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Apple (AAPL) only looks cheap if it maintains its profit margins (35.3% in 2012), writes The...

Apple (AAPL) only looks cheap if it maintains its profit margins (35.3% in 2012), writes The Brooklyn Investor. Slapping Samsung's mobile operating margin of 18% on Apple's $181B in expected revenue this year then giving it a 10 multiple and adding back cash yields a value of $370/share. Margins might not decline right away (and revenues may increase to offset), but Apple bulls are fighting the powerful historical tendency (particularly for Apple) of excess margins getting competed away.
Comments (102)
  • Echo To All
    , contributor
    Comments (138) | Send Message
     
    And why would any sane thinker slap samsung's gross margin on to apple? Because if anyone need to tell someone why that's not a reasonable comparison really doesn't understand the two companies.
    20 Apr 2013, 10:59 AM Reply Like
  • rocback
    , contributor
    Comments (987) | Send Message
     
    Why would any American buy a cheap knockoff Korean phone when they can buy an American phone from Apple just as good or better. The U S taxpayer already subsidizes Samsung by defending its homeland from N Korea while Samsung steals our technology, is run by a convicted felon and hires students to trash other phones like HTC.
    20 Apr 2013, 12:08 PM Reply Like
  • wyostocks
    , contributor
    Comments (7708) | Send Message
     
    rocback
    "buy an American phone from Apple"

     

    Apple phones are made where?
    20 Apr 2013, 12:43 PM Reply Like
  • Omer Altay
    , contributor
    Comments (360) | Send Message
     
    Doesn't matter where they are manufactured. Manufacturing is literally $20 or less of "value added" to the Iphone. The parts for the Iphone are sourced from all over the world. It is fair (IMO) though to say the Iphone is an American phone, as it's owned by an American company.
    20 Apr 2013, 01:16 PM Reply Like
  • MrAllister
    , contributor
    Comments (114) | Send Message
     
    China,but Apple is an American Brand their no getting around that, fact is most components that go into the iPhone are made in the USA. But since you want to go their lets go down the list of great American brands that are no longer made in America
    Where does Ford make their cars?
    Where does Nike make their shoes?
    Where does GM make their cars?
    20 Apr 2013, 01:23 PM Reply Like
  • Energysystems
    , contributor
    Comments (1009) | Send Message
     
    imo, an "American brand" means more than where a company has their Headquarters. I could refer you to many corporations HQ'd in Delaware, but you wouldn't think of them as such.

     

    Toyota vehicles have more American made parts(%) in them than those "Detroit" brands.
    20 Apr 2013, 01:46 PM Reply Like
  • Etoile Brilliant
    , contributor
    Comments (121) | Send Message
     
    Apple is as American as its earnings that are retained offshore
    20 Apr 2013, 02:13 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    "slap samsung's gross margin on to apple? "

     

    to develop a range. Closed thinking does not lead to innovation, nor profitability.

     

    Just think what S Jobs said about 7" tablets and the successful premiere of the IPad Mini.

     

    It is quite insane that AAPL would continue to drop (below $450), considering only the PE ratios.

     

    Lighten up!
    20 Apr 2013, 04:02 PM Reply Like
  • what do I know
    , contributor
    Comments (1049) | Send Message
     
    How would you compare IBM with AAPL, do you know how much of their profit are from outside of USA from say, 1960. How would you compare Coca-Cola with AAPL, would you know how much of Coke's profit is outside of USA, most probably you do not know? Your response is probably from a disgruntled investor, you like to blame AAPL going down the drain on any factor you care to know. Would you have any idea about "outsourcing" that American companies are exporting American jobs outside, it has been going on from ever, it is a political game, whenever some one thinks he can make good job with it make use of it. You know some of the "gambling" companies have big operation in Maccao and Singapore, do you ever think how much of their profits is abroad? You are on the right track, just use it all across the S & P 1500.
    20 Apr 2013, 04:30 PM Reply Like
  • Mike123456
    , contributor
    Comments (7) | Send Message
     
    Apple stole tech from BBRY
    20 Apr 2013, 07:07 PM Reply Like
  • Rickrays
    , contributor
    Comments (2) | Send Message
     
    Bud weiser owned by brazilians
    21 Apr 2013, 10:29 AM Reply Like
  • peterfarah
    , contributor
    Comment (1) | Send Message
     
    The article misses an important point! If apple drops margins to 20% or so, as Tim Cook said he can do in an instant, Then apple may add 10 billion in sales. Imagine what will happen to Samsung if Apple slashes prices. With this addition of sales it will cover somewhat for lost margin. And what is wrong with a 15 multiple if that fear is finally taken away? That will take the stock north of $550 not to mention the 150 billion in cash after Q2. I think aapl is way under valued. I thought so before reading this article and now I have more conviction in my statement.
    21 Apr 2013, 10:45 AM Reply Like
  • deercreekvols
    , contributor
    Comments (5235) | Send Message
     
    Who or what is the Brooklyn Investor and why should I care about such a misguided statement?
    21 Apr 2013, 01:50 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8335) | Send Message
     
    Brooklyn Investor is one of the most followed and respected stock analysts in the U.S.

