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kashtan

kashtan
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  • Apple Shares Are Undervalued By Over 50% [View article]
    All good points raised about interest of carriers and subsidies. There might be a regulatory issue in the future, some 'consumer protection' cr%&^p, which would mandate wireless carriers offer wireless service and subsidy separately. Under the notion that not everyone wants subsidized phone and yet they still (those unsubsidized consumers) subsidize subsidized customers and/or they pay for the value not received. This is happening in Europe and it is going to take one class action here in US to happen. So watch out. Once margins go down so goes the P.

    Using the commodity metrics the iPhone is a quarter the size of iPad yet it costs the double? Something has to give (me thinking:-).
    Apr 26, 2012. 04:13 PM | Likes Like |Link to Comment
  • Apple Shares Are Undervalued By Over 50% [View article]
    I'd say all it takes to get AAPL into equilibrium (=true value of company) is to get wireless carriers decrease or stop subsidize smartphone purchases (like they did in Spain). That's where the bulk of AAPLs incredible 40+% profit margin lies. This is unhealthy for a hardware company to have and it only spells troubles going forward.

    Unsubsidized iPhone is $649 vs. subsidized $199? How long will it take existing iPhone 4 users to get that their iPhone is good for another 4 years while they don't want to pay elevated monthly carrier costs to sponsor iPhone 5 and 6 owners?

    With 17% profit margin new iPhone 4s 16GB is going to cost $380. Not a killer difference to $199 especially if your plan is going to cost you $40 per month and not $70.

    And with 17% PM AAPLs recent Q revs are 23.4 instead of $40 and net profit -$6B (OMG it's a loss!! :-).

    So that's why AAPL is kinda wild card.
    Apr 25, 2012. 02:13 PM | 1 Like Like |Link to Comment
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