Timeline Strategy Consulting

What Are the Best Hedge Funds Buying Now?

Contradicts your last posting about AAPL being overvalued.

Amazon, Apple Stock Going Vertical: This Never Ends Well

AMZN may be overvalued, but time will tell that AAPL is not.

If Apple posts a highly-reasonable EPS of $2.10 for their FY10 Q1, which ends in December, that will reset their trailing full year earnings to $6.61. They will also post a $3.5 billion addition of cash and equivalents to the balance sheet, meaning that they hold $40 billion or so in cash - equivalent to 18% of their $180 billion market cap.

During some period in the future, $205 will look very cheap, if you have the stomach to deal with the stock's oscillations and the market's corrections here and there.

And, a detail. The company you refer to as 'Price Line' is either 'priceline' or 'Priceline'. Details matter when you are writing and you should attempt to get them right.

The Power of Instant Approval

More pointless grumbling about Apple.

If the tension for change is so high, and the developer payoff exists elsewhere, the developers will go elsewhere.

I don't, as yet, see a similar marketplace where a developer will have access to 60 million devices from one version of a program, with that number increasing quarterly by a double-digit percentage.

There's always this "wait until this or that happens, we'll show you then" complaining about Apple but none of it diminishes the consumer appeal, and thus the sales, and thus the install base. And that's the hand that turns the crank.

Developers simply need to know this - Apple doesn't really care about their feelings. They should just keep their heads down and do good work and they might be rewarded. And if they want to go ride the unicorns in Android Land, that's up to them.

They should just know that each unicorn is different, and they will need to have a different riding style for each one, and that some riding styles are not compatible with some unicorns. They'll figure all of that out after a few years with all the different unicorns that come and go in Android Land. Every holiday season there will be a whole new crop of unicorns and your old riding style may need some modifications, but it's all good because everything is happy in no-rules Android Land.

And just tell them to ignore the fact that by 2012, when they have figured out how to ride 10 or 15 different unicorns, that there will be 150 million identical Apple devices in real customer's hands, each of them tied to an iTunes account that has a credit card.

Good luck with the Unicorns, suckers.

Apple to Open 50 More Stores - Let's Be Careful, Steve

I had El Jobso on the phone this morning, and let him know that the decision didn't please you. He was a little upset, but knows that you know a lot more about how to run retailing at a $180 billion market cap company than does he. After all, what retailing has he ever done besides Apple and Pixar?

Oh, and that Disney company.

He promised to run any major decisions by you in the future, umkay? He'll call you.

The Future Is Mobile: Telecom Returns

"Keep your eye on the ball and you will see the businesses of tomorrow sprouting today."

That might be one of the best mixed metaphors that I have ever read.

However, I prefer to make hay while the ball's in my court.

Europe's Biggest Newspaper Forcing Purchase of Its iPhone App

Good one. That Europian is really stuped!


On Nov 06 11:56 PM KACER wrote:

> Stupid Europian

Research In Motion: Still the Best Positioned Smartphones Play

Lucky Lenny, I read that blog and the writer's opinions are legitimate and well-written.

However......I'm guessing that out of 5 people who carry Blackberries, perhaps 2 will appreciate the blog that you reference. This means that 3 out of 5 are candidates for switching to something else, be it iPhone, Droid, whatever. That's a problem for RIM. They have no current solution for this problem, and I'm guessing - based upon their track record of introducing the same thing with some slight improvement - that they have nothing substantial in the pipeline.

If the RIM argument comes down to safety and security that mandates acceptance by large corporations.....well, that sounds a lot like a utility company and not a technology company.

People assume that iPhone sales are rising because overall smartphone sales are rising. I would go a step further and suggest that smartphones sales are rising precisely BECAUSE iPhone sales are rising. iPhone has raised expectation levels for all smartphones, not just those made by Apple. In this manner, it has pulled the market along with it, by forcing handset makers to develop more quickly in order to survive. Touch screens, app stores, browsing, syncing, GPS, and other iPhone features have raised the bar, and handset makers who have embraced this future have a realistic chance to outperform the competition.

I am afraid that RIM does not show that urgency.

And if you think that Apple is not working on many of the legitimate issues, then you're looking at a different company than I am. Probably the biggest of them, battery life, is a tough nut to crack because it's pushing the limits of physics. I would suspect that battery life for all devices is a very hot topic at Apple.

Go Google another arcane reference from a non-switcher. I bet I can find 10X more in the other direction.

Research In Motion: Still the Best Positioned Smartphones Play

RIMM may very well increase in value as speculators flood back into its shares, but this won't be a long-term increase because nothing has fundamentally changed with the company's (in)ability to innovate. They have squandered years in which they could have been innovating for real, and are now fading fast.

You're obviously smart, you are managing other people's money. I really don't understand why it's not obvious to people like yourself, when you look into the future, to see how RIM will have trouble staying viable. Perhaps you are on the East Coast, on the Verizon network, and surrounded by people with Blackberries, so you have a bias. They are swimming against the tide for many different reasons: (1) Lack of touchscreen devices, despite obvious market direction toward touchscreens; (2) very slow development in apps; (3) heavily tied to one carrier, Verizon, who sees the writing on the wall and is pushing Android to compete with iPhone; (4) serious hardware limitations.

Mentioning this or that acquisition that RIM has done, or their supposed 'innovation' is not going to cut it. They should have been innovating in 2005 when they had the lead. Now they are playing catchup like a bunch of other sad-sack companies, trying to be belle of the ball once again. Why should I bet on RIMM with my investment dollars, when I could choose MOT - who clearly acted with urgency - or AAPL?