     

    Look at some of his prior analysis. A true value analyst.
    22 Apr 2013, 08:36 AM Reply Like
  • blackberryxyz
    , contributor
    Comments (29) | Send Message
     
    Correct. And that is what the stock price is telling you now.
    At the end of the day, they are still a handset company with declining margins and a disastrous and incompetent CEO.
    20 Apr 2013, 11:02 AM Reply Like
  • chabig
    , contributor
    Comments (546) | Send Message
     
    There is no evidence that margins are declining. Maybe on Tuesday there will be, but there hasn't been so far.
    20 Apr 2013, 11:56 AM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (5931) | Send Message
     
    Exactly. Where are margins declining? Too many people confuse selling an iPad mini with possibly slimmer margins as if the whole company has declining margins.
    20 Apr 2013, 12:32 PM Reply Like
  • DIgitalMediaView
    , contributor
    Comments (668) | Send Message
     
    And furthermore, according to this analysis, margins would have to not just decline a little, but free-fall almost 50% before the current share price would be warranted. Where is the indication that margins are completely collapsing? If margins only declined a few percentage points, according to this analysis, the share price should be over $600, right?
    20 Apr 2013, 12:37 PM Reply Like
  • Energysystems
    , contributor
    Comments (1009) | Send Message
     
    If margins are slimmer, margins are declining. Semantics don't make a difference. Last quarter, correct me if I'm wrong, but weren't the margins down 600 basis points yoy and 140 basis points qoq?
    20 Apr 2013, 01:07 PM Reply Like
  • MrAllister
    , contributor
    Comments (114) | Send Message
     
    As soon as you wrote the words "according to this analysis" I find your augment invalided.
    20 Apr 2013, 01:26 PM Reply Like
  • rrosey2
    , contributor
    Comments (689) | Send Message
     
    Yes, and six to nine months from now, you'll be claiming you predicted the massive rise in Apple stock.
    20 Apr 2013, 03:14 PM Reply Like
  • raincity
    , contributor
    Comments (217) | Send Message
     
    Margins always drop with initial product releases. End of last year Apple updated its entire lineup. Watch margins improve with time. All the naysayers on Apple will be eating mud by year end.
    20 Apr 2013, 07:53 PM Reply Like
  • Matt-Man
    , contributor
    Comments (523) | Send Message
     
    One clear reason for margins is Apples phone strategy. Verizon results tell that only half of the iPhones sold were iPhone5:s, while iPhone4s and 4 are bit cheaper than latest model to make they still have lower margin than latest model with full price.

     

    There is not much difference on iPhone5/4s/4 to a common man so it is easy to see why those still sell so well. I think Apple will change their strategy and bring cheaper model that is actually cheap to manufacture (plastic, only 3G, etc) on a side of the top of the line model rather than continue selling last years top model as cheaper alternative.
    21 Apr 2013, 01:39 AM Reply Like
  • jzivick
    , contributor
    Comments (92) | Send Message
     
    Interesting calculation and enlightening. It makes it clear that if Apple's strategy is simply to continue to rely primarily on revenue from the iPhone, its margins will decline as the iPhone transitions to a commodity product and Apple makes little effort to innovate with new products or reengineer its current product line to reduce marginal costs, also innovation. Using BI's calculations suggests to me that $370 is a floor not a ceiling share price.
    20 Apr 2013, 11:13 AM Reply Like
  • benito67
    , contributor
    Comments (59) | Send Message
     
    why is there any reason to buy aapl...T.C. is not doing anyone any favors not even his own employees who also are watching there savings disappear like a fart in the wind. the risk versus reward is too great...ask JC Pennys what a lousy ceo can do who says he is right and everyone else is wrong
    20 Apr 2013, 11:29 AM Reply Like
  • dmarilley
    , contributor
    Comments (590) | Send Message
     
    This was all abundantly clear over a year ago, but 1111 became a price target anyway. I guess you call that shooting for the moon?
    20 Apr 2013, 11:19 AM Reply Like
  • Arthur Fisher
    , contributor
    Comments (232) | Send Message
     
    I'd call it hanging your wumpus out a window.
    20 Apr 2013, 01:28 PM Reply Like
  • SoldHigh
    , contributor
    Comments (1013) | Send Message
     
    I've been bearish on AAPL since 600s and took plenty of heat from the AAPL permabulls all the way down. I've been right.

     

    Now, in 300s the stock is starting to have some appeal. The "easy" money in shorting has been made. At this point, I think the question is what earnings should be in the future because the growth part of the story is over imo...
    20 Apr 2013, 11:30 AM Reply Like
  • Kenn Wagenheim
    , contributor
    Comments (149) | Send Message
     
    ... Margin compression, just like what happen to the Macs declining in share because of the high margins? Oh wait... I guess we should all keep waiting for that.
    20 Apr 2013, 11:32 AM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (8857) | Send Message
     
    The evidence already shows a mix shift towards older generation iPhones. Further, Apple's iPad Mini sells for well below corporate margin, as stated on the most recent call.

