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  • Apple lower following cautious Pac Crest, Deutsche notes [View news story]
    Let's look at the numbers. According to Fiksu, iPhone 6 and iPhone 6+ total 16.2% of the iPhone installed base, and last year iPhone 5S was 8.1% of installed base at this same point in the launch timeline. That's double a larger number, because the installed base grew considerably year-over-year. Now, that's not the total picture, because you had the iPhone 5C launch last year, and older models are in the mix both last year and this year, but based on the Fiksu numbers, it's hard to see how Apple doesn't sell 70 million iPhones this quarter.

    Next quarter you'll have Chinese New Year and a much larger 4G market in China, I expect iPhone sales will beat YOY numbers by a similar percentage as Q1. Furthermore, the Android "intent to switch" to IOS numbers would appear to indicate this is not just an accelerated upgrade cycle.
    Dec 2, 2014. 08:44 PM | Likes Like |Link to Comment
  • The One Lingering Concern From Apple's Earnings [View article]
    IPad will sell 30 million units this Quarter. The basis for this wildly optimistic projection was contained in the margin guidance from Apple. Last Q Apple had relatively low gross margin results because they cut prices to clear out inventory of iPhone 5S & 5C, that is clear and referenced in the conference call. This quarter margins are projected to be similar to last quarter..... Why? Because, the old iPad mini price was reduced to $249, but, Apple will cut this price to maybe $150 to retailers who commit to buying large quantities. Come Black Friday, the iPad mini will be offered for under $200, maybe even at their cost, $150, as a "door buster". Apple is going to do an Amazon with this one product and blow out 15 million of the things at almost break-even prices. Each iPad mini will generate around $100 a year in future content sales and that's the plan. You heard it here first.
    Oct 22, 2014. 11:04 PM | 1 Like Like |Link to Comment
  • Update: Apple Q4 '14 Earnings [View article]
    $120 in 2014, never happen. Too many $700 Leaps sold that expire in Jan. $110 maybe in Dec., then a plunge to $100.00 exactly at options expiration. I have the screen shot on my iPhone from Jan 2012 of Apple at exactly $500.00 to the penny on Yahoo Finance to remind me of how Leaps work.
    Oct 20, 2014. 10:27 PM | 1 Like Like |Link to Comment
  • How Facebook and Apple are Attacking Google's Earnings [View article]
    I find Google search results increasingly cluttered with paid results - it's really getting bad. Once you have 90% of the market for anything, how do you drive 20% plus YOY earnings growth? You try to extract it from your current customer base, and that's what Google is doing. They have totally failed at monetizing anything other than search, and maybe YouTube a little, and they're desperately trying to squeeze more money out of these two products.
    Oct 16, 2014. 10:59 PM | 3 Likes Like |Link to Comment
  • Why Is Apple Undervalued? [View article]
    That's $54 - $63 annually. 7 times $8 - $9
    Oct 14, 2014. 09:20 PM | 1 Like Like |Link to Comment
  • Carl Icahn's Valuation Of Apple Is Too High [View article]
    I have no idea about TV's or Apple Watch or ApplePay, but I can see what's going on with iPhone 6 and that alone should put Apple's EPS over $8.00 in 2015. It's been reported Apple ordered 70-80 million units of iPhone 6 for delivery in calendar 2014, and upped that order to the high end. If they sold 15 million in FQ4 then they'll sell 55 million in FQ1 2015, with the remaining 10 million in channel inventory. iPhone 5S, 5C and 4S are still being sold. I figure there’ll be 65-70 million iPhones sold in Q1, counting all versions. ASP’s will be over $700 per unit, based on skew towards iPhone Plus and higher memory versions. Margins will exceed guidance by a healthy amount. Apple will be over $120 a share after earnings report end of January, and still be dirt cheap. $135 a year from now. Buy leaps and forget the short-term gyrations.
    Oct 12, 2014. 08:34 PM | 5 Likes Like |Link to Comment
  • Is This The Most Stable Of The mREITs? [View article]
    I have to say, the author didn't describe CMO's profit model and risks very well, although his comparison with other mREITs was informative, CMO is a totally different animal from all the other mortgage REITs, and I don't think he truly understands that. CMO has a business model that removes the number one risk most mREITs take on, that of borrowing short and lending long. This is why NLY suspended their dividend and had to do a reverse stock split in Oct of 2008 to keep from being delisted. All NLY needs to go under is an extended period of inverted yield curve. And, an inverted yield curve happens in almost every recession. CMO is the only REIT, to my knowledge, that borrows and lends at identical durations.

    There are two main factors that influence the profitability of CMO. The steepness of the interest rate curve and the rate of change of interest rates. When interest rates flatten, as they have done in the last 4-6 weeks, (by this I mean long rates drop faster than short rates) this pinches CMO's spread (the difference between their borrowing cost and what the 1 year ARM borrower pays) and this could result in lower profits and a dividend reduction. That is why CMO dropped to $12.25 in September.

    The reason CMO perked up last week was the VIX (fear gauge) jumped up and people began to worry more about the return of their money, than the return on their money. In this scenario, CMO is a safe harbor, especially selling right around its net asset value, because the assets are government guaranteed mortgages - no principal risk.

    The second profitability risk factor is a rapid rise in mortgage interest rates, which is not in-play right now. When this occurs, CMO's profits get squeezed because there are more early Pay-Offs in ARMs as people roll out of them into 30 year fixed mortgages to lock-in their rates. This costs CMO money as they have a cost of acquisition to replace these mortgages.

