Notes of interest from Apple's Q1 2011 conference call - Page 2

Originally Posted by melgross

Yup! Nothing at all from either side. Hard to understand. I was on three live blogs, and the call, and people were wondering the same thing. I can understand Apple not mentioning it for some reason, but I'm surprised the analysts, who are usually quick to pick up on something like that, didn't mention it. They have in the past.

Originally Posted by macinthe408

Vapor. Invisible. BOOYAH. Eat that iPad. (Oh wait, you can't. Because you can't find it.)

Originally Posted by Postulant

I wonder what it feels like to have 60 billion in cash...

Originally Posted by Dr Millmoss

I've been saving my Dixie cups.

So it turns out that Apple is more cautious about preserving their capital then, say, CitiBank. Why am I not comforted?

Originally Posted by PeterO

I'm not so good at media multitasking. My hands were full just listening to the audio.

Good to know that it wasn't just me. Maybe the analysts were still trying to digest the incredible numbers and processing where and how their projection models need adjustments.

With respect to the US market, I'd also wish they discussed the potential impact of US mobile carriers' data-cap and paid packet content prioritization. How will it change consumer behaviour? Does Apple need to enter into agreements with each carrier? What does the change between Google and Akamai mean for Apple streaming?

Originally Posted by cvaldes1831

Apple still considers the device to be a "hobby."

They need the right content deals before this thing is going to take off. If they sold a million of them this past quarter, that's really $100M in revenue, which works out to 0.37% of total revenue, an insignificant amount.

By contrast, they sold 7.3 million iPads at an ASP of $630, giving $4.6B in revenue. That's significant.

They really need to sell ten times as many Apple TVs before the device has any relevance to the bottom line.

iPad cannibalization of the Mac: "Yes, I think there is some cannibalization," Cook said. "But I also think there is a halo effect."

"We have introduced millions of people in Asia to Apple through the iPhone. And we're now introducing many more through the iPad, and I think some of those decide to buy a Mac."

"If this is cannibalization, it feels pretty good."

Apple still has a low share of the PC market, so cannibalization isn't a concern to them. "The other guys lose a lot more. And we have a lot more to win because of that."

Originally Posted by Haggar

If Apple is not worried about "cannibalization" then they should have no problem selling that midrange Mac tower that people have been asking for.

Originally Posted by melgross

Good one!

Well, banks haven't proven to be cautious at all, have they? How much did Citigroup lose on those mortgage derivatives? I assume that Apple isn't buying other companies debts either, as banks were doing. I'm not concerned. If you were right about your concerns, the cash and investments would have seen a big drop during 2009. It didn't.

Originally Posted by dualie

Aug 27, 2010
Apple Death Knell #54: Apple: Short Term Winner, Long Term Loser
By Fabrice Grinda, Published in BusinessInsider
Relevant Quote:

Android, with its relative openness, seems to be playing the role Windows played for the Mac. [] On the DOS, then Windows side, the constant competition between PC makers, processor makers, and software developers, while less elegant and functional at the beginning, given enough time led to a plethora of offerings and innovation that not only copied many of the Macs best features but extended them.[] The combination of faster PCs with more software at lower prices eventually completely marginalized the Macintosh.

Steve Jobs seems to be repeating the same mistake all over again. The elegant integration between the iPhone, iTunes and the App Store is definitely a current source of comparative advantage. It is easier to offer a better user experience at the beginning when you limit the form factor and completely control the hardware and software. The iPhone 4 is clearly the best smartphone on the market. The apps in the Apple App Store are clearly the best apps on the market.

However, Apples insistence on having a single form factor, on being a premium player at a premium price point (to carriers at least), and its arbitrary decisions with regards to what apps make it in the App Store will eventually make Apple a niche player. Even if Apple keeps innovating and has the best phone on the market, it wont matter.

http://www.macobserver.com/tmo/death_knell/

Originally Posted by LTMP

I posted this in the previous article as well, but it is worth repeating:

Here's an interesting group of numbers I haven't seen reported yet:
iPhone: 16,240,000
iPad: 7,330,000
iPod Touch: 10,000,000 (19.45 million units, over half of which were iPod touch)
Apple TV: 1,000,000 (we know they sold at least this many)

Total IOS devices sold this quarter: 34,570,000

Average IOS sales per day over the last quarter: 384,000.

Looks to me like IOS is outselling Android by a huge margin, since they have only recently started claiming over 300,000 per day

Originally Posted by melgross

To be fair, Android is still almost all phones. If we're comparing phone sales to phone sales, they are ahead now. Will it remain that way? Probably, but who can say for sure?

Originally Posted by Maestro64

google does not care if you want the latest OS you need to upgrade you phone.

Originally Posted by melgross

Those are interesting questions, but likely too specialized for that call. Apple is still mostly an electronics consumer company. You'll see questions like that on calls for other companies.

Originally Posted by Dr Millmoss

Mad Magazine, circa 1965. Got a mind like a rusty trap.