     

    Deny reality at your own peril.
    20 Apr 2013, 12:14 PM Reply Like
  • bgold1955
    , contributor
    Comments (1988) | Send Message
     
    So you know the margins on the older phones? What are they? It was the 5 that had lower margin due to the retooling required for any ramp up on any phone, ie 4, 4s. Even with 2m sold last qtr via Verizon it is still the number 1 seller of all vendors.
    20 Apr 2013, 07:59 PM Reply Like
  • IncomeYield
    , contributor
    Comments (1514) | Send Message
     
    A couple of other issues also.

     

    I missed the BYOD trend. Didn't think companies would allow it or support it.

     

    The retail stores are a mistake IMO. When that market (walk-in, Joe Retail buyer) is saturated, the stores will be a big yoke.

     

    iPayments would be big. Apple needs some recurring revenue from their installed base. If they do a major acquisition, buy the PayPal division from ebay.

     

    They can't count on new hardware sales forever. There are only 8 billion potential customers. How many can/will buy a high end smartphone that have not done so already?
    20 Apr 2013, 11:41 PM Reply Like
  • Echo To All
    , contributor
    Comments (138) | Send Message
     
    Follow reality. Review the bom of the ipad mini, and see where it stands w overall gm. It's far lower then the iPhone, but still pretty high.
    21 Apr 2013, 11:30 AM Reply Like
  • 1980XLS
    , contributor
    Comments (3314) | Send Message
     
    Ashraf,

     

    They will have to come out with a "new" older geneation i-phone then.

     

    VZ will no longer subsidize non 4G phones, soon. (The I phone 4 & 4S are not 4G-LTE)

     

    VZ does not want antique i-phones on their network, as their capacity increases have all been for 4G
    21 Apr 2013, 04:13 PM Reply Like
  • rocback
    , contributor
    Comments (987) | Send Message
     
    Misleading again Mr. Eassa. The mini has a higher percentage margin than the I pad. Perhaps not as big as the "corporate margin" since that includes the I phone but if you read your entire post it implies otherwise. You have an agenda my friend
    23 Apr 2013, 12:26 PM Reply Like
  • DIgitalMediaView
    , contributor
    Comments (668) | Send Message
     
    Just because investor sentiment has turned against the stock doesn't mean the business strategy doesn't work. AAPL's value-generating ecosystem, especially as it relates to content, drives their high margins. No other competitor comes close to imitating their strategy, certainly not Samsung with the borrowed, low-value Android ecosystem (http://bit.ly/ZzFmHv). Lazard sums up the implications: "In the global market for smartphones, for example, [AAPL] takes home more that 70% of the profit with less than 20% market share." http://bit.ly/11vOtpL
    20 Apr 2013, 11:44 AM Reply Like
  • Clayton Rulli
    , contributor
    Comments (2509) | Send Message
     
    I agree 100 percent. Sounds like you read my article from months ago.... http://seekingalpha.co... Note the part about the Samsung exec admission in using Apple
    20 Apr 2013, 12:06 PM Reply Like
  • DIgitalMediaView
    , contributor
    Comments (668) | Send Message
     
    Clayton, I read your articles with regularity but missed that one. Thanks for the link. The Samsung exec quote is priceless!
    20 Apr 2013, 12:13 PM Reply Like
  • MajorDude
    , contributor
    Comments (252) | Send Message
     
    Samsung is a consumer electronics company that has applied consumer products mentality to conventional phone products.

     

    Apple is a computing and productivity company that has applied human productivity mentality to communications products.

     

    Apple's margins are higher because the people who buy Apple products are willing to pay more.because they get significantly more value from the products they buy than Samsung customers get from their products.

     

    Apple users also use Apple products to SPEND significantly more buying everything from music and media to apps to online shopping - they spend more time using their devices to do more things.

     

    For their margins to be the same either Samsung would have to equal Apple's functionality (which is mostly a result of integrating hardware and software utility) OR Apple would have to throw in the towel and start pumping out generic Samsung-class devices (which I see no indication of happening).
    20 Apr 2013, 11:46 AM Reply Like
  • Judge mb
    , contributor
    Comments (6) | Send Message
     
    Those I know who have purchased Samsung smart phones did so mainly because of price---with screen size a second factor. None of them owned a smart phone before and really have no idea if or why an Apple phone might be better.
    21 Apr 2013, 04:12 PM Reply Like
  • bimmerguy09
    , contributor
    Comments (60) | Send Message
     
    Saying Samsung competes with Apple is like saying Hyundai competes with Audi. True in technicality, but few people will compare the two. I suppose, VW should brace themselves for the inevitable margin compression that will come from the Asian commoditization of the automobile? Maybe, but probably not. Both companies have completely different customers

     

    The automotive market is big enough for low-end Marques and high-end Marques. The mobile handset market is no different.
    20 Apr 2013, 11:53 AM Reply Like
  • Energysystems
    , contributor
    Comments (1009) | Send Message
     
    Both Hyundai and Kia have a higher profit margin than VW....
    20 Apr 2013, 01:22 PM Reply Like
  • nguyenvanphuoc
    , contributor
    Comments (373) | Send Message
     
    At the end of the day, margins become irrelevant. If revenue grows faster than margins are declining then there's no issue. If the company can grow EPS, it doesn't really matter what margin they're using to do it.

