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Mark Hibben

 
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  • GT Advanced Technologies: How The Bulls Got It So Wrong
    Editors' Pick • Yesterday, 3:47 PM GTAT 67 Comments

    Summary

    • Analysts and tech writers inflated the importance of the Apple/GTAT agreement by shifting focus to iPhone, a more important product than Apple Watch.
    • In order to support the iPhone sapphire screen theory, projections of sapphire production capacity were grossly overstated.
    • The letdown following the iPhone 6 event shouldn't blind investors to the future potential for sapphire in iPhone, but should make them more cautious.
  • Apple Pay And The iOS Wealth Advantage
    Mon, Sep. 15 AAPL 39 Comments

    Summary

    • Michael Blair recently published an estimate of Apple Pay revenue in 2017 of $1.5 billion.
    • Blair's estimate is based on global market share and doesn't account for the greater spending on apps and services by iPhone owners.
    • Accounting for the greater wealth of the iOS ecosystem as well as e-commerce spending raises the revenue estimate to $6.45 billion.
    • While this is small relative to Apple's annual revenue ($170 billion in fiscal 2013), Apple Pay will be important in sustaining Apple's revenue growth.
  • Apple Watch Vs. The Competition
    Fri, Sep. 12 AAPL 108 Comments

    Summary

    • Apple's Watch unveiling may have initially disappointed investors, probably because of its relatively small screen.
    • Although Apple doesn't offer the best and biggest display in a smart watch, the overall quality and features of Watch make for a compelling value proposition.
    • I expect Apple Watch to capture about 15% of the worldwide electronic watch market in 2015, which sold 276 million watches last year.
  • Apple's iPhone 6 Market Impacts
    Tue, Sep. 9 AAPL 192 Comments

    Summary

    • Apple's new iPhone 6 and 6+ erase the advantages Android phones have had in screen size but offered no sapphire screens.
    • The new phones maintain Apple's advantage in 64-bit mobile processors and operating systems.
    • These phones also will feature iOS 8 with Healthkit, Apple Watch connectivity and ApplePay.
    • The impact of the new iPhones will be a significant increase in smartphone market share.
  • How Apple And Google Crushed Windows Phone
    Fri, Sep. 5 AAPL 60 Comments

    Summary

    • Apple has set the standard for smartphones with its 64 bit processors and true 64 bit mobile operating system.
    • This dashed any hope Microsoft had of positioning Lumia as a premium brand and forced it to compete with Android as a commodity smartphone.
    • The result has been declining shipments and market share for Windows Phone.
    • The purchase of Nokia was the wrong move that leaves Microsoft with almost no chance to be competitive or establish a viable smartphone ecosystem.
  • Apple Upstaged By Samsung... Until Next Week
    Thu, Sep. 4 AAPL 58 Comments

    Summary

    • Samsung presented new mobile devices at IFA, preempting Apple's iPhone 6 event.
    • Samsung's new Galaxy Note 4 represents its first foray into mobile 64 bit computing, but only partially closes the gap with Apple's 64 bit processor and iOS 7.
    • Apple's forthcoming iPhone 6 will extend its 64 bit processing lead while taking away a key Samsung discriminator: screen size.
  • Can Amazon Afford Twitch?
    Thu, Aug. 28 AMZN 11 Comments

    Summary

    • Amazon has announced the purchase of Twitch Interactive for $970 million, beating out Google, which had also sought Twitch.
    • The purchase price represents a huge 2100% profit for Twitch's investors, but appears to be fairly valued given the amount of Internet traffic Twitch generates.
    • Given Amazon's mounting losses, and the costs of its diverse products and services initiatives, it remains to be seen if Twitch is really affordable.
  • Apple's iPad Problem Is Lenovo's Wintel Tablet
    Fri, Aug. 22 AAPL 163 Comments

