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Apple (AAPL +0.6%) estimates were lowered today in response to Tim Cook's iPad comments and...

Apple (AAPL +0.6%) estimates were lowered today in response to Tim Cook's iPad comments and worries about iPhone 5 supply issues. But with shares now at 11x FY12E EPS (exc. cash), these concerns might be baked in ahead of tomorrow's report. The iPad Mini's pricing is yielding plenty of debate. Nomura: "A 65% price premium ($129) is significant and ... allows for Amazon and Google to continue to build out their positions." Baird: "Though priced above [rivals], the device is thinner, lighter, boasts a bigger screen and better cameras, and ... much wider app selection."
Comments (33)
  • also different quality of materials. You can't compare $199 plastic to $300 anodized aluminum. The apple logo alone costs an extra $100.

     

    i hope the ipad mini sells a crapload. my aapl investment depends on it.
    24 Oct 2012, 07:25 PM Reply Like
  • Note that the $329 iPad Mini model has 16GB, and the Nexus 7 model that has 16GB is $249 (and if you get it online from Google, it will cost you $13.99 for shipping, while Apple ships for free.) Plus given that the screen is 35% larger, does a comparison based strictly on price really make sense?
    24 Oct 2012, 08:09 PM Reply Like
  • An iPad Mini costs a bit more because it is simply worth more - it is built with better material, is thinner, lighter, has better cameras, a larger screen, and does not hire analysts who discredit a competitors product simply because they are paid to do so.....

     

    Those who buy it and those who use it know that an "Apple" is worth every penny they pay for one.....
    24 Oct 2012, 10:34 PM Reply Like
  • Indeed these are differentiated and branded goods so no comparison on pure pricing is appropriate. Let's see the reaction of the consumer.
    24 Oct 2012, 11:51 PM Reply Like
  • Me too pman.. I just know analyst have slammed Apple stuff before and obviously been dead wrong. I know I want one for the convenient size and I am absolutely confident it will still have the same quality as all of the other Apple products I have. Tough going through this period with a lot of AAPL shares and all the other b.s. going on but we will be okay. Also, Normura is one, if not the only, analyst that recently had a negative outlook rating.
    24 Oct 2012, 07:41 PM Reply Like
  • I want an iPad mini too. I use my iPad 2 all the time and look forward to having one in smaller size as well.

     

    Long AAPL
    24 Oct 2012, 07:52 PM Reply Like
  • Apple sells innovative technology. Amazon, Google and Barnes & Noble sell cheap items at a loss so they can sell other things, such as books or advertising. There is little to compare in the items. Why insist on comparing the price. Also, Apple needs room to cut prices when new versions are brought out.

     

    This much ado about price being too high is total BS.
    24 Oct 2012, 08:13 PM Reply Like
  • I fully agree with all the analysis/comments you all provided! It's joy to use any of the Apple products.
    24 Oct 2012, 08:38 PM Reply Like
  • Hold anything Apple; it not only works, it's an accessory;
    Apple stuff has an elegance to the device, also.
    24 Oct 2012, 08:40 PM Reply Like
  • amazon and google set the bar too low, making people believe that selling at $200 is profitable when it's not.

     

