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TanToday
95 Comments
Apple: How the Street Weighs In on the iPhone
One - with Apple pro-rating the income over 24 months, on let's say 4 mill of the 6 mill sold to date { the others are bootlegged and wont produce anymore income than the sales ticket, which TOO was prorated } I expect ALL that deferred revenue { or the VAST bulk of it, to be recast and brought forward NOW as sold and bookable } THAT will add an impressive quarterly POP that will more than offset the NO SALES of any units for two months for all extents and purposes.
Two - if you historically look at what happed with the iPod, when it was mainlined with a drastically lowered price, the sales skyrocketed, and continued exponentially UP for a few years, and there certainly was no dearth of competition, I know, I resisted and bought the other models, I wasn't gonna get "caught" in that buy trap they had with iPod. { I now own three of them, and boy was I stupid for trying to make the others all work right. } Should that same scenario happen, if they could sell SIX mill in a year, at prices 2 or 3 TIMES higher, a new unit now going to be available in 70 { and more, they are not done signing co's up } at 1/2 the price and 2.5X the speed....I see the only real constraints out there, making enough of them and Hon Hai { Foxconn } will have all 200,000 girls in the Shenzhen plant working as much overtime as they can crank out of them. I call it for 10 million from July 11 to Christmas.
Income: each phone will be bulked out to the carriers for a 200-250 per unit profit to apple, NOW, not deferred. That brings the income to the sales date, not staggered out over two years.
and what is now GROSSLY overlooked....
THE KEY to all this, the APPLICATION STORE.
With each Apple, you get a hook into THE STORE, where every time you go there there will be SCADS of neato, cool, fun, useful, coy, pleasing, gotta have THIRD PARTY applications being showcased for your pleasure....a single CLICK, and it is ON your machine, working, tested, and compatible....NO ONE has that. And joy of joy, our company rakes off 30% of each and every sale for hosting this little hidden gem.
Now, if each user puts say 20 apps on his new toy a year, at an average of 19 bucks an app, that is $400 a year, and apple gets 120 of that.
Add 'em all up, $250 on the hardware as it goes out to the carriers as profit. The SERVICE CONTRACT covering damage, etc at $70 for the three years, and approximately 75-120 cut of application sales.
So, each iPhone has a potential to generate a bottom line to the company of $375-450 over the life of the phone.
AND ... the halo effect, every one of these people WILL be buying into the former .MAC now renamed with all the convergence aspects...
ADD in ANOTHER 99 a year, and the sales of iMacs, and iThis and iThat that will follow these units as the world is now interacting WITH the Apple experience.
... oh yeah, add in the ENTERPRISE side as companies see the STATUS of having their outside people looking like STAR TREK future citizens, instead of chickenpecking at little eetsy beetsy chicklet minikeys.
This is huge guys, SEE THE BIG PICTURE here, Job et al BLEW it when they didn't see the WORLD in the last explosion, they are NOT going to make that mistake twice.
3G iPhone: What Has Apple Got Against Cameras?
"Hmmm, I need a PHONE, one that can do other things.....but a PHONE is what I really need. OK, there is this this one, WOW all the nice features, and that one, WOW...more features...but I want a PHONE.....now I want a Computer too, and toss in a GPS...and a MP3 player, a Game console, and it all works together...yeah, that is cool...but WAIT, it isn't a full blown CAMERA TOO?"
"Forgettabout it then, MY PHONE/GPS/GAMER/BROWSE...
is GONE....cause I really REALLY wanted a camera, so forget those other things..."
Suggestion,
Get some VELCRO, and buy the best camera you can find, and stick your Cell phone on the side.
Apple: Analysts Struggle to Say Something New About the 3G iPhone
In a company wide address to the employees...
"We didn't do ANYTHING.."
And they got the equivalent of $400 MILLION in free "Buzz Marketing" and eclipsed the Consumer Electronics show, with a market presence 100X that of Apple.
What OTHER firm gets ACRES of free print space, and dozens of articles written about something they have said NOTHING about publically in advance?
Put THAT into your valuation matrix's and crunch THOSE "numbers!"
Apple: Analysts Struggle to Say Something New About the 3G iPhone
"We read the same blogs and discussion boards everyone else does...and we are POSITIVE, that we tell you in advance, AFTERWARDS, what everyone already knew days or weeks ago.."
Oh, our services are FAIRLY VALUED and please sign up for more, only $200 a month, and our NEWS is as fresh as any other rumor you can get for FREE with a few mouse clicks.
And IF the price seems to go UP, we will adjust our "targets" to match what anyone with a FREE charts program knows, and if down, we will be ON THE BALL there too, and when it becomes apparent to even the doddering fools out there, we WILL let you know for a FEE that the price trend is down!
Honestly, in two solid years watching the ANAL-ISTS on Apple, I have yet to see one BREAK news without cribbing from a blog or discussion site, BUT I have seen many "break NEWS" that was 100% wrong.
However, STAY TUNED everyone....they ARE the "EXPERTS" after all, are they not?!
