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  • Why Apple Will Beat The Street [View article]
    MohanTX:

    The so-called "Law of Large Numbers" does not apply. In the current fiscal year, 80% of Apple's revenue will be derived from products that did not exist in the market as recently as six years ago. Chances are six years from today more than 50% of Apple's revenue will be derived from products that are only now in early stages of development.

    There are large and essentially untapped regional markets for Apple's products and the company is the only maker of iOS-based devices. Apple will maintain high margin and the leadership in digital device revenue share even as more competitors enter the digital device markets.

    Android is an amalgamation of device makers competing more with one another than any one Android device maker successfully compete with Apple. Apple's gross margin is pressured in the current quarter due to manufacturing changeovers that do not impact the marginal cost of each additional unit sold. Carriers are willing to pay over $400 in subsidies to provide the iPhone 4 at $0 to customers in the States and the iPhone 5 continues to deliver high average selling prices for Apple.

    Competition among Android handset makers will continue to increase. But that doesn't necessarily mean more competition for Apple. Revenue share is more important to Apple than nominal market share numbers and management has stated the company will manage its operations for margin, not market share.
    Dec 2 02:59 PM | 10 Likes Like |Link to Comment
  • Why Apple Will Beat The Street [View article]
    hobart16:

    Apple's gross margin will move above 40% as early as the March quarter and remain above that threshold for the next four consecutive quarters. Among the reasons Apple's gross margin remains the envy of the industry is because of manufacturing and supply chain management. Also, Apple develops its own OS, designs its own chips and sells a high percentage of the company's products through its own distribution channels. Each of these factors contribute to high gross margin.
    Dec 2 03:12 PM | 8 Likes Like |Link to Comment
  • Apple Price Target: $950 Per Share [View article]
    Thank you for your kind words. I put a great deal of time into developing my share price forecasts and 12-month price targets.
    Aug 12 03:58 PM | 7 Likes Like |Link to Comment
  • View Apple By Seasons, Not By Quarters [View article]
    The Microsoft Surface is a compromised product with a compromised message. It's an anachronistic relic of the bygone PC era. It may find a market among buyers locked into the Windows product paradigm, but at best it's a zero-sum game for Microsoft. Windows PC sales will decline much faster than Microsoft can sell Surface tablets.
    Oct 28 05:38 PM | 6 Likes Like |Link to Comment
  • Why Apple's iPad Stands Alone [View article]
    The PC market is in a state of economic implosion. For Microsoft to succeed in the mobile device market the company needs to move away from a mindset the mobile market is an extension of the Windows monopoly. The mobile market has its own dynamic and a decidedly different approach in the way users desire to interface with the devices. Until Microsoft changes the way it views the mobile device market I'm not expecting much success no matter the technology put in place.
    Aug 24 02:10 AM | 6 Likes Like |Link to Comment
  • Forecasting $590 per Share Price Target for Apple [View article]
    In my view Tim Cook is much different than Steve Ballmer. I've listened to Tim on each of the quarterly conference calls with analysts for the past few years and I'm impressed not only with working knowledge of all aspects of Apple, but also with his passion for the company. While no one can replace Steve Jobs, under Tim Cook's stewardship the company is in good hands.
    Jun 12 01:52 PM | 6 Likes Like |Link to Comment
  • Apple's March Quarter Madness [View article]
    rrosey2:

    Apple's net income per revenue dollar is the envy of the industry. In the March quarter about 25 cents on each revenue dollar will flow to the net income line. This is due in large part to attractive gross margin. It's also due to the fact Apple keeps operating expenses at well under 10% of revenue. The more than 400 Apple retail stores worldwide shoulder much of the advertising and marketing burden for the company and are more effective at generating new customers and more revenue per customer than outsized conventional advertising budgets. Further, Apple's two fastest-growing regions (Greater China and Japan) have the highest rates of operating income per revenue dollar.
    Mar 24 04:21 AM | 5 Likes Like |Link to Comment
  • Why Apple Will Beat The Street [View article]
    barnsteen:

    Android device makers compete more with one another than any of the Android handset makers compete directly with Apple. Samsung invests billions in marketing and promotion and took advantage of the final four months of Apple's 26-month cycle on the iPhone 4 series form factor to push product. Samsung's earnings performance in CQ4 will be much different than the company's earnings performance in CQ3.

    Apple's biggest competitors are time and manufacturing capacity. Samsung doesn't make the list.
    Dec 2 09:40 PM | 5 Likes Like |Link to Comment
  • Why Apple Will Beat The Street [View article]
    richbar:

    On a sequential basis, Apple will experience a modest drop in margin this quarter. This will occur because of manufacturing changeovers, not issues related to competition. In the December and March quarters this fiscal year the rates of revenue growth will exceed the rates of earnings growth due to extraordinarily high gross margin in the prior-year periods. The rates of earnings growth will exceed the rates of revenue growth again beginning in the June quarter and continue through at least the March quarter of FY2014.

