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Dialectical Materialist

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  • Here's Why Apple Is Weak Since Earnings [View article]
    Moxi, you're being silly. Yes, sure, that's how we differ. I think companies should take advantage of poor children and you don't. Do you actually read what you write?

    I'm going to allow you to continue your campaign of hyperbole against anything and everything Apple, I'm simply going to exercise the discipline it takes not to respond. I thought for a short time you might be capable of reasoned debate, but I see I was wrong.

    If even a fraction of what you have said about Apple was true, the company would be destined for very dark days. Instead, I am confident I will enjoy positive returns from the stock and hours of enjoyment from their products in the years to come. But life is too short to engage in nonsense like this.
    May 13, 2015. 03:02 PM | 4 Likes Like |Link to Comment
  • Here's Why Apple Is Weak Since Earnings [View article]
    "They probably got under the table compensation or commission for signing a $1.3B deal. Apple is running a scam cheating taxpayers, no wonder they have so much money, they steal it."

    If that is true, the FBI will nail them. But (spoiler warning) it's not true.
    May 13, 2015. 11:31 AM | 4 Likes Like |Link to Comment
  • Here's Why Apple Is Weak Since Earnings [View article]

    If you Google "911 false flag" you get a lot of results too. You can't be too careful about tying results you get on a Google search to the truth.

    But here's a few interesting things about the LA case:

    --Federal investigators declined to name the target of the probe.

    --They have not yet brought charges.

    --Former Supt. Deasy wanted to use construction bonds to pay for the technology initiative.

    --Former Deputy Supt. Jaime Aquino had been early champions of the Apple devices and software from the British company Pearson, without fully exploring alternatives.

    --Aquino worked for a Pearson affiliate before joining the district.

    It is a stretch, and I mean a long stretch, to assume that Apple is tied in any nefarious way to the apparent plan of a couple guys to funnel voter approved construction funds to an initiative that would line their pockets.

    One could envision the same circumstances involving a purchase of chrome books. That is to say, what is troubling about this program has nothing to do with the fact that iPads were being bought. The problems are that there was a no bid contract being awarded that involved iPads and also software of the company they the deputy superintendent used to work for. And the money they wanted to pay for this program had been earmarked for construction.

    This is a messy city level political scandal. There is no evidence, even on the face of it, that this has anything to do with Apple in any specific way. No one is saying bribes were given, faulty equipment was being trafficked, kickbacks were offered (by Apple) or anything else.

    The FBI will continue to investigate and may one day bring charges against whoever they are investigating (smart money says Aquino). But the claim that Apple is "involved" in this is pretty thin. If it happened to be Google products, they would be no more guilty than Apple. They are just the company that built the tablets that Aquino was trying to buy in order to load his former employer's software on to them. What benefit he would receive from this is unclear, but a kickback or boost to stock value seems the most likely. It is why people do things like this.

    The reason this story does not have more than local interest is that it is a local story, albeit with the Apple name that helps drive some clicks.

    If anyone has anything more substantive to say about Apple's nefarious involvement in this scandal, I'd love to see evidence of it.
    May 13, 2015. 11:23 AM | 4 Likes Like |Link to Comment
  • Apple Holds China Smartphone Crown, CEO Opens Microblog [View article]

    You are not giving some or possibly most AAPL bulls enough credit. It's not necessarily that so many expect the past to be repeated. In my case, for example, it is that the past performance of the company has put them in such a strong position.

    I know you see Android barbarians at the gate and, according to another comment you made, every single measurable metric showing Apple in decline.

    But they have a war chest of $194b and a brand that is second to none. In evaluating risk (which is part of determining what is a "good" investment) these fruits of past labors have ensured Apple is in great shape.

    So as an AAPL bull, when I look forward, I don't think they can possibly grow at the 74% clip they were managing just a few years ago. Apple will not envelop the universe. But they aren't going away, either. Not any time soon.

    With its user base of somewhere around 500 million, it is hard to see Apple going into the tailspin so many bears urgently (even desperately) want to see. Apple understands China and is also a premium brand in the mind of Western consumers.

