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Notes of interest from Apple's Q4 2010 conference call - Page 2

post #41 of 64
Quote:
Originally Posted by newbee View Post

I would imagine any touch screen device NEEDS a bezel around the perimeter so you can hold it without your thumbs activating something on the screen, by mistake .... no?

It's not obvious for him because he doesn't own nor has he ever used an iPad for any amount of time
post #42 of 64
Quote:
Originally Posted by TNSF View Post

The stock had risen a lot before the earnings were announced. Investors then wait and see if anything unexpected happens. In this case earnings were pretty much as expected: slightly above projections. So, sell the stock and take profits.

So much for value investing. No change in the company's long term prospects, only the market's short term expectations.
post #43 of 64
Quote:
Originally Posted by TNSF View Post

I think the biggest note from the call was when he was questioned about what they are going to do with the $50 billion USD cash they have in the bank (plus an additional $5 billion or so every quarter going forward). In response, Jobs said they think they have "one or two opportunities" that they are waiting for.

What is Apple planning to do with its $50 billion? What are the "one or two opportunities"?

I still think, deep down, Steve still wants to get rid of the "orifices." Not that he wants to go into the mobile carrier business as it now exists, but if technology and opportunity line up, he'd love to re-imagine it from the ground up.
In his heart of hearts, he want to control the whole widget from fiber network backbone to servers in the cloud to wireless transmitters/receivers to device to software to integrated services to retail etc. How disruptive would Apple be if they could do to wireless carriers what they've done in music, publishing, mobile computing and communication, etc.?
post #44 of 64
Quote:
Originally Posted by TNSF View Post

I think the biggest note from the call was when he was questioned about what they are going to do with the $50 billion USD cash they have in the bank (plus an additional $5 billion or so every quarter going forward). In response, Jobs said they think they have "one or two opportunities" that they are waiting for.

What is Apple planning to do with its $50 billion? What are the "one or two opportunities"?

I think, nothing. They did nothing with the first $10 billion, nothing with the second, nothing with the third, and so on. This question is always answered with the same double-talk, which means... nothing.
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post #45 of 64
Quote:
Originally Posted by Dr Millmoss View Post

I think, nothing. They did nothing with the first $10 billion, nothing with the second, nothing with the third, and so on. This question is always answered with the same double-talk, which means... nothing.

True they've done nothing of note so far. Seriously, they could do $5 billion per quarter in acquisitions and never touch the $50 billion they already have.

And true they've been asked about it before. But somehow the answer seemed different this time. In the past they've just talked about how reinvesting it in the business is better than paying it out. They've never made mentioned of these one or two opportunities before. They never hinted at something quite so significant.

Steve is up to something, as usual. Now I have to see if my lesser brain can figure it out.
post #46 of 64
Quote:
Originally Posted by pnoble View Post

Most interesting to me is that as usual after their blow out quarterly reports, Apple's stock has again plummeted - over 6% in after hours trading so far! Anyone in the financial community care to explain why?

Apple is a stock heavily favored by the "institutional investing crowd" and they have the ability to move large amounts of shares quickly. That makes for interesting profit taking which, when done on a fairly large scale, can drive prices down ... and then they can get back in at a lower price and ride it up for even more profit .... nice, huh? The stock, thus far, is behaving as I assumed it would ....... http://forums.appleinsider.com/showt...94#post1734494
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post #47 of 64
Quote:
Originally Posted by solipsism View Post

How do you define win?

Win...as in iPod win. 70%+ share win.
post #48 of 64
Quote:
Originally Posted by Dr Millmoss View Post

I think, nothing. They did nothing with the first $10 billion, nothing with the second, nothing with the third, and so on. This question is always answered with the same double-talk, which means... nothing.

Are you finally going to shut up about this when they buy nvidia and AMD or something else equally large? Or are you going to continue to whine that's only $10B-$20B or so worth?

Heh, I doubt the EU or US would let them get away with owning the GPU market but it would be amusing.
post #49 of 64
Quote:
Originally Posted by TNSF View Post

True they've done nothing of note so far. Seriously, they could do $5 billion per quarter in acquisitions and never touch the $50 billion they already have.

And true they've been asked about it before. But somehow the answer seemed different this time. In the past they've just talked about how reinvesting it in the business is better than paying it out. They've never made mentioned of these one or two opportunities before. They never hinted at something quite so significant.

Steve is up to something, as usual. Now I have to see if my lesser brain can figure it out.

When asked Steve has made similar comments in the past, so I don't think we should be fooled into believing that this remark portends anything. Situation normal, as far as I can tell.

Quote:
Originally Posted by nht View Post

Are you finally going to shut up about this when they buy nvidia and AMD or something else equally large? Or are you going to continue to whine that's only $10B-$20B or so worth?

Heh, I doubt the EU or US would let them get away with owning the GPU market but it would be amusing.

No, sorry. As a stockholder I'd become even louder in my complaints if Apple did something truly stupid with the cash.
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post #50 of 64
Quote:
Originally Posted by nht View Post

Win...as in iPod win. 70%+ share win.

Note that Apple won by legally taking the majority of the revenue and profit. Thats winning. If you regulate winning to marketshare by ignore profit then you end up with what HP and Dell have in the PC industry. Each have abut 25% and yet Apple takes ⅓ of the profit. You also have to ask yourself if marketshare over profit was so important why hasnt Apple licensed Mac OS X yet as it would increase their marketshare.
Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
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post #51 of 64
If I were Apple, what would I invest $50B into?
We all know that Apple are control freaks. I believe that one area that Apple would love to have more control over would be distribution. Apple are currently having to work with phone carriers in order to have their phones function. What if Apple bought, or investing in a satellite company to increase it's service distribution to all areas of the world and would possibly eliminate the need for a phone company. I'd venture to say that in the next 20 years, satellite phones will be commonly used, as well as satellite iPads, iCars, iHomes. etc. Forget cloud computing, think Star computing. They would be able to distribute media, data, real time location info, radar imagery, phone service, and so much more that I can't imagine. They may start off by just buying Dish Network or DIrect TV. This would give them fantastic leverage with networks for programing.
So that's my idea.. Apple you can send the money to my paypal account.
post #52 of 64
Quote:
Originally Posted by solipsism View Post

Note that Apple won by legally taking the majority of the revenue and profit. That’s winning. If you regulate winning to marketshare by ignore profit then you end up with what HP and Dell have in the PC industry. Each have abut 25% and yet Apple takes ⅓ of the profit. You also have to ask yourself if marketshare over profit was so important why hasn’t Apple licensed Mac OS X yet as it would increase their marketshare.

No, I mean winning as in "dominates the market segment so much that the EU starts having conniptions". Apple may make the lions share of the PC market profits but they don't dominate it like the iPod does the MP3 market.

Market dominance generated $4.55B of revenue/$3.06B operating income this last quarter for Microsoft (Windows Division). I dunno that is typically factored into the 1/3 profit number attributed to Apple for the PC market as opposed to profits of HP, Dell, Acer, etc.

Apple has very low probability to successfully dominate the cell phone market...even the smartphone market...simply because of size. 314M phones worldwide, 172M smartphones. Selling 30M+ iPhones into that market makes you a major player but not dominant. Apple IMHO has no real expectations of "winning" that market and had from the start tempered expectations to be reasonable (1% of the market). They didn't intend to be Nokia with a product for every price point and given Apple success is tied to hardware sales that is the only way they can dominate. Highly profitable? Yes. Very successful? Yes. Major Player? Yes. Win? Not so much.

If Apple sells 30M iPads/year they probably own 70% of the tablet market based on the 40-50M netbook market size as a rough guide. Given the $499 to $829 range the iPad is meant to address as much of that market as reasonable for Apple.

Dell, HP, Samsung, etc can make Android slates but Apple's production constraints won't be a limiting factor for market dominance as it does for phones.

