KenC

Android, iPhone Ride Rising Tide

You wrote, "The US carriers will eventually run out of people who want to permanently increase their phone bills $600 a month"

Strangely, noone so far has commented upon your math. Presumably, above, you meant year, but even the, you are implying that data plans are $50 a month, which they are not. They are $20 to $30 a month.

I have an iPhone 3G, and my data plan is $20 a month. Why? I live in an EDGE area, with 3G 100 miles away. I pay the EDGE rate even though when I'm in 3G-land, I get 3G speeds.

So, data plans are not as outrageous as you seem to believe.

10 Reasons Not to Buy Apple

You wrote: <<1. Highly competitive markets
The chart below shows Apple's (AAPL) revenue share according to product. All of Apple’s product lines are in highly competitive markets and subject to rapid technological change and aggressive pricing.>>

Yes, and what tech companies don't compete in highly competitive markets? Wouldn't it be better to say that Apple has ALWAYS competed in highly competitive markets and has carved out a successful niche in all of them? They are at the forefront of rapid technological change and have been driving aggressive pricing where they have pricing power, like in iPods and iPhones, iTunes and the AppStore.

You wrote: <<2. Lower margin
Business Week reported on June 19, 2009 that the cost of components for Apple’s iPhone 3G is $179.16, while its retail price starts at $199. >>

This illustrates that you don't even know that the iPhone is subsidized, and is Apple's highest margin product!

You wrote: <<3. iPhone relies on single carrier>>

Uhm, room for growth?

You wrote: <<4. No room to grow for wireless market
In the US, 90% of Americans eligible to use a cell phone already have an account. There is simply no meaningful growth in this market sector.>>

Yeah, and there was no room to grow when Apple entered this sector two years ago, and look at how they've grown! You need to stop overgeneralizing and look at specific sectors that Apple is targeting. They are targeting smartphones, not the general cellphone market.

You wrote: <<5. No room for iPod growth>>

Apple is evolving the market from pure music players to include game players and cameras and whatever else they can think of. There's plenty of room for growth if you look at what the iPod touch can do.

You wrote: <<6. Wrong market target>>
And, what is the right market target? The one Dell is in? Why is BB trying to expand into the consumer space? And, pc share stats are skewed by the proliferation of cheap netbooks. You need to segment the pc market to those areas Apple actually competes in to show that their market share is declining.

You wrote: <<7. Heavy investment needed for Mac stores>>
Yes, and Apple has about $30B in cash that they can spend. As an investor, would you rather they not have stores?

You wrote: <<8. Steve’s health
It’s the process, not the pocketbook, according to the management consultancy Booz Allen. Without Steve Jobs, no matter how much more money Apple spends in R&D, there are unlikely to be more many new, revolutionary products coming to market from Apple soon.>>

Of all the companies out there, Apple may have the strongest corporate culture of all. They have internalized "the process", so that all the top execs from Cook to Ives to Shiller know it. Why should any investor rely upon your unsubstantiated conclusion that there won't be any more new and revolutionary products?

You wrote:<<9. Unclear future strategy
The next big thing in consumer electronics seems to be in home digital entertainment. With iPhone, Apple is moving into communications. I doubt iPhone could be a central control for home entertainment systems.>>

Wow, you are clueless. The iPhone AND its descendents, are the most likely devices that will be the central control for home entertainment.

You wrote: <<10. SEC investigation
Apple’s past stock option practices and the restatement of financial statements may result in additional litigation against the company.>>

The SEC investigation of Apple's stock option grants is CLOSED.

I am thinking of writing an article on ONE REASON NOT TO READ HAO JIN's posts: 1. Total lack of clear thinking.

Smartphone Operating Systems: The Market Share, Usage Disconnect

Actually if you have been studying AdMob's stats over time, you'd realize they undermeasure the iPhone's net usage. It measures MOBILE web, ie, mobile website use. It does NOT measure if the iPhone goes to a normal website, which it does all the time.

Palm's Pre Launch Has Made RBC Bullish

10M units is optimistic, since this is not a world phone, and it's on Sprint for 6 months before being added to Verizon. I think 4 to 5M units would be far more realistic.

