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  • Apple's Q3 Bonanza: The Real Story May Be Not Quite So Bullish [View article]
    Wow, MB's articles sure brings out the shrill commentary. He catches more attention than a loud fart in church.
    Jul 27 06:40 PM | 1 Like Like |Link to Comment
  • Apple Earnings: Gross Margin Drives The EPS Beat [View article]
    Apple's gross margin decline resulted from the growth of the iPad and its relative portion of the revenue mix, particularly the launch and growth of the iPad Mini. And now it gross margin accretion/recovery is precisely because of the decretion of iPad in Apple's relative revenue mix.

    Weirdos that kept on harping on iPhones' "increasing competitive vulnerability and loss of market share from price competition" never could understand or understand that their theses was contradicted by the fact that Apple's iPhone ASP actually didn't move much from the low to mid $600's.

    Here we go again to bring out the zombie shorts to paul revere "OMG the iPhone ASP is cr*pping through the floor", when in reality it is a mix shift in iPhone to improving market acceptance of the 5C and its greater impact on ASP for iPhone. Initially the potential impact of mix shift to 5C was masked by the far greater success of the 5S relative to the 5C models during first couple of quarters of launch. Now we see that the ASP for iPhone is starting to illustrate that mix shift as the 5C gets an increasing portion of the overall sales mix. But I agree with author that Apple's margin beat during 3Q despite this shifting mix to 5C (or 4S if you believe Michael Blair) suggest the COGS of the 5C is quite competitive in order for Apple to increase consolidated gross margin....and because shrinking lower margin iPad sales.
    Jul 25 05:27 PM | 2 Likes Like |Link to Comment
  • Apple's Q3 Bonanza: The Real Story May Be Not Quite So Bullish [View article]
    "If I am right"...

    but MB, you weren't right, because you can get to the same overall ASP if you did not inflate the ASP for the 5S model like you did. Get to the same answer on overall ASP without your conclusion (that discounted 4S is flying off the shelves) if 5S ASP is $30 less.

    And do you know why you clearly aren't right -- look that the gross margin beat from guidance. Some of that was from lighter iPad volume (which are much lower margin, especially the Mini), but the other is precisely because the 4S did not hugely impact volume mix rather than how you posited.
    Jul 25 05:11 PM | 8 Likes Like |Link to Comment
  • Quantifying iPhone 6's Potential Cannibalization Of iPad, It Is Not Pretty [View article]
    iPhone 6 Pro's gross profit dollars is almost twice that of an iPad Mini (it's closest screen size likely to be displaced). Tell me why that is a bad thing? Oh, you didn't know that iPad Mini's have 20 pts lower margin and half the ASP of an iPhone?

    Enough said.
    Jul 24 12:19 AM | Likes Like |Link to Comment
  • Why The IBM-Apple Agreement Could Fail [View article]
    BBRY is only more secure at the device level but it is becoming extinct. Enterprises are not going to trust / rely on the device OS to protect security. They are going to force solutions vendors to develop app solutions that leave the data in the enterprise's private cloud and only send minimal encrypted data streams that are decrypted within the app itself to wall it off from the rest of the device. In other words those selling hyper security solutions will not accept the security weaknesses of any of the mobile devices and instead design their solutions expecting device security flaws. These are not off-the-shelf mass market consumer apps but rather high value B2B (high priced too) designed to serve the enterprise needs. They will bias to iOS because Android is fragmented, and BBRY is not even in the discussion. BBRY sole claim to fame is security in an email context - it has no presence, ZERO, anywhere in many of the custom applications (largely relational database management) that characterize enterprise application solutions -- and besides, no enterprise application developer would make it through investment decision committee to actually invest in resources to develop a solution that operates on BBRY 10 as its devices are seen in the wild only slightly more frequently than Big Foot sightings.
    Jul 23 06:14 PM | 3 Likes Like |Link to Comment
  • Why The IBM-Apple Agreement Could Fail [View article]
    Blackberry killed Blackberry....
    Jul 23 05:54 PM | 1 Like Like |Link to Comment
  • Netflix: Weak Management Guidance Should Concern Investors [View article]
    Why do you suppose that each of HBO and AMC enjoy in excess of 30% margins? Why are their content costs not going up massively? Why dont their content suppliers such as Universal, Fox, Warner, Lionsgate, have massive pricing power? Maybe because you have no clue and it just sounds good to say as a fact that "content prices are going up".

    Netflix is spending more on content because it is adding geography -- content is licensed by region, and Netflix is spending more because it can. It can spend more budget because its revenues are growing at 25%+. AMC, STRZA, Showtime and HBO's revenues are not growing at same rate as Netflix's, and there is something in business called "budget" where they manage their costs budget based upon expected revenues less they deny their bosses the operating margin that mgmt promised (and are incented to deliver -- no make numbers, no jewelry for GF/BF).