Right, that's what I was driving at. The banks treat their capital like... capital. Apple treats their capital like... Fort Knox.

Originally Posted by ghostface147

And yet still no white iPhone.

Originally Posted by mstone

I read somewhere yesterday that they only earn around 1% interest on that cash, which some shareholders claim is a good reason for Apple to instead offer a dividend. I was curious why they can't get at least 3%.

Originally Posted by LTMP

True, Android is mostly phones, but you can bet they're counting the tablets and PMPs too.

Originally Posted by PeterO

No doubt mine are but a twig in a forest of countless questions that could be asked -- the detailed answers and strategies to which Apple has no doubt discusses internally but need and want to keep bland in public discourse -- it's just inquiring minds are, well, you know, curious.

Originally Posted by Paul94544

aapl is doomed...

well yeah right! , simply amazing numbers. The Ipod touch too. I think I'm going to get and iPod touch and attach a wi max 4G router to it, then make calls for virtually nothing over skype. Theres plenty of apps to do Texts and SMS. Why people buy iPhones is a mystery to me, yeah I know its harder to receive calls but hey, Is paying over
199+(24mths*85)=> $2239.00
or 199+(24mths*105)=> $2719.00 both are 1 GB per month data
for ONE device , ONE freaking device?

Compared with this: -

Wi-Max (4G) + Ipod touch (month to month contract, unlimited data plan, with up to 5 wifi devices)
($50*24)+ 299 => $1399.00

This is a saving of between $840 - 1320, is imho a really good deal given that I can get the same and more - up to 5 wi-fi devices ie:- run a laptop, iPad, ipod touch and Kindle

Plus I can stop and start the Wi-Max plan as needed to save more

Originally Posted by PeterO

(Unless I missed something) Other than rolled into both the iOS device and iTunes numbers, nowhere during the earnings call was there a discussion on Apple TV -- Apple's 4th leg. The officers and analysts talked about current and future projections and strategies on all other devices and services, but not Apple TV. No mention of current market penetration or of a push to new markets.

Originally Posted by noexpectations

I can't wait for the next BIG PRODUCT from Apple. It will be another "must have" device that I don't even realize that I must have it. Yeah, I'll buy it anway.

Originally Posted by melgross

Ad revenue sharing is common. It's also possible that they are sharing some of the money MANUFACTURERS ARE PAYING them. See? You got it partly right.

There are a number of articles about this, but this one happens to be handy:

http://theunlockr.com/2009/09/26/the...e-vs-cyanogen/

Originally Posted by melgross

I'd rather be safe than sorry. You know how our conversation over this has gone throughout the years. Neither of us would like to see a really big purchase, though they could always make one that "surprises and delights". But they could make a number of smaller, but still large ones that do make sense. And no, I have no idea as to what they're thinking.

Originally Posted by zoetmb

To me, what's most remarkable about Apple's continued record-breaking success is that almost everything they sell is priced higher than the competition and that they accomplished this in what is still a terrible world-wide economy (in spite of a recovering stock market.)

Imagine what Apple would be accomplishing had there been no recession.

I do think that in the long term, Apple is planning to get involved in totally new businesses. Otherwise, why would they need all that new space in that new campus? And why are they supposedly intending on doubling the size of the server farm?

My bet is that Steve deferred announcing his leave until these numbers could be announced so that there'd be little overall negative impact on the stock price (although I've always gotten the impression that Steve never managed the company to the stock price.)

Originally Posted by Paul94544

aapl is doomed...

well yeah right! , simply amazing numbers. The Ipod touch too. I think I'm going to get and iPod touch and attach a wi max 4G router to it, then make calls for virtually nothing over skype. Theres plenty of apps to do Texts and SMS. Why people buy iPhones is a mystery to me, yeah I know its harder to receive calls but hey, Is paying over
199+(24mths*85)=> $2239.00
or 199+(24mths*105)=> $2719.00 both are 1 GB per month data
for ONE device , ONE freaking device?

Compared with this: -

Wi-Max (4G) + Ipod touch (month to month contract, unlimited data plan, with up to 5 wifi devices)
($50*24)+ 299 => $1399.00

This is a saving of between $840 - 1320, is imho a really good deal given that I can get the same and more - up to 5 wi-fi devices ie:- run a laptop, iPad, ipod touch and Kindle

Plus I can stop and start the Wi-Max plan as needed to save more

Originally Posted by zoetmb

I do think that in the long term, Apple is planning to get involved in totally new businesses. Otherwise, why would they need all that new space in that new campus? And why are they supposedly intending on doubling the size of the server farm?

Originally Posted by nealg

Great growth overall, phenomenal growth in China which will be a very important market for Apple to continue to grow. Wasnt it the Lenovo CEO who said he was glad Apple wasnt paying attention to China as a market? He has to be sweating a bit right now.

Originally Posted by penchanted

They were also no questions on Jