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steftheref

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  • Apple's Q3 Risks Are To The Downside [View article]
    I think this attempt at analysis is a perfect example of why 'numbers' guys consistently fail to understand Apple, perhaps best illustrated in the statement '... selling iPhone 4S at discounted prices.. ploy that supports market share but contributes only marginally to net income.' This is so wide of the mark, demonstrating a wide gulf between someone who juggles numbers and someone who 'gets' Apple.

    Do you imagine Apple focuses on net income? This company is richer than Croesus! Do you not read its statements that its focus is in building great customer experiences? Have you no understanding of the ability of Apple to retain customers because of the positive experiences they have after becoming a customer? Most discounted 4S sales create a new, most probably long term customer for everything the Apple Eco-system has to offer. Defections from Apple are remarkably low and have been for 35 years. You can resist them for as long as it takes, but once the 'it just works' feeling surfaces for you personally there is usually no turning back.

    And who still believes the artificial construct 'market share' is anything other than another passably interesting but essentially worthless measure by which to judge a company, and especially Apple?
    Jul 19 05:43 AM | 28 Likes Like |Link to Comment
  • Apple And Me: Why I Finally Bought Some Apple Shares [View article]
    I read similar analyses on RIM as its stock continued its inexorable decline in the face of Apple's strategy. There was always tomorrow's 'awesome' new product that was going to blow Apple away. It might have been that unlamented paperweight of a tablet they rushed out to beat the iPad (the one that has to be strapped onto a BlackBerry phone to use email - what were they thinking?). Or it might have been some 'wunder' handset replete with an irresistible chiclet keyboard. It didn't matter: there was always something in the works that was going to turn the tables.

    We were treated to a similarly facile 'analysis ' on why RIM shares were a 'better buy'. I think this went along the lines that shares which had tumbled from 100 to 15 only had to climb back up to 25 and that was a bigger % that you'd get buying Apple shares.

    It was all make-believe of course.

    The ONLY way anyone is going to beat Apple is by being better. Do that, and you have a chance. Talking the talk won't do it, mind. You've got to walk the walk, because people see through the flim-flam. They're not as dumb as some people make out.

    There's absolutely nothing I can see in Nokia or Microsoft that stands a prayer against the relentless advance of Apple's all- round excellence.
    Jul 27 05:47 PM | 19 Likes Like |Link to Comment
  • Apple Crushes The Competition [View article]
    May I offer a contrary view for your consideration?

    Firstly, of course, Apple products are designed in the USA and indeed, use some key components that are actually manufactured in the USA (I know it's hard to believe we still manufacture anything, but we do!). Other components come from Japan, Taiwan, Germany and China. The software is entirely made in the USA, although key parts are licensed from ARM in the UK for some products. It is true that assembly is conducted in China, but shortly that monopoly will be broken by a massive assembly plant in Brazil.

    So characterizing the Apple product line as 'cheap China imports' is somewhat wide of the mark, as I hope I have demonstrated.

    As to being gouged, this comes down to your personal assessment of value for money. People vote one wallet at a time and by that measure it cannot be be concluded the company is pricing itself out of the market. People aren't stupid, they know how to work out if they are getting value for their hard-earned money.

    In terms of 'blind loyalty' as an explanation for Apple's popularity, and attributing this to some mystical skill on the part of the company's marketing team, it is surely true that Apple's customers are very loyal, and it's also true Apple's marketing is subdued, careful, considered and usually hits the spot. But to attribute the company's success solely to a mystical force is to devalue the consideration each consumer makes as he or she puts a hand into the wallet to buy a product.

    One can only reliably speak from personal experience and what I think I do when I choose to buy Apple is to understand I've divined the essence of something quite remarkable. I've got a gleam in my eye only because I think I saw the light.

    It didn't happen recently. I was a researcher working with Apple when the Mac was being planned. The first time I saw Andy Hertzfeld pick up a document and put it in a folder, right there on the screen, a big light went on in my mind. It's still burning, more than 30 years later.

    Because in that moment I saw how I might use this box of electronics to do things I wanted to do in my life. I don't mean in my work, I mean in my life. At the time I was quite the mathematician who could do all sorts of complex programming to find cryptographic keys, or probabilities for various options. But the idea of using a computer to keep notes, or write letters, make music, design kitchen layouts, mess around with writing my books.... that had NEVER occurred to me.... but NOW I saw through a glass dimly that here, right here at Apple, was the kernel of the thing that could do all these things, and more, for me, and I assumed millions and millions of others.

    I've never lost this belief that if you make elegant products that 'just work' people will find amazing things to do with them, and that's the meme Apple found all those years ago and hasn't stopped exposing ever since. I don't see this as a cult, and I don't regard myself as some unthinking 'fanboy': it's more a shared belief that things can be better.

