David Lentz

Is the iPhone Slowing AT&T's Network?

"Is the iPhone Slowing AT&T's Network?"

Or the alternative view,

"Is AT&T's feeble attempt at a broadband cellular network inadequate to the task?"

Either way, we are looking at the same coin. In a static, regulated-market-share market, AT&T could merely raise prices on its unlimited data plan (or raise prices on other parts of its network, milking its captive landline customers, for instance). But in a competitve marketplace, AT&T must either beef up the services it is selling or lose market share.

If losing market share to Blackberry, Android phones, and the Palm Pre is not satisfactory to Apple, they have only one choice -- expand the iPhone empire to other carriers.

I suspect that at this point, it is beyond the capabilities of AT&T to beef up its networks fast enough to stem the rise of competing smartphone market shares, and that means Apple will open up iPhone distribution.

Same theme as the above article. I'm not as confident that the first non-AT&T iPhone carrier will be Verizon, it will instead be whomever offers the best deal on coverage (subscribers) + bandwidth + iPhone subsidies. It could easily be T-Mobile (except for the part about subscribers), or (my favorite alternative) Apple could simply buy its own carrier.

Sprint looks ripe for the picking, especially with its beachhead in WiMAX. Apple could easily buy Sprint with a cash+stock offer.

AT&T, Apple Can't Win Fight Against VoIP

Check out GOOG's available cash and then check Sprint's market cap. It's a doable purchase, easily done via a combination of stock and cash.

If/when that happens, ATT will use every trick in its (very large) book of bribery and political influence to block it. But eventually, ATT will face genuine competition, if not from Google or Verizon, then from a foreign telecom company willing to spend the money to install technology that is far superior to the penny-pinching inadequate band-aids that ATT touts as being "technology".

Wireless makes it easy to put up a national network in a very short time that negates the 50-year-old copper infrastructure (plus a little fiber) that ATT continues to milk for all its worth, all the while charging some of the highest rates on the globe to its captive customers.

On Aug 01 05:17 PM nmelendez wrote:

> When Google comes out with it's own network plus apps, Apple and
> AT&T are gonna be toast. An i am not even mentioning sprint,
> palm and vonage.

AT&T, Apple Can't Win Fight Against VoIP

Last timer I checked, ATT was a regulated utility, granted EXCLUSIVE rights to certain markets and being guaranteed profits in exchange for agreeing to abide by some form of public control. If they want to compete in the open markets, abandon those rights and compete with Verizon on to-your-home connections.


On Aug 02 10:35 AM daniel3582 wrote:

> Am I missing something here? Didn't ATT spend years and years
> and tens of billions of dollars to build a wireless network from
> the ground up? What right does Google or the US government have to
> come in and tell them what to do with it?
>
> I'm really searching for a good answer here... feedback appreciated.

Bonds Signal Fed Should Start Raising Rates Soon

I've been hearing the "deflation is dead" story throughout this year. When one looks at the statistics that supposed "prove" that case, and step back an look at a 2-3 year interval of data, it always becomes clear that what has been mistaken for an upturn is merely statistical noise.

So long as the economy continues to shrink, with retail sales trending lower and unemployment higher, deflation is still alive and well in the economy. It may not be the roaring force that it was a while ago, but it is by no means dead. If it were, we would see gold quickly jump past 1000 and head skywards. But when we look at the broader monetary aggregates, we see M2 (and if you look at shadowstats.com, the reconstituted M3) trending lower.

Deflation isn't dead, it's just catching its breath. For the Fed to kill deflation, they would have to either print so much money that they would also kill the dollar, or else they would have to go after the banksters, and erase the hoard of toxic debt (masked by the mark-to-model rule) via bankruptcy. Neither seems likely to occur.

MacWorld to Follow Floppy Disk Into Extinction

One might look upon the series of "Special Event" webcasts/keynotes this past year as a test run to see how product rollouts do when they are not bunched together in January (AFTER the biggest shopping period of the year is over).

I've thought for years that Apple was nuts to announce new products in January -- instead of just before Thanksgiving. I'm glad to see them making some changes to do away with that practice. I'm sure it was a problem within Apple to target product rollouts to a specific extravaganza in January.

Much better to serve the food as soon as the cooking is done, rather than trying to artificially target a predefined serving time.

Apple Falls Flat as Market Rebounds - Is There Really Investor Confidence?

It's all kinda eerily reminiscent of the gold bugs, and their chants of "gold is money!". After a few months of tanking gold prices, while the Fed was doing exactly what they thought would cause gold to explode, the gold bugs learned to quietly (well, almost quietly) watch the markets and take their cues from the markets instead of their beliefs.

Sadly, it appears that the tide is starting to turn for the gold bugs, and the evening air will soon be filled with their shrill cries once more.

Apple Falls Flat as Market Rebounds - Is There Really Investor Confidence?

Zach, I am comforted by the still-vociferous AAPL fanboy community that I am not missing the boat by having sold my AAPL LEAPs a while back. I plan to use some of the proceeds to buy new Macs in the coming year, and reinvest the rest when we approach lower levels (60? 40? who can say? the market's crazy). There can be no definitive rally in AAPL until the chorus of boisterous fanboys are subdued by their rising losses.

Amazon, Apple, Google: Buying on the Way Down

Averaging in as one approaches a bottom is not a Bad Thing, not even an especially Risky Thing.