How to Get Apple to $200
One more "mathematically challenged" observer.
I admit, I went to school a LONG time ago, but then $118 was considered THREE digits...has the "new math" changed that one today?
Apple: Anticipating What Steve Jobs Will Say Monday
Apple will "sell" about 1 million phones in the first 48 hrs, with the only constraints being the meltdown of the Apple online store.
Just the STOCK UP with the seventy nations now that can "legally" buy an iPhone will be MORE than that in the first few days.
Remember, IF they use a reduced price for a CONTRACT model, that will ACCELERATE the sales exponentially, AND have the corollary effect of negating a LOT of the "unlocked phones" that produce little to no monthly revenue.
So, you have the unit sales exponentially changing UP, and the REVENUE aspect due to legalized machines UP { even if the model is for a lower sharing percentage, assuming that model is still the one they are working with }
AND the kicker....
EVERYONE that goes into one of these "other world Apple shops" to SEE not just BUY an iPhone, will in all likelihood be exposed for the FIRST TIME to the Apple "Experience" and if they are smart, they will have point of sale materials for the desktops, and laptops. Remember, in many of these countries, Apple has been a "weirdo product" a niche of a niche, and MOST of the world has never touched one, played with the OS X operating system, and for NOW it is all "hypothetical products."
But put a few MILLION status hungry iPhone potential wannabes, in a room laden with MacBook Airs, iMacs, and FAST INTERNET connections....and the NUKE EFFECT will blow out the WinDoze { pun intended } and the SEISMIC SHIFT from the old way...to the dazzling new way will have just had a shot of Viagra.
Apple: Anticipating What Steve Jobs Will Say Monday
We now gonna liss'n to the same SHAMUU that DOWNGRADED Apple right before an earning call with a HUGE increase in profits, then FLIP FLOPS about two weeks later with a STELLAR UPGRADEANDSELL?
Essentially, SHAMUU is saying...
They MAY, or they MAY not, but stay tuned, cause I WILL DEFINATELY predict that the price WILL rise, OR fall, and you can take that to the BANK!
The man should LAY LOW for a year or so, to let the STINK of his pandering faux pas blow off....
And Eric...
SHAME ON YOU for continuing to put this honky whore out there as worthy of the electrons it takes to post this!
How to Get Apple to $200
I was a commercial real estate honkey for 30 years, pretty big one at that.
We used to run these "models" all the time, Discounted Dollar Cash Flow Analysis was the term we used. I got pretty sophisticated and had models that would actually take into consideration deflation, inflation, weather, consumables, population trends...the WORKS!
Now...
Reality.
In ALL those 30 years, I can HONESTLY say, that NONE of those models were worth SQUAT, they were WORSE THAN USELESS. Every single time, "Chaos Theory" hit, and a totally unforseen variable entered in, some camel jockey in the middle east got mad at some Jews down the street, some moron politician changed the rules, this or that became unfashionable, weather sucked, too hot, too cold, inflation, deflation, you name it.
These models are USELESS.
What counts is TRENDS and INNOVATION. How do you "model in" the gizmo that Steve Jobs and Co's will whip out in the future...."OH, ONE MORE THING.." How do you count for them being IN businesses not even conceived of today, for example, a computer company selling music players? A computer company selling TELEPHONES? A computer company with the #1 RETAIL stores in the world?
So, if you want to play mental masturbation, have at these models. If you like them, HIRE ME, and I will build you modeling programs that will dazzle anyone....
BUT they will all be CRAP in the end. All of them were.
Go with the WINNING HAND, and remember, WORLD CHANGING TECHNOLOGY CANNOT be modeled, it doesn't EXIST, it cannot be factored in....and toss in a few BILLION Chinese and Indians into this blender...and who KNOW what froth will spill out?
By How Much Will Apple 'Blow Away' Its 10M iPhone Target?
As compared to what? Seriously?
Are you buying a computer company? Then yes. They ARE really a dime a dozen frankly.
Are you buying a REVOLUTION with a few million zealots that will sweat blood to pay for just about ANYTHING that is cool, nifty, neato, sleek, and hot to trot? Then no, those are rather rare.
I like to watch the discussion boards, and there are many, for all things Apple. It never ceases to amaze me, the passion, the involvement, the subsuming of one's own self into identification with Apple products and lifestyle. THAT isn't something that Wall Street can factually measure, but what OTHER firm could bring out a new can opener, have 1/3 the media give it free publicitiy, and have swarms of fanboys and gals standing in LINE for hours on end to purchase it, even sigh unseen?
NOW THAT is what I call a FRANCHISE, and that is MONEY SECURITY, even better than a depreciating money horde that they have too.
By How Much Will Apple 'Blow Away' Its 10M iPhone Target?
In the long run, it all hits the bottom line. But in the over three years I have watched the ANAL-ists at work with AAPL, I have observed they have this uncanny and GROWING inability to SEE the bigger picture. They are lemmings, they are myopic, they are basically TRADERS mentally, and the window a trader see's through is never much longer than the time it takes to read an article in People Magazine while visiting the .... yeah, that place.
