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  • Apple's Success Is In The Sensational And The Subtle [View article]
    dpw:

    I do see opportunities for Apple to develop at least a modest revenue stream through mobile payment facilitation. It would come at no cost to the device owner and all new revenue is welcome revenue.

    My view is for Apple to develop sustainable revenue streams it may require disrupting existing services industries. For example, through Apple technologies as well as services and accessories developed by 3rd parties, device owners could put together their own health or home monitoring systems. There are other services revenue opportunities through content delivery devices such as Apple TV.

    My question is can Apple successfully partner with 3rd party services providers in such a way as services are contracted through iTunes or does Apple need to develop direct services revenue channels?

    In my view, to develop ongoing services revenue opportunities, Apple needs to disrupt existing services industries to provide similar or better services at lower costs to consumers or through greater convenience for device owners.

    Apple’s iPhone line will deliver strong revenue and earnings growth next fiscal year. I’m looking beyond FY2015 for new sources of revenue to sustain growth.
    Sep 1 04:16 PM | Likes Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    TechEnthusiast:

    I believe we can all lose sight of how much cash Apple generates each year and I suspect there’s a process of cognitive adjustment following the 7-for-1 split. For example, a move from Friday’s closing price of $102.50 to $105 might be met with a yawn by a casual observer. But that $2.50 per share gain is equivalent to a pre-split jump of $17.50 in the share price and would add nearly $15 billion to the company’s market cap.

    Through the June quarter, Apple’s trailing 12-month net income is $38.555 billion. On roughly 11.1% revenue growth to $200 billion, Apple can achieve 12% year-over-year net income growth to around $43.2 billion with amplified eps growth due to the ongoing share repurchase program. It’s possible or even probable Apple will deliver revenue north of $200 billion next fiscal year.

    While aggressive growth investors might seek more attractive percentage growth targets, long-term investors may continue to be richly rewarded over time. Achieving in the range of $5 billion in additional net profits in one year in my view would be an outstanding accomplishment. It would provide ample cash resources for management to return more dollars to shareholders while funding necessary capital investments and support even greater investments in R&D.
    Sep 1 03:37 PM | 3 Likes Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    scott trader:

    The so-called “Law of Large Numbers” is not really applicable to share prices or revenue growth as it is a mathematical law related to probability of outcomes. It is loosely referenced as a means to suggest there will be diminishing rates of growth as an enterprise grows in size.

    Apple has been able to generate higher rates of growth by disrupting new markets. As a successful disruptor initially claiming only a small percentage of a market, revenue growth rates will be larger than what Apple might achieve in its current major product markets.

    I think there’s a valid argument to be made that on an expected revenue base of let’s say $200 billion next fiscal year, which is suggesting revenue growth of about $20 billion or just over 11% revenue growth, in percentage terms it’s not particularly impressive considering Apple’s revenue growth rates of the recent past.

    But I look at it a bit differently. Increasing revenue from $180 billion this fiscal year to $200 billion next fiscal year adds to revenue the total revenue of more than 350 enterprises in the Fortune 500 list. With the prospects of net income rising faster than the rate of revenue growth, the rising revenue total provides more dollars for dividends, more dollars for increasing the size of the current share repurchase program as well as funding for cap ex and product R&D.

    Rather than looking at the percentages of growth, I’m looking at the sheer volume of growth and how that may continue to reward shareholders over the long-term.
    Sep 1 02:22 PM | 6 Likes Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    dpw:

    I’d like to address both of your comments.

    It’s possible fees from mobile payment services will deliver a new revenue stream. But how much revenue from mobile payment services, considering an expected revenue base of $200 billion next fiscal year, is needed to really move the earnings needle?

    As we know, Apple has in the past reduced its services revenue opportunities, such as by providing free OS X and iOS upgrades, free iCloud services and now the sharing of apps among family members without additional cost, etc. to provide a value added to device owners and protect product pricing.

    In my view, protecting product pricing and sustaining high gross margin in part through the delivery of new services without cost is at least as important as creating more revenue through services.

    For example, how much revenue can be expected from mobile payment fees versus the appeal of upgrading one’s iPhone to gain access to this new service? One could argue the addition of mobile payment services as a convenience to owners of the newest iPhone handsets might generate more revenue from the sales of more devices than it might generate as a service unto itself.

