southbeach

Android, iPhone Ride Rising Tide

was about to comment on that 600 a month! thanks for taking care of it. always worth a re-read before publishing an article, particularly things like ARPU figures...


On Oct <span title="Convert this amount" class="currency_conver... 11:08 PM KenC wrote:

> You wrote, "The US carriers will eventually run out of people who
> want to permanently increase their phone bills $ 600</span> a month"
>
>
> Strangely, noone so far has commented upon your math. Presumably,
> above, you meant year, but even the, you are implying that data plans
> are $<span title="Convert this amount" class="currency_conver...
> </span> a month, which they are not. They are $<span title="Convert
> this amount" class="currency_conver... to $<span
> title="Convert this amount" class="currency_conver...
> a month.
>
> I have an iPhone <span title="Convert this amount" class="currency_conver...
> </span>G, and my data plan is $<span title="Convert this amount"
> class="currency_conver... a month. Why? I live in
> an EDGE area, with <span title="Convert this amount" class="currency_conver...
> </span>G <span title="Convert this amount" class="currency_conver...
> </span> miles away. I pay the EDGE rate even though when I'm in
> <span title="Convert this amount" class="currency_conver...
> </span>G-land, I get <span title="Convert this amount" class="currency_conver...
> </span>G speeds.
>
> So, data plans are not as outrageous as you seem to believe.

Buying Apple Today: Like Buying Microsoft in 1998?

"Apple has 100 million credit card-registered iTunes users who have access to one-touch purchasing. This will swell, conservatively, by 4-6 million customer per quarter as iPhone and iPod touch devices require syncing and loading. No company on earth will have what Apple has within 2 years, and that's key to the software portion of the business."

Just to add a detail to this good point. In the mobile value chain, so called 'operator billing' - where the consumer pays for items via their monthly operator/carrier phone bill - adds a massive cost to the transaction flow, which makes the proposition less appealing to content providers and application store owners. So App Store could easily be not just the largest application store in the world, but the most efficient/profitable since it reduces the excess profit grab of the operators for their billing services.


On Sep 11 06:34 AM Timeline Strategy Consulting wrote:

> I think you're wrong, and here's why.
>
> In 1998</span>, Microsoft had established a massively dominant operating
> system and business suite (Office) business, as well as leading market
> shares in database, server, and other enterprise. There was little
> that it did in which it did not lead. Thus, its growth outlook was
> capped. It's ironic that Microsoft's current dominance in operating
> systems (93.06% for Microsoft vs. 4.87% for Mac via one measurement)
> is often used as the defense of investing in MSFT or against investing
> in AAPL. Such dominance is more risk than opportunity, for the company
> and for the shareholder.
>
> Contrasted, there is no space in which Apple competes, other than
> music players (which have now declined to 18% of its revenue) where
> it holds more that 10% market share. Not desktop or laptop computers,
> and despite the success of iPhone, not mobile handsets.
>
> Here's an open question for you. How can you financially value a
> business that is:
>
> <span title="Convert this amount" class="currency_conver...
> </span>. Already massive (<span title="Convert this amount" class="currency_conver...
> </span> million units sold worldwide for at least $<span title="Convert
> this amount" class="currency_conver... per unit,
> or $<span title="Convert this amount" class="currency_conver...
> </span> billion)
> <span title="Convert this amount" class="currency_conver...
> </span>. Growing massively (20% year over year)
> <span title="Convert this amount" class="currency_conver...
> </span>. Technologically up for grabs
> <span title="Convert this amount" class="currency_conver...
> </span>. The next consumer-driven revolution
> <span title="Convert this amount" class="currency_conver...
> </span>. Led by hardware but followed by software
>
> This, of course, is the smartphone market, and Apple's swiftly-growing
> position here on the technical side is somewhat muted by the manner
> in which it recognizes revenue via the 2-year subscription model.
> I am admittedly biased in favor of (long) Apple, but I believe that
> they are building an unassailable position in handsets and applications
> that go with them. Simply put, the competition is confused and scrambling,
> consumers are flocking, and Apple got 95% of the ecosystem right
> at exactly the point that the terrain was unclaimed.
>
> One practical example - there is currently a 5-8 week wait time for
> iPhone <span title="Convert this amount" class="currency_conver...
> </span>GS at various T-Mobile locations in the Netherlands and at
> other carriers throughout Europe. At those same locations, you can
> obtain practically any other handset the same day, but Apple can't
> make theirs fast enough. What's next? China, of course, and perhaps
> that's even the reason why these handsets are in short supply currently.
>
>
> And here's one point that should not be overlooked - Apple has <span
> title="Convert this amount" class="currency_conver...
> million credit card-registered iTunes users who have access to one-touch
> purchasing. This will swell, conservatively, by 4-6 million customer
> per quarter as iPhone and iPod touch devices require syncing and
> loading. No company on earth will have what Apple has within <span
> title="Convert this amount" class="currency_conver...
> years, and that's key to the software portion of the business.<br/>
>
> Practically speaking, AAPL sees $<span title="Convert this amount"
> class="currency_conver... earnings in 2010, which
> at a P/E of <span title="Convert this amount" class="currency_conver...
> </span> yields a share price of $<span title="Convert this amount"
> class="currency_conver...
>
> So, in summary, Apple's potential rests upon this area in which they
> snuck in. Once there, they quickly established something simultaneously
> untouchable by competition and very appealing to consumers, and that's
> the appeal.
>
> By the way, I think that you forget the 'not' in this sentence:<br/>
>
> "Of course, if you're buying Apple, you're too terribly interested
> in the assets."

Google Keeps Thriving Despite Tough Environment

Google is indeed a solid company, with a good and defensible value proposition. When the stock drops below $250, I might well take a meaningful long position. I can imagine that doubling, but more likely over a 5 year time line.

Research in Motion: Vulnerable to a Takeover Bid?

As predicted, RIMM continues to tank, tracking the market and then some. If I were unfortunate enough to be long RIMM right now, I'd be concerned about the giant bites Apple is taking out of the high end consumer market. The battle gets interesting. Still I've been successfully bearish on both RIMM and Apple since they were 3x and 2x their current price, and the feel bad continues. Given its a Friday, and the markets are looking sea sick, why not switch off that Berry and go for a long (and cheap) lunch with some old friends. When RIMM hits high 30s and Apple low 80s, I'd take a bite (and pardon the pun), but not too large a % position in either - its a long dark road until the bounce.

Research in Motion: Vulnerable to a Takeover Bid?

Crazy times - from a few months ago with Cannacord and others looking for $200 a share... a MS bid for RIMM, even if it fails, (aka gets "Yanged") could represent a nice % pump for the stock. Unless the Bold does very well, the stock could sink to the low 40s, or even high 30s, this year. News of MS due dili on RIM could add 50% to the stock in a week. Not sure I'd buy any OOM calls right now, but the more RIMM falls, the greater the chance of a take out bid. What was that old Chinese curse - may you live in interesting times.

Google Looks Too Cheap to Ignore

Google's a tough call. Despite the risk, I'd pick up a long position at $290-300, with a few puts just in case.

Complete Web Browsing On Your Cell Phone? Not Yet

Quite right XamaX. The iPhone should be rebranded the 'godphone'. Since I got mine I've become smarter (up 721% in the markets YTD), more sexy (dumped ageing wife for hottie young millionaire chick) and quit work (since the iPhone goes to work for me dressed in my clothes, and is actually better at my job since it says "Boom" and "Wouldn't it be cool" all day and co workers caress its UI). I now live in South Beach in a 10,000 sq ft condo I bought for $100 (down from 10 mill) just flaming innocent folk on blog posts all day.