    My latest work is a quite small contribution to helping make the iPad a friend that enables autistic kids fulfil their potential within the world in which they have to live. The iPad's infinite patience, forgiving nature and natural language 'just work' and the teachers are reporting remarkable results.

    All from that spark when a piece of paper was put in a folder 30 years ago.

    You know, there's a pride of ownership in having the best of breed. Most of us can't do that with cars, or we'd all be driving Porsches or Mercedes, and most of us can't afford to live on Park Avenue. But when it comes to computers and mobile devices we CAN afford best of breed. And that's part of Apple's appeal, the call to the individual's pride in owning and using something that is elegant, effective, beautiful even, and, more than this, it 'just works'.
    Feb 23 10:06 AM | 17 Likes Like |Link to Comment
  • Apple: One More Thing [View article]
    You're the guy who recently wrote an article about 'why I now hate Apple'.

    Am I right?

    So why would I think this present article is anything other than another excuse to get digs in at Apple?

    You're entitled to your opinions, of course. But as an avowed Apple-hater, you disbar yourself from being regarded as objective.

    For what it's worth, I think the iPhone 5 along with iOS 6 will indeed earn the appellation 'Amazing' for its technological prowess, the sophisticated manufacturing processes required to bring it to fruition, and its sublime design. And of course, a phone selling tens of millions probably does deserve to be called 'amazing'.
    Sep 12 07:16 PM | 16 Likes Like |Link to Comment
  • Why Apple Shares Probably Won't Be Hitting $700 Anytime Soon [View article]
    I hear all the chartists and slide rule merchants, all the tealeaf diviners and those watching the conjunction of Jupiter and Mars and drawing inspiration for their decisions on AAPL. I think about all this every time I walk by the local Apple Store.

    Then I look in. The place is heaving.

    When I see it empty I'll be ready to read the tealeaves.
    Apr 2 03:39 PM | 15 Likes Like |Link to Comment
  • An Apple Bubble Is Forming [View article]
    This article mentions the competition. Everyone mentions competition as though it forms a guaranteed threat to Apple. This is not the case.

    I'll propose you look at the iPod story to understand that competition can sometimes actually strengthen the incumbent, or have no noticeable effect whatsoever.

    10 years on, and having faced off innumerable challenges from competitors, including a big effort from Redmond, iPod still commands 80% of the market. This, despite regular prognostications along the way from doomsayers who told us 'iPod's day is numbered, here comes a competitor to take its market'. And why is this?

    Because Apple launched a product that defined a category which turned out to have longevity, and did it with breakthrough technology that left everyone else in the dust initially. They wrapped the hardware device in a cocoon of elegant software delivering functionality nobody else had thought of (iTunes): you didn't just buy an mp3 player, you bought into a little eco-system whereby the mp3 player was closely integrated with iTunes and thence your life.

    They then began an unstoppable process of steady product refinement, with each iPod improving on its predecessor and maintaining and growing the chasm between it and the competition, and the little eco-system growing in sophistication and functionality to add in videos, then movies, books, podcasts, iTunes University...

    Now turn to iPhone and iPad. They're following the same strategy! Initial technology breakthrough + constant improvement + eco-system.

    But now the eco-system is vastly more sophisticated, with 600,000+ apps in the bundle, and iCloud to sync it all together, and Siri maturing by the day to help navigate around.

    Once you buy into this eco-system with your first Apple product the entire experience is so rewarding and fulfilling that it becomes an exercise in futility for the average user to look to a competitor for his or her next purchase. Why would you bother?

    If Apple treated all this in a complacent manner, and just assumed customers would roll up with open wallets, then that would present a competitive opportunity. But have you ever been to an Apple Store? That's an exercise in retail perfection right there, with everything geared to customer service. And do the Apple execs you see fronting the company give the impression they are taking things for granted? That's not what I see.

    Given all this, and the reality that in none of their chosen market sectors is Apple running at or even near saturation, what is to stop customers leading Apple to continuing growth?
    Mar 18 10:25 AM | 13 Likes Like |Link to Comment
  • A Breakdown Of Apple's ROE Tells A Cautionary Tale [View article]
    There's a yawning gulf between number jugglers and those who 'get' Apple.

    That's some hubris to say you know certain actions the company needs to take. The assumption must be Apple's leadership doesn't know these things. Really?