     

    I appreciate that 'margin compression' is a buzzword that analysts love, and the idea of it sends investors running for the hills, but the reality is that ANY company will, at some point, face a changing margin landscape.

     

    The issue isn't whether Apple's margins will drop - history and logic dictate that at some point they'll have to as the related products age, etc. But that doesn't mean they won't still find a way to grow revenue and earnings, even with a shrinking corporate margin rate.
    20 Apr 2013, 01:54 PM Reply Like
  • freed0m
    , contributor
    Comments (579) | Send Message
     
    how much revenue growth is Apple going to get to compensate the declining margin?

     

    how many potential customers can Apple get?
    21 Apr 2013, 12:50 AM Reply Like
  • nguyenvanphuoc
    , contributor
    Comments (373) | Send Message
     
    " how much revenue growth is Apple going to get to compensate the declining margin?"

     

    This is the million dollar question. I'm not saying that they absolutely WILL be able to offset any decline in margin, just that companies can and do survive declining margins.

     

    "how many potential customers can Apple get?"

     

    How many CAN they get? Very literally BILLIONS. China and India represent fully 1/3 of the world's population, and those are 2 markets that Apple is JUST beginning to enter.

     

    Basically my point is that almost all the Apple doom & gloom is based on the assumptions that Apple doesn't know what problems it is facing; or that it knows what the problems are but doesn't understand them; or that it knows and understands them but isn't able to figure out how to tackle them. I believe that none of those properly describe Apple.

     

    Can I be wrong? Of course. But it doesn't seem logical that a company that executes so well will suddenly become paralyzed.
    21 Apr 2013, 11:04 AM Reply Like
  • bgkbgk
    , contributor
    Comments (9) | Send Message
     
    The Brooklyn investor just offered the biggest BUY argument for AAPL without even being aware of it. He argues that even under a "worst case" scenario there is only a 5% downside to the current share price. And he immediately concedes that there is probably upside to his assumptions. BTW, Samsung also competes in the low-end phone segment which weighs on margins... So, conclusion from the Brooklyn investor: buy AAPL here since your downside is capped but there is potentially plenty of upside.
    20 Apr 2013, 02:21 PM Reply Like
  • zakwill
    , contributor
    Comments (26) | Send Message
     
    Apple will blow away earnings with a surprise beat and iPhone sales mostly from underdeveloped countries especially India. Tim Cook and the CFO will put more of their 160 billion to work in stock buy backs and dividend increase.
    They will announce refreshes coming for the IPad, IPhone and IPod in the second half of the year.
    Cook will briefly discuss the new Iwatch and AppleTV for release in 2014.

     

    The stock will trade between 420-550 in 2013.
    The stock will trade between 485-650 in 2014.
    The stock will make new highs of 750-950 in late 2015
    20 Apr 2013, 03:09 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (800) | Send Message
     
    I own Apple and have a $188 cost basis and have no intention of selling. However...

     

    #zakwill is in a drug induced state of mind if he thinks any of those predictions on Apple will happen on Wednesday with announcements from Tim Cook. Apple will most likely have a somewhat scaled down version of their report from January (eps beat and a slight revenue miss) and NO major announcements will be made. Cook will offer little to no additional information and Apple will continue to treat their shareholders like lemmings. Therefore, shareholders who are long will continue have to sit back and hope for the best.

     

    I could be wrong. However, passed history tends to make me believe I will be correct.
    20 Apr 2013, 09:45 PM Reply Like
  • Randal James
    , contributor
    Comments (2480) | Send Message
     
    A few days ago, the LA Lakers were in danger of missing the playoffs. It reminded me that we treat stocks much like we do favorite sports teams and there are 'dynasty' teams such as da Bulls/Bears, Cowboys or Miami (take your pick from pros or NCAA). When they are in their best of forms, we are righteously happy and oh-so-correct in our unswerving praise.

     

    In those off years when injuries, bad refereeing, weather and other things combine to make our team look like dog food, we cling to our tired excuses for far too long. When we fail, we look to seasons for 'rebuilding.' Being a Denver fan, I understand the concept all too well.

     

    Stocks do exactly the same thing. Retailers choose poorly, underestimate competition, overexpand. Tech companies, if they are lucky enough to have held the brass ring, often fail to recognize that other companies want it too and, like the Stanley Cup, it is unlikely to be in your hands for too many years in a row.

     

    We often want to invest in firms that have a 'moat' of impressive girth. Who, for instance, is a likely challenger to the staggering distribution and heft of WalMart? Nice moat, dudes! It is going to be near impossible for a start-up to ever duplicate the infrastructure of Boeing, even though they will surely duke it out with EADS for who wins the year.