Can you honestly tell me what RIMM will report on December 17th? Because I have no idea. What will be the stock price on December 18th and why should I think it won't be cheaper then?

Riddle me this - if many people prefer anything other than AT&T, and Verizon accounts for 1/3 of RIM's sales, what happens when iPhone goes to another U.S. carrier? What happens today - on Verizon - when the Droid is another option? How many fewer Blackberries get sold then?

Look into the future man, it's clear as day. When the CEO of a company is off trying to buy hockey teams, his head's not in the game.

Good thing they have another CEO for a spare. Just another buy-one-get-one-free deal from Blackberry.

Apples to Apples: Will History Repeat Itself as Android Gains on the iPhone?

Three points, one technical and two strategic.

First, the iPhone camera is not rubbish. Limited it may be, but it does take very nice pictures in the right conditions. If it were so terrible, it would probably not be the second most popular camera - of all types - on Flickr. Furthermore, the app choices for picture processing make it a very interesting camera with which to be creative, and cover up some of the technical limitations. Nonetheless, if you have no ability to consider the conditions of a shot, perhaps it's your photography skills and not the camera that are rubbish.

Second, iPhone may have been a 'fashion item' or 'cult' object 2 years ago, but again no longer. 60 million devices in use make it a powerful, flexible force that can be all things to all users thanks to the customization that apps provide. As an affirmation of the platform's value, compare used iPhone prices with prices of other handheld devices at gazelle.com. iPhone OS devices will be reused in higher percentages than any other device. This fact, plus the fact that Apple is now selling the better part of 10 million (iPhone plus iPod touch) per quarter, make the math impossible to ignore. Can you really argue your way out of the 60 million vs. less than 5 million paradox?

Third, you make it sound as if it's an aggressive strategy that has all those handset manufacturers converting to Android. Wrong. Those companies are moving out of desperation. A few of them won't even be in this industry in 2 years, and half will be gone in 5. Just watch. That's how much iPhone has changed expectations and the playing field.

I think if Android had made a major push in 2007 or 2008, perhaps they could gain a significant position, but the horse has left the barn. It will grow to some middling platform that is not terribly profitable for anyone involved, and will have just enough device sales to keep it modestly interesting for the top few sellers.

Finally, the observation that Apple is now in a position to repeat its previous behavior - snatching defeat from the jaws of victory - is now the argument du jour used by bloggers who are predicting Android success. Technical details aside, how many credit card numbers and customer accounts did Apple have in 1985? How many does it have now?

(Hint - it's 100 million and growing by 5% per quarter). That's the power of the platform, and that's a big part of why they will not lose again.

Cramer's Stop Trading! How Apple Can Get Past $200 (10/27/09)

Solid advice Cramer. I'll just sell my AAPL shares and buy shares of corn flake manufacturers.

We'll just wait for Kelloggs to make the future for us. They have a strong history of innovating all manner of sugar spraying and Froot Looping technology to see us through this recession.

With Vonage App, Apple Isn't Even Bothering to Lie Anymore

Are you going to have VoIP apps on the CrunchPad when it comes out?

Is the Time Right for Nokia?

I agree with the conclusions of this article.

Nokia's problems are only too clear. Those 'economies of scale' that will make them so profitable in the future? Good luck with them, because they come shackled to a corporate bureaucracy that calls press conferences and makes PR announcements instead of executing anything.

Apple makes innovation look so simple and straightforward that it's easy to think that any company can just do it. Nokia spends $6 billion for R&D annually. For what? Apple spends $1 billion and is eating Nokia's lunch. On the basis of that metric alone, Nokia may still be overvalued, at a P/E of 18.

Europe is the next battleground that Nokia will lose. iPhone is penetrating heavily into this market (6-8 week wait times for iPhone in the Netherlands, for example), and Nokia's fallback will be the developing world. Guess what? They will lose that too, it's just a matter of time.

I also completely agree with the concept of too many products for Nokia. That mattered less when the devices were not part of a platform. Now that they are, too many configurations make their strategy a complete liability.

Want proof of that? Go on gazelle.com, and check the resale value for a used 3G iPhone in fair or good condition. That's right - a cell phone that you can resell after your contract is up. iPhone is so well made, so desirable, and has such a rapidly growing platform that they sell them used.

Now compare that with any Nokia and see what you find. The proof of that pudding is right there in the eating.

Reading Palm: Pre Sales and the Secondary Offering

A further point on the numbers used in this research briefing:

You say "Apple...selling more than 5.4 million phones in its second quarter"...". This statement is incorrect on two counts.

First, Apple sold 5.2 million phones in the calendar second quarter. That can be seen here: www.apple.com/pr/libra...

The difference is minor, but because it's a published number, there is no reason to get it wrong, even by 3.85%.

Second, the calendar second quarter is Apple's fiscal 3rd quarter. Again, this is known, and precise use of relevant timeframe makes the point clear and correct, and avoids confusion.

Good research starts with details, not sloppiness, or pulling numbers that appear to be close enough.

100% Gainers and Their Estimated P/Es

Isn't a P/E from a company having negative earnings, not 'Negative' as you state, but rather incalculable and thus 'N/A'?

Motorola's Cliq Builds on iPhone Concept

How can a phone that needs to be given away for free be seen as a 'game changer'?

That device, unlike the iPhone, is cluttered and messy. What's the value in that, even for free?

I'm sorry, but I'm just not convinced that Android offers anything yet, despite the fact that it's open source and all that business.