    In conclusion, CMO's profitability (and dividend payout) varies, but is never in question. They paid substantial dividends right through the Great Recession of 2008 - 2009.
    Oct 12, 2014. 12:51 PM | 1 Like Like |Link to Comment
  • The GT Advanced Technologies Debacle: Where Does Apple Go From Here? [View article]
    One of the biggest, if not the biggest, causes of mobile phone repairs is screen breakage. Solving this issue would have given Apple a signifiant differentiator in the smartphone wars. It was well worth the risk, IMO, and may eventually work out well if the production problems can be solved. Time will tell.
    Oct 11, 2014. 11:55 AM | Likes Like |Link to Comment
  • Apple's iPhone Launch: Predicting A Strong 2014 Holiday Quarter? [View article]
    Reports swirled this morning that due to frenzied production efforts surrounding its enormously successful 6th generation iPhones, Apple would be forced to delay the launch of an upcoming jumbo-sized tablet.

    An official at Foxconn, a leading Chinese assembler of Apple products, told The Wall Street Journal that it was struggling to hire enough workers to produce the iPhone 6 and iPhone 6 Plus -- of which a record 10 million were sold during their first weekend on shelves. All told, 200,000 Foxconn employees are currently dedicated to production.
    Oct 9, 2014. 05:17 PM | 1 Like Like |Link to Comment
  • Now That The iPhone 6 Is Out, Time To Put Down The Apple Kool-Aid [View article]
    This author is just another click-bait writer like M.B. With his 1 share short position. Fact is, Apple is going to sell minimum 20% more phones in FQ1 at minimum 15% higher ASP's. That plus the 2-3% higher gross margins and the lower share count will increase EPS by at least 33% over FQ1 2014. Furthermore, this will continue at least till FQ4 of 2015. The handwriting is on the wall. Why some can't read it is beyond me.
    Sep 29, 2014. 08:46 PM | 1 Like Like |Link to Comment
  • Thriving Gold iPhone 6 Black Market In China [View article]
    I just left the Verizon store in Short Hills Mall here in NJ. I went to the Apple Store first to buy a case for my new iPhone 6 and Apple was completely out of stock on the 4.7" cases. While in the Verizon store paying for my case, a woman in front of me was buying a Galaxy S5. The guy behind the counter said "Wow, a Galaxy S5, you're the first customer this weekend not looking for an iPhone". Meanwhile, there was a line just for people needing help activating their new iPhones.
    Sep 21, 2014. 12:47 PM | 9 Likes Like |Link to Comment
  • Base Scenario: Apple's Mobile Payment Service Generates $2 Billion In Revenue [View article]
    Apple offering nearly fraud-proof credit card processing will be a huge revenue opportunity.

    I just read LexisNexis® "True Cost of Fraud" report online (for free). Turns out the incidence of fraudulent credit card transaction is over .50% -(1/2 of one percent) of sales. But, this is the tip of the iceberg. The true cost, to the merchant and to the consumer of this fraud is more than 5 times this amount, in lost sales, replacing and handling merchandise, time spent resolving each incident - which is many hours for both the consumer and the merchant, etc. The actual fraud cost, in the US alone, is over $20 billion a year and climbing, but because of the extra burdens placed on the merchants and consumers, the cost to the economy is well over $100 billion a year, and that's just in the US.

    Apple, by stepping into the bank position and guaranteeing 100% of the payments made thru its system (I believe Apple will be issuing one or more credit cards) they can claim a large piece of this .50% plus, on Apple issued cards, plus the usual bank % of the transactions. It's a $20 billion plus opportunity in just the US alone. Plus the benefits to the consumer (no more LifeLock, etc.) and to the merchants (no more fraud prevention and resolution costs) will drive rapid adoption.

    Conclusion: This is going to be a significant revenue driver over the next few years, potentially adding 10's of billions in revenue on the credit card side, most of which will be profit. And, will drive higher sales of the iPhone and iWatch at the same time. All by solving a huge problem for everyone who uses, issues, or accepts a credit card.
    Sep 7, 2014. 01:25 PM | 4 Likes Like |Link to Comment
  • Apple's Payments Platform May Be Ready To Roll [View article]
    The revenue model for Apple in payments may lie in advertising. What is the value to a retailer who knows a customer is in his store spending money? A special offer or a coupon directed at someone you know is located where he can walk a few feet and see the merchandise is worth a lot more than any normal ad on the Internet.
    Sep 1, 2014. 12:49 PM | 3 Likes Like |Link to Comment
  • Apple - September 9 Will Give You A Stomach Ache And Nothing More... Focus On Sales [View article]
    5 out of the last 6 iPhone events resulted in the stock trading lower 30 days later. That said, I think this time may be different. The wearables and the payments may not be all Apple has up its sleeve. We know demand for iPhone 6 is off-the-charts, but know nothing of supply. A strong rollout encompassing 50 or more countries would probably send the stock higher, as there's been a lot of speculation regarding supply chain issues. What if the watch is available for sale in November? What if a new AppleTV with gaming is available before the holidays? There are too many unknowns to play this event one way or the other. That said, The only thing I might do is sell at-the-money Jan 2015 calls against some of my deep-in-the-money Jan 2015 Leaps if Apple is above $105 on the 9th. Under $105, I think I'll sit tight.
    Sep 1, 2014. 12:33 PM | Likes Like |Link to Comment
  • Report: Apple wearable unlikely to ship before early 2015 [View news story]
    No pictures, no parts leaks, nothing from the supply chain. Has to be a 2015 product. How could anyone think otherwise? The stock will move on the perceived desirability of the device, not on any immediate contribution to sales. Also, if very desirable, and if it requires an iPhone 6 to work, it will boost iPhone sales next quarter.
    Aug 29, 2014. 02:28 PM | Likes Like |Link to Comment