     

    Apple has fans and cool products and a fascinating history but to suggest that the phone market is en fuego is no longer true. Yes, there are countries that are underpenetrated but they are also under-incomed for AAPL to expect similar market share to what they've earned in the US. One writer above suggests that we should remember Apple is American even though very little about its composition is. Don't expect flag loyalty from the Chinese.

     

    Apple does have a moat and it may well be that pile of money sitting in worldwide accounts and investments. Apple's string of successes have given it one thing that only the best of breed possess: the ability to acquire and defend enough relevant technology to assure their continuity. It is a strong CONSUMER brand, and so should seek to use that loyalty and image across similar consumer fields where people interact with lifestyle technologies.

     

    There is no reason to exit markets where AAPL products currently have decent footholds but there are always new and different markets to explore. Would anyone here be interested in Apple Audio for their vehicles? Would you consider Apple -branded cameras if they were more intuitive to use than today's Canons or Nikons? Seem farfetched? You'd be surprised what you can accomplish with a few billion dollars.

     

    Taking a seat at the table of tech giants, along with IBM, Intel, Microsoft, Oracle and others is no guarantee of success. Kodak was there once, as was AOL. One can use elitist terms such as 'ecosystem' or 'human productivity' but those that stay at the top for decades are constantly and aggressively changing to suit the markets. That is nowhere more true than in techland where today's must-have is tomorrow's yawn.

     

    Today's share price, disappointing as it must be, is just a reflection of what the market believes AAPL is worth. That might change by ten or even twenty percent following earnings and IT COULD GO EITHER WAY. If things are not improving, it is time to take the time-honored route and buy some growth. Growth is what stokes expectations and expectations are what drives share prices.

     

    20 Apr 2013, 03:24 PM Reply Like
  • Energysystems
    , contributor
    Comments (1009) | Send Message
     
    Starting with that Lakers reference, I was hoping for a Kobe Achilles/Death of Steve Jobs comparison. Instead, you not only took the high road, you put together a hell of a write up.
    20 Apr 2013, 04:38 PM Reply Like
  • Jacob Steinberg
    , contributor
    Comments (814) | Send Message
     
    Slapping Samsung's margins on Apple? What's next?

     

    "If we slap HTC's margins on Apple, we see that Apple is barely able to stay profitable; and therefore we value Apple at $12 per share."
    20 Apr 2013, 03:25 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8335) | Send Message
     
    Apple could use its cash hoard and buy huge pieces of its top competitors on the open market.

     

    Then no matter what phone is purchased Apple wins.

     

    I can't figure out how Apple loses. They have too much brand power and with that...pricing power.
    20 Apr 2013, 06:36 PM Reply Like
  • Energysystems
    , contributor
    Comments (1009) | Send Message
     
    Has Apple yet shown to be able to use it's cash hoard to it's benefit? It's easy to figure how Apple loses, look how few products represent the vast majority of their earnings. Cook continues down the road of slimmer margin products, while continuing to disappoint the "core" with too few improvements/innovations with the core products. I've been a shareholder since Jobs unveiled the iPad. Glad I sold half my position this past summer, figured I'd play with house money. I can't figure out a situation where I'll be happy I did, at this point.
    20 Apr 2013, 07:32 PM Reply Like
  • Ninja Trader
    , contributor
    Comments (665) | Send Message
     
    zakwill,

     

    Possible, as long as the market doesn't tank. Otherwise, all bets are off.

     

    Long AAPL
    20 Apr 2013, 07:26 PM Reply Like
  • bgold1955
    , contributor
    Comments (1988) | Send Message
     
    The market is "forward looking", which is bs, forward looking for about the next 90 days. Buy 25% of desired position before earnings and play after the call. For those of you that think Apple's best days are behind them you are missing a big opportunity. From the comments, i say buy, buy. Lets check Dec 31 this year. Also, I assume that aapl will get a pass like goog did on not exploding estimates.
    20 Apr 2013, 07:47 PM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (8857) | Send Message
     
    Didn't everyone say that AAPL would be rocketing by now after 2012 sucked? What was it blamed on...right..."Tax loss selling"?

     

    lol
    21 Apr 2013, 01:38 AM Reply Like
  • hahaha48
    , contributor
    Comments (1055) | Send Message
     
    bgold1955 posted end of last year about AAPL

     

    I have raised my target to $ 1,112. 31 Dec 2012, 12:01 PM Reply ! Report AbuseLike 9

     

    he got 9 likes.

     

    I rest my case
    21 Apr 2013, 08:47 AM Reply Like
  • bgold1955
    , contributor
    Comments (1988) | Send Message
     
    Yep I did and I stand by that number. Didn't provide a date. I am very patient. I have made plenty investing in aapl. And as for you hahaha... after my review of your investments, going thru a bit of your comments, I could not find any. From what I saw you spend most of your time on comments bashing apple and blackberry.

