Dr. Dan

8 Comments

    • ON: Wed Jul 30th 11:29 AM
      Commented on:
      Apple Math: Market Share over Margins
      I agree, the short-term gross margin reduction is almost certainly due to new products, product upgrades, and marketing for these changes. Any significant new items will cost money to produce, ship, and advertise, while the revenues from them won't be seen until the following quarter.

      Given their traditional conservative guidance, one wouldn't expect them to say "after that drop to 30%, we expect the following quarter to jump back past 35% or 40%." Given the high margins Apple likes for new products, I think it's silly to think they'd deliberately lower margins without any expected reversal.

      I also agree that the market mentality driving this stock seems inexplicably short-sighted and stupid. How can the same exact scenario - great earnings blasting consensus, conservative guidance below consensus, stock plummets - play out three times in a row? Each time with the earlier fears shown to be unfounded? Where are all the people who were "proving" that iPod sales were flat for good, or that iPhone market was saturating, or whatever fear-du-jour was used to explain the last selloff? It just seems nuts.
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    • ON: Wed Jun 11th 17:44 PM
      Commented on:
      Palm Girds for a Smartphone Comeback
      I've got Apple stock, which has been doing very nicely for me. And I use both an iPod and an iBook, in addition to my XP systems. So I'm not a Mac Hater. However, my phone is a small portable LG and my day-to-day life is run from a Palm T|X. I don't know what would be involved in getting eight years's worth of Palm history transferred seamlessly into an iPhone, and I'd rather not find out if I don't have to! If Palm comes out with something that can just keep me moving without an ugly transition - like they did when I went from my Palm IIIxe to this unit - I won't be selling my soul to AT&T, which is something I'd rather avoid anyway. I'll probably get a Touch or a Nano anyway when my Mini finally starts to die, whatever planner I end up with. I'm sure lots of people will buy iPhones, and I'm holding on to my Apple stock, but Palm looks like a nice bargain-bin stock right now, when everyone's written them off. I'm not expecting them to ever beat Apple at it's game - but that's not necessary for the company and the stock to do very, very well.
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    • ON: Fri May 30th 11:49 AM
      Commented on:
      By How Much Will Apple 'Blow Away' Its 10M iPhone Target?
      I really do hope that Cramer or something makes the stock drop - I missed buying more at $120 and I've regretted it since. Short-term panic drops like that are like finding money on the floor - if you've got the guts to ignore the panic.

      On the delayed revenue side, I'm not sure I understand the issue here. Wasn't the AT&T revenue sharing deal the reason for not wanting to record all the income up front? The revenue sharing doesn't apply to about 30% of the sales, so I'd imagine those sales are counted up front. And if they're not, they mean guaranteed income for four quarters, pushing up the base for all calculations and making the bottom line even more secure.
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    • ON: Tue May 13th 14:21 PM
      Commented on:
      What's Better: BlackBerry or iPhone?
      Hmmm. It's tough to write in support of the iPhone after so many rude, vulgar and obnoxious people already did - kinda makes me want to take the opposing view, though that's a losing argument. I wonder how some of these iPhone lovers do in personal relationships when someone says something they disagree with. "Liar" and "stooge" seem to fall from their lips at the drop of a hat. Glad they're not my co-workers.

      Still, there are real points to make, and one is this: Whether the chicklet keyboard is better than the touchscreen is an arguable point. However, from what I've seen the touchscreen is good *enough* after some practice for most users to be happy with it - it wasn't even in the top three complaints on satisfaction surveys. There are so many other advantages the iPhone has over current BlackBerry products that there will be inevitable market share loss to Apple, in my opinon. With the developer's kit out, it's only a matter of time before someone has a small chicklet iPhone keyboard for those occasions when you want to type faster and longer. I've used my Palm Bluetooth keyboard along with my TX to get "good enough" results instead of lugging a laptop around - once, an admiring crowd gathered as I used them in an Apple store while waiting for the Genius bar!

      Personally, though, I want a phone to just be a phone. But I'll be buying an iPod Touch as soon as my TX dies.
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    • ON: Mon Apr 28th 10:18 AM
      Commented on:
      Microsoft Did Us a Favor - Andreessen
      Candidus: Your ID is very apt, since your philosophy seems to echo that of the sadly naive and ill-fated Candide. Of course people don't cause global warming, because this is the best of all possible worlds, and in this best of all possible worlds only the best of all possible explanations can be true, and that would be that they don't. The painful part is when you apply conformism, or "stupid ideas, those that do not require too much effort at researching and thinking" to global warming. While thousands of scientists all over the world spend their careers researching, publishing, and discussing the data and worrying about how to deal with an obvious and present crisis, you listen to propagandists like Rush and Fox News and decide that they're all idiots, and only the handful of nay-sayers with minimal work in the area (but corporate funding to nay-say) could be right. That's your constitutional right, of course, but for someone like that to rail against conformism - in the same post! - is just too painfully dumb to put up with. Then again, you seem to also believe that anyone who believes that Microsoft is a company with a long history of illegally using monopolistic practices to crush or co-opt companies with superior products is only doing so out of trendy conformism, and that anyone who finds their bloated, buggy software annoying is just deluded. That sort of smug ignorance is a sad but common feature of the true conformists in this society.
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    • ON: Thu Apr 24th 11:03 AM
      Commented on:
      Starbucks: Price is What You Pay, Value is What You Get
      Thank you! I've never seen a clearer, more concise and practical guideline for estimating value. I bought a few shares of SBUX yesterday, hours before the bad news that knocked it down, and was trying to decide if I'd made a mistake (other than timing) or if I should buy more. Using your system, if we assume that the earnings will come in two cents/share lower, we get $0.85 x 725.1m = $616m. If we further assume that earnings are dead flat for five years - and I think that's unlikely - the 5 year multiple is about $3.1 billion, which still beats a $2.6 billion return on a CD. And any growth above zero is gravy!
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    • ON: Wed Apr 23rd 14:36 PM
      Commented on:
      The Outlook for Apple's iPod Business
      Good analysis overall, but there are a couple of points that I think were missed. First, the chart doesn't really show an S curve, it shows three of them - and each time the leveling off became pronounced, an innovation or upgrade shifted it back to the high-slope region for at least a quarter. The slope on the chart for most of '07 is virtually identical to that for most of early '06. This doesn't mean that saturation isn't a problem (each flattenning area is longer than the last one), but it means that accurate forward projections need to aim much higher. The bump in late '06 not only added 20% to the total, but also delayed the flat-to-declining section of the curve.

      Finally, I have no interest whatsoever in an iPhone, both because AT&T is a company I happily abandoned some years back, and because I want a small, very portable phone with great battery life that won't be cannibalized by other uses. But, as soon as the Touch gets better PDA functions I'm racing to the store to get one, for everything it has in addition to the phone. I think there are many people like me - in love with the iPhone concept but not the phone part - and others who don't want to spend the extra money and pay monthly fees (which makes it a tough gift to present.) I think the phrase "the iPhone will cannibalize a sizable amount of iPod sales" is exactly backwards.
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    • ON: Tue Apr 15th 10:14 AM
      Commented on:
      Will the iPhone Eat Blackberry's Business Lunch?
      So I guess "...qu'ils sont imbeciles, sans culture, sans education et sans instruction" must be French for "You're correct, I misspelled a word in my post wherein I claimed that extra sales of iPhones to countries without carrier contracts are somehow lost revenue to Apple. The spelling mistake was irrelevant to my argument, which was of course silly and illogical. The more important thing to remember is that I'm a well-bred and polite Canadian, and thus my insults and rabid attacks shower glory on my country's reputation."
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