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Kevin Murphy

Kevin Murphy
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  • Apple: Big Opportunity To Create Value In Mobile Payments [View article]
    Seems to me that the article & comments miss the real revenue opportunity for AAPL.

    Credit card fraud is a being problem for Visa, Mastercard & their banks. ApplePay helps to reduce the opportunity for fraud. Once enough history is collected on the rate of fraud that happens with ApplePay transactions, the value will be clear and proven. At that point in time AAPL's share of transaction fees can double, and eventually approach 0.40.

    That becomes a lot of money dropping to the bottom line. As Stone Fox points out, this is very high margin income.

    I don't think AAPL wants to do without the card issuers, the world is simpler for them, as others have pointed out. They are much better off working in partnership with them as it cuts AAPL's costs to the bone. Besides, if they tried to move in on the card issuer's turf, they'd have a fight on their hands that would essentially kill a very profitable business that is easy to administer.

    I look forward to an increase in dividends, part of it falling down from the ApplePay tree.
    Apr 1, 2015. 10:00 PM | 3 Likes Like |Link to Comment
  • WSJ: Apple talking Web TV service for fall launch [View news story]
    I have an antenna -- hi def broadcast, quality is better than cable.
    Mar 16, 2015. 10:46 PM | 4 Likes Like |Link to Comment
  • Why Is Apple Making A Gold Watch? [View article]
    Will they sell 1,000 gold watches? Almost certainly. This is $1 billion in revenue, which would cover all development expenses for all models of the watch, plus the cost of making the thousand watches, plus contribute some profits.

    Look at this as a business decision. Everyone reading this publication is an investor or has investment interests. As an investor, I'm more than pleased. This is a great way to make money and leverage the brand.

    And I can buy the same thing for $400. Pretty good deal for the little people like me.

    Someone made a comment already that it's possible to replace the guts of the watch, and AAPL will probably have such a program. I'd be surprised if the gold watch does not come with a guarantee that the watch internals will be upgraded for free for 1 or 2 product iterations, maybe more.
    Mar 12, 2015. 07:14 PM | 9 Likes Like |Link to Comment
  • Notes On Cars (And Apple) [View article]
    If it can see the potholes when it's raining and the pothole is filled with water, that would be very impressive.
    Mar 2, 2015. 10:45 PM | 2 Likes Like |Link to Comment
  • Notes On Cars (And Apple) [View article]
    I think GOOG is doing that...

    plus developing an app that causes rainbows to shine whenever Google cars are on the road
    Mar 2, 2015. 10:38 PM | 2 Likes Like |Link to Comment
  • Notes On Cars (And Apple) [View article]
    Maybe AAPL is onto something else? Why go to all of the bother of going to Hilton Head. AAPL can make a virtual reality machine that I'd keep in my garage - a VR Car. Then all I'd have to do is get in the VR Car, select Hilton Head, it would take me there and show me around.

    The windows would all be LED screens and it would be exactly like the car went to Hilton Head, except much more energy efficient. Think of the industries that could be disrupted - cars, hotels, gas stations...

    It could even have a little kitchen window, in the trunk. It would replicate local cuisine -- some good Carolina BBQ, or maybe some crawdads, hush puppies etc. I don't think AAPL wants to get into the grocery biz, so they'd farm that part out to AMZN, which would deliver the stuff via drone to the garage & from there it's put into the kitchen/trunk & from there into the car via the service window.

    What to do once we get there? How about going to the movies, or a rock concert? They would appear in the windows while I ate my popcorn in the car's lounger.

    As in most markets, porn would be the initial killer app. The early cars might be x-rated, and replicate my 1st trip to the drive-in movie, with some nice robotic features.

    By golly, I think we've broken the code...
    Mar 2, 2015. 07:51 PM | 8 Likes Like |Link to Comment
  • Micron: The World According To NAND [View article]
    I wonder why those who wonder where all the new data will come from cannot see some obvious sources.

    - By the end of this decade every cop in the US will be wearing a data cam that uploads the cops workday in video format to some data farm.

    - There are more street cameras recording intersections, toll booths, store fronts, ATMs, cash registers and so on every day.

    - Street views on Google & other map apps are updated more and more frequently.

    - Defense departments create more and more visuals.

    - Mining companies are mapping more and more data.

    - Shipping containers can be used as bomb delivery media by terrorists and the infrastructure for monitoring every container in the world 24x7 is already scoped out by companies that own these containers.

    - I think security (national & property & personal) will soak up tremendous amounts of data.

    - Cameras on cell phones take higher density photos & films with each new iteration. Social media continue to grow.

    - Advertising via PC and cell phones gets increasingly sophisticated, especially visually.

    - Education is moving online -- Stanford, Harvard, and other major institutions have created online courses, which can reduce the unsustainable costs of a good education.

    - Medicine is moving online, with X-Ray & MRI images being cataloged and stored in huge medical databases.


    There is a lot happening to soak up data, and most of it is outside the traditional enterprise applications that your grandfather worked on -- and that this particular grandfather worked on as well for a couple of decades.

    One thing that really kills me is how I was incapable of seeing how Google search, for example, would disrupt traditional advertising media. Now my eyes are opened a little bit to future apps, and I don't want to miss future innovations that are essentially data dependent.

    Thanks for the fine article and all the comments.
    Feb 20, 2015. 11:43 AM | 17 Likes Like |Link to Comment
  • Apple Entering The Car Sector? Why This Could Be Its Next 'Large Numbers' Move [View article]
    My guess: APPL will fold the car business into the home control business, and take on another huge industry while they are at it -- the electrical utilities.

    Imagine this scenario:
    - A fuel cell in the garage, running on NG.

    - Fuel cell makes enough electricity to charge the electric car.

    - Fuel cell makes enough electricity to run the home.