     

    Are you paid to make negative post on western smartphone companies? I hope so as your posts indicate bitterness if not.
    21 Apr 2013, 05:13 PM Reply Like
  • bgold1955
    , contributor
    Comments (1988) | Send Message
     
    lol? Very immature don't you think? By the way, 2012 didn't suck, at least for me it didn't.
    21 Apr 2013, 05:26 PM Reply Like
  • steven russo
    , contributor
    Comments (169) | Send Message
     
    Even if Apples margins collapse they have enough cash to raise the dividend every year for the next ten years already, this will create a floor on the stock that will only increase year after year. They are positioning themselves for a long ride back to the top.
    20 Apr 2013, 07:54 PM Reply Like
  • j main
    , contributor
    Comments (197) | Send Message
     
    For all of you Apple bulls, what's the next big thing for Apple? What industry will they change?

     

    I realize that Tim Cook is not Steve Jobs, but Apple still can create excitement in the consumer tech world. The game is not over. Not by a long shot.
    20 Apr 2013, 08:02 PM Reply Like
  • whaddyamean?
    , contributor
    Comments (514) | Send Message
     
    Eventually Tim Cook will figure out that AAPL can make more proft by laundering money overseas than it can with the "Rocky MCMXLIV" version of its iPhone.
    20 Apr 2013, 09:08 PM Reply Like
  • iyamwutiam
    , contributor
    Comments (80) | Send Message
     
    Apple is not a cutting edge product any longer because of its ubiquitous distribution. This was fantastic for apple's rise but I do think they have lost the high end label and cool factor because so many carriers have subsidized the cost. You can be assured that the long lines outside Apple stores will be shorter.

     

    This along with margin compression and more competitive offerings from HTC, Samsung and yes even BlackBerry will make it difficult for Apple Inc to continue to be a dominant player that can command premium dollars for their products. Google with Android has already established market share majority and a perception that Android based products are not only competitive but may offer more value. If Apple disappoints in 2013 in terms of product buzz- their 'brand' image will take a hit and the public will move away from them like they did from BlackBerry. It is frightening how quickly products can be seen as passe.
    20 Apr 2013, 09:31 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4068) | Send Message
     
    YAWN! How many of those will still come?? Tuesday is near luckily.
    21 Apr 2013, 12:41 AM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (8857) | Send Message
     
    That's what the longs kept saying before the last earnings report.
    21 Apr 2013, 12:42 AM Reply Like
  • TruffelPig
    , contributor
    Comments (4068) | Send Message
     
    You are also starting to sound like a broken record.
    21 Apr 2013, 12:52 AM Reply Like
  • freed0m
    , contributor
    Comments (579) | Send Message
     
    there is always next earning report for those who are hoping.
    21 Apr 2013, 12:59 AM Reply Like
  • sdnayak
    , contributor
    Comments (16) | Send Message
     
    Tuesday could be a big day after earning is announced. Apple products are still the best whether it's PC, iPAD, iPhone or iPod. Once you use apple product it's not easy to transition to another brand. However, Apple management is so secretive not being candid to the share holders and sitting silently with tons of cash has back-fired substantially. Also the team must realize that they are no where near the charisma of Steve Jobs. He was a true genius and can come out something from his sleeve that surprised everybody. Let's wait till tuesday and see where it goes. I believe that they may meet/fail Analyst expectation. But I also believe that Dividend increase couple will share buy back are on the card. If that do not happen then it may still tank further down. I have been holding AAPL since $200 and will hold further. Though, it's little late for the management but it's never too late to realize the reality and pull the derailed train to the track.
    21 Apr 2013, 01:27 AM Reply Like
  • WisPokerGuy
    , contributor
    Comments (800) | Send Message
     
    Agreed. The fact is that Tim Cook is starting to make me believe that he has a lot more in common with Steve Balmer then Steve Jobs. That is NOT a compliment (obviously).
    21 Apr 2013, 01:40 AM Reply Like
  • Kraken
    , contributor
    Comments (542) | Send Message
     
    Apple has done poorly because they thought their loyal fanbase would stick around and wait in lines for 10 hours. Why would they do this when Samsung phones not only have all the same features, but more. When the iPhone 5 came out, one of the commercials showed that the headphone jack was on the bottom instead of the top now. Seriously? This is their idea of innovation now. Apple is still surviving because of its brand name, but as history told us, companies cannot live off their brand name forever.
    21 Apr 2013, 02:17 AM Reply Like
  • jl45389
    , contributor
    Comments (44) | Send Message
     
    tell it to KO
    21 Apr 2013, 05:26 AM Reply Like
  • Kraken
    , contributor
    Comments (542) | Send Message
     
    KO has a solid product. Poor example.
    21 Apr 2013, 02:05 PM Reply Like
  • jl45389
    , contributor
    Comments (44) | Send Message
     
    it is water and sugar it is the brand not the product, most people failed to identify the product in a blind taste test
    21 Apr 2013, 02:40 PM Reply Like
  • Kraken
    , contributor
    Comments (542) | Send Message
     
    True, but technology can be disruptive. It doesn't really apply to technology since you can always keep making a better product. I should have clarified I meant brands in regards to tech companies not for companies like P&G and Coke.
    21 Apr 2013, 02:46 PM Reply Like
  • banerjeesudip
    , contributor
    Comments (10) | Send Message
     
    Que Sera, Sera,
    Whatever will be, will be
    The future's not ours, to see
    Que Sera, Sera
    What will be, will be.