But determining approximately WHEN a bottom is at hand is A Very Risky Business.

Consider that IF this is truly the collapse of a global credit bubble, and not merely a housing bubble, that the bubble may still be inflating and has not yet exploded. Numbers of the amount Total Credit (government+corporate+... seem to show that it is still expanding, despite the gratuitous implosion of a lot of toxic debt and shrinkage of portions of the debt markets. Apparently, Ben Bernanke and other central bankers, intent on inflating our way out of deflation, have been creating credit at a sufficient rate to create a net expansion of the credit bubble. A pity that most of the credit they have created is being hoarded by those who got the bail-outs.

Imagine if, just as the housing industry is approaching a bottom -- say, sometime in the summer of 2009 as various mortgage restructuring programs build up a head of steam -- and housing prices are within 10% of having bottomed, suppose that the credit bubble finally pops. The most likely sign of that at this point would be a cascading series of sovereign defaults, with the USofA somewhere along the chain.

What do you think AAPL, GOOG and AMZN will be trading for at THAT point? And how long will poor Fred have to hang onto his purchases until they are breaking even? The only way Fred's scheme works is if we have a V-shaped recession, and if we are somewhere close to the inflection point. We could easily have neither of those things be true.

Granted, this is a worst-case scenario. But a better way to attempt value-based investing is by following the tenets of Ben Graham, the way Warren Buffett has tried to do so over the years. That methodology is a MUCH better way to pick entry points for purchases during troubled times.

Risks Remain, But iPhone's Fundamentals Should Help Apple Surpass Expectations - RBC Analyst

Ranchr -- I agree most emphatically. Here in the Ohio Valley, I visited the Keystone Apple Store a couple of days after the new Macbook roll-out. The rest of the (upscale) mall was deserted, with the Apple Store being the only place with any customers at all.

That said, the traffic at this particular Apple Store on that particular day was the lowest I have ever seen, with about 2/3 to 3/4 of the floor space being unoccupied (as opposed to the 10%-20% that is the norm). Not many were exiting the store with purchases. I plan to check again on Black Friday.

My guess is that Apple will see a modest (25%, maybe 35% worst-case) drop off in sales volume on a year-over-year basis in the next two quarters. That will move it even farther away from the rest of the consumer electronics field, as nearly all of the rest are going to be struggling to turn a profit. And I suspect that Apple's emphasis on the consumer, rather than the corporate markets, is going to serve them well, as I doubt that ANY corporations are going to be refreshing their PCs for a couple of years. Consumers will do the irrational thing and blow their last paycheck (literally) on iPhones. HPQ is gonna get hurt, big-time. And Dell just might be extinguished.

General Electric Moves On Down the Largest Company List

An interesting additional thing to have shown would have been the percentage change in their market caps. Without looking, I'm fairly confident that the market cap of every company listed is smaller today than it was a year ago.

If one looks at these in terms of industry groups (financials, manufacturing, consumer staples, etc), there is a clear rotation. Again, this isn;t exactly news either, but it's a nice way to quantify the sector rotation.

Will Apple's Q1 2009 Revenue Estimates Be a Blowout?

ummm ... I see no mention of the reports of a 20%-30% reduction in Macbook orders to manufacturers.

Maybe robust iPhone sales can propel the comply to exceed analysts expectations.

Prolly a Good Idea to hang around a local Apple Store over Thanksgiving weekend and see how many people are exiting the store with new purchases.

Rampant enthusiasm for stocks -- any stock -- tends to tell me that we have a long way lower to fall.

Full disclosure -- I may be buying a couple of new Macs in January, depending on what they announce at MacExpo and what the pricing is like.

Apple Could Crush Competitors With a $99 iPhone

While I am certain that cheaper iPhones are in the future (just review the history of iPod pricing), it is not in Apple's game book to pump out lowball products. There wasn't an $800 Macbook, and the Mac mini, the cheapest Mac available, is cheap only when you consider the package you are getting for the money. In terms of absolute dollars, the mini is a lot more than the $300 and $400 junque PCs you see at places like Wal-Mart, that are matched in price only by their ability to do work.

When you figure out how Apple can make 30% margins on a $99 iPhone, then you will see it happen -- but chances are, Apple will figure out how to do that before you do.

I know that they will NOT get there by stripping out functionality.

How Low Will Apple Go?

While I am certain that the coming quarterly financials will be another blowout number, the stock price reflects the future, not the past. I visited the local Apple store yesterday, to check out the new notebooks, and while there were people buying them, the place was emptier than I have ever seen it before. While in the past, the available floor space is usually AT LEAST 50% occupied by customers (or wannabe customers), and usually more like 75%, yesterday it was well under 25%.

Don't count on the Christmas quarter being anything at all like the preceding 3 quarters, and the one after that will be worse still. I like AAPL, but there's no point in foolish expectations. I'll buy in when I see consumers returning to the stores.

Also, the lowball earnings guidance should set new lows -- it will be interesting to see how Oppenheimer pitches the guidance next week.

Deflation Changes the Rules

But-but-but ...
how could Google buy AT&T and still keep its corporate motto?

Awaiting Apple Earnings and Guidance

One last thing when contemplating taking Apple private -- there are not many investments for that amount of money that return in the range of 25%-30% (Reuters reports Apple's return on equity to be 27% for the last 12 months).