Is This The Beginning Of The End For Facebook? Reasons For Concern For Investors [View article]
A shrinking market share is not necessarily a bad thing for FB. In terms of competitive advantage, they rely less on economies of scale and more on demand captivity. An incumbent firm which derives most of its competitive advantages from economies of scale will be at a disadvantage when the market grows compared to smaller entrant rivals.
I agree with you that there are no barriers to entry in this market. I can start a social networking site today, but there's about a 100% chance that it won't attract any members beyond my own friends, and even that's questionable. Just look at American Idol. Everyone thinks they can be the next superstar, but only a few actually go on to make real money and record deals. No one has replicated Kelly Clarkson's success on that show since it began!
Is This The Beginning Of The End For Facebook? Reasons For Concern For Investors [View article]
I have no doubt that FB will be replaced at some point in the future by another revolutionary product. It's just how life is. But, for now and the near future I agree with the above comments. Just like Apple's ecosystem FB has a sticky factor that prevents me from having to spent a lot of time rebuilding what's already been built on FB. There are tremendous search costs and demand captivity. Also, with the internet we are seeing winner-take-all-effects. It's going to take $%^& load of money and effort for a competitor to knock off FB, and the likes of Amazon. I feel like Google is wasting a lot of money going in all different directions like Microsoft in the past.
Another worthless article on AAPL's declining margins without talking about their sticky ecosystem. You were wrong about Amazon, and you're wrong about Apple.
I do think AAPL's return on capital will regress to the mean, but not so much as Trainer assumes due to the stickiness of their ecosystem. It gives them just enough of a competitive advantage to keep from becoming a Microsoft.
Samsung Is Eating Apple's Breakfast, Lunch, And Dinner [View article]
Margins erode as products transform into commodities. Unfortunately, there's nothing that Apple does that Samsung can't do. And that's coming from an Apple shareholder. The next couple of years is going to depend on how Apple reacts to Samsung's aggressive posture. I'm just holding on for the buybacks. Really unfortunate what's happened to this once-great company. But this time is no different.
Some Apple (AAPL) commentary: 1) Horace Dediu estimates the iPhone and iPad's component costs respectively rose 29% and 65% Y/Y in FQ2, well above rev. growth of 3% and 40%. This, along with a mix shift towards iPads, is mostly responsible for Apple's gross margin drop (rather than price pressure). 2) Tero Kuittinen sees similarities between 2013 Apple and 2007 Nokia. "The strongest parallel is in the weird way both companies started fighting the consumer preference for larger displays … and then dug in as margins began eroding rapidly." Tim Cook may have just hinted a bigger iPhone will eventually arrive. But how long will it take? (yesterday) [View news story]
Nothing new to add, except that the only reason I'm holding onto my shares of Apple is the historic buyback. There is no question that Samsung is bound to do Apple what Toyota did to GM. If you don't see that you might want to go out more because everywhere I look, I see people pulling out their Samsungs and showing them off like they're new breast implants. Especially women and feminine Asian guys love those things. Not trying to be funny just calling it as it is.
Very frustrating to see management continue their denial about the attractiveness of the larger screens. The more I hear Tim Cook talk the more respect I have for Steve Jobs as a human being and the more loathing and hatred I have for arrogant MBAs.
J.C. Penney (JCP +11.8%) might have a little breathing room with its cash flow headaches as Goldman Sachs reportedly rounded up financing for the retailer of $1.75B. The news is good enough to help shares pop over $17 for the first time in over a month. (Previous: Stars starting to line up for JCP?) [View news story]
I agree. I don't see anything that's made a material difference to JCP's strategic position in this sector. What do the big boys see in this thing?
Most U.S. consumers remain either unfamiliar with or unenthusiastic about Nokia (NOK) and BlackBerry's (BBRY) latest hardware, according to an MKM survey of 1,500 people. While 51% of respondents owned a smartphone, only 6% plan to buy a BlackBerry in the next 12 months, and just 1% a Nokia phone. Moreover, in spite of the Z10 and Lumia 920/820 launches, 63% of respondents had no idea when BB10 would launch in the U.S., and 61% were unaware WP8 (MSFT) phones are available. BlackBerry is counting on a fresh marketing push to raise its U.S. profile. [View news story]
I like how these guys can make such a quantum leap between 1500 people to US consumers. Oh that's right. Central limit theorem. Because book-learning (academic) works so well when it comes to investing.
A Johnson-Less J.C. Penney Is Still Dead In The Water [View article]
Agreed. Now we'll never know if Johnson's strategy would've ultimately paid off or not. Difficult to know the linkage between cause and effect unless sufficient time is allowed.
You're right. In absolute terms NEW degreed enrollments in bachelor's degrees did go down. But as bachelor's degrees begin to make up a larger portion of their student body, enrollments should go up with declining default rates.
I think Apollo knows that the previous business model of marketing to associate's degrees was not sustainable. Selection bias dictates that students with associate's degrees are of the lowest caliber compared to others, and therefore have the least chance of getting a good job after graduation which increases probability of default.
Furthermore, DEGREED enrollments in bachelor's degrees did go up in absolute terms from 171,000 to 172,600 from Q12010 to Q42012.
Though Intel's (INTC) superb credit rating has allowed it to issue dirt-cheap debt to finance buybacks, "leverage works best when a company is growing," cautions Bernstein's Stacy Rasgon. The chip giant's aggressive cash-return strategy has already led net cash to fall below $5B, its lowest level since '95. Now, with weak PC demand pressuring sales, capex about to surge, and a 4.2% dividend soaking up over half of free cash flow, Intel probably has little choice but to either slow its buyback activity or further weaken its net cash balance. [View news story]
Agreed. Textbook leverage and capital structure problem dependent on EBIT growth.