    So far as I'm concerned, Apple can just go right on truckin' .. it's doing insanely great
    Jul 21 07:38 PM | 12 Likes Like |Link to Comment
  • Apple Stabs BlackBerry In The Heart [View article]
    You're clutching at straws here. This isn't a security breach. It's a deliberate design decision in response to corporate IT demands for more pervasive control over devices they deploy. The implementation is robust as it stands, but if experience shows greater control is required, it can be done. Right now you can only access the diagnostics from an iOS device physically tethered to a trusted computer. How on earth do you imagine a hacker is going to be able to get hold of the device (and know its passwords) AND the trusted computer (and know ITS password)?

    Apple's security architecture for iOS is in a class of its own. It begins right at the chip level where device unique crypto keys are burned into the chip using a method whereby even Apple cannot deconstruct them. There's nothing like this foundation on the BlackBerry platform. A layered security model applies robust crypto at every layer right up through the apps and into iCloud, and now embraces TLS end to end mail service security.

    The meme of superior BlackBerry security isn't bought by corporate IT who have abandoned BlackBerry in droves, so one wonders why the meme peddlers persist.

    7 years ago Steve Jobs observed that in order to respond to iPhone, RIM (as it then was) would have to turn from a hardware company into a software driven house. "This is no easy task" he observed. It seems as though Chen buys this argument, but it's 7 years late. Possibly too late. The world has moved a long way in 7 years.
    Jul 23 07:45 PM | 11 Likes Like |Link to Comment
  • Why Talk Of Apple's Demise Is Greatly Exaggerated [View article]
    Apple's been building for more than 30 years, always holding to the notion that if it builds systems that 'just work' customers will find that attractive, buy their products and join the family. Even when it just made computers, this promise was fulfilled and despite the dominance of the ubiquitous PC with its Microsoft OS, Apple still had several million loyal customers who stayed with their Mac through thick and thin.

    With the iPod, Apple began to expand this 'just works' approach to people who had never owned an Apple product before, and then continued the process with the iPhone and iPad, and now the glue that holds everything together, iCloud.

    There are hundreds of millions of loyal customers now, who survey after survey has shown will select an Apple products for their next purchase.

    Apple is clearly no flash-in-the-pan. It's here for the long haul, building its loyalties one wallet at a time.

    The very notion that a financial quarter where the company fails to grow by 80% signals the end of the dream is rubbish, plain and simple.
    Jul 27 03:42 PM | 11 Likes Like |Link to Comment
  • Why I Now Dislike Apple [View article]
    Why is this worth the space at all? It's a single individual's personal experience which doesn't translate to the general experience.

    Remember the app that got banned because it contained personally offensive criticism? The one where a Danish political cartoonist got turfed off? That was Apple's policy at the time, but as soon as they realized it wasn't appropriate to political cartoons because by their nature cartoonists are frequently offensively critical, guess what? The policy got changed.

    Apple's not some faceless lump. It's run by people. People make mistakes, and when they do, let's encourage them to change things.

    But do I want an app on my iPhone or iPad that calls executable code that hasn't been validated? Are you NUTS?

    Yes, you can do this on Android. Best of luck with that. There are thousands of trojans out there in the Android space. You want to run the risk? Be my guest. Google is running like a scared rabbit to try to close down the open aspects of its free software that present the most threats, but even if they ever manage to do that, it won't help the tens of millions of Android devices out there that have never, and will never be updated. If that's your idea of a better environment, as I say, best of luck.

    But please don't use your bully pulpit to push your simplistic idea about freedom down my throat thank you very much. It may be your genius idea. It's not mine.
    Apr 2 05:06 PM | 11 Likes Like |Link to Comment
  • Why Research In Motion and Nokia Can't Compete with Apple [View article]
    It's a myth that companies cannot compete with Apple. However....

    If you want to be competitive you have to actually BE competitive. The idea that consumers are idiots who won't be able to tell the difference between the marvellous experience it is to be an Apple customer and some PR spin from a company with inferior products, poor service, crappy security etc. etc. IS a myth. Consumers are savvy and when they take their hard earned money out and exchange it for Apple, it's because they've figured out the best deal for themselves. All a competitor has to do, therefore, is to offer a truly better deal than Apple and get the message across.

    And that's not going to be easy because Apple sets the bar very high. Apple isn't spin, smoke and mirrors, PR fluff and nonsense. Apple is very, very good. But impossible to compete with? Of course not.
    May 1 06:39 AM | 11 Likes Like |Link to Comment
  • Amazon Is Not Worth Your Analytical Firepower [View article]
    Amazon is a considerable logistics achievement. And a brilliant online fulfilment operation. That's it.

    It doesn't have a sustainable business model at 1% profit margins. It never had one.

    It's only still in business because big investors cling to the mistaken belief 'you can make it up in volume'.

