. Apple simply outflanked them from the outset by ensuring the phone was both accessible and usable by Chinese consumers almost from the outset, as 3-4M unlocked iPhones testifies to.
I fail to see why anyone refuses to acknowledge the brilliance of Apple's China strategy. It has already been a wild success. The first stage was the invasion of 3-4 million unlocked phones into the hands of Chinese consumers. The second stage will be those users upgrading to the next version of the iPhone (whether the 3GS with WiFi enabled, or a version to be released next year). Sudddenly you'll see millions of official iPhones sold in China in 2010, and I doubt you'll be reading much about "miserably failing launches" then.
Just remember: the real Chinese launch already happened, 2 years ago. The "official" launch last month was just for show and lays the foundations for the next tsunami of sales in 2010.

How Apple and iPhone Blew It in China

So let me see... 3.5M chinese have bought an iPhone since it was launched (irrespective of whether those were grey market imports or not) and those would have been bought at full price from US Apple stores unsubsidised by a network, and then unlocked.
In addition, some stupid Chinese laws stopped Apple from including WiFi - which were only recently repealed. This caused manufacturing to go ahead - presumably at the networks', not Apple's, request, without WiFi included.
This, coupled with the equal stupidity of the local network providers who tried to get Apple to cripple the phone's software to only work with their own app stores and bickering over revenue sharing arrangements meant the phone's official roll-out in China was delayed by 2 years.
And this is how "Apple and the iPhone" blew it? Lol! What a "whoring for hits" headline. Its the networks who blew it, and the Chinese government who up until just a few months ago wouldn't allow the phone to include WiFi. The networks commited to purchasing millions of devices, and Apple is no better or worse off irrespective of how many - 5000 or 500,000 - of these crippled devices they can sell on to end users. By now manufacturing lines will have switched over to producing WiFi-enabled versions, and normality will return to the Chinese market once they do and grey market, unofficially-supported units no longer seem so attractive.
But to say Apple blew it? Please, Apple already has almost 4M iPhone users in China from grey imports - all potential upgrade candidates for its next official release there. I think that's a pretty outstanding success story especially as all those units will have been sold at full price, from Apple Stores, and with resultingly higher margins.
Offiicial iPhone sales may be off to a rocky start in China, but blame the Chinese government and the networks' stupidity for that. Apple has played them both like a violin, and reaped the benefit of almost 4M full-cost sales booked in US dollars from their own stores WITH NO SUPPORT OR WARRANTY REQUIREMENTS as a result.
Put that in your spreadsheet and eat it. Blown it? In the UK we have a different expression for when you manage to hit on something which brings in unbelievable amounts of cash: "coining it."
Apple played the Chinese to perfection, probably the only Western company to have ever done so in modern times. While seemingly intrasigent in the face of official negotiations, it ensured it looked the other way and actually encouraged Chinese unlocking (the phone fully support Chinese character sets and has done for years) so that grey market importers could saturate the Chinese market with its devices sold at full price, giving the carriers no choice but to eventually capitulate.
Now Apple has grown a user base so huge that the upgrade sales into the official sales channels for the next-gen devices is all but guaranteed to be one of the biggest roll-outs in the company's history.
The guys with egg-fried rice on their faces are the Chinese networks. Apple is laughing all the way to is non-GAAP accounting revenue bank account.

Research In Motion: Still the Best Positioned Smartphones Play

Lenny... did you check the date of that report? Its August... 2008... a whole generation of iPhone/iPhone OS ago.
Virtually every issue the BB user complained about has been remedied now.
You're using a 15-month old comparison of a BB user's experience trying an iPhone to try and illustrate why BB users won't switch now. The smartphone world has been turned on its head in the last 6 months, let alone the last 15. This isn't you're grandfather's smartphone world, so to speak :)

Research In Motion: Still the Best Positioned Smartphones Play

Here's your biggest blindspot: You recognise that "not for a minute" do you think RIM will outsell Apple in the consumer market, but you say: "It is also reasonable to expect RIMM to benefit from the return of enterprise spending both in the US and abroad, which has been largely absent from the growth side of the company’s revenues over the past six quarters. This could be a game changer in 2010."
Here's the news you won't talk about: given a choice, virtually every report from executives at Fortune 500 companies offered the chance to switch to an iPhone are choosing to switch. The company standing to benefit the most from a pickup in enterprise spending isn't RIMM, its AAPL.

Research In Motion: Still the Best Positioned Smartphones Play

The blind leading the blind. RIMM is facing its most competitive challenge in its history, has an OS that's about 10 years out of date, and yet chooses to spend money on a stock buyback to support its shareholders/hedge fund shills rather than investing in more R&D to improve its margins and help reduce its costs.
Last sign of a desperate company shrieking of its relevance. Remember DELL's massive buybacks?
Enough said.
Why invest in RIMM, which is losing market mindshare, when you can invest in AAPL, which is growing all over the world, both in mindshare and market share?
RIMM is so 2004.

Apple Remains Overvalued, Despite Its Gadget Glory

Wow - I remember reading analysis like this when AAPL was at $10 (pre-split)...and $35.. and $50... and it was NEVER going above $100. $200 was plain "STOOOOPID" right? I mean, earnings growth on a scale never achieved by a mega-cap and sustained through the worst recession in 80 years means nothing, right? You, my friend, are the best contra-indicator there is. While generally well-educated and eloquent individuals such as yourself can continue to spew forth saddeningly ill-informed and ill-judged analysis, I am reassured that the AAPL-bus still has many, many yet to welcome on board. I think I'll start following you and once you start going bullish on AAPL, I'll know its time to get off :)

Good luck with them MOTs... go easy on the analysis though; you might cut yourself with that RAZR-sharp brain of yours. Personally I think you're off your ROKR though. Tell you what, why don't you add a dash of RIMM to your portfolio, and a sprinkle of PALM - all of which are about to vanish into the tarpit of history.