I don't see why this is contentious at all. Tablets are an area that Apple can really win big in and Jobs just threw down the gauntlet. There's no need whatsoever to try to define the word "win" to one limited limited aspect whether that is market share or profits. Apple intends to have both.
post #53 of 64
Quote:
Originally Posted by Dr Millmoss View Post

No, sorry. As a stockholder I'd become even louder in my complaints if Apple did something truly stupid with the cash.

Buying both nvidia and AMD is perhaps excessive given that it would never be approved but one or the other to capture key GPU technology is worth the $6-7B of strategic advantage on both the mobile and desktop fronts. Of the two nvidia is a good fit given CUDA, OpenCL and Tegra fits into multiple segments of the Apple lineup and doesn't immediately butt heads with Intel.

But essentially what you're saying is that you are going to continue to whine unless Apple forks over a large dividend regardless of what else they plan to do with the money because you know business better than Steve Jobs.
post #54 of 64
Quote:
Originally Posted by djmikeo View Post

If I were Apple, what would I invest $50B into?
We all know that Apple are control freaks. I believe that one area that Apple would love to have more control over would be distribution. Apple are currently having to work with phone carriers in order to have their phones function. What if Apple bought, or investing in a satellite company to increase it's service distribution to all areas of the world and would possibly eliminate the need for a phone company. I'd venture to say that in the next 20 years, satellite phones will be commonly used, as well as satellite iPads, iCars, iHomes. etc. Forget cloud computing, think Star computing. They would be able to distribute media, data, real time location info, radar imagery, phone service, and so much more that I can't imagine. They may start off by just buying Dish Network or DIrect TV. This would give them fantastic leverage with networks for programing.
So that's my idea.. Apple you can send the money to my paypal account.

Yah, Motorola tried that once. Google Iridium...and I bet Iridium would let Apple buy into Iridium NEXT. It only costs $2.9B but you can forget about very slim phones.
post #55 of 64
Quote:
Originally Posted by nht View Post

Buying both nvidia and AMD is perhaps excessive given that it would never be approved but one or the other to capture key GPU technology is worth the $6-7B of strategic advantage on both the mobile and desktop fronts. Of the two nvidia is a good fit given CUDA, OpenCL and Tegra fits into multiple segments of the Apple lineup and doesn't immediately butt heads with Intel.

But essentially what you're saying is that you are going to continue to whine unless Apple forks over a large dividend regardless of what else they plan to do with the money because you know business better than Steve Jobs.

The problem with these acquisitions isn't getting them approved by regulators, it's making them look even remotely intelligent. These market "captures" apparently aren't worth that much to the companies that already own the technology, so the burden is on you to show how they'd be worth even more to Apple. Hint: not just saying it is.

Essentially what I am saying is that Apple can't spend anything close to the amount of cash they already have on hand in a responsible way, so they should give some of it back to the stockholders. I will continue to say this because it's demonstrably right, and becomes blindingly more obvious with every quarterly report. How much is a matter for discussion, but from the sound of it, you'd think a penny a share it too much, so we probably don't have anything further to discuss in that area.
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post #56 of 64
Quote:
Originally Posted by Dr Millmoss View Post

The problem with these acquisitions isn't getting them approved by regulators, it's making them look even remotely intelligent. These market "captures" apparently aren't worth that much to the companies that already own the technology, so the burden is on you to show how they'd be worth even more to Apple. Hint: not just saying it is.

Here are a couple off the cuff answers that I may have mentioned earlier:

The nvidia's tegra SOC IP seems to offer Apple as a competitive advantage in conjunction to the A4 package.

Nvidia CUDA and GP-GPU IP.

And of course all the other GPU IP.

Apple owning nvidia eliminates the Intel license problem in as much as Apple would be the only ones that would be using nvidia's integrated GPUs. Intel still probably wants Apple as an Intel only customer enough to allow this so long as a the Dells and HPs of the world are stuck with intel IGPs.

That last alone seems rather compelling and not factored into nvidia's current market value. It would allow Apple to move forward with the MB, MBA and Mini having decent IGPs that support OpenCL and the new Core CPUs.

