goofyfoot5's  Instablog

•  I am long RIMM at a loss of course. When I listened to the call I was crushed by the delay in BB 10 phones but they seem to have a road map for a resurgence in their fortunes.
  Marketing is extremely important here in that it BB has lost its cool factor in US. The Samsung commercials will help RIMM calling into question buy the counter-culture "creative" coffee pushers will buy AAPL products as a statement to their coolness even though the product doesn't merit it. It was the same with RIMM as in Crackberry while it had an awful browser and layout. It catches up with a company eventually.
  I own 2 Playbooks (one for my wife) and it is a fantastic product. The bridge which people diss is great as I save $360 or more a year by not needing another data plan and don't have to pay a couple hundred bucks for a 3g iPad or Android tab. In Feb I'll have most or all of the Android apps. The screen is so sharp and bright you don't need the bigger screen and it fits in my breast pocket in most of my sportcoats. The Italian style suits pocket is too small. They have to market these attributes.
  I think management gets it and has a good plan. Bringing in new management and having them get up to speed would waste time and add risk as in Leo at HP.
  The industry knows well that QNX is far better than Android which Google bought when Harman wasn't into selling Canadian QNX. It's the kernel design that has quietly made it better than Unix to apps and industrial software due to its very small basic kernel then able to effeciently hang things like aspects of other OS's as if it was part of ITS OS. Amazing... Google would loved to have had it instead of Android but its too late for them. Unfortunately somebody like Oracle will offer $25 or $30 and steal this company to integrate it into their TOTAL corporate offering with QNX AND BES then massively increase data center with SUN servers and tighter integration of JAVA into it all. If we go long term RIMM would sell back to $70+. KIM RIMM is a system/platform company that sells phones which is repeat business where APPL is as good as its last manufactured offering except for iStore and is why they are trying to move to the cloud where they have no edge and a lot of competition.

Why is it that we have essentially the World saying that Apple is cheap, the multiple is low, the growth is high and so on but the stock hangs around $600?

Because it is essentially a manufacturing company of premium products that has filled the needs of the premium buyers and although they will upgrade most of them to future products there will be some slippage. That slippage will be taken up by greater market penetration to make up for the non upgrade of current users as upgrades become marginally less meanful (law of declining marginal utility) and competitors become stronger and offer phones that fulfill specific needs that a "one size fits all" doesn't.

Yes, you will say, they have the iStore and iCloud which is recurring. Well yes, but not so fast. Say with music. You load all your favorites when you first go on, maybe 500 songs. The following is incremental as new song come out such that in the first year you may add the 500 then you may add 200 the seond year, 150 the third year then maybe level out where Apples revenues become dependent on hit tunes--not good for rapid growth.

If we look at the iCloud, it is a good integration idea for their platform, but they are late to the party.

Apps are great but having 200,000 or 2,000,000 doesn't matter as the tops apps garner most of the revenues. Video downloads could be a source of growth, depending on the deal, but remember, Google owns Utube.

iTV. Will a better user interface cause me to junk my 2 y/o big screen, bright 1080p 3D(useless) TV. They may have the Retina display in the set. Great, but they have to have a circuit to make it much sharper than 1080p and the fact that the best broadcast is 1080i and frequently at 720, they have to work with the signal sent.

Let us not forpet the carriers. As the iPhone platform matures they are going to push back and put pressure on Apples and Android's for that matter, margins. The following point is important not only for Apple and Google, but for Microsoft and RIMM as well. The carriers DO NOT want a duopoly in smartphones. They very much want at least 3 maybe 4 platform suppliers to keep the competition strong so that particularly Apple can't price gouge the carriers. Retailers as well want more platforms. Note that Costco doesn't offer any Apple products.

So there you have it. Apple is probably priced about right here +/- 10%. With the cash they have you might get a big pop on a special dividend and then an INTC/MSFT type dividend through time. But saying it is sooo cheap is doing what I have seen for many years. It is linear extrapolation, just taking the current growth rate and extending it on a linear basis. Housing, internet are examples among many.

I would recommend you think about this against your conviction that may differ.

Disclosure: I am long INTC.