So, whereas the money WILL all hit, expect to see sales skyrocket, and THEN expect the slew of articles like this "Apple SALES SOAR, PROFIT languishes.." or the like.
I saw them go bazonkers over the iPod sales slowing down in UNITS, never mind that three years ago, they were little MP3 players, and now they are baby multimedia wireless machines with average price tags DOUBLE before.
Sadly, for a trader, or those with trader mentalities { that isn't a bad thing, but it isn't normally associated with fully understanding the why's and wherefore's of the strategic growth, and long term viability of a paradigm changing firm } they will ACT on the nits, and ignore the chestnuts that were planted but not yet ready for harvest.
As most studies show, a patient, SMART investor, who will trade out the LOSERS but let the winners ride { that is why they invented trailing stops } generally will outperform the in and out boys almost every time. Apple is such a firm, so watching the MACHINE of the SYSTEM being assembled, and pretty much ignoring the minor ripples, seems to me to be a less risky endeavor than any other course of action.
By How Much Will Apple 'Blow Away' Its 10M iPhone Target?
{ long AAPL 2k shrs }
One, AAPL has used a deferred version of accounting, that may or may not be applicable to these new deals around the world. They took the sale of the iPhone with ATT and spread out recognizing the income over the life of the contract, two years if I remember correctly. That means that NONE of the impact will show up other than the amortized portion in any quarter. It does mean that even units sold last summer will be adding to the bottom line in the remaining quarters of this year.
Two, AAPL said that NONE of the income from ANY iPhone sold from the SDK announcement would be recognized until the release of the application store presumably after the WWDC expected rollout of the 3G phone.
These two factors are good for the leveling out of, and support of, the AAPL profits over the next year, but will NOT materially goose the bottom line no matter how many are sold...IF, and I stress IF they continue to book the profits on a incremental basis over the life of any contracts. There is no way of knowing now if that will be the case.
What IS going to massively hit the bottom line, immediately, is the overlooked workhorse that is really adding to the cash horde, the old standbys the desktop lineS { plural } and the notebook lineS { plural }. The next quarter, leading up to September is when the back to school market hits. And studies seem to show that going to school WITH an Apple is cool, and with a PC is just so...DROIDISH and uncool. Some schools are reporting that in excess of 80% of students either have a Mac or want a Mac, and the profits on these are good, and the money goes right to the bottom, as sold. The desktop lines, while overlooked, are poised now to RAPE the PC sluts, Vista is a known dog, OS X is a high priced but very attractive lady of the night...with all the charms of the best courtesans!
Not to mention the LOCK IN MARKET the applications store, added onto the iTunes store will have, every single user of an iPod Touch, or iPhone will be furiously downloading this or that new application as they flood out there, with AAPL taking a cool 30% off the top for each download. That alone, could and most likely WILL account for more bottom line profit than the hardware profit on the actual handheld unit will.
And NEVER forget the retail end, the juggernaught, grossing in excess of $4.6k/SF retail, numbers TWICE as high as Tiffanies, or the very best retaillers out there. And they are now opening as many as five stores a month, directly, and some partners, such as the Indian franchise, promise over 600 outlets within a year selling partial lines.
Add 'em all up, and you have a KA-CHING thing going.
Don't think the iPhone is the horse driving the buggy, it is the jockey leading folks TO the horse and buggy, which is the ongoing relationship, that equates to the online sales, online programs, to the desktops and laptops, and even and eventually to EVERYTHING digital.
This is going to shape up as the APPLE DIGITAL LIFESTYLE company!
Cell-Tower Fatalities: 3G iPhones at Any Price?
www.ussafetyequipment....
Maybe the frazzled workers find them uncomfortable, I know I would...but parachutes are bulky and awkward too, but when you NEED one, it is certainly nice to have one on.
HINT.
GE May Spin Appliances Unit, Not Sell It
Just as with WESTINGHOUSE, a stellar brand name dragged down and sunk when the bean counters and financial wizards decided financing boondoggles in Florida beat making appliances...and innovating in technology.
RIP
LAZARUS!
Brought back to LIFE AGAIN! Resurrected and thriving now as a Korean company using the goodwill, but NOT the technology, nor Americans', as anything but buyers.
GE can live again!
COME FORTH GE, rise and cast off your funeral rags!
GE May Spin Appliances Unit, Not Sell It
Just as with WESTINGHOUSE, a stellar brand name dragged down and sunk when the bean counters and financial wizards decided financing boondoggles in Florida beat making appliances...and innovating in technology.
RIP
LAZARUS!
Brought back to LIFE AGAIN! Resurrected and thriving now as a Korean company using the goodwill, but NOT the technology, nor Americans', as anything but buyers.
GE can live again!
COME FORTH GE, rise and cast off your funeral rags!
Will 'Free' Make Money for Netflix?
One price, same net, lowest provider WINS!
Until they ALL go out of business.
You NEVER get rich, selling something for FREE. Business 101.