    There will be stocks that yield better returns than AAPL. Plenty of them. But the risk one must take to find these high fliers needs to be factored in as well. Apple is a rock solid company with a bright future. Looking for tiny cracks in its foundation is a popular pursuit, but the building is tall and strong and will be standing for many years to come.
    May 13, 2015. 11:01 AM | 3 Likes Like |Link to Comment
  • Apple Holds China Smartphone Crown, CEO Opens Microblog [View article]
    Cannothelp, You are right. Stanford's endowment is "only" 21.4 billion as of Aug 2014. So maybe that should have been 99% instead of 99.5%.
    May 13, 2015. 10:44 AM | Likes Like |Link to Comment
  • Apple Earnings Call: Under The Radar Gems [View article]
    "I can guarantee the watch won't gain adoption"

    I don't know what this means. Can you put a number on it and tell me how many they will sell through the end of 2016. I'm thinking about 30 million. That would be roughly 10 million this year and 20 million next year. But given how popular the product is likely to be in China, my guess may be a little low.

    But you'll see by the numbers I am talking about, this pales in comparison to the 200 million iPhones Apple will sell this year alone.

    Betting against wearables is a bad idea. And betting against the premier mobile device company on the planet is a risky proposition as well. It's not much of a stretch to think the Apple Watch will be the best selling smart watch on the planet over the next couple years.

    But I'd love to hear your number for future comparison.
    May 12, 2015. 10:27 PM | 1 Like Like |Link to Comment
  • Apple Earnings Call: Under The Radar Gems [View article]
    dezee, my argument for the watch is that it makes a good thing (Apple Pay) that much better. I do not expect everyone to use Apple Pay, nor do I expect every iPhone user to buy the watch.

    But it is clear to me that Apple Pay is gaining momentum. And it is easy to see why. It is a frictionless form of payment in every sense of the word. Vendors know that the easier it is to pay for something, the more sales you make. Shoppers know that the worst part of shopping is waiting in line. These factors combined will pretty much ensure that Apple Pay will be huge in the coming years. And there will be other non Apple versions of the same thing that will also become more popular than they are today. Some of them will be good and some not so much.

    The interesting thing about Apple Pay and the Apple Watch to me is that the Watch does not sell Apple Pay but rather the reverse. If you are going to wear a Watch, it will need to do a few things in a way that is an improvement over just carrying a phone. And Apple Pay is clearly one of those things. I think using Apple Pay with the Watch may very well prove to be the killer app that drives people to adopt the watch.
    May 12, 2015. 10:58 AM | 2 Likes Like |Link to Comment
  • Here's Why Apple Is Weak Since Earnings [View article]

    Assume a base of 400 million phones (just as a thought experiment). Apple sells 130 million iPhones in 2 qtrs but only, say 100 million of them are iPhone 6/6+. If 20 million were switchers, "20%" of the installed base would be 80 million that "upgraded". This would leave a pool of 320 million potential upgraders.

    If you used voodoo math and added the new purchases to the installed base (as in your example), then 20% would be .2*530 million = 106 million. This would mean of the original base, only 294 million potential upgraders would exist.

    So you are right that the number can be calculated in such a way as to mislead. But since the number is so small, even if you make bad assumptions about the way the stat is calculated, it leaves you with hundreds of millions more potential buyers.

    Why haven't these buyers upgraded? Some never will. They either can't afford to, don't want to (next phone will be Android, for example) or the phone that is being counted in the installed base is a hand me down that simply will never be upgraded.

    But of the pool of potential upgrades, most haven't because they are in the S-cycle. The 4s sales were huge, then this wave hit again with the 5s. The 6s has a huge installed base of potential upgraders.

    It is no surprise the 6/6+ has captured only a small percentage of the base (however it is calculated). It would be folly to think this represents anything other than the wave of upgrades that will hit next fall on the S-cycle.
    May 12, 2015. 01:45 AM | 3 Likes Like |Link to Comment
  • Apple Stock: Affirming My $140 Target By The End Of May [View article]
    Moxi, I see what you are saying. Thanks for clarifying,

    Nevertheless, I think the observation is not as important as you seem to think. Of course iPhone 6 sales will peter out. They always do. They peter out most sharply just before the release of the next product.

    It is hard to make a compelling case that Apple is in trouble because more people bought iPhones in q1 than they did in q2.

    As for Samsung, it is good for them to sell more phones, but this is typical for this time of year for them is it not? And in any case:

    "In Q1, Samsung regained its position as the No. 1 smartphone vendor worldwide. Samsung shipped 83.2 million smartphone units, compared with Apple's 61.2 million units. But Apple's average sales price for the iPhone was $665, vs. $198 for Samsung's handsets, including feature phones."

    Read More At Investor's Business Daily:

    These are not really comparable sales, are they?
    May 11, 2015. 10:58 PM | 1 Like Like |Link to Comment
  • Apple Stock: Affirming My $140 Target By The End Of May [View article]
    "You want to compare numbers from a year ago and that makes zero sense to me."

