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McGonicle
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  • Apple Caramel Dip 0 comments
    Jan 18, 2013 7:38 PM

    Not particularly an apple fanboy. However, I am long this dip.

    Questions and comments;

    a cheap iphone; US users get their 849$ phone for 200. Sometimes, they give you 100 for your dead 3d gen. How much cheaper do you want this to be, that they pay you to buy the phone and then you pay them back through the carrier subsidy?

    AAPL has made an amazing game with the carriers of asking for their entire margin in return for allowing them to sell the phone...which moves the actual capture closer to 1100-1700 per two years. For a device they make for what, $353-$417? Probably less when you build say 10 million. A month.

    You replace the phones every 30 months, on average. This means the entire market turns over every two and a half years, taking your invested dollar and nearly tripling it.

    The phone sells you content that you cant pirate, they just take a cut of the sale price; they dont create any content, they are just upselling it. This has very little 'cost' attached, so its free money to AAPL.

    The story about the cancelled orders is complete rumor and is nonsense. 65 million phones, 35 are already sold, idea is that then about 16MM screens, chips etc were cancelled, however no more than 3.5MM phones would be in the pipeline, so the cancellation concept is attacking about 5 times as many phones as would be in the monthly production pipe....like canceling 5 months worth of orders...

    PALM claimed that foxconn returned 200000 phones and stopped production. They claimed the reason was that dealers were fully stocked; the reality is that they couldn't well 500000 phones in inventory. Two weeks later, the stock went from 10 to 3.

    HLF fell less (70 to 50) on allegations that it is an illegal company subject to delisting and thusly worth zero. Ackman claims they are making up nearly 90% of their income.

    AAPL's income is real. It is not based on the 'capture of a future marketplace' concept like the cloud, like SaaS, like mobile payments, or the online marketplace. Those four subsectors price stocks based on nothing.

    There simply isnt any comparison; NFLX, CRM, PCLN, CMG and PNRA and AMZN (and RL, FOSL, DECK etc etc) have all moved from the low two figures to the low three figures on the QE stupidity. AAPL is the only one of these movers that deserved it.

    Disclosure: I am long AAPL.

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