reinharden

Google: Setting Itself Up for Failure?

Google might have overpaid from a pure revenue metric (AdMob's estimated run rate is around $100 million which is split 60/40 with publishers leaving AdMob with around $40 million). But AdMob's entire revenue stream has come online essentially in the last 3 years. So the growth rate is outstanding.

Unlike some of their other deals, Google did this as an all stock deal. So they didn't really pay anything for the company, their shareholders did. And considering AdMob's alleged $100 million revenue run rate and GOOG's P/S ratio of 7.9, it looks like GOOG paid exactly an amount they considered to not be dilutive to their shareholders.


For the record, for AdMob's most recently reported period, the iPhone accounted for 48% of smartphone ads, but Android accounted for 17%. This was before the launch of the Droid. So Android is slowly building some market presence.

I agree that we've yet to see Google effectively monetize most of their non-core initiatives; however, Google believes that with things like Android, Chrome, and ChromeOS that they're creating incrementally larger markets to serve. If they define things in those terms, it'll always be difficult to establish a firm metric for success versus failure.

reinharden

Apple Dropped the Ball on an NFL Deal

Yes, AAPL has billions in the bank. But giving away those billions isn't how one accumulates them.

Let's be generous and say that AAPL has sold 2.5 million Apple TVs and that each and every one of those users would run out and sign up for the new NFL plan. At a cool billion, that'd be a customer acquisition cost of $400 per year.

At a billion dollars a year expense, to get that cost down to $40 per year, AAPL would need to increase the Apple TV sales to 25 million units a year!

Admittedly, AAPL would recoup some of that outlay by selling the games or subscriptions to the seasons. But I think they need a much larger installed base to sell into before it'd truly make economic sense.


And first I'd argue that Apple needs to get full NFL games on iTunes. And get the NFL "Follow your team" game season ticket back. After that they can worry about things like streaming live games.

Stocks on My Watchlist: Apple, Google, Cardinal Health

To be fair, you should probably back AAPL's $25 billion in cash out of their market cap. Which gives you a trailing PE of 19.4. Personally, for a company that's growing both top line and bottom line in the current economy while maintaining near record margins, I'd think that they'd deserve a higher PE ratio.

If I didn't already hold AAPL, I'd certainly be acquiring it on weakness.

reinharden

iTunes Breaks 6 Billion, DRM is Dead

I suspect that the "over the air" ability will help accelerate iTunes sales a little bit. Especially when combined with Shazam.

For what it's worth, iTunes says I've purchased 730 items including 584 audio files; however, I've been stupidly fanatic about getting the free songs each week. After 4 years, that's 400+ right there.


Seeing as how I came into iTunes with a few hundred CDs (and eBay and used stores have usually been cheaper than iTunes), I've personally been more interested in ripping music from my CDs than buying new music directly from iTunes.

And since, for the last nearly 2 years, we all knew that iTunes was going to go DRM-free any day now, I've avoided buying any music there.


So, the combination of $.69 back catalogue songs, finally DRM-free music, and over the air purchases for iPhones means that there *might* be some pent up demand...I guess we're find out this quarter.

reinharden

Steve Jobs Explains His Weight Loss as 'Hormone Imbalance'

On Jan 05 03:02 PM Aapprehensive wrote:
> As a physician, "hormonal imbalance" means nothing to me. This is
> incredibly vague. If it wasn't a serious problem, then he would have
> revealed the names of the diagnosis and the treatment. It sounds
> like he is being evasive.

Which part of "private" don't you understand?

The only two people who should know the name of the diagnosis are Steve Jobs and his physician.

reinharden

It's No Big Deal That Apple Is Pulling Out of Macworld

And let's not forget that it was increasingly stupid for Apple to hold their consumer product announcements until a week or three after Christmas, you know, the biggest consumer spending frenzy of the year. ;-)

Now AAPL can unleash updates to the iPod and their consumer Macintosh products in September/October and people will buy them confident that they're getting the latest and the greatest. Of course, that may well make calendar Q1 even weaker for Apple than it has been traditionally...put AAPL would probably rather have the money in their greedy little hands a quarter earlier. ;-)

reinharden

Infineon's Woeful Outlook Is a Result of Apple's Slowed iPhone Production

When reading between the lines with chip providers, it's also important to recognize that the chip sales typically take place anywhere from 6 weeks to 3 months ahead of the retail product sales.

So one would expect Apple to reduce orders of components in calendar Q4 because most of those components would be going into products to be sold in calendar Q1 -- traditionally Apple's weakest quarter.


I don't track IFX, so I can't speak as to its previous behavior. But it'd be worth comparing and contrasting the two company's previous quarterly reports so as to get a better feel for the correlation between IFX and AAPL as a predictive tool

reinharden

Web Browser Wars: Google Looking Beyond Market Share

You left a few important points out.

1) Chrome and Firefox are indeed open source; however, Chrome is built upon WebKit which is an open source tool strongly supported by Apple (it's the basis of Safari on the iPhone and under MacOS X). Assuming that all of Chrome is maintained in the open source arena, Apple will benefit relatively quickly. As Firefox doesn't use this software, their benefit will be less direct and immediate.