The Palm Pre's Coming Out Party

Web apps have their place, and dedicated apps have theirs. Pre putting all of their eggs in web apps is only giving the user half of the benefits. Remember how developers and analysts kicked and screamed when Apple only offered web apps initially?

A lady phone is not going to appeal to guys.

Apple: Three Battles Won, Nicely Positioned for the Fourth

Let's look at FTEs from a year ago, and then extrapolate for the additional stores.

Here are the numbers:

March 2008 = ~12,000 FTEs

March 2009 = ~14,000 FTEs

Both figures were preceded by the word “approximately”, so they are clearly + or - 500 FTEs. Around 17% more FTEs this year than last, HOWEVER…, you have to factor in the number of stores open.

March 2008 = 205 stores

March 2009 = 251 stores

So, number of stores increased by 22%, and FTEs increased roughly 17%, but given the vagueness, the range would be from, 8% to 26%.

In other words, the increase is in the margin of error. Much ado about very little.

Clearly you did NOT read the filings you are citing, so everything you say afterward is SUSPECT. And, what are you going on about iPods in WalMart, that has been going on for a LONG time now. Jobs was there, when that decision was made.

No one likes one-sided stock hyping, but one-sided stock bashing with no basis in fact is worse.

How did you become a Top 3 Commenter? Did you game the system, because you are clearly out of your depth in commenting on Apple. Have you even read any of the filings that you are commenting on?

On Apr 24 03:53 AM Moon Kil Woong wrote:

> My take. According to filings Apple dropped its employees 10% from
> 15,600 to 14,000 and is currently under consolidation. It's margins
> rose due to cost cutting and a revenue mix shifting from hardware
> sales to software which means less market share gains.
>
> Looking at Apple to total PC shipments make more sense than comparing
> them with HP and Dell which they are loosing market share. This makes
> sense since Apple sells at a premium and we are in a recession.<br/>
>
> One can see positives as well as negatives in this filing. Cost cutting
> is not bad if management is honest about it. Expanding into China
> this year is a positive if Apple is honest about it combating expected
> domestic sales. Choosing not to get into Net books is fine if you
> think it undermines your value proposition with 13" Macbooks and
> iPhones around that price and functionality area. Dissing netbooks
> for no good reason isn't so intelligent. Apple should be happy it's
> computers sell for a premium and commit to those price points even
> if it looses market share. Jobs was always clear it was not his intention
> to try to become 20 or 30% of marketshare.
>
> The fact that Apple sells its iPods in Wal-Mart is unsettling for
> a few reasons 1) it doesn't fit their demographic niche, 2) it doesn't
> ring brand value, 3) it sounds like a good place to dump, and 4)
> shows Jobs is utterly absent in making corporate decisions there
> anymore.
>
> So yes, Apple had a nice quarter but it doesn't smell like victory
> to me.
>
> I don't own or short Apple. I'm a fan of their products but don't
> like one sided stock hyping.

Mobile Ad Market Share: Android Catches Up to Palm, iPhone Still King

What the last chart implies is that since these modern smartphones are showing real internet pages, not JUST mobile internet pages, their numbers of requests are far lower than their their actual internet usage. Just something to keep in mind, because not all of the smartphones in their analysis are so good at going to real internet pages as the iPhone and G1. Thus those other phones that go ONLY to mobile websites would get a disproportionate number of mobile ads, as measured by AdMob.

For example, looking at the last chart, and at the iPhone's numbers. They are saying that July 08, the iPhone got 20M ad requests, and by Nov 08, was getting 12x more, at 238M? Clearly, the iPhone number looks small in July 08, as the iPhone was avoiding mobile websites and going to the real websites, where AdMob's ads were not being served. Once the dedicated apps were launched, AdMob could then serve their ads in those apps.

Apple's New iPhone Could Crash Palm's Pre Release Party

Lots of hyperbole being thrown around.

I think where this all started is the author's contention that iPhone 3.0 "isn't exactly groundbreaking stuff". And, someone responded correctly, that analysts, etc wouldn't understand what is or isn't groundbreaking when it comes to technology.

I suppose the other implication is that some people think the iPhone 3.0 is some sort of response to Palm. Given that Apple had an iPhone 2.0 beta conference at the exact same time last year, and that the expected 3rd gen iPhone is expected in June or July, just like the first two generations, it's hard to imagine that either their iPhone 3.0 OS or 3rd gen iPhone is some response to Palm.