    Summary

    • Recent SA articles have offered encouragement that Apple's iPad can reverse its sales decline.
    • In order to do that, Apple will need to meet the challenge of tablets running Intel's subsidized Bay Trail processor.
    • Foremost among these is Lenovo's Thinkpad 10, which helped Lenovo post a 67% y/y tablet sales gain.
  • Apple's iWatch Profit Potential
    Thu, Aug. 21 AAPL 133 Comments

    Summary

    • Morgan Stanley's Katy Huberty has predicted that Apple could sell 60 million iWatches in the first year of production.
    • This may be optimistic, but it's in line with growth estimates for the wearable market for 2015.
    • This sales volume for iWatch could add as much as $9 billion in gross profit for 2015.
  • Apple As An Aspirational Brand
    Fri, Aug. 15 AAPL 29 Comments

    Summary

    • Apple can be an aspirational brand in BRIC countries, but needs to have entry level products that are less unattainable.
    • The impact of somewhat lower-priced entry level products, such as iPhone 5c, is a dramatic increase of sales in BRIC countries, although never to mass market levels.
    • The dramatic expansion of the iOS user base in BRIC countries that will result is an opportunity that will be too good for Apple to pass up.
  • Why Apple Won't Build A Cheap iPhone... And Why It Should
    Tue, Aug. 12 AAPL 103 Comments

    Summary

    • A recent article by Benedict Evans pointed out that a “cheap” iPhone costing about $300 (unlocked) would address a large new market for Apple.
    • Apple hasn't priced its current low-cost iPhones (the 5c and 4s) at the $300 price point because doing so would reduce Apple's gross profit on these phones.
    • Despite this, Apple should field a ~$300 iPhone in order to increase market share and drive growth of the iOS ecosystem.
  • Apple's iPhone 6 Event: A Turning Point
    Wed, Aug. 6 AAPL 106 Comments

    Summary

    • Re/code has reported that Apple will unveil on September 9 its new iPhones, which will feature larger screens and faster processors, but probably no sapphire.
    • Recent data from IDC indicates that Apple is gaining market share among the top 5 smartphone vendors, and iPhone 6 may accelerate this gain.
    • What Apple shows in iPhone processor innovation may be more important for Apple's future than any other feature.
  • Tesla: The High Cost Of Disruption
    Editors' Pick • Fri, Aug. 1 TSLA 222 Comments

    Summary

    • Tesla's Q2 earnings report showed deepening losses as Tesla prepares for Model X production.
    • This was to be expected, and investors seem to be taking the loss in stride.
    • Tesla's Gigafactory has become lower risk due to the partnership with Panasonic.
    • Tesla is the wave of the future, but the road ahead may be bumpy for investors.
  • Corning's Results Suggest No Sapphire iPhone - This Year
    Tue, Jul. 29 GLW, AAPL 127 Comments

    Summary

    • Although sapphire is a superior material well suited for smartphone displays, production cost may limit its use in Apple's iPhone in the near term.
    • A review of Corning's Display Segment earnings results failed to find the definite impact to Gorilla Glass sales expected if Apple had switched to sapphire for iPhone 6.
    • This indicates that Apple has delayed the use of sapphire into next year.
  • Apple's Mobile Profitability: The Illusion Of Advantage
    Mon, Jul. 28 AAPL 87 Comments

    Summary

    • Recently, analyses have been published showing that Apple takes the lion's share of mobile phone profits.
    • Such analyses suffer from conceptual flaws that fail to take into account the structural differences between the Android and iOS ecosystems.
    • A more balanced analysis shows that Android and iOS are about evenly matched in revenue and gross profit.
    • Apple's greater mobile device operating profit derives from spending less on R&D and Sales and Marketing, and doesn't confer a competitive advantage.
  • Resilient ARM
    Fri, Jul. 25 ARMH 9 Comments