    Apple continues to achieve extraordinarily high average gross margin due in part to carrier iPhone subsidies. The build costs per unit for the iPhone 5S may be lower than the build costs for the current flagship handset. This will provide for attractive gross margin in the December and March quarters next fiscal year.

    I do expect the global smartphone market to "peak" or enter the first stages of maturity in the latter half of CY2013. To sustain rates of revenue growth on par with the rates of growth achieved over the past five years, Apple will need to identify the next global market management intends to disrupt no later than the first half of CY2014. Apple will sustain average revenue growth greater than 30% through at least FY2013 and the first half of FY2014.

    Much of Apple's revenue growth over the past three fiscal years has been achieved through geographic expansion, particularly in China. Greater China represented about 15% of Apple's revenue in FY2012. Essentially untapped markets including Brazil, India and Russia will deliver growth opportunities over the next three years. But growth in those markets will not come as quickly as Apple's rapid growth in greater China.
    Dec 2 05:16 PM | 5 Likes Like |Link to Comment
  • Why Apple Will Beat The Street [View article]
    Professor Dave:

    Apple's growth is best measured by the growth in the company's global customer base, not the growth in unit sales of any one of the company's popular digital device lines in any one particular quarter. Apple manages for margin and manages for yield per customer. There are vast regions that remain virtually untapped by Apple for product sales. But infrastructure development to create sales in those regions will take time and building out the retail store presence is vital for creating new customer relationships and introducing Apple products to hundreds of millions of new customers over the next five years.
    Dec 2 04:44 PM | 5 Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    danf:
    In the March quarter Macintosh unit sales revenue represented about 13% of reported revenue. The PC market has reached a mature phase and outside of Macintosh sales global industry revenue growth has slowed to a crawl. As early as the September quarter Apple may reemerge among the world's top 5 PC makers and the company is the most influential PC maker on the planet in terms of product innovation.

    There's little risk to Apple through continued innovation. Apple's biggest risk is a lack of innovation.

    Concerning supply chain vulnerabilities: Apple has diversified its component sources and through strategic partnerships is providing for stable lines of component supplies. From the chips used in IOS devices to the SSD technology now used in most devices, Apple continues to deploy proprietary technologies. A risk to component supplies and manufacturing capacity is somewhat remote. Apple has ample cash resources to invest in its supply chain to acquire components and manufacturing capacity as needed and from different sources.
    May 20 09:24 PM | 5 Likes Like |Link to Comment
  • Apple's Expanding Global Reach [View article]
    One of the issues with printed text books is accelerated obsolescence (in addition to the high costs of printing, binding and shipping). Digital devices allow for access to the latest information as it is updated and in text embedded with links, students and instructors have access to additional curriculum resources.

    If the most recent education buying season is an indication, school migration to iPads is well under way. 
    Sep 4 11:30 PM | 5 Likes Like |Link to Comment
  • Why Apple Will Beat The Street [View article]
    goofydon:

    Price and margin capitulation to gain or sustain market share is a clear sign an enterprise's (or industry's) pace of production innovation is no longer satisfying the needs and demands of users.

    This is why the Android v. iOS comparisons are invalid and lead to gross misunderstandings about Apple's primary product markets. The iPhone 4, in its 3rd year of release, still commands a high subsidy from carriers. Conversely, Samsung is spending heavily on advertising and price promotions to clear inventory of smartphone handsets in the current quarter.

    Android is an amalgamation of handset device makers using a common series of OS releases because the cost of the OS is considered minimal, not because the OS offers a superior experience for users.

    Microsoft is stepping in as a hardware device maker because lack of device margin and global price competition are driving both HP and Dell from the consumer PC market. Microsoft will spend billions convincing consumers to purchase a Surface tablet while the global Windows PC market continues to economically implode.
    Dec 2 11:33 PM | 4 Likes Like |Link to Comment
  • Why Apple Will Beat The Street [View article]
    Based on the extended useful life of Apple products, the company prices its products attractively for consumers. For example, my current laptop is a 2002 PowerBook G4. It's been used every day for the past ten years. Today, consumers can often resell their used iPhones for more than the subsidized price at the time of original purchase.
    Dec 2 05:21 PM | 4 Likes Like |Link to Comment
  • Apple Offering Excellent Entry Point [View article]
    richbar:

    I look forward to comparing notes with you on Apple's FY2013 revenue growth performance twelve months from today.
    Nov 6 12:01 AM | 4 Likes Like |Link to Comment
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