Quote:
I will continue to say this because it's demonstrably right...

And yet you have done no demonstration beyond repeated assertion that all other ideas are stupid because you think so. Despite every other tech company having large cash holdings. Hint: it is not just saying it is.
post #57 of 64
Quote:
Originally Posted by nht View Post

Apple owning nvidia eliminates the Intel license problem in as much as Apple would be the only ones that would be using nvidia's integrated GPUs. Intel still probably wants Apple as an Intel only customer enough to allow this so long as a the Dells and HPs of the world are stuck with intel IGPs.

That last alone seems rather compelling and not factored into nvidia's current market value. It would allow Apple to move forward with the MB, MBA and Mini having decent IGPs that support OpenCL and the new Core CPUs.

Unfortunately, the "Intel license problem" isn't the limiting factor when it comes to implementing non-Intel IGP with Nehalem and later CPUs. The real problem is technical - the integrated graphics have moved into the CPU chip, and will soon be on the CPU die itself.

It would be better for consumers if Intel bought Nvidia and used their IP to make Intel IGP not suck anymore.
it's = it is / it has, its = belonging to it.
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post #58 of 64
Quote:
Originally Posted by nht View Post

Here are a couple off the cuff answers that I may have mentioned earlier:

The nvidia's tegra SOC IP seems to offer Apple as a competitive advantage in conjunction to the A4 package.

Nvidia CUDA and GP-GPU IP.

And of course all the other GPU IP.

Apple owning nvidia eliminates the Intel license problem in as much as Apple would be the only ones that would be using nvidia's integrated GPUs. Intel still probably wants Apple as an Intel only customer enough to allow this so long as a the Dells and HPs of the world are stuck with intel IGPs.

That last alone seems rather compelling and not factored into nvidia's current market value. It would allow Apple to move forward with the MB, MBA and Mini having decent IGPs that support OpenCL and the new Core CPUs.



And yet you have done no demonstration beyond repeated assertion that all other ideas are stupid because you think so. Despite every other tech company having large cash holdings. Hint: it is not just saying it is.

The value must be demonstrated, not just termed possibly sort of interesting. Remember, acquiring these companies comes at a premium to what the markets think they are currently worth, so the acquired company has to worth more as part of Apple than the current market value. This is never an easy thing. You seem to be trying to demonstrate the opposite, particularly in the instance of nvidia, which by your scenario loses all of its customers other than Apple. I'm not saying you can't provide the needed evidence for your case, only that you haven't.

You have also invented a characterization of my views on dividends. If you're interested in my actual views, then I will share them -- if not, then do us both a favor, and get off it.

Oh, and good luck finding companies with larger cash hoards than Apple, or any that are accumulating cash at the rate Apple is piling it up.
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post #59 of 64
Quote:
Originally Posted by Mr. H View Post

Unfortunately, the "Intel license problem" isn't the limiting factor when it comes to implementing non-Intel IGP with Nehalem and later CPUs. The real problem is technical - the integrated graphics have moved into the CPU chip, and will soon be on the CPU die itself.

It would be better for consumers if Intel bought Nvidia and used their IP to make Intel IGP not suck anymore.

You can ignore the IGP if you want. You can't ignore the inability modify the integrated memory controller in a way to make their own IGP work. nvidia can do this with QPI to make boards but really they want to be able to build a reasonable chipset to support their IGPs. My understanding of this stuff is somewhat spotty but my guess is that intel would let apple get away with a lot more than a company that competes with intel.
post #60 of 64
Quote:
Originally Posted by Dr Millmoss View Post

Oh, and good luck finding companies with larger cash hoards than Apple, or any that are accumulating cash at the rate Apple is piling it up.

I've done that for you in the past but I'll do it again. As of end of September 2010 (more or less) from the Google Finance site.