    Summary

    • Despite Intel's mobile challenge, ARM revenue and profit grew substantially in the June quarter.
    • Intel's mobile processors and Microsoft's withdrawal from ARM will continue to put pressure on ARM's share price, probably through the end of the year.
    • The Samsung/Global Foundries collaboration on 14 nm FinFET will probably bear fruit in early 2015, fending off the Intel challenge, and paving the way for ARM's continued growth.
    • This scenario makes the near-term depression in ARM's share price a long-term buying opportunity.
  • Microsoft's Nadella Gets It
    Editors' Pick • Thu, Jul. 24 MSFT 28 Comments

    Summary

    • On Microsoft's earnings call, CEO Satya Nadella announced that MSFT will pursue a single converged Windows OS for all devices from desktop to mobile.
    • While strong in the enterprise, MSFT faces losses in its mobile device activities and a “perfect storm” for its Windows ecosystems.
    • The bet on a single converged OS represents a risky but necessary attempt to leverage its current Windows user base to create a viable mobile ecosystem.
  • Apple Earnings: A Tale Of 2 Devices
    Tue, Jul. 22 AAPL 29 Comments

    Summary

    • While iPhone sales were at an all-time high for fiscal Q3, iPad sales declined dramatically.
    • Apple's iPad problem illustrates the peril of ignoring market share declines.
    • Apple's commitment to innovation remains high, however, with increased R&D spending.
    • Earnings guidance suggests strongly that new products are on the way this Fall.
  • AMD's Future Is In The Hands Of Samsung, Global Foundries And... Apple
    Fri, Jul. 18 AMD 61 Comments

    Summary

    • AMD reported results in line with my expectations as of 2014 Q1, but disappointed the market, leading to a sell off.
    • Although AMD's future in consoles appears secure, its future in PC computing remains in doubt.
    • AMD's future ability to compete with Intel depends mainly on Global Foundries and Samsung making good on their collaboration on 14 nm FinFET.
  • Intel's Costly War On ARM
    Wed, Jul. 16 INTC 83 Comments

    Summary

    • Intel revealed in its latest earnings that it had been selling Bay Trail tablet processors for about $5 apiece.
    • Such pricing amounts to a declaration of war on the ARM mobile device ecosystem.
    • Intel's Mobile device unit lost over $1 billion in the latest quarter, indicating that the war will be costly, while its outcome is uncertain.
  • Will Apple Earnings Gain From Samsung's Pain?
    Tue, Jul. 15 AAPL 56 Comments

    Summary

    • Apple appears to be set for a record-breaking quarter, with iPhone sales topping 38 million.
    • In contrast, Samsung recently pre-announced revenue and earnings declines for calendar Q2, citing slow smartphone sales.
    • This could be the quarter that Apple takes market share in smartphones from Samsung.
  • How Apple And Intel Crushed Nvidia's Tegra
    Fri, Jul. 11 NVDA 51 Comments

    Summary

    • Nvidia's recent shift away from mobile for its Tegra ARM processors amounts to an admission of failure.
    • Nvidia had been fighting the trend in ARM processors toward customization by device makers such as Apple and Samsung.
    • 64 bit processors from Apple and Intel dashed Nvidia's hopes of positioning Tegra as a premium mobile processor.
    • The financial consequences of the Tegra failure may not emerge until Q4 of this year.
  • Apple iOS Vs. Android: The Wealth Of Ecosystems
    Mon, Jun. 30 AAPL, GOOG, GOOGL 31 Comments

    Summary

    • The population of iOS devices in current use is much closer to the Android device population than many assume, about 690 million vs. 1 billion.
    • The higher device population of iOS relative to sales is due to the greater “stickiness” of the iOS ecosystem.
    • As a result of higher app spending per device, iOS app revenue is much greater than Android, and the trend is for the gap to widen over time.
  • Where WWDC Hinted, Google IO Delivers... Something
    Fri, Jun. 27 GOOG, GOOGL 23 Comments

    Summary

    • At Google IO, it was announced that the current number of Android device users had reached 1 billion, the largest of any mobile device ecosystem.
    • Improvements in the next generation Android L OS will make it even more competitive with Windows Phone and iOS.
    • New product announcements in Android Wear watches and Android TV demonstrate that Google can move quickly into new product categories.
    • IO confirmed that Google has become an even tougher mobile device competitor.
  • Myths Of Apple's iPhone Market Share
    Tue, Jun. 24 AAPL 152 Comments