    Netflix's output contract with Disney is long term based upon number of films per year and guard rails tied to box office (a lot of mega hits, then each film's license goes up; more dogs, then those film's license fee goes down). Since signing the deal 12 months ago and it's not even initiating until 2016 (and assume it's only a 5 year exclusive deal rather than the longer one that Disney had with STRZA previously), where do you see "pricing" going up. Almost all production deals gives the network options to extend/renew for additional seasons -- and yes the networks will increase the budget per show over time if it is economically rational for them to do so (like the big raise to the Friends ensemble after the 6th season) but that is because talent whacks both the production studio (its profits) and the network. Or the network can just cancel the show. Historically another network doesn't pick up a dropped show that is successful (the original network have ROFRs). Only recently have you had Netflix being the first to "refresh" dormant franchises (such as "Arrested Development") when the original network's option ran out or passed (like the last season of The Killing that is now a Netflix original).

    Where exactly is all this price competition that you have seen? Rumors of Big Foot abound but it is frankly more of your imagination.
    Jul 23 11:44 AM | Likes Like |Link to Comment
  • Apple Earnings: Ecosystem Contraction Playing Out; Regulatory Risk Looms In China [View article]
    Apple is a "home grown" phone in China. HonHai is hiring an additional 100,000 in China factory just for the iPhone 6 Pro launch. From day 1, every single iPhone has been made in China except those intended for Brazil which are sent in kit form to Brazil for "final-final-final" assembly to comply with Brazilian local content regs (just like all other OEMs).

    BTW, I opened the back of my Samsung flag ship phone -- yep "Made in China"

    In fact pretty much all smartphones are made in China, including almost all final assembly and most of the components are fabbed there as well since most the chipmakers have moved their production capacity to be near final assembly.

    If you know absolutely nothing of what you are talking about why spew nothingness?
    Jul 23 10:42 AM | 4 Likes Like |Link to Comment
  • Why The IBM-Apple Agreement Could Fail [View article]
    No one is going to bet on BB as no user will be "bringing" those devices. You think Android is more secure than iOS? Which version of Android as there are 5 flavors out at any time - you think that makes it more secure? The reality the type of apps and software solutions that have value in the enterprise segment are going to drive to the tablet devices first rather than on smartphones. Tablets are not BYOD devices as the applications that an enterprise wants to migrate are corporate centric and the device budget displaces laptops.

    P.s. Written on a corporate issued iPad.....
    Jul 22 11:08 PM | 5 Likes Like |Link to Comment
  • Update: Netflix Winding Down DVD Business [View article]
    pauldeba has been talking about bankrupting Netflix for as long as I can remember. The DVD business is entirely different thant he streaming business. the former is based upon first sale doctrine which means there is no licensing limitation -- however, Netflix has agreements with the major studios for significant wholesale DVD discounts (also avoided costs such as no packaging) in exchange for Netflix agreeing to delayed release up to 60 days from retail release of the DVD. Outerwall doesn't agree to this (and pays higher through wholesale distributors) because its Redbox kiosk business is more reliant upon impulse and early release customer.

    100% of the Big 6 Studio new release movie content (and the bulk of the remaining except the small independent studios) are PRE-COMMITTED to EXCLUSIVE licensing windows (definition in Websters is that only one guy gets the show it in the subscription pay cable 1 window when it first is available for streaming or broadcast to paid subscription providers -- this is AFTER the PPV or rental window). Universal-Fox-Warner are with HBO, Paramount is with its own Epix, SonyColumbia and Disney are with Starz (all of Disney are going to Netflix after 2015).

    So sherlock paul, the DVD business is during the NON-EXCLUSIVE DVD and PPV window, and everyone and there brother (WalMart, K-Mart,Best Buy, Amazon, Target) can sell the same physical product, and then again everybody and their brother can rent the PPV product: any of which includes cable PPV, via internet streaming, or physical DVD rental. Those that offer "rental" on a pay per rental or PPV basis include: cable/sats, Apple iTunes, Amazon, GooglePlay, SamsungMedia, WalMart'svudu, Redbox, Netflix DVD (on self-determined delayed release), etc. Everybody within this window have non-exclusive access to all the content. The digital / broadcast version of this content (i.e. non DVD) will GO DARK and be unavailable during the the EXCLUSIVE pay cable 1 subscription window tha thave been licensed exclusively by HBO/Showtime/Netflix/S... etc. Epix has subsequently sub-licensed Paramount, LionsGate, and MGM studio output on a 90-day delayed release basis (so-called pay cable 1.5 window) to each of Netflix, Amazon Prime, and Redbox Instant.

    So the scenario where Netflix DVD "moves its" deep library and early release content to streaming service is not possible given current licensing regime, AND, the fact that Netflix's positioning is a deep and broad library as opposed to "immediacy of recent releases such as RedBox plays (Redbox has limited shelf space in the kiosk to house a deep library silo'd in each kiosk and its business model is premised upon velocity of rentals and utilization), means that Netflix's DVD service is literally the only place to rent that "deep and broad library" solution.

    Netflix's mail delivery service is dependent upon USPS who tried cut all mail delivery service on Saturdays but Congress would not allow that so USPS has instead cut back everything except first-class and premium services.