    Moxi, if this seems confusing to you, you may lack business experience. I produce financial reports for my clients and if I ever told them that their revenue or net income was declining because I was comparing it to the previous quarter, they would probably laugh at me (and possibly cancel my contract). In order to know if their business is improving or declining, they want to know how they are doing compared to the same period of the previous year.

    This is a common notion. Unemployment and housing are both seasonally adjusted as well. Why? Because consecutive changes are misleading. The only proper way to grasp how these things are changing is to compare as directly as possible to the same period one year ago.

    Do you think that Disney World looks at October ticket sales and compares them to September? What would such a decline tell them? That they were losing business? No, they compare this October to last October. Every business I can think of looks at sales this way. It is the only meaningful way to examine business activity.

    And the evidence you have been shown is very clear. Apple sold 38 million more iPhones in the first two quarters of 2015 compared to the same time last year.

    The comparison may not make sense to you, but that is not the comparison's fault. That is simply the only sensible way to examine this data.

    Look at Samsung versus 2014. You may be able to say the same thing you are saying now in a way that actually says what you want it to.
    May 11, 2015. 10:31 PM | 5 Likes Like |Link to Comment
  • Apple Earnings Call: Under The Radar Gems [View article]
    Dezee, did I say everyone will be using Apple Pay? Of course not.

    And you could make an argument that pulling out your wallet is easier than pulling out your phone. But you don't need to pull out your watch. Those using Apple Pay with the Watch don't need to pull out anything.

    Still, not everyone will use Apple Pay. Some people enjoy making everyone behind them wait while they fumble around with their purse.
    May 11, 2015. 04:46 PM | 2 Likes Like |Link to Comment
  • Significant R&D Increase Suggests Apple Is Working On Something Big [View article]
    I think it is hard to say for sure what the margin would be on a self driving electric car. Wear and tear is less in an electric motor than in a combustion engine, and wear and tear from a computer driven vehicle should be less than an average human, since the car can be designed to drive in ways that promote component longevity. We can't know what materials will be used in such a vehicle. All we can say now is that current automobiles with decades of legacy design baggage and a well established ecosystem of middlemen have a certain cost to build and a certain price. If Apple (or anyone else) can redesign personal transportation in such a way as to meaningfully impact the cost of production, margins could be improved. The only way to find meaningful efficiencies is to throw out all the assumptions about what a car is and redesign everything from the ground up. Interestingly, this is exactly how Apple would approach a car.

    I doubt a car would have margins comparable to the iPhone, but the addressable market is much larger as well. And the price is higher. It is conceivable Apple could net more money from a car than it currently does from its iPhone line.

    But we can't lose site of the fact that if Apple does move into transportation, it will be as another point on the spectrum of personal devices. You might call your car over to pick you up using your watch. Your phone may serve as the navigator. A car will be part of a new mobile paradigm, not just a car.
    May 11, 2015. 02:32 PM | Likes Like |Link to Comment
  • European Commission Trying To Take A Bite Out Of Apple - Should Investors Worry? [View article]
    I think what Google is doing in education is awesome. I hope they help educate lots of young folks so they can grow up and get good jobs and buy MacBooks.
    May 11, 2015. 02:03 PM | 4 Likes Like |Link to Comment
  • China Mobile Is A Game Changer For Apple [View article]
    Well in any case the numbers involved are small compared to the size of the total buyback, so it was really only a minor consideration anyway.

    The important thing is that the buyback is huge and will noticeably reduce the float.
    May 10, 2015. 08:41 PM | 1 Like Like |Link to Comment
  • Significant R&D Increase Suggests Apple Is Working On Something Big [View article]

    I also think Apple's understanding of the Chinese market may be coming into play here. If they are interested in helping to solve the world's pollution problems, China is a great nut to crack. And providing low emission vehicles to the growing middle class in China would be an economic and socio political coup d'etat.

    Additionally, when one thinks about all the computer chips which now exist in the modern automobile, it seems ripe for a company that can design both the silicon and software from the ground up. The gas powered car is not really a computer on wheels, but the electric (self driving) car certainly could be.

    Given Apple's interest in disruption and Jonny Ives interest in design, the car market seems like a very real possibility for Apple. And what is a self driving car but a robot with transport capacity, which opens up a whole world of robotic assistants.
    May 10, 2015. 02:46 PM | 2 Likes Like |Link to Comment
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