    people are now spoiled by the $200 price, and forget that amzn and goog make no profit on the tablet.
    24 Oct 2012, 08:45 PM Reply Like
  • I bought a Kindle Fire when it came out, and after a week gave it to my library. Just not a good product.
    25 Oct 2012, 04:19 PM Reply Like
  • I agree with all of you. However, as for the short term performance of the stock, I would not want to hold this through earnings.
    24 Oct 2012, 09:19 PM Reply Like
  • Regardless of the Apple on the product it is the fact Apple is moving away from their base and into a market that wants value. For an Apple'er its the name and ego associated to it. The itune store numbers are not that great for the quantity of phone, pods, and pads sold. It's like milk, its the milk inside not the carton. Is it the milk that cost $3. 99 or the carton and getting it there and the milk is really free. Apple charges for all 3.
    24 Oct 2012, 09:28 PM Reply Like
  • Are these the same analysts that value AMZN a buy at 300x P/E? This is a joke. AAPL shares are on sale and will run up soon.
    24 Oct 2012, 09:35 PM Reply Like
  • Apple's TTM P/E valuation hasn't changed much over at least the last year (currently at 14.4). With the amount of coverage Apple receives, why would you think Apple's stock is "on sale"? I don't think such a large valuation differential would exist that long and yet so many small investors tout Apple as a screaming buy on a daily basis. What do you think is an appropriate TTM or forward P/E valuation?
    25 Oct 2012, 12:33 PM Reply Like
  • Dont look at P/E it is misleading. Look at 3 year forward P/E. I.e. growth rate of revenue. Growth has major impact on discounted cash flow models. see
    http://bit.ly/Rxekdm
    24 Oct 2012, 09:37 PM Reply Like
  • I agree with you wholeheartedly Salman. After a good 2013 with 20% revenue growth expected, I expect revenue growth over 2014 and 2015 to approach 10% annually as market saturation and competition increase. With slowing revenue growth and pressure on margins, my DCF calcs suggest that AAPL is fairly valued at present.
    25 Oct 2012, 10:20 AM Reply Like
  • All the good news is in the price..be ready for disappointment..watch for important guidance..that's the key!
    24 Oct 2012, 10:29 PM Reply Like
  • GIve me a break. Long AAPL Nobody buying another AAPL device for their home for their kid or whatever cares about $130. They have that invested in shared apps already and want dependablility.

     

    All upgraged products are making great products even better.

     

    Buy now or suck wind. I still have my standing offer about who will be the braggard at Thanksgiving dinner the uncle who is short or the Mom who is long. Then wait for February earnings.

     

    Tomorrow may not be great but who cares, at this price you should not expect anything but upside. Period

     

    Stock down - a big whooping 14% from it's high which if you remember was 66% up from Jan 1 - I am not sad owning a stock that has appreciated ONLY 53%
    24 Oct 2012, 10:30 PM Reply Like
  • Apple is NOT competing with these other "mini" tablets. 95% of iPad mini purchasers will not even look at the competition. They know what they want because they already have iPhones or Macs and they've long since settled the question of whether or not Apple products are a value. Plus, seeing their friends wrestle with the Android function fails is all of the minor reinforcement they need to avoid those pitfalls.
    24 Oct 2012, 10:43 PM Reply Like
  • I find myself in a rather funny position. I consider the current price a true bargain, but I've forced myself to hold off buying additional AAPL shares until after earnings tomorrow since I think they may report a lukewarm quarter. However, if this stock did somehow happen to push below $600, I think you should consider it an early Christmas present and buy... buy... buy... since I think there is a heck of a lot better chance that AAPL pushes far north of $800 then there is of it ever getting close to $500 again.

     

    There is a VERY good 12-18 month risk reward here.
    24 Oct 2012, 11:06 PM Reply Like
  • Nomura must be wokring for Samsung. They make totally dishonest idiotic statements denigrating Apple at its peak performance and growth and real earnings triumphs.

     