Cash and Short Term Investments

MSFT 36.7B
GOOG 33.3B
AAPL 25.6B
ORCL 23.6B
IBM 23.5B

Total Current Assets

MSFT 55.6B
IBM 44.9B
AAPL 41.6B
GOOG 39.4B
ORCL 30.2B

Total Assets

IBM 103.4B
MSFT 86.1B
AAPL 75.2B
ORCL 65.3B
GOOG 53.3B

Total Equity

AAPL 47.7B
MSFT 46.2B
GOOG 43.3B
ORCL 32.1B
IBM 21.1B

Wow...that sure took a lot of luck to find folks holding about as much cash and short term investments as AAPL.

AAPL leads in terms of total equity but is within the ballpark of it's peers.

But don't let reality interfere...I'm sure all these CEOs and CFOs are negligent in holding so much cash.
post #61 of 64
Except that Apple's cash and short term investments now total in excess of $50 billion, and of course you completely ignored my other challenges. Try again.
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post #62 of 64
Quote:
Originally Posted by Dr Millmoss View Post

Except that Apple's cash and short term investments now total in excess of $50 billion, and of course you completely ignored my other challenges. Try again.

Except it doesn't. Find me one financial balance sheet link that says Apple is holding 50B in cash and short term investments. Not the whinings of an analyst asking for dividends but an actual financial summary showing $50B in cash and short term investments.

http://finance.yahoo.com/q/bs?s=AAPL

http://ycharts.com/companies/AAPL/cash_on_hand

http://finapps.forbes.com/finapps/js...APL&period=qtr

http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii

http://www.dailyfinance.com/financia.../balance-sheet

http://www.marketwatch.com/investing...-sheet/quarter

http://data.cnbc.com/quotes/AAPL/tab/7

If you can't get something this basic right then your other challenges and opinions are almost meaningless.

AAPL is a $50B company. Not AAPL has $50B in cash laying around.
post #63 of 64
Quote:
Originally Posted by nht View Post

Except it doesn't. Find me one financial balance sheet link that says Apple is holding 50B in cash and short term investments. Not the whinings of an analyst asking for dividends but an actual financial summary showing $50B in cash and short term investments.

You are misreading. Just take a look at the concurrent thread on Apple's cash position, and the questions which were asked in the earnings report conference call about same:

http://forums.appleinsider.com/showthread.php?t=113952

Apple currently has $51 billion in cash and liquid assets on the balance sheet, and is accumulating cash at a rate of about $5 billion a quarter (translation: at the end of the current fiscal year, they will be sitting on around $70 billion). You can continue to misread and believe otherwise, but you will continue to be wrong.
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post #64 of 64
Quote:
Originally Posted by Dr Millmoss View Post

You are misreading. Just take a look at the concurrent thread on Apple's cash position, and the questions which were asked in the earnings report conference call about same:

http://forums.appleinsider.com/showthread.php?t=113952

Apple currently has $51 billion in cash and liquid assets on the balance sheet, and is accumulating cash at a rate of about $5 billion a quarter (translation: at the end of the current fiscal year, they will be sitting on around $70 billion). You can continue to misread and believe otherwise, but you will continue to be wrong.

Apple's cash and short term investments are NOT $50B as you stated before. if you include long term investments they are $50B. It is liquid in the sense that AAPL can sell these assets but for whatever strategic reason this is ownership in things it would rather not part with. This is why they aren't listed under current (liquid) assets but as non-current (less liquid) assets. So your characterization of $50B in liquid assets is STILL incorrect.

A good example is Steve Jobs' Disney holdings. These aren't liquid unless Steve doesn't want to be Disney's single largest shareholder anymore. So yah, in theory he could sell it all and get an aircraft carrier for a yacht or something but in practice it's not liquid for strategic reasons.

Taking MSFT as an example if you add in long term investments to their cash and short term investment then they are sitting on 45B cash. GOOG drops behind a little since they have only 34B in cash + short term + long term investments. Both are still in the same category as AAPL in terms of liquid assets.

Actual "cash" position is somewhat unknown if you include long term investments. They tend to get booked at the purchase price of the security, not the current price. Given that, you can't count on that $11B or so of long term securities actually being worth $11B today. They could be worth a lot less or a lot more.
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