Seeking Alpha

Poseidon  

View Poseidon's Comments BY TICKER:
  • Apple's iPhone 5C Is Not Cheap Enough [View article]
    Great article George. -7% and falling!
    Sep 11, 2013. 10:39 AM | Likes Like |Link to Comment
  • Why Is The Market Not Buying Apple? [View article]
    I did not mean to underestimate the new features in their software, particularly the iOS7. Also the new changes, come on, everybody wants automatic updates NOW.

    ... But what I was talking about is that there was no "new concept" released.


    So you need to check the WWDC past events to see where we stand now...

    2008: App Store for iPhone, iPod Touch. iPhone SDK stable version and a new iPhone 3G.

    2009: iPhone OS 3.0, a sample of Mac OS X v10.6 for developers, the new MacBook Pro of 13 inches, MackBook Pros 15 and 17 updates, and the new iPhone 3GS

    .... the rest is... history.
    Jun 15, 2013. 07:33 PM | 1 Like Like |Link to Comment
  • Why Is The Market Not Buying Apple? [View article]
    Nice article.

    " I have to admit, the announcements at the Apple (http://bit.ly/pFSoX2) World Wide Developer conference the other day were impressive. "

    Mmm... what did you find particularly impressive, I wonder? I saw a lot of cute software and some improvements on the MacBook Air regarding battery and flash storage, but I was expecting more.
    Jun 15, 2013. 07:04 AM | 7 Likes Like |Link to Comment
  • Danger Zone For This Week: Apple [View article]
    Interesting article but allow me to disagree. To begin with, Apple is not a computer company. They produce smartphones, iPads and laptops. They own the iTunes store, an independent payment ecosystem which recently surpassed 50 billion downloads. Comparing Apple's ROIC to "competitors" like Microsoft (MSFT), BlackBerry (BBRY) or Dell (DELL) is, therefore, not accurate. Microsoft does not produce smartphones. Blackberry does not produce computers. Dell is mainly in the business of personal computers. And none of them owns something similar to iTunes.

    I do, however, think that comparing Apple to Google (GOOG) in terms of ROIC makes sense, as they have similar business portfolios. According to you, if Google's 34% ROIC is the benchmark, the stock is worth only ~$191.

    However, Apple's current ROIC is, 71%, again according to yout numbers. In other words, you think that ROIC will fall from 271% to 34%. This is a very strong statement that needs to be supported with more than a reason. The only reason you provided is:

    (...)Apple's ROIC could fall if it returns to more normal levels, which I think is inevitable after the departure of Steve Jobs.

    But there is no evidence that the absence of Steve Jobs will hurt Apple's innovative culture permanently. As a matter of fact, the "Steve Jobs" effect on market capitalization and stock price is statistically insignificant, as a famous paper measures If we assume that stock price and market capitalization more or less reflect the real value of a given firm in the long run, we can infer that there is no statistically significant evidence that the absence of Steve Jobs per se will hurt the firm's value.

    You justifies the $191 estimate by saying that elevated ROIC rates invites lots of competition. I agree. Everybody is interested in high margins. However, not everybody can compete well. To my way of thinking, only Samsung and Google are important competitors, specially in emerging markets. Other companies have dozens of competitors. Apple has only 2. And, of course, they are strong competitors. The upside is that by creating its own market ( the iTunes, iPad and iPhone concepts were fantasy before Apple introduced them in our eveyday life), Apple avoided fierce competition for a long time. As long as Apple continues introducing new devices, margins will not decrease.

    Notice also that there is another explanation to the "ROIC Has Peaked" graphic provided. Sure, ROIC has very high in 2011, a record number. But there were so many peaks before (1998 and 2005, to say the least)!

    Finally "an astounding 664 of the 7,000 ETFs and mutual funds I cover allocate at least 5% of their value to AAPL."... You can understand this ln many ways: 664 trying to copy the same idea. But also 664 fund managers and equity researchers arriving at the same conclusion!