    The sell off yesterday was idiotic. The mini IpAd should be premium priced, and will still steal 50% of the low end market. Your average middleclass person will shell out another $100 to get an Apple. Most of them anyway, the ones who care about quality. Bottomline, Apple will pre sell every single copy they can possibly make and will book a nice margin on every item. Thdeir competitors are practically giving away theri low end items just to stay in the game. Huge difference. Kindles are no real threat to Apple iPad. Just another low end pretender trying to sell downloads.
    25 Oct 2012, 01:40 AM Reply Like
  • Anyone who buys down here is going to make a lot of money, and soon. Think about it. A 90 point drop. Why? Yeah a few minor headacxhes, speed bumps and concerns, but the stock was undervalued at $700.
    25 Oct 2012, 01:41 AM Reply Like
  • As an Apple investor and long-time consumer I believe the price point of $329 was an excellent decision. Yes this product has many more attributes than the competition not to mention quality light years ahead of the competitor tablets. Now for the real reason the price point was well thought out by Apple "Schools around the world". Apple has long placed a strong emphasis behind promoting their products for educational purposes and clearly has beat the competition when it comes to desktop PC's and now the iPad in schools. Apple has recognized that the larger version of the iPad is to large and heavy for students in particular in grade school to hold for prolonged periods of time. Apple has placed a major focus in the education system for text books to be converted and developed in the future to fit the iPad format. Many schools have already proven the benefits of teaching kids with an iPad it's easier to read the presentation materials are much more colorful and you have the ability to incorporate video. As more schools move to use a tool like the iPad mini fewer text books will need to be printed updating of materials will be less expensive and implemented quicker saving money and making it available for other educational needs. Also lets not forget as more young people are exposed to tools like the iPad mini in school what do you thing their preference is going to be outside of school. Let's not sell the management team at Apple short many of them worked with Steve Jobs for many years. A strong team is built by an environment that allows team members to challenge each other. Apple's success is a testament to the bench strength running much deeper in the company than we all realize.
    25 Oct 2012, 03:32 AM Reply Like
  • Sales for Apple is not the issue. Distribution is. Product is constantly sold out. Don't think the methodical rhythm isn't PRE planned. In 10 years from now CURRENT stock price may look as the buying opportunity of the decade. Think APPLE as long term mobile technology revolution. NO OTHER TABLET COMPETES OR COMPARES. iPad is awesome as is the APP STORE. The App Store is just the beginning of a technology advancement so powerful . . . It IS changing all that we currently do. While the competition mimics, the App Store is filling with unadvertised explosive Apps. . . Search the Apps, what is being created, in ALL FIELDS, and see beyond the vail. . . Then ASK: "Why is this being kept so secret?"

     

    While others must advertise, Apple creates in silence. . .

     

    Wake Up!
    25 Oct 2012, 04:38 AM Reply Like
  • This product is a rip-off. It'll still sell - based on the brand name and goodwill that Apple has generated over the years, but you can expect a lowered customer experience.

     

    With lousy internals (512MB RAM in 2012 are you kidding?) the performance of this will be highly inferior over a long period of time and when customers start to compare this against the competition (Nexus) they'll find the Apple "premium" is a big joke.

     

    No doubt all the blinkered Apple bulls will continue to live in denial but ask yourself why Jobs refused to release a 7-in while he was in charge. Ask yourself when releasing a more expensive, 2-generation old product has ever been a good market strategy. Draw your own conclusions, folks.
    25 Oct 2012, 06:17 AM Reply Like
  • So are you short? Or long the other stocks? Really, shouldn't be trashing it unless you have money where your mouth is. Make a bearish bet then, Shanghai.
    25 Oct 2012, 06:48 AM Reply Like
  • Short by way of calls sold, little lady.

     

    We may not be at the absolute peak yet, but the long-term trend is DOWN.

     

    Look at my comment history, I called it when AAPL was trading 680+, now where is it? LOL.
    25 Oct 2012, 10:58 PM Reply Like
  • Please stay short, shangjeen. It will make my holidays a bit brighter.
    26 Oct 2012, 12:19 AM Reply Like
  • Once the consumer holds it in their hands they will pay the premium. It's a WINNER!
    25 Oct 2012, 07:25 AM Reply Like
  • Don't be sandbagged! Apple is on sale. Buy it now!
    25 Oct 2012, 08:22 AM Reply Like
  • I'm sure they gave it the amount of power they thought the customer needed my iPad 2 has never disappointed me.

     

    Its odd that 299 was to be interpreted as competitive with nexus 7 etc and 30 bucks more isn't...
    25 Oct 2012, 10:07 AM Reply Like
  • I just bought more. On margin too. That is how confident I am. Whatever the earnings are this afternoon, Apple will clobber all earthly notions of estimates soon prove they can and do make more money than any company in history, and can keep doing it for a long time.

     

    Earenigns days are volotile times but first Apple has already dropped almost 100 points for almost no reason, and so the risk see3ms very minimal. Plus, every time Apple has "missed" and the stock dropped, it has proven to be a rare buying op. On the otehr hand, two tims this past year, the stock has shot up 40 points on earnings news. I say this stock is springloaded to pop 100 or more points soon. The only question is if it takes a few days, weeks or months, and by February I expect it to be pushing 800.
    25 Oct 2012, 10:37 AM Reply Like
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