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Wim Lewi

 
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  • How Stephen Elop Destroyed Nokia [View article]
    Nice article, but I wouldn't blame it all on Elop. With Elop, Nokia glued itself to MSFT and wrote off billions of Symbian R&D and made 40k people obsolete. Symbian came out of an other era and always ran behind the trends. They should have opened up to Android long ago, remain independent and focus on making good hardware. The Fins were too stubborn and had too much money in the bank (now gone). They could have secured a 15-20% smartphone market share and make low double digit margins. With its low invested capital, that would have been plenty. Now, the only way out seems a bid by MSFT or support to get the Lumia accepted in the market. I am long Nokia at 2.30 USD, but if the Lumia 920 flops, it's game over. However, the slightest positive news will double the share price. I have the Windows 7.5 on Lumia 710 and love the robust OS, it doesn't have the good looks of iOS, but is very robust. The Nokia phone has better Wifi and reception than my last iPhone 4S that cost 3x. I hope Nokia gets a good reception on the new Lumia's. At least, they wont have 35 models in store anymore.
    Oct 11 11:07 AM | 1 Like Like |Link to Comment
  • Apple's Positive Uncertainty: Universal Remote iPad [View article]
    The iPad 'mini' will sell more units than iPhone ? Even if it is true, it is dramatic for Apple. What will the mini do that can not be done by an App that the iPhone will perform much faster ? Why would people buy an additional device simply because it is smaller and doubles as a remote control ? The iPhone is too good. If the iRemote control is enough to check mails, read papers, etc... Apple has shot itself in the foot. Lets have another rally on this miracle device, that will revolutionize the remote control. At least, you realize that the iTV is not a TV set, that game is long gone. Maybe the iCar will be a set of keys or an iPhone App, oh no bugger/
    Oct 11 03:53 AM | Likes Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    QCOM is a mobile technology company, AAPL has no mobile technology patents, they bought some ARM design shops,
    Check this link on their ARM design houses,
    http://bit.ly/Rxm4MC
    Oct 10 04:37 PM | 1 Like Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    Thanks for the compliment. In a way we agree that Apple has to do something to continue the success. I just dont believe that they will make anywhere near the profitability of the iPhone or iPad or spend too much money. TV's were the core business of Philips (PHG), they begged a Chinese company to take it over and paid for it. I know Philips well as I live nextdoors. In the 80's, they invented the CD, they are a strong R&D company. The TV is end-of-line and dominated by Samsung. The iTV will have to cook my dinner in order push out Sony. MSFT and GOOG also had their shot. The iCar has the same problem, it will have 4 wheels, an engine, and look like a Smart, nothing new.
    An innovation like the iPhone doesn't happen very often.
    Oct 10 04:22 PM | 1 Like Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    I apply the same method for all my stock valuations based on growth, margin and capex. I will post more articles in future when I find another clear discrepancy between short term earnings momentum and long term valuation, long or short. I only recently started as an independent financial planner. Before, I was not allowed to publish anything outside my job as analyst. I still do the same research for my portfolio. So far I like the SA platform, it is a good benchmark to test your ideas and gather knowledge.
    Oct 10 04:09 PM | 3 Likes Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    I agree that the Apple retail network is more profitable than all other retailers. But that is not the point. The point is that Apple makes a higher ROI if all the distribution is done by AT&T, they even pay the phone in advance and worry later. Adding the retail network adds to the bottom line, but needs much more PPE than using third parties. Every iPhone that goes through the retail network instead of the operators, dilutes profit and ROI, Will Apple spend 20bln to finance 50 mln iPhone at 400 USD ? Maybe yes, but then the cash declines.
    Oct 10 01:31 PM | 2 Likes Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    True, I dont know exactely when this will become clear and the market will react on it. I see datapoints that connect to a trend and I extrapolate this trend based on other evolutions in history. I believe that most market watchers also note the same trend, but have faith that Apple will find an answer. I am just not so sure about that. Without a 130 mln liveline of MSFT Apple would have perished in 1997. Apple can make mistakes. http://bit.ly/AkMdeX
    Oct 10 01:22 PM | Likes Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    Thanks, I have met institutional investors for the last 20 years and must admit that this board and its reactions are new to me (at least openly). I guess Apple is a hot topic that stirs emotions. I dont take anything personal, this is my belief and if I am wrong in 12 months, I will have lost money and credibility or vice versa.
    Oct 10 01:15 PM | 4 Likes Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    I try to model a long horizon so the terminal assumptions become less dominant. It is still half the value of the company in 2021. Only 5 years ago, Nokia was a cash machine with 18% margins, nobody would have put margins below zero in 2014. I believe that Apple will remain an innovative company and make margins that are well above typical hardware vendors, I have put the margin at 18%. This is still double the cost of capital. Competitor Samsung will compete at lower margins as they are not programmed for profit. Growth is limited as Apple already has such a large share of the spending wallet. The replacement rate of the products will slow as the innovation slows and the ASP's are always declining.
    Oct 10 01:07 PM | 2 Likes Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    Indeed Apple pre-finances production via Receivables, Prepaid expenses and some other current liabilities, but that is all taken in the working capital, in the last quarter the WC was still 20 bln negative, due to payables 17 bln and other current liabilities of 15 bln, check the link
    http://bit.ly/PXBQ1v

    The advances will increase and become structural, like Apple writing the check to Foxconn, to keep Sharp alive, 2 bln Capex hole, etc...
    Oct 10 12:56 PM | 3 Likes Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    I agree, it links in with herd behaviour. The bargaining power was all with Apple as they had a new product that took massive share in the mobile market. Now, the game has shifted to hardware performance and the balance of power shifts back to the supply chain. With less competitors for each component, it will be easier to get better deals. This wont happen overnight, but is a theme for 12 months.
    Oct 10 12:45 PM | 2 Likes Like |Link to Comment
  • Apple's Cash Position Is Overstated By $70 Billion [View article]
    Thanks Jason, I live indeed in the old continent. The 500 is a ball park number, just like bulls are throwing the 1000 around, the 0.7 is a rounding error.
    Oct 10 12:37 PM | 1 Like Like |Link to Comment
  • iPad Mini Success Will Sink Apple Margins; Look For 30% Downside [View article]
    Thanks for the many comments, some were very constructive and critized my sales slow-down in the DCF model. I only focussed on the impact of technology maturation on the margin as it has the highest leverage on the bottom-line. The sales decline in my model is not due to market share losses or people buying less iPhones. It just follows the ASP decline trend of hardware. Apple iPhone consumers pay 3x times the value of components because they want a 'cool' and innovative product. That appeal is decreasing and when they pay only twice the BOM, the sales also decline by 33% even when units sold are unchanged. Hence, the sales will decline even if 30% more iPhones are sold. This can also get worse as the replacement cycle slows down as the consumer realises the new iPhone has the same functionality, but is a bit faster, lighter or has shorter battery life to feed all the hardware improvements. When operators lengthen the replacement cycle from 2 to 2,5 years, then sales decline 25% with the user base unchanged. I dont agree that iPad sales will not cannibalise iPhone sales as they come out of the same spending wallet. Consumers will get pickier on how they spend their dollars as the iPhone hype cools down. I find it striking that Flash memory costs 0,45 cents per Gbyte, while Apple charges 100 USD for 16Gbyte extra. It is a matter of time before consumers will demand a MicroSD slot, like Samsung offers on its tablets. I am preparing a new article on the Apple capital base as I believe it is important to understand the distorted power balance in the supply chain.
    Oct 5 07:25 AM | Likes Like |Link to Comment
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