    There will be a core DVD-by-mail customer - think of the vast parts in rural america, where their nearest access to a general store is 5 miles or more, let alone a super market or a WalMart. That guy gets a subsidized delivery system from the USPS -- his cheapest form of transport is DVD-by-mail, and he probably doesnt even have the bandwidth for streaming (but may have access during the PPV window from his cable provider on recent release content). Nobody can offer the deep content library (its not economic other than on a scaled distribution center basis to aggregate/cache physical content inventory).

    the key is that Netflix has proven that it can manage the DVD-by-mail business (as it always said that it could) as a pure variable cost business so that it can maintain percentage margins (actually it has grown them slightly due to cut-backs in marketing costs) even as the revenue base shrinks. So Netflix is exercising the classic business strategy of milking the cash cow in order to redeploy the cash contribution elsewhere to fund the streaming business which is in capital consumptive stage of development.

    Getting out of DVD, or claims that the DVD business will become unprofitable, or that the DVD business will totally disappear are all naive statements at best, or simply blissful ignorance. The only one scenario where that may be different is if the studios never made any of their content available on DVD's -- and the margins for the studios are simply too high for the studio to consider that for now. It's true their digital COGS is even lower, but the rev share toll extracted by the distribution bottlenecks (remember all those useless "middlemen") still makse the physical content distribution more attractive economically to the studios.

    Jul 17 05:30 PM | Likes Like |Link to Comment
  • An Office And Industrial REIT Positioned To Deliver Alpha - Chambers Street Properties [View article]
    what is your view on overall macro issues such as the rising interest rate overhang on entire REIT sector? wouldn't steepening yield curves and higher absolute interest rates put a ceiling on yield stocks like CSG and other REIT stocks?
    Jul 12 09:41 AM | Likes Like |Link to Comment
  • Iron Mountain's Growing Dividend And REIT Status Should Attract Investors [View article]

    Dude, you are looking at the Australian entity Iron Mountain Mining Ltd. There is also a Canadian entity (Iron Mountain Ltd.) also with same name that is a jobber and maintenance shop for pulp mills and sawmills.
    Jul 9 01:44 PM | Likes Like |Link to Comment
  • Chinese government calls for phone subsidy cuts; UBS sees iPhone impact [View news story]
    just because some idiott speculates that this is a protectionist move, don't believe it.

    100% of iPhones are made in China, and pretty much every single other OEM's as well.

    I just opened the back of my Samsung Galaxy -- guess what? "Made in China"

    There is no "protectionist conspiracy". the gov't watchdogs don't feel that chinese consumers should spend beyond their means and the large subsidies are compensated with higher recurring service fees so the high subsidies on higher priced phones acts as what is viewed as an undesired inducement for the chinese consumer of limited means to over extend themselves financially. Very paternalistic gov't those chinese.
    Jul 9 01:18 AM | 1 Like Like |Link to Comment
  • Apple: Time To Scrap The iPod [View article]
    iPod Touch has the one thing that iPhone doesn't have -- it strips out the QCOM com processor and saves a bunch of cost in order to deliver a lower ASP. The Touch is exactly the screen size as the 5c/5s and has all the functionality except the cellular connectivity. therefore without the $50-$100/mo bill.

    iPod is the gateway drug intended to introduce trial and seed the addiction
    Jul 6 09:24 PM | 2 Likes Like |Link to Comment
  • Don't Tell The iWatch What It Can't Do [View article]
    there were all these mini-CD players and portable MP3 players before iPod showed up and totally re-imagined the user interface.

    there were all these MS-DOS-based PC's and even Apple's own, until the Mac showed up with a different user interface; Of course Xerox had been working on that 10 years before.

    interesting that 7 years later, Apple introduced the iMac using NEXT's operating systems that was re-named OS-X. Of course everything it did, mostly, was also done by Windows.

    By the time of the introduction of iPhone, there had been many years of "Smartphones" (originally coined by Compaq for its iPaq) relying on the Palm platform and RIM. They all could access the internet by 2007. So what the iPhone "could do" had all been done before.

    At the introduction of the iPad, others had conceived different forms of mobile computing, including laptops, netbooks, and other PDA and tablet type devices (even Apple's own failed Newton). So the concept of mobile or portable computing was certainly not new.

    The point is that nothing is EVER new and almost any new successful product that resonates with the mas market all had previously failed versions that had various "pain points" for the consumer that the ultimate successful product eventually solved -- but almost everything it "did" was done before but maybe not in the same seamless and effective user experience.

    I agree with you that we have no clue whether this new iDevice will be successful but just because other have conceived similar functionality and may or may not have more success doesn't mean that it is certain there is no opportunity for Apple to iConceive the product and user experience differently. I certainly wouldn't "pay up" for this unknown iWhatever, but I think the bet is well paid for by the existing cash flow stream and expectations of a robust iPhone refresh cycle with a free option on maybe some unknown iDevices. Hell, iBeats headphones is a $1.4B business out of the box; who know whether that has legs to become a $3B biz relatively quickly leveraging Apple's distribution footprint and marketing prowess.
    Jul 3 07:00 PM | Likes Like |Link to Comment