     

    But remember, an APPL a day keeps the doctor away!
    21 Apr 2013, 03:53 AM Reply Like
  • hahaha48
    , contributor
    Comments (1055) | Send Message
     
    Next earning report by itself will share a little bit more information but not enough. The guide for next quarter may also disclose a little more but also not enough.

     

    The real one is the earning announcement for the current quarter and the guide for the July to sept quarter. I expect April to June will be the worst quarter for AAPL and how much better the July to Sept quarter will be key for APPL's future.

     

    I have make small amount of money mostly shorting weekly put options that has very good option premium from Jan to March. I stopped about 5 weeks ago because I see the risk to be more than it's potential return.
    21 Apr 2013, 08:52 AM Reply Like
  • adamtwiss
    , contributor
    Comments (5) | Send Message
     
    If you take any premium brand and slap a mass-market profit magins on it, of course you get a low valuation. If you take Porsche or BMW and stick Ford's profit margins (but keep only Porsche or BMW's revenues), then you would no doubt get a lower valuation.

     

    Samsung make some nice phones, but have little stickiness or eco-system. Their margins are kept low that they fundamentally are using simple hardware components and operating system as HTC and other Android phone vendors. Apple on the other hand is currently able to offer an integrated eco-system, it's own operating system which many (but not all) prefer, and a heavily differentiated product that owns much of the high-end of the market.
    21 Apr 2013, 10:33 AM Reply Like
  • freed0m
    , contributor
    Comments (579) | Send Message
     
    You are comparing iPhone vs Samsung with Porsche vs Ford?

     

    are you kidding me?

     

    what makes an iPhone Porsche of the smartphones?
    21 Apr 2013, 07:49 PM Reply Like
  • Rosco Chamani
    , contributor
    Comments (8) | Send Message
     
    So much has been written about AAPL's cash hoard and its secretive management. Why not just wait till Tuesday and see what happens. Whatever is written is not going to change the earnings report and forecast on Tuesday. So just be patient.
    21 Apr 2013, 11:42 AM Reply Like
  • Nicholasq
    , contributor
    Comments (4) | Send Message
     
    Whatever Mr. Cook is planning for Apple,he is waiting too long.Plain and simple, investors are viewing him as a substandard leader. Money is being lost as well as confidence.Do something to prove yourself a respectable head of a company or step down. Mr. Jobs certainly would not be proud of this misdirection of Apple.
    21 Apr 2013, 04:11 PM Reply Like
  • 9425041
    , contributor
    Comment (1) | Send Message
     
    Uh, yeah, "at a 10 P/E" ... And at IBM's P/E, $481, at MSFT's, $566, at GOOG's, $910, even at GE's (of all ridiculous comparisons), $580... On what make-believe/intellect... dishonest planet does a company like Apple trade at a 10 P/E over time?
    21 Apr 2013, 04:12 PM Reply Like
  • freed0m
    , contributor
    Comments (579) | Send Message
     
    All names you mentioned does not feel much when one of their product fails. Can't say the same for Apple.

     

    That's the difference.
    21 Apr 2013, 07:51 PM Reply Like
  • jgeiser
    , contributor
    Comments (2) | Send Message
     
    That's not a terribly bad worst case scenario. I agree with a previous poster that this implies a floor of 370. However, I expect one more capitulation trade lower and then Apple most likely trades sideways for a while.

     

    Perfect stock to sell calls against for income.
    21 Apr 2013, 04:12 PM Reply Like
  • szeducate
    , contributor
    Comments (79) | Send Message
     
    I am getting so tired of hearing the argument that Samsung is competing with Apple. Of course, there is competition and no one ever expected Apple to have the field all to themselves. Does Coke go out of business because there is Pepsi, does Ford go out of business because of GM and Chrysler or Exxon with Citgo etc. You get the point. Apple is a fantastic company that people are willing to pay more for their products. The world is big enough where two companies can sell similar products and still prosper. The media wants everyone to believe because of Samsung, Apple will be out of business in the next few weeks. Give me a break!!!
    21 Apr 2013, 04:12 PM Reply Like
  • pat45
    , contributor
    Comments (300) | Send Message
     
    agreed but wish he would do buyback or up dividend and most of all..good earns and new products
    21 Apr 2013, 05:49 PM Reply Like
  • Judge mb
    , contributor
    Comments (6) | Send Message
     
    I committed the sin of putting to much of my portfolio into one stock--Apple. I still have it all--another sin I think--and this keeps engrossed in all these arguments. Obviously I am nearly praying that the Apple bulls are right.

     

    Margins on the iPhone are threatened by the fact that they are heavily subsidized by the Carriers and this is not a given going forward, especially if and when new Carriers like China Mobile are added.

     

    The idea that Mr. Cook is a failed CEO is very premature. Also, it is quite likely Steve Jobs left a number of visionary ideas behind when he passed on. Time will tell! Meanwhile I will keep on hoping that Apple remains at the front of the information technology revolution.
    Apple has had large margins by being first and, so far, remaining best. Anyway it is only money.
    21 Apr 2013, 04:12 PM Reply Like
  • MarketingMaven
    , contributor
    Comments (84) | Send Message
     
    This whole discussion is dumb. Samsung is at 18% because it sells TV sets, monitors and rice cookers - not just phones. If it was 18% on a plastic phone into which they added only refinement software, it would likely look like AAPL.