    - AAPL provides the intelligence to manage all of this, including the base load and peak loads of power to be made.

    The fuel cell and power/home management can be used with any battery driven car -- or any that integrates with AAPL's design criteria and interface specs.

    The AAPL car integrates seamlessly, maybe provides the best driving experience, but it is not essential to the goal of putting fuel cells into homes. The car battery can also be used as backup energy for the home, when it is parked in its station (in the garage, or carport, or parking spot in the condo garage).

    This would be a cool way to integrate several projects that AAPL seems to be working on as separate efforts.
    Feb 19, 2015. 04:22 PM | 2 Likes Like |Link to Comment
  • WSJ: Apple car project is for real, and it's a minivan [View news story]
    Lots of outsourcing in the auto industry:

    Johnson Controls does interiors and electronics. Harmon does electronics -- like entertainment systems. The servo motors the lift windows are outsourced. Entire interiors of car doors are outsourced. Transmissions are outsourced to a great extent... and let's not even talk about batteries, for trad cars or hybrids or electric cars. I mean everything -- seats, switches, dashboards, locks, glass... for virtually all cars.

    All these suppliers would be more than happy to work with AAPL to develop a new car. And perhaps cover the costs of R&D for the project.

    I'm just puzzled by AAPL wanting to get into such a business.
    Feb 13, 2015. 09:49 PM | 5 Likes Like |Link to Comment
  • Apple Numbers Get Serious [View article]
    Good article, but I think your concern is unwarranted. My guess is that Cook, as a very savvy manager, understands exactly what you are saying about the huge market cap of AAPL being a potential sea anchor dragging down the future price of the stock. So what to do about it?

    How about splitting off separate business units?

    Here are some ways they can do this:

    - Payments processing, if it takes off as it seems to be doing now, can be a business totally separate from the hardware segment at some point in time.

    - Apple TV, if it goes in the direction that some expect it to, can be a separate business.

    - Devices, like Macs, MacBooks, tablets and phones can be separate.

    - iTunes can be a separate business, at some point.

    - Healthcare apps, delivered via Apple devices, can be a huge business on its own, and why not offer it on other devices from Android, HP or whatever?

    - Same for HomeLink after it establishes market position. Maybe it acquires some home security companies that run alarm systems? Great sales force & infrastructure.

    Of course the challenge is to keep them all on the same page in terms of design and integration. I think that can be solved -- at least for a time. If those businesses are spun off, not all at once, but over time, then they can be reined in.

    But as an investor, I don't care much if AAPL gets so big that eventually it becomes separate competing companies, I'll own several companies that will all be competitive, even if they fight among themselves for revenue, acquisitions, business vision etc.

    Spinning off businesses like this may be how it all ends for AAPL, but it is also how it all grows into separate successful businesses -- and makes more money for me.

    Imagine if MSFT had the guts to do something like this:

    - Windows SW as a separate business.

    - Gaming as a separate business.

    - Media as a separate business (MSNBC & Slate might be very different now).

    - Hardware (mice etc) as a separate business.

    The company would be totally different and investors would probably be better off. Maybe something like Media would have been killed in its crib, or maybe it would have been much more successful as a separate company.

    Regardless, thank you for the thought provoking piece.
    Feb 12, 2015. 09:46 PM | 1 Like Like |Link to Comment
  • Apple beats estimates, guides in-line [View news story]
    Yep, everyone that wants a phone already has one. Too bad for Tim Cook, next quarter they'll have zero revenue.
    Jan 27, 2015. 05:11 PM | 2 Likes Like |Link to Comment
  • A Diversified, High-Income, Lower-Risk CEF Portfolio For 2015 [View article]
    Question on KED: I see the summary on cefconenct.com, and it shows the big discount to NAV. However, NAV seems to be updated only every few weeks. As KED holds all MLPs, and MLPs have been hit during the recent crash in oil prices, I do not trust the NAV given by cefconnect.com.

    Did you get the NAV discount from a different source? Can we be sure that it is correct? In particular, one holding (EMES) has dropped over 50% in the last few months and it is shown on cefconnect.com to be almost 10% of the fund's NAV.

    It is important that we get recently updated NAVs to determine the actual discount or premium.

    Thank you for the article, it is very well done.
    Jan 3, 2015. 04:20 PM | Likes Like |Link to Comment
  • Why Apple's Retina 5K iMac And Mac Pro Increase Its Competitive Advantage [View article]
    Interesting table of unit sales of PCs, with AAPL at the #5 slot with about 5000 units shipped in the last quarter.

    It would be even more interesting to see the revenues from those 5000 units. I'd bet for sure that it dwarfs the revenues from Acer Group (6632 units), and probably also Dell (10,442 units). It might even approach the revenues from HP, number 2 on the list, with almost 15,000 units.

    And margin contribution? It could be the #1 manufacturer of PCs.
    Dec 30, 2014. 01:01 PM | 3 Likes Like |Link to Comment
  • Will Gaming Apps Sustain Apple's Software Growth? [View article]
    Hedge fund proceeds are being saved for a trimmer to expand his lawn & garden service.
    Dec 16, 2014. 11:33 PM | Likes Like |Link to Comment
  • Update: Apple's HealthKit Seeing Early Adoptions [View article]
    Exactly right.
    Google is a media company, their revenue source is selling advertising space to companies that want to sell you something.

    Apple is primarily a device maker, their major source of revenue is from hardware devices.

    Google goes so far as to give away Android for no charge to companies that want an operating system for a mobile phone. And Google gets the info -- it's uploaded from the OS that is embedded in each Android device. If Google stopped doing that, it would hurt their business significantly.

    Apple says that it does not collect such information and their business model does not depend on it.
    Dec 5, 2014. 10:39 PM | 1 Like Like |Link to Comment
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