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darekz

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  • Estimating Apple's Growth Potential Over The Next 2 Years [View article]
    While smart phones might be getting close to commodity, IOS offers IMHO much better customer experience. I am not talking about underlying technology as most tablets/phones allow you to do pretty much the same thing so the key is how and it is likely the customer experience that will make the difference.

    I borrowed friend's Galaxy 2 Tablet and tried to play with it for a day. It took me a lot more time to figure my way around than with iPad (never mind the cheap and plasticy feel of the Galaxy). And even after feeling comfortable with Galaxy I gladly returned to my iPad.

    I think majority of existing Apple customers will continue to buy Apple products, so Apple needs a product or two at a lower entry point to get newbees hooked on IOS. This is what repricing older models and intro of iPad mini should accomplish.

    At this size, growth also requires deeper market penetration, what Apple is currently accomplishing by getting into government and education businesses as well as expending geographically.

    As for innovation, Apple did not invent mp3 player or smart phone, they just made it better. They don't need to lead the innovation to lead the market, all they need to do is to stay vigilant and continue to offer thoughtful improvements. While my rumblings do not help to determine the future stock price, they reassure me that as long as I continue to see Apple executing these actions, they will remain a solid investment.

    Of course the stock price can go down, so it is important to look at the broader picture. We may see market drops, dragging Apple down with it, if Euro collapses, Mr. O gets reelected or Israel decides to put a lid on Iran atomic ambitions, but this will only shake out weak players. With over $100 billion cash reserves Apple can withstand a lot, where smaller players may have to fold.
    Jul 26, 2012. 05:14 PM | 1 Like Like |Link to Comment
  • Some more "leaked" images arrive purporting to depict future Apple (AAPL) hardware. Images of the next iPhone show a device with a larger display and smaller dock connector, in-line with earlier rumors. Meanwhile, schematics for the iPad Mini suggest the tablet will be 7.87" tall and 5.3" wide, and be as thin as an iPod Touch.  [View news story]
    you will probably just need a different USB cable (with the small connector on the other end).
    Jul 13, 2012. 03:23 PM | Likes Like |Link to Comment
  • Apple And The Cult Of The Greater Good [View article]
    Just a word or two on Apple Store pay (or any pay). Apple is a business and not a charity and in general I see it as a negative signal when a company starts confusing the two (what seems you and a few others are encouraging). Apple as any business pays what the market (in this case a job market) is willing to take. While I am not particularly impressed with $12 an hour pay, just get any job ad section in your local newspaper and count the jobs that offer less. I do not get the impression that Apple has issues finding employees for its stores, they seem to be well staffed. Admittedly I have no idea about employee turn-over. However, if the working conditions were bad you can generally sense it when you interact with the employees and my interactions with Apple store employees are so far 100% positive which I cannot say about my interactions with Best Buy or Walmart employees. You can also ask yourself a question, given an equal pay (or maybe even not so equal) where would you rather work.

    I find attempt at linking sales value with pay somewhat questionable. By that logic employees in diamond and jewelry stores should be earning millions, right?

    Apple store employees pay topic is hardly innovative (it has been trumpeted in liberal media recently) and it sounds like you are jumping on a that trendy Apple bashing train.

    Not so long ago we have heard about illconceived and deliberately misinformed stories about Apple factories in China, only recently quietly admitting that it is actually Foxconn but still blaming Apple.

    We have heard also about Apple "cheating" on taxes by investing through Nevada, not bringing earnings to US or guilt trips for sitting on a cash pile and not investing/spending in US and insinuating that this is a reason for lack of economic growth and high unemployment in US. I throw it all into the same category as "rich must pay their fair share stories".

    I also thought that not paying commission was part of their model so that sales people act more like advisors to you and are not compelled to push Apple products on you. I appreciate that and would not want to see Apple employees turn into used car salesmen embodiment.
    Jun 28, 2012. 12:47 PM | 1 Like Like |Link to Comment
  • 5 Reasons Apple Is A Bad Bet [View article]
    #4. - let's forget for a moment that Apple does not have factories yet takes an action to improve working conditions for workers at its suppliers. Who would know best if conditions were bad? Perhaps workers? When Foxconn in Shenzhen hires, lines are forming up to horizon... While conditions there might not be the same as at a comparable factory in US, they are above average for China already in many aspects and unless Chinese were masochistic in nature, this has to be a testimony contradicting author's claim.
    May 11, 2012. 11:05 PM | 2 Likes Like |Link to Comment
  • 5 Reasons Apple Should Not Depend Too Much On Asia [View article]
    The Chinese companies making look-alike iPhones, are too tiny to create such an infrastructure even with "frugal engineering". Do you really think that a company making fakes would be able to do the same thing as iPhone and support similar infrastructure and yet be able to sell a phone for $50-100 and even make a profit?