    That being said, group thinking is not necessarily a bad thing. Even if we assume that many fund managers want to allocate a decent proportion of their capital to Apple, that demonstrates that the demand for Apple shares is not in danger. New fund managers and new funds will try to copy their peers, therefore, they will have Apple in their portfolios. Only a very strong negative catalyst could cause everybody to start selling the same stock at the same day.
    May 16, 2013. 06:11 PM | 4 Likes Like |Link to Comment
  • Why A Budget iPhone Is A Great Idea: 4 Reasons [View article]
    Interesting topic. I really thought hat there was already an article about the sales failure of the iPhone 5. This is pretty important because we need to identify what exactly Apple did wrong this time, how much of the responsibility is due to endogenous reasons and how much is related to exogenous reasons, so we can judge better whether the next releases will be successful or not.
    May 9, 2013. 05:30 PM | Likes Like |Link to Comment
  • Why A Budget iPhone Is A Great Idea: 4 Reasons [View article]
    Thank you for your time. It seems that the iPhone 4 is already acting as a sort of "budget" device in China but not at a scale strong enough to impact revenue significantly.
    I agree with the fact that Apple should not attempt to get the biggest market share, which could be done by introducing a very cheap device perhaps, but that would have awful consequences in the long run. They should target the middle red price band in the graph, were most of the revenue will be located at in the next years.
    May 9, 2013. 05:25 PM | Likes Like |Link to Comment
  • China And Apple: The Beginning Of A Beautiful Friendship? [View article]
    Thanks for the observation. It has been corrected.
    Apr 28, 2013. 10:05 PM | Likes Like |Link to Comment
  • China And Apple: The Beginning Of A Beautiful Friendship? [View article]
    Thank you for noting that, I corrected it.
    Apr 25, 2013. 08:21 PM | Likes Like |Link to Comment
  • China And Apple: The Beginning Of A Beautiful Friendship? [View article]
    How do you know that? Links, References Please.
    Apr 25, 2013. 08:21 PM | 1 Like Like |Link to Comment
  • China And Apple: The Beginning Of A Beautiful Friendship? [View article]
    Actually I had a very different advise for Tiffany which is related to hedging forex risk properly, and I never wrote anything about Rolex ever.

    So you deny the commoditization trend in the smartphone market?
    Apr 25, 2013. 08:20 PM | Likes Like |Link to Comment
  • China And Apple: The Beginning Of A Beautiful Friendship? [View article]
    Well so far that strategy doesnt seem to be working that well in China does it?
    Apr 25, 2013. 08:18 PM | Likes Like |Link to Comment
  • China And Apple: The Beginning Of A Beautiful Friendship? [View article]
    China cares about the brand but they ultimately make decisions based on price! How else would you explain that despite the massive economic growth experienced in the past years, China has a huge saving rate, low consumption levels for an emerging economy, extreme price sensitivity and reluctancy to use credit-card interest payments? They are very aware of the notion of a "budget".
    This article is nice, explores the topic in detail: http://on.wsj.com/Zo6h9G

    I mentioned seasonality in the sense that the Chinese New Year holiday (an exogenous reason for growth) makes it difficult to judge how much Apple sales are growing in the region due to endogenous reasons.
    Apr 25, 2013. 08:17 PM | Likes Like |Link to Comment
  • China And Apple: The Beginning Of A Beautiful Friendship? [View article]
    I did take into consideration the Lunar New Year effect in the seasonality section. This helped to increase sales of course, and that is partially why we saw a 20% q/q increase there.
    Apr 25, 2013. 08:05 PM | Likes Like |Link to Comment
  • China And Apple: The Beginning Of A Beautiful Friendship? [View article]
    Yes. It could be better if they complement the effect of new stores with a China Mobile deal.
    Apr 25, 2013. 08:03 PM | Likes Like |Link to Comment
  • China And Apple: The Beginning Of A Beautiful Friendship? [View article]
    Exactly! The need of introducing a new device that has top-quality features and a lower relative price could be eliminated by introducing the right plans, at the right time. A partnership with China Mobile has to address this topic if it wants to make a significant change in the distribution of market share.
    Apr 25, 2013. 06:10 PM | Likes Like |Link to Comment
More on AAPL by Poseidon
COMMENTS STATS
177 Comments
86 Likes