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Apple: There's Still Upside, Near-Term Unclear

I believe analysts said the same thing about Q4 '08...weakness in the educational market. And Apple still had a record quarter in computer sales. $4.60 for '09 is ridiculous...especiall... considering all the built-up iPhone revenue. Bachman will be exposed for the fool he is, just like Huberty.

Should Apple Investors Feel Good About Yesterday's Rally?

You can always tell a Zach Bass article by it's title...Doom and Gloom boys. Doom and Gloom. Even a monkey is right 50% of the time.

But Zach is right. Cash is king until sanity returns to the market. It may take awhile. Maybe January earnings will be that turning point, once "investors" realize that Apple blew out expectations once again.......nah.

Huberty will alert the public that Apple will never sell an iPod again after earnings and Apple will crash to $20. People will practically be paying others to take Apple off their hands.

The market can stay irrational longer than any us can stay rational. Turn off the computer. Walk away. Go enjoy the holidays. Come back in January and buy like crazy if Apple does go down.

How Low Will Apple Go?

How do earnings play into this next week? Are you looking for Apple to reach $74 before earnings, or are you thinking $74 after earnings? If after, how does fair value come into play once Apple again blows out the quarter? Would the $74 be adjusted higher?

Part of me thinks it doesn't matter at all by just how much Apple beats estimates. It's the past. Everyone is so scared about the future and guidance is key, even though we all surely know by now that Apple sandbag's it's guidance.

Why Apple Stock Is Poised To Go Flat - At Best

So wait a minute...Apple's market cap is getting too big, but it is just now attempting to go mainstream?

Let's continue to poke holes in his arguments:

1. "I mean Apple being a larger company than GE with only 5% market share in the electronics department, I doubt it."

When Apple is still doubling it's earnings (counting deferred revenue up front), not that difficult. You see, there comes a firm belief from many of us that Apple will be the computer of choice in five years. It will overtake Microsoft. Apple will overtake GE in marketcap. Apple will become the biggest company in the world by owning our entire digital life.

2. "What if people prefer a much smaller mobile device with only voice capabilities to a large one with a screen and a lot of data tools?"

Not gonna happen. It's about convergence in the future. But even if so, then Apple will make one that's easier to use than any other competitors device. It's the beauty of Apple. They don't necessarily start trends. They see where they are going, and do it better than anyone else.

3. "Recent projections tie a significant amount of projected revenues to the App Store."

A few. But not enough revenue to significantly affect earnings.

4. "I think major game developers would be quick to establish their own devices and own App Stores."

[sarcasm]Right...becau... EA made their own Nintendo DS.[/sarcasm]

It's all about convergence. No one wants to carry around 3 or 4 different devices in their pocket. That's why a "smaller mobile device with only voice capabilities" is not the future.

Game developers will embrace the iPhone. Period. They aren't going to make their own device, especially given the costs and since the App store isn't a profit maker anyways.

Apple's whole business model has been to use iTunes, to use the App Store to sell hardware...iPhones, iPods, Macs. That's why so many other online music services have failed, because the service in itself isn't that profitable.

5. "Apple is trying to make up for its decreasing margins in the devices department through making use of the greater volume in its iTunes and App Store. However, if a serious attempt is made by Apple’s rivals in targeting its online stores Apple’s profit margins can be under serious trouble. In turn, an earnings miss could make a huge dent in Apple’s stock."

Remember that the iPhone isn't just $199, but that it's getting at least $200+ per device from the carriers. So technically, it's margins are not decreasing on that product at all.

Second, Apple's rivals have seriously tried to make a dent against iTunes. Microsoft, Dell, Napster and they have all failed!

6. "As people get more financially strained, discretionary premium products are the first thing to go."

Possibly. But cell phones are no longer a discretionary product. I think as things get tighter, consumers will get smarter.

What will get canceled is satellite radio services as you can now access programs and radio on the iPhone itself. Satellite TV and Cable will get canceled because you can now access just the shows you want through AppleTV and the iPhone.

Convergence!

Heck, even a MacBook or iMac will save you money because of all the software that comes with it.

Even With Apple, Price Will Follow Value

James, let me remind you of what you said from an earlier article, titled "Over-Hyped Apple Has No Real Value".

"So I'll fit the growth curve to that, which means taking into account analyst estimates for 34% growth in the current quarter (I'll put that as my full year-one growth even though growth estimates for the next quarter are 18.5%)"

Try 54%. The problem with your model is that you are always significantly below what Apple's true growth will be. I can give credit to those who deserve it. But your numbers are so far off that you simply don't deserve the credit. It simply proves that you don't understand the growth Apple is experiencing and that, like you said, Apple was a victim of sector rotation and the general pull-down of the market.

AmTech Expects Apple To Meet Or Beat In Report Monday

Wu is an idiot, one of the worst analysts out there. His original iPhone forecast was just 250,000 for all of 2007. He's always playing catch up.

Only 10% YOY growth for Q1 08? Come on Wu. Apple has averaged 70%+ for the past year. Once again, Wu will have to up his estimate in January. And he'll still be way short as usual.