    Samsung phones are high quality good iPhone clones yet they don't sell as well as iPhone there.

    The only Chinese company that could come up with something similar to itunes, icloud, etc. is possibly Tencent IMHO... They are listed in US and don't engage in fake manufacturing.

    All these discussions about fakes evolve around assumption that somehow consumers will be stiffed with fake iPhones passed to them as a real thing and buy them unknowingly. When I read something like this I know a person saying these sort of things was not in China (or perhaps not even in a China Town).

    For those that missed my other comments on fake iPhones, the iphone clones are just look alikes (form a distance) and are not sold as iPhones. When you go to these places that sell clones, they will tell you that these are not real iPhones, if you did not notice it yourself.

    These clones are not competing with iPhone. To use the phrase beloved by Korean companies these are not fakes, they are iPhone "inspired" designs;-)

    They don't provide the same functionality (though there are some androids around) and are appealing to a different market. There are no statistics on sales of fakes but you can rest assured that they don't come anywhere near even 1% of iPhone sales in China. I was in February in Beijing and visited some of these markets where fakes are sold, and I can tell you that there was virtually "0" (zero) interest in them. I have seen no people asking to see them. I believe I was the only one that asked to see one and the sales person mentioned several times that this is not a real thing to be sure that it is worth her time unlocking the glass cabinet.

    An owner of one of these stalls selling iPhone clones told me that he stopped ordering new ones and will likely discontinue selling them as they are only a headache because of quality issues and returns (he never sells them as iPhones, no one I know does).
    May 2, 2012. 05:23 PM | Likes Like |Link to Comment
  • 5 Reasons Apple Should Not Depend Too Much On Asia [View article]
    If you are willing to trust CNN, then Tusc is correct. The estimate of middle class defined as making between $10k and $60k per year is 300 million. http://cnnmon.ie/KvbPn7