    This is the classic Tulip Mania company. One day, enough folks will realize this outfit only remains in business because of the tax breaks it has received (sales tax breaks), its predatory business practices that drive well-run businesses out of business (they need to make a profit!) and the ability of Bezos to convince investors to hang in there.

    Once air leaks out of the bubble, the knife-edge it has always run on will be clear even to the currently-blind investors and it will be hasta la vista.
    Jul 25 04:10 PM | 10 Likes Like |Link to Comment
  • Apple Stabs BlackBerry In The Heart [View article]
    Black is white. Up is down. Right? It's an Alice in Wonderland world in BlackBerryland.

    Ignoring Apple's penetration of corporates is typical behaviour from the BlackBerry camp. Like when that comedy duo Balsillie and Lazarides dismissed the iPhone as a toy that no serious user would be interested in. 800 million iOS devices later, how's that prediction looking?

    IBM is a serious outfit. They wouldn't have gone the Apple route without serious thought. They probably considered the option of going with BlackBerry... for about a New York second, I would say.
    Jul 23 07:56 PM | 10 Likes Like |Link to Comment
  • Apple: Why Is The 'Cult' Of Mac So Misunderstood? [View article]
    The Ugly Truth has hit a home run again.

    These so-called 'expert financial analysts' who dish outrageously ill-informed opinions about Apple's supposed 'problems' are nothing more than haruspices, snakeoil merchants peddling their 'insights' to part fools from their money.

    No company is perfect, every company faces problems, nobody is immune from competitive threats, but after 30 years at the plough, Apple's got pretty damn good at what it does and it's most unlikely a guy in an expensive suit sitting at a desk in an ivory tower is going to figure something out the company hasn't already thought about.

    I remember Sibelius' comment when someone told him 'The critics are not going to like your latest symphony.'

    'Critics!?' he exploded, 'Critics? Whoever erected a statue to a critic?'
    Jul 12 08:54 AM | 10 Likes Like |Link to Comment
  • Get Ready To Be Disappointed With Apple [View article]
    You kinda know it's going to happen, don't you? A company comes out with astonishing results that even the most jaded person could surely appreciate, and what do you know, here comes Johnny with all the problems nobody else has seen.

    (I've posted this data elsewhere, so for those who have read it before I apologize)

    Is it OK if I just do a quick reality check right across the market to see what the analysts are saying about Apple's prospects? (not that these guys know anything, of course.. but indulge me...)

    Richard Gardner, Citigroup: “Stellar…firing on all cylinders.” Buy rating; target to $600, from $500.

    Kulbinder Garcha, Credit Suisse: “One for the record books.” Outperform rating; target to $550, from $500.

    Toni Sacconaghi, Bernstein Research: “Stunning…eclipsed expectations in every line of business.” Outperform rating; target to $600, from $575.

    Bill Shope, Goldman Sachs: “$98 billion in cash, 116% EPS growth and a depressed valuation.” He repeats his Buy rating; target to $600, from $550.

    Tavis McCourt, Morgan Keegan: “Breaking the law of large numbers.” Outperform rating; target to $650, from $513.

    Mike Abramsky, RBC Capital: “iDominance.” Outperform rating, target to $600, from $525.

    Brian White, Ticonderoga Securities: “Apple takes our breath away.” He keeps his Buy rating and $666 target.

    Keith Bachman, BMO Capital: “Apple delivered material upside in all product segments.” Outperform rating; target to $545, from $460.

    Matthew Hoffman, Cowen: “Blowout…another exceptional quarter.” Repeats Outperform rating, with at 15% more upside.

    Rob Cihra, Evercore Partners: “That a lotta iPhones.” Outperform rating, target to $650, from $600.

    Anil Doradla, William Blair: “Calling it a blowout quarter is an understatement.” Outperform rating.

    Brian Marshall, ISI Group: “With minimal real competitive threats to AAPL’s major product families in CY12, we believe the outlook for the next 4 quarters can be characterized as smooth sailing.” Buy rating; target to $525, from $500.

    Kevin Hunt, Auriga USA: “Wow…Apple remains a cheap growth stock that even value investors can love.” Repeats Buy rating; target to $650, from $550.

    Avi Silver, CLSA Asia-Pacific Markets: “How do ya like them Apples? A blowout.” Buy rating; target to $550, from $505.

    Bill Choi, Janney Capital: “Blowout Q1 results.” Buy rating, target to $580, from $515.

    Scott Sutherland, Wedbush: “The Big Apple…[a] monster quarter.” Outperform rating, target to $585, from $540.

    Daniel Ernst, Hudson Square Research: “Awe-inspiring.” Buy rating , $700 target.

    Alex Gauna, JMP: “Spectacular.”
    Jan 25 05:32 PM | 10 Likes Like |Link to Comment
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