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lichan

lichan
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  • A Cheaper Nuance By The Day [View article]
    I picked up some for 19.35. Wrote a out of the money call option at strike price of 20 expiring in March and earned a small 0.50 cts. But 0.50 cents is roughly 2.75% of 19.35 and if I can do something like this each month, then - well, you get the picture. I don't believe NUANCE is going to run up in a hurry for the next few months.
    Feb 13 06:48 AM | 1 Like Like |Link to Comment
  • Apple's Bright Spot In China - Not Really That Bright [View article]
    As you might have notice from my name, I'm chinese, though not from China, but I visit usually more than once a year and speak Mandarin, have relatives there.

    I think Apple should build a bigger screen phone and stay in the upper end of the market. It should also build a mid level phone which is sufficiently differentiated from the upper end phones. The average chinese consumer is still very very cost conscious -they save a lot of their disposal income. That said, there are also the Chinese consumer which is very brand conscious - hence the upper end.

    I understand trying to do both could be very very tricky for Apple. But I happen to think that it is important to hold on to sufficient market share so that developers will create apps in China for the chinese. For that, I believe you need a critical mass of market share from the middle level and the high end.
    Feb 5 12:07 PM | 1 Like Like |Link to Comment
  • Apple's Growing Channels [View article]
    My understanding from past work with other manufacturers is that under US GAAP, the practise is that revenue is recognised if title and risk of loss passes to the distributor. When title and risk of loss passes can vary from company to company. Variation can be for example, whether the delivery is FOB or CIF. In the FOB case, the revenue can be recognised as soon as the product leaves the factory premises because the Distributor takes title and risk of loss once the product leaves the manufacturer's premises.

    If the distributor agreement states that title and risk of loss does not pass to the Distributor until it reaches the docks of say - Australia, then Apple is responsible until the product reaches the relevant Australian port. Technically, Apple should NOT recognise revenue until it reaches the Australian port. Whilst on board the ship, it's still Apple's product and part of its inventory for accounting purposes.

    Apple has far more bargaining power than most companies viz a viz their distributors. I'm guessing that Apple can recognise their revenue at FOB, if it wishes to.

    The other problem with companies which use distributors is called Channel Stuffing. I don't suppose Apple needs to engage in channel stuffing it's distributors but technically, it can happen. Channel Stuffing occurs usually at the end of a quarter. The manufacturer makes it's distributors/channels purchase say 25% or 50% MORE than what the distributor really wants. The manufacturer may do so by offering discounts. The manufacturer makes it's quarterly or annual numbers. Distributor can lower the price of the products sold with discounts etc to increase demand for it's products. This tactic can of course negatively affect margins. Also, if the product sucks then at some later stage, you won't be able to push the channels/distributors to buy more. Depending on the terms of the channel stuffing, the manufacturer may even have to reverse it's revenue as it takes back products from the distributors which it had overstuffed. But you know, meeting that all important year end quarterly figure may be enough of an incentive to stuff your channels in the short term.
    Nov 27 01:20 AM | Likes Like |Link to Comment
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