    It is difficult to understand China without spending sighnificent time there and I mean not business trips but actually living there. If you lived there then one thing you would understand that even if iPhone in itself is a tad more expensive than in US, Chinese spend a lot less on other things what makes their ability to come up with money for iPhone perhaps even stronger than in US. The litany is long and I will not try to itemize it.
    May 2, 2012. 04:48 PM | Likes Like |Link to Comment
  • 5 Reasons Apple Should Not Depend Too Much On Asia [View article]
    The fake iphone issue has been beaten to death here, but for an argument sake, even if one day a Chinese company came up with a near-perfect iPhone looking fake with similar quality, actually running IOS, and sold it at competitive price, Apple would be likely able to stop it from running on it's infrastructure (iTunes, Apple Store, iCloud). The benefit of access to Apple infractructure is increasingly a part of a value proposition that attracts buyers to Apple products and not solely the hardware and esthetics. That infrastructure cannot be duplicated by a Chinese fake manufacturer.
    May 1, 2012. 05:06 PM | 5 Likes Like |Link to Comment
  • 5 Reasons Apple Should Not Depend Too Much On Asia [View article]
    I feel that the first comment you made ("...a lag in product distribution deals over there") might be at least partially arguable. I was living in China during iPhone 1 through 3 launches in US and I would like to assure you that iPhone was available in China on the same day as in the US. While these were initially not official channels, availability was pretty extensive. Actually because a lot of iPhone 1 came purchased from ATT in US, before it tightened it's activation policies, an iPhone could be purchased back then in US for $200 without signing a contract or in-store activation. ATT must have lost tons of money on it as the ATT iPhones travelled back to China by thousands and were resold for about $400-500 which was actually cheaper than an official iPhone sold in China now. Since availability was not an issue and the initial grey market price was below the price today, I am tempted to attribute the raise in demand for iPhones to firstly growing afluance of Chinese consumer and secondly to gradual increase in popularity of Apple products in China. Of course this is just IMHO...
    May 1, 2012. 04:15 PM | Likes Like |Link to Comment
  • Apple (AAPL -2.2%) responds to a weekend NYT column noting its low overall tax rate. The company touts its U.S. job-creation efforts and charitable donations, and says it has paid $5B in federal and state taxes over the first half of FY12. Jay Yarow isn't impressed, pointing out Apple includes UPS positions among the jobs it has created, and that its payment figures are inflated by taxes withheld from employees.  [View news story]
    Let's ask Hugo Chavez if he has any suggestions how to handle this situation...
    Apr 30, 2012. 12:20 PM | 3 Likes Like |Link to Comment
  • Why Apple May Not Dominate China [View article]
    Thanks for all the additional info. I know it is getting off topic, but I was in Beijing Starbucks (The Village) this February and used their Wi-Fi. I know about the change in Chinese law so it is no longer as simple as before, but you essentially get iPhone recognize the Wi-Fi network and enter your phone number on the website that pops-up, then you get an SMS with a password to log in. Once logged in, you are good for a week at this location so no need to renter anything. The procedure is a tad cumbersome but with the help of cut and paste I was in business under two minutes. My friend also had her iPhone stollen. She happens to work close to Apple Store and just picked up a new one on the way home. She is not a highroller, just a salesperson in one of the stores nearby but I am not sure if she has her data turned off or not. I did turn off my as my prepaid card was getting eaten pretty fast. I had a whole motherboard exchanged in Beijing in my iPhone 3GS a year ago for a 1000 RMB. I think this would not be even fixable in US. The ironic thing is that is was shorted by one of the Apple Geniuses in Apple Store when demonstrating their amplified iphone/ipod docks...
    Apr 25, 2012. 03:41 PM | Likes Like |Link to Comment
  • Why Apple May Not Dominate China [View article]
    Good Staff! Thanks! Just FYI Chinese Apple Store website currently shows 4S for 4988RMB for 16GB, 5888RMB for 32GB and 6788RMB for 64GB. Free wi-fi is a lot more common in China (at least in Beijing) than it is here (US), so that helps Chinese stay within their limits. I thought that signing up new carriers will not affect much the sales for a slightly different reason though. My feeling was that by now pretty much most Chinese that wanted an iPhone, already had it (obviously seeing Q2 numbers there were a lot that did not).

    My Chinese colleagues in Beijing passed on Tobao even though the price was lower and got theirs straight from Apple Store because they were afraid of buying... a fake. They did not even want to buy from a reseller... Thanks again for sharing the details.
    Apr 25, 2012. 04:36 AM | Likes Like |Link to Comment
  • Why Apple May Not Dominate China [View article]
    Thanks for clarifying that. I meant the search engine. In fact I visited the Google office in Beijing and can testify it remains intact:-)
    Apr 25, 2012. 01:26 AM | Likes Like |Link to Comment
  • Why Apple May Not Dominate China [View article]
    @neurocog: You are right. Eggs? If you cheat someone in China of a $1000, there would be a lot more than eggs going your way. I am not sure if you witnessed a street fight in China. I did. They don't stop when you fall on the ground...
    Apr 24, 2012. 09:09 PM | Likes Like |Link to Comment
  • Apple Adds $12.5 Billion To Cash, Now $116 Per Share [View article]
    One more quarter like this and I will throw a Toga Party for Tom!
    Apr 24, 2012. 05:23 PM | 3 Likes Like |Link to Comment
  • More on Apple: Gross margin was 47.4%, up 270 bps Q/Q and 610 bps Y/Y. Cash/investment balance rose to $110B. Asia-Pac, likely driven by China, played a big role in the earnings beat: sales rose 32% Q/Q and 114% Y/Y, compared with 20%+ Q/Q seasonal drops for the Americas and Europe. iPhone revenue +85% Y/Y with implied ASP of $646, iPad revenue +132%. Mac desktops +8%, Mac notebooks -1%. Retail revenue +38% Y/Y. AAPL +7.4% AH. (PR) (CC webcast)  [View news story]
    Chinese suitcase enterpreneurs now shuffle already used iPhones of the Chinese market to less affluent SE Asian countries. I have seen them in Cambodia, Laos and Vietnam. That preps these markets for even more Apple products once income level raises. I recall a CNN report from Somalia a year ago and a village leader was sporting... iPhone....
    Apr 24, 2012. 05:16 PM | Likes Like |Link to Comment
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