And some seem to think specific implementations are a response to Palm's WebOS, which also seems a bit far-fetched, as those things don't happen in a matter of a few months, seeing as Palm's WebOS was only announced in January. It's sort of like the LG Prada. I doubt either the iPhone nor LG even knew of the work of the other, let alone had the time to make any specific responses to the other. Some times these things occur at the same time, in particular, when the right inputs, all become available. I mean, the Newton came out a long time ago, what was it, 1991? it had lots of the features that PDAs have now, though more primitive, but actual usability was low. Networking meant slow dialup, etc.

The bottom line is that the analysts inadvertantly conflate the timing of the Pre with the iPhone, when in fact they are coincidental.

I hope the Pre comes out late June, as they strongly imply, but it still has lots of hurdles to overcome. FCC approval, software and hardware "polishing", mfring, etc. Never hurts to have another good option.

Disclosure: I am long Apple and Palm.

Smartphone Update: 2008 Q4 Market Share

Apple has more than one product, it has millions of products. If you look at the iPhone and touch as blank slates, and realize that everyone can customize their iPhone and touches with what apps they want and need, Apple has offered millions of different products, at a few price points..

The Battle Lines Are Drawn in the War for Mobile Developers

The article raises an interesting question, where will developers go, and then all the comments talk about where the users will go. Okay, so they're related.

I would say that the article doesn't develop the various choices very much, but what really struck me is the total non-comment about device fragmentation. Sure there are lots of WinMo users, but they are on dozens of devices, as MS is so happy to tell us. Dozens of devices all with different configurations and specs. Any developer who is considering a platform to develop on is going to look at installed base by how many iterations of an app he will have to develop. If he develops for OS X, there's essentially one config, though the iPod touch is missing a couple things like camera, mic, etc. If he develops for WinMo, there are so many possible combinations of OS, cpu, gpu, screensize, etc., etc., etc.. This is a key consideration and totally unaddressed by the author.

Look Who's Talking About Smart Phones

Sure, Dell has had their PDA, fail. They had their Ditty, fail. They can combine their PDA with their Ditty and put a phone on top. Lemme see, you think it's going to succeed? Have you even looked at what HP is doing? They just put their name on a HTC, kind of how they used to put their name on an iPod. They have almost no traction in smartphones, and you think Dell will?

Dell needs to stick with their knitting. They need to fix their core business before they go traipsing into new areas just because some consultants told them to do it.

Windows Mobile: Like Using Fred Flintstone's iStone

The link between 5 of your first 6 bullet points is of course, WebKit. Developed by Apple, given back to the open-source community. Now, Nokia's S60 uses it. Google's Android uses it. Adobe's AIR uses it. Palm's Pre will use it. Of course, the iPhone uses it. Even Ballmer was quizzed about using it, a couple months ago.

Palm's Pre Goes a Step Further Than the iPhone

Thanks for the response Seth, I figured as much. What's with editors that they need to sex up stories? Anyhow, I hope Palm can sell the Pre in more outlets than the Treo Pro.

Palm's Pre Goes a Step Further Than the iPhone

For some reason your headline and your story don't seem to match. I read the story to find where the Pre is a "step further" than the iPhone and didn't see any reference to it.

It's not like I don't want to see Palm do well, as I have 1000 shares still, but looking at the hardware, there's nothing there that screams a "step further". Right a mag induction charger. Looks nice but man, I still need to have two of those, one at home and one at work. It'd be better if it just used the iPhone USB cable, then it'd connect to tons of existing peripherals! Mini-USB adapters are just not as plentiful.

The bottom line is that I don't expect to see the Pre until the very end of the "first half" of 2009, and that would mean being launched 2 years after the iPhone. 95% of the ideas are cribbed from the iPhone, and we still have to see how well it executes. I mean, the proof of the pudding is in the eating, and not some canned presentation of a beta OS.

Canaccord Bleak on Handsets, Sets Palm Target at $0

Gloomy scenario on Palm, Nokia and Apple. Hmmm.... don't tell me, he's Canadian? And, what is his scenario on Rimm?