2) Chrome is designed to slide right into Android. So Chrome is Google's Mobile web browser (akin to Apple's Safari on the iPhone). Obviously Apple wasn't likely to do something so potentially competitive with the iPhone and Google would be nowhere with a PhoneOS without a web browser.

3) Google's line of web applications (Google Documents, gMail, Google Reader, etc) are currently hobbled by the absence of some key features in the web browsers. By providing an open source web browser that is optimized for enabling these web applications, Google is better able to compete with Microsoft's (and Apple's) more desktop centric application suite.

In the final analysis, short of buying Opera, Google really had little choice but to develop their own web browser.

reinharden

Steve Jobs: Honesty Is the Best Policy

AAPL has to treat Steve Jobs' health as a private issue. As a matter of law, it is. While the federal legal obligations on Apple Inc. aren't entirely clear when it comes to discussing the health of an employee, California has more clear-cut laws on the issue.

Steve Jobs can choose to discuss his health with people. Apple Inc., until such time as his health is a material fact, cannot initiate such disclosures.

Also, it'd be mind-boggling stupid to get stuck in the never-ending loop of "What is the current state of Steve Jobs' health?"

One, Steve Jobs can die at any time in any number of ways. If Apple Inc. claims he's healthy and he dies of an aneurysm or a heart attack or a stroke the next day, how many class action lawsuits will there be the day after that? Apple Inc. isn't a medical profession -- they can't affirm or deny his health.


Once Steve Jobs goes on the record, the only way to control this issue would be to providing constant medical data with increasing amounts of information. For example, the treatment can affect one's immune system. How long before people want to know his white blood cell counts? Survivors often develop diabetes. How long before people want to know his blood sugar levels? Diet is believed to play a role in avoiding recurrence of problems? Will Steve Jobs have to issue a weekly menu? Will Apple have to disclose that Steve jobs had a steak dinner?

The only reasonable and correct answer is "Steve Jobs' health is a private matter".

reinharden

Low Flash Memory Prices Pressure Chip Makers

One suspects that with flash prices at all time lows and with overall demand practically non-existent, it might behoove AAPL to continue to buy flash on the spot market at these self-same new-all-time-low-price... every week rather than lock-in longer term, possibly higher prices.

I'm just saying...


And, if AAPL is unsure of their own demand, definitely better to stay on the spot market unless supplies start to look tight.

Perversely, generally speaking, in the current market, the longer AAPL goes without entering into new contracts, the less their supplies will cost.

reinharden

China Mobile, Apple Butt Heads Over iPhone

I suppose to be fair I should note that you said China Unicom doesn't know GPRS. So that they have 100 million GSM subscribers might not be relevant.

That having been said, China Unicom offers GPRS service in 250+ cities across China and claims that they'll have it enabled in "all" cities prior to the 2008 Olympics.

Nearly all current GSM base stations are capable of supporting GPRS. For most GSM service providers, it's just a matter of logistics and provisioning...which are not admittedly not necessarily easy matters in the countryside.

But I'm not convinced you were actually distinguishing between GPRS and GSM in your article since you were comparing to CDMA...

reinharden

China Mobile, Apple Butt Heads Over iPhone

You might want to do some fact checking.

China Unicom operates both a CDMA and a GSM system. They have 100M+ GSM subscribers and a substantially smaller number of CDMA subscribers.

I didn't bother digging up the most recent numbers, but this article from the summer of 2006 discusses their GSM subscriber base reaching 100 million:
www1.cei.gov.cn/ce/doc...

Of course, that you're using phrases such as "The odorless-feces-factor" pretty much makes it clear that objectivity and facts aren't really the goal of your article. So sorry if I've harshed your buzz by interjecting inconvenient and likely unwanted facts. ;-)

reinharden

A Glimpse Into Apple’s Future

> stayed pretty much the same for a good few years

With the possible exception of, you know, changing out everything that was on the inside of the box?

The first Intel iMac shipped in January, 2006.

Yeah, it might be worth tweaking the products now that the Intel transition is truly done. But AAPL did quite a lot of work to make those boxes look like they hadn't changed.

reinharden

Employees Determine iPhone Success in Business

One note with regards to Exchange support for email: Exchange Server supports IMAP and a preponderance of large corporate sites even have it enabled. But not all sites do and there's lots of FUD about enabling IMAP being "insecure"...even so, it works fine with Exchange via IMAP.

That doesn't give one the full functionality of Exchange, but I think it's important to recognize where the lines really are whether than where the media says the lines are.

reinharden

Google Mobile: Winners and Losers

Let's not forget Symbian (and by extension the owners of Symbian).
04.5% - Samsung
08.4% - Siemens
10.5% - Panasonic
13.1% - Sony Ericsson
15.6% - Ericsson
47.9% - Nokia
Their investments in Symbian have arguably decreased in value due to the gPhone consortia.

UIQ and the various companies that invested in UIQ similarly are definitely square in the sights of the gPhone.


There's no doubt that Windows Mobile / Windows CE / whatever the other Windows-based phone OS's are are losers in the sense that they'll be negatively impacted. But it's definitely not clear whether or not they're losers in the sense that they've lost. So I agree that this has yet to be determined.

reinharden