    What do you think?
    Sep 1 02:02 PM | Likes Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    Gary:

    Thank you for your comment. The purpose of the article is to highlight and illustrate while the market expects Apple to deliver the spectacular this fall through new products and services, there are underlying factors that will boost net income and net income per revenue dollar.

    In my view net income growth is the primary catalyst for share price appreciation. Due to the factors highlighted in the article, the rate of net income growth next fiscal year may be faster than the rate of revenue growth. This provides an opportunity for long-term investors to be rewarded through additional share price appreciation no matter the sharp rise in the share price since the release of March quarter results.
    Sep 1 11:24 AM | 1 Like Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    nickysg:

    I did not specify a dollar potential for the iWatch. The reference I did make was the revenue generated by the iWatch next fiscal year might rival the revenue growth delivered by the iPhone 6. However, the revenue generated by this yet-to-be-announced accessory line might also come in below that level. The point of the reference is the iPhone product line will continue as the principal revenue and net income driver for the company.

    Due in part to Apple’s already massive market cap of over $600 billion, share price appreciation expectations need to be kept in check. In my view, earnings growth is the primary driver of Apple’s share price appreciation.

    The share repurchase program will push the rate of earnings per share growth higher than the rate of growth in underlying net income. As I mentioned in the article, there are overlooked factors such as a diminishing impact of revenue deferrals on reported revenue and gross margin next fiscal year and a lower percentage of revenue to be consumed by R&D expenses next fiscal year even if R&D expenses continue to rise.
    Aug 31 11:10 PM | 3 Likes Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    Camden:

    The disclosure is on the source article. Apparently it wasn't picked-up by SA this time around. I have not changed my position on the company.
    Aug 31 10:43 PM | 3 Likes Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    jsmunroe59:

    I expect China Mobile to participate earlier than last year in the launch of new flagship iPhone handsets and the carrier is adding more 4G/LTE infrastructure by the day.
    Aug 31 10:27 PM | 1 Like Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    fitness14:

    Apple is attractive as an ongoing growth story with a dividend component and a massive share repurchase program underway. Through the end of the $90 billion share repurchase program, earnings per share will rise at a faster rate than the underlying rate of growth in net income growth.

    As I mentioned in the article, Apple may set a new net income record in FY2015, surpassing the $41.733 billion in net income achieved in FY2012.
    Aug 31 10:20 PM | 4 Likes Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    ultraz2:

    $250 dollars per share would value Apple at over $1.3 trillion dollars versus a market cap in the vicinity of $615 billion today. What do you expect in revenue and net income growth in just over a year to support a rise in the market cap of over $750 billion?
    Aug 31 06:31 PM | 4 Likes Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    cem11:

    Thank you for your comment. This is the first time I’ve placed eight different graphs in one article, but I believe all of the illustrations are necessary to highlight the factors currently in play that may boost Apple’s financial performance.
    Aug 31 06:12 PM | 2 Likes Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    Camden:

    As I stated in the article:

    "No matter the dramatic rise in the share price over the past four months, opportunities remain for long-term shareholders to be richly rewarded over the next several quarters."

    I haven't changed my position one iota. As I believe you know, I am a long-term investor and I see real share price appreciation potential for Apple moving forward.
    Aug 31 06:02 PM | 2 Likes Like |Link to Comment
  • Apple's Success Is In The Sensational And The Subtle [View article]
    aardvark3:

    I expect strong growth for Apple through the introduction of new products and services and a strengthening of the underlying fundamentals due to the factors outlined in the article.
    Aug 31 05:58 PM | 4 Likes Like |Link to Comment
  • Apple's Game Of Inches [View article]
    BBwetrust:

    Apple has over 800 million content customers around the world and is investing billions of dollars in content delivery infrastructure.

    Content sells devices. As you know, Apple defers revenue on each Mac and iOS device sold for the value of the services and operating systems Apple distributes for free. The value of the content and services can be seen not only in the iTunes revenue the company reports, but also in the total for iTunes billings which includes the revenue pass through to developers and content providers that Apple doesn’t recognize as its own revenue.
    Jul 30 01:22 AM | 2 Likes Like |Link to Comment
  • Apple's Game Of Inches [View article]
    Arnie:

    Apple does have the financial firepower to acquire desired technologies as well as revenue generating device lines and services. After a $90 billion share repurchase program, there will be other ways to increase shareholder value and certainly large acquisitions are a means to immediately boost revenue and earnings potential for the owners of the company.
    Jul 29 09:56 AM | Likes Like |Link to Comment
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