    Summary

    • In this article, I attempt to debunk recurring myths I often see in comments on my Apple related articles.
    • These myths include: “Apple doesn't care about market share”, “Apple shouldn't move down market”, “Market share data has been deliberately distorted”.
    • Even when market share analysis excludes the alleged distortion, Apple's iPhone market share trend is still in decline.
  • Why iPhone 6 Won't Reverse Apple's Market Share Decline
    Editors' Pick • Fri, Jun. 20 AAPL 202 Comments

    Summary

    • When iPhone 6 arrives this Fall, it will only briefly arrest Apple's smart phone market share decline.
    • This decline speaks to the increasing competition that Apple's iPhone faces rather than the inherent worth of iPhone 6.
    • Based on several years of sales data, it's possible to project sales results for iPhone in 2014 Q4.
  • The Growth Potential Of Apple's Mac
    Wed, Jun. 18 AAPL 76 Comments

    Summary

    • Apple's Macintosh computer line has surprising growth potential, despite declines in the overall PC market.
    • This potential derives from missteps in Microsoft's attempt to converge mobile and PC operating systems in Windows 8, as well as Apple's more successful and gradual approach.
    • A low cost MacBook Air, based on Intel's Bay Trail, affords an opportunity for significant growth in Apple's Mac revenue and PC market share.
  • Microsoft's Xbox One: Good Strategy, Poor Execution
    Editors' Pick • Fri, Jun. 13 MSFT 10 Comments

    Summary

    • In the first quarter of the year, Xbox One sales of 1.2 million units fell behind PlayStation 4 sales of 2.8 million.
    • I believe Microsoft's original strategy of creating a versatile multimedia device in Xbox One was sound, but was hobbled by poor execution.
    • It remains to be seen whether recent changes, such as unbundling the Kinect sensor, along with a renewed focus on games, will be enough to improve Xbox One sales.
  • Universal Display: Outstanding Revenue Growth Will Begin To Taper This Year
       • Tue, Jun. 10 OLED 24 Comments

    Summary

    • Universal Display posted outstanding revenue growth of 152% y/y for the first quarter of 2014.
    • Despite a 15% pop following the earnings report, UDC's stock has had difficulty holding onto the gains.
    • Uncertainties about the prospects for the OLED display market persist.
    • Revenue growth this year will probably be about 36%, in line with UDC's projections.
  • What WWDC Says About Apple's New Products
    Editors' Pick • Tue, Jun. 3 AAPL 71 Comments

    Summary

    • No new hardware was unveiled at WWDC.
    • Information about iOS 8 and Mac OS X Yosemite does point to new products such as iWatch and Apple TV and helps define their characteristics.
    • When eventually announced this Fall, I expect these products to positively impact Apple's share price, despite having relatively small impact on revenue.
  • Apple: Why Netflix Could Follow Beats
    Thu, May. 29 AAPL, NFLX 104 Comments

    Summary

    • The Beats acquisition points to negative motivations for Apple: the need to reverse declines in iTunes sales and its appeal to young people.
    • I expect the acquisition to deal effectively with these issues, as well as provide a valuable subscription music service and line of audio accessories.
    • The streaming music service points to the need for Apple to acquire or develop a similar streaming video service.
    • As the market and brand leader with well established youth appeal, acquiring Netflix is a logical path to such a service, but not the only path.
  • Why The Apple/Beats Deal May Be Dead
    Editors' Pick • Tue, May. 27 AAPL 100 Comments

    Summary

    • Because Beats Electronics isn't a publicly traded company, there's too little information for anyone outside of Apple to judge if Beats is a good investment.
    • Apple's motivation for the deal is questionable, and what has been offered in the media is flimsy at best.
    • Publicity surrounding discussions between Beats and Apple probably dooms any deal that might have been.