Bon chance.

Apple: Weaker Dollar Will Benefit Revenue Growth and Margins

Turley Muller .. as usuall leading the way most analysts fear to tread: towards insightful, well-informed, big-picture lateral-thinking analysis.

Is it any wonder Wall Street always gets Apple wrong and the independents get it right?

Nice piece Turley.

Is Apple's Stock Headed for a Reversal?

Edge_Jeff
Actually Apple topped 100,000 apps this week :)
Your comments re: the approvals process are very pertinent and media pundits together with disgruntled programmers who often try to shortcut the system or use unathorised APIs to add features to their apps should really just STFU and instead celebrate the biggest opportunity for programers - from massive software houses such as Electronic Arts to a kid in a bedroom - since the days of the beginning of the home computer revolution decades ago.

Is Apple's Stock Headed for a Reversal?

AAPL has been bouncing nicely, all year, along a strong uptrend line and continues to bounce off it ever time it pierces the 20-DMA.
RSI had also dipped concurrent with this pullback from that dash to $208 to levels from which it also usually stages a strong rebound.
Lo and behold, when the stock Wednesay broke through the 20-DMA it then went on to tag the uptrend just about $190, and bounce hard to close at $196.35.
This potentially clears the decks for the stock to now attract new money after all the profit takind drovw the stock down almost $20 from its high post-earnings, as the inevitablity of an absolutely blow-out quarter of mind-bending magnitude sinks in to even the most skeptical investor.
Sure if the market tanks, AAPL will pull back, but with the comnpany increasing manufacturing orders for iPhones by 20% only a week or two ago, there's no reason to doubt that this company is totally recession proof any more. Its performace over the last year is testament to that.
And then there's that China launch, which wil add several million sales this quarter.
And the impending reporting of earnings without the deferred revenue/subscription accounting method under-reporting true EPS by 30-40% every quarter, which I think will be first introduced in Q2 10, with guidance for Q2 given during the Q1 report in January given by the company using this new approach. Q1 earnings don't need boosting by changing accounting methodology, but considering AAPL always gets hammered by appaling and consistently 20-30% low guidance for Q2 off the back of the usual blowhards and bears, by changning accounting to a non-subscrition-based method for Q2, they will be able to "beat 'em and raise 'em" through the roof.
This January could see the opposite of the usual AAPL trade - an incredible eye-watering rally - if the company chooses to use the folloowing Q2 as its changeover quarter for its accounting methodology. The guidance for Q2 would be simply staggering.
So yes, you could have a point and caution is merited, but an analysis of AAPL's TA actually presents a case to be bullish, not bearish, *providing the broader market doesn't pull back sharply as so many expect*.
If you're bullish on the market, you should be in AAPL up to your neck.
If you're worried the market has topped, get out, now. In fact you should have gotten out when it spiked over $200. This is a market call, nothing to do with AAPL. Lets keep that in mind when analysing a stock shall we?

Google Should Make Apple Beg for Maps Navigation

Fred LA, old-skool "analysts" never research - they just fart brainwaves. Of course he didn't know Apple had just bought its own mapping company. It also stands to reason that Apple knew Google intended to launch turn-by-turn navigation at the outset of the project's development, and made contingency plans to avoid being dependent on Google.
Acquisitions don't happen out of the blue, especially for a company like Apple, so this move, and Apple's reassuring forsight to stay ahead of the game by outflanking Google with its own purchase of a mapping solution, shows just how forward thinking Apple's management is.
Screw Google - Apple doesn't need them.

Why Apple Is Worth $80

Wow. Asshat analysis. The worst ever analysis of AAPL I have ever - literally ever - seen, and as a moderator of one of the most popular AAPL stock discussion forums on the web that is really saying something. I won't repeat what others have already explained vis-a-vis your completely arse-over-tit goats entrails analysis except to say I wholly agree with them.
I'm laughing myself all the way to the bank. Sorry fellow-contributor, I know I shouldn't be rude, but you deserve a slap round the face for publishing such tripe on a site like this. If I was SeekingAlpha I'd be embarassed to see in published under my banner.

Apple May Find Itself at Risk in Legacy Core Business

Wow - not so much sour grapes as bitter lemon.

The Case for Shorting Apple

Wow - a cut and pasted chart and a few lines of TA textbook drivel and suddenly there's a case for shorting AAPL, just whenits about to get a 5M iPhone order from China? You go girl... because you're going to lose your balls on this one.

Should Apple Spin Off Its App Store?

Oh god, here we go.. parallel this with "Should Apple license OS X" and you've got the same craptapulous arguments to go over all over again....

Why SHOULD Apple spin off the App Store? Its one of the most compelling reasons for buying and sticking with the iPhone and its successors. Its a unique selling point. It makes the iPhone the most compelling device to write software for. It singlehandledly slays all other competitors.

Sure, go write ahead (pun intended).. knock yourself out. Can't wait for the next piece of insightful AAPL analysis.

Bye Bye Apple

When an arsehole farts in the forest and there's nobody there to witness it, does anyone care?