     

    Everyone needs to cool it on Cook. He's been running the company for years while Steve was nominally alive. I hate where the stock is, but it's got nothing to do with what he or the company is or isn't doing. It has a lot to do with irrational forecasts by analysts who need to pile on in either direction. Let's see what Tuesday's report brings.
    21 Apr 2013, 04:13 PM Reply Like
  • realornot
    , contributor
    Comments (1281) | Send Message
     
    Cook is excellent on managing money & people but not a strategic or a person with innovative ideas. All he did lately was to apologizing one after another to his Chinese partner on multiple blunders.

     

    Enough said, this stock is now a long term technical buy environment. Something tells me, this company will make some positive structural and management changes in the Near Term.

     

    Ron
    21 Apr 2013, 04:28 PM Reply Like
  • pat45
    , contributor
    Comments (300) | Send Message
     
    I like everyone sold out of apple at a loss-but it is looking interesting. I dont believe all the negative chatter and paid for negative press-stock going up and will be roses again...just like bby they r scaring people out. Analysts r gettin bully and traders are hopin for an earnings fall to buy into. And if margins r worry...what about goog pe of 24?? My buy small before earns.
    21 Apr 2013, 05:47 PM Reply Like
  • Jabbertherapy
    , contributor
    Comments (234) | Send Message
     
    Another writer that believes that AAPL has no new products in the works.....come on! Cell phones are pretty much old news at this point.
    21 Apr 2013, 05:48 PM Reply Like
  • Dividend Investor
    , contributor
    Comments (16) | Send Message
     
    Apple should just issue $50b-$100b in debt/preferred shares at 3.5%-4% interest, which is tax deductible, and buyback shares with those funds. They can easily pay back the debt within a few years, given their ability to generate tremendous free cash flows; even if revenues decline. This is a much cheaper alternative than repatioting income at an additional 35% tax.

     

    Once the U.S. realizes how desperate our federal deficit is, they'll eventually create a tax holiday for U.S. corporations to repatriate their offshore funds. After this occurs, Apple can then permanently increase their dividends. They're currently bulwarked with the 35% repatriotization tax, which makes any idea of transferring back international funds fruitless.

     

    Until U.S. corporations, like Apple, can bring back their "permamently reinvested earnings", we won't be experiencing the significant dividend hikes most investors are anticipating. The cost is simply too much.
    21 Apr 2013, 05:52 PM Reply Like
  • Omer Altay
    , contributor
    Comments (360) | Send Message
     
    I think they can borrow at cheaper than 3.5-4% if they issue 10 year bonds. Much less.
    21 Apr 2013, 09:37 PM Reply Like
  • Dividend Investor
    , contributor
    Comments (16) | Send Message
     
    Omer, that is true. I was being conservative with the 3.5%-4% yield, which would be indicative of a 20-30 year time horizon. At 10 years, they can likely issue debt for only 2%. Given an effective tax rate of 25.2%, they'll actually only be paying only 1.5% interest (given the tax savings).

     

    They can easily issue $100b in debt and bring down the outstanding shares by 25%.
    22 Apr 2013, 12:24 AM Reply Like
  • hx88
    , contributor
    Comments (115) | Send Message
     
    Brooklyn actually proved AAPL is cheap at $390!
    21 Apr 2013, 10:47 PM Reply Like
  • ninderad
    , contributor
    Comments (38) | Send Message
     
    Wake up American.
    Please save the American icon Apple.
    Buy Korean or Iphone?
    22 Apr 2013, 01:22 AM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (8857) | Send Message
     
    Yeah, you do know Apple doesn't manufacture its products here, right?
    22 Apr 2013, 01:35 AM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    " American icon Apple!"
    22 Apr 2013, 03:30 AM Reply Like
  • pman6
    , contributor
    Comments (270) | Send Message
     
    well, I guess I'll never break even at $500.
    22 Apr 2013, 03:26 AM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (8857) | Send Message
     
    If you believe in the company, start averaging down. I'm guessing there will be a post earnings rally.
    22 Apr 2013, 07:41 AM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    "The market is not being irrational with Apple today," he said. "The market was being irrational with Apple last year, when they kept taking the stock price higher."

     

    http://huff.to/ZDgtdS
    22 Apr 2013, 05:03 AM Reply Like
  • Sameer Advani
    , contributor
    Comments (254) | Send Message
     
    Samsung has a gross 48% margin on the Galaxy, not sure what these clowns are talking about. Apple has 55% margins on iphones and 30% margins on everything else. If Apple drops to 48% it won't be the end of the world.
    22 Apr 2013, 09:11 AM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (8857) | Send Message
     
    Samsung's "Galaxy" gross margins won't stay that high, either.
    22 Apr 2013, 09:12 AM Reply Like
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