Apple (AAPL) has withdrawn proposal #2, preferred stock shareholder voting requirement and all, in response to the injunction placed earlier today at Greenlight Capital/David Einhorn's request. Apple: "We are disappointed with the court’s ruling. Proposal #2 is part of our efforts to further enhance corporate governance and serve our shareholders’ best interests." Greenlight on the injunction: "This is a significant win for all Apple shareholders and for good corporate governance." (court ruling) [View news story]
I love how you and others like you talk about innovation like something akin to making coffee in the morning. Innovation is not a choice. You can direct your efforts at innovation, and get nothing in return. Did you even check out Einhorn's presentation? At this stage of the game "iprefs" can be a kind of innovation with respect to capital structure.
I keep having to remind people on seeking alpha about non-linearities. Innovation goes in discrete leaps and bounds. I believe in Apple's value. I've been a recent buyer. But don't expect for them to start rolling out new products on the level of iphones and ipads any time soon.
Is This The Beginning Of The End For Facebook? Reasons For Concern For Investors [View article]
I agree with you that there are no barriers to entry in this market. I can start a social networking site today, but there's about a 100% chance that it won't attract any members beyond my own friends, and even that's questionable. Just look at American Idol. Everyone thinks they can be the next superstar, but only a few actually go on to make real money and record deals. No one has replicated Kelly Clarkson's success on that show since it began!
Is This The Beginning Of The End For Facebook? Reasons For Concern For Investors [View article]
Apple's Magic Is Broken [View article]
David Trainer's $240 Apple Price Target Analysis Just Doesn't Add Up [View article]
http://bit.ly/148n2pV
I do think AAPL's return on capital will regress to the mean, but not so much as Trainer assumes due to the stickiness of their ecosystem. It gives them just enough of a competitive advantage to keep from becoming a Microsoft.
Why Apple Is Becoming Irrelevant [View article]
Samsung Is Eating Apple's Breakfast, Lunch, And Dinner [View article]
Some Apple (AAPL) commentary: 1) Horace Dediu estimates the iPhone and iPad's component costs respectively rose 29% and 65% Y/Y in FQ2, well above rev. growth of 3% and 40%. This, along with a mix shift towards iPads, is mostly responsible for Apple's gross margin drop (rather than price pressure). 2) Tero Kuittinen sees similarities between 2013 Apple and 2007 Nokia. "The strongest parallel is in the weird way both companies started fighting the consumer preference for larger displays … and then dug in as margins began eroding rapidly." Tim Cook may have just hinted a bigger iPhone will eventually arrive. But how long will it take? (yesterday) [View news story]
Very frustrating to see management continue their denial about the attractiveness of the larger screens. The more I hear Tim Cook talk the more respect I have for Steve Jobs as a human being and the more loathing and hatred I have for arrogant MBAs.
J.C. Penney (JCP +11.8%) might have a little breathing room with its cash flow headaches as Goldman Sachs reportedly rounded up financing for the retailer of $1.75B. The news is good enough to help shares pop over $17 for the first time in over a month. (Previous: Stars starting to line up for JCP?) [View news story]
Is J.C. Penney Now A Buy? [View article]
Please replace the last word of your thoughtless statement with "speculation."
J.C. Penney: Ron Johnson's Mistake Was Fair And Square Pricing [View article]
Most U.S. consumers remain either unfamiliar with or unenthusiastic about Nokia (NOK) and BlackBerry's (BBRY) latest hardware, according to an MKM survey of 1,500 people. While 51% of respondents owned a smartphone, only 6% plan to buy a BlackBerry in the next 12 months, and just 1% a Nokia phone. Moreover, in spite of the Z10 and Lumia 920/820 launches, 63% of respondents had no idea when BB10 would launch in the U.S., and 61% were unaware WP8 (MSFT) phones are available. BlackBerry is counting on a fresh marketing push to raise its U.S. profile. [View news story]
A Johnson-Less J.C. Penney Is Still Dead In The Water [View article]
Is Apollo Group A Value Trap? [View article]
I think Apollo knows that the previous business model of marketing to associate's degrees was not sustainable. Selection bias dictates that students with associate's degrees are of the lowest caliber compared to others, and therefore have the least chance of getting a good job after graduation which increases probability of default.
Furthermore, DEGREED enrollments in bachelor's degrees did go up in absolute terms from 171,000 to 172,600 from Q12010 to Q42012.
Though Intel's (INTC) superb credit rating has allowed it to issue dirt-cheap debt to finance buybacks, "leverage works best when a company is growing," cautions Bernstein's Stacy Rasgon. The chip giant's aggressive cash-return strategy has already led net cash to fall below $5B, its lowest level since '95. Now, with weak PC demand pressuring sales, capex about to surge, and a 4.2% dividend soaking up over half of free cash flow, Intel probably has little choice but to either slow its buyback activity or further weaken its net cash balance. [View news story]
Apple (AAPL) has withdrawn proposal #2, preferred stock shareholder voting requirement and all, in response to the injunction placed earlier today at Greenlight Capital/David Einhorn's request. Apple: "We are disappointed with the court’s ruling. Proposal #2 is part of our efforts to further enhance corporate governance and serve our shareholders’ best interests." Greenlight on the injunction: "This is a significant win for all Apple shareholders and for good corporate governance." (court ruling) [View news story]
I keep having to remind people on seeking alpha about non-linearities. Innovation goes in discrete leaps and bounds. I believe in Apple's value. I've been a recent buyer. But don't expect for them to start rolling out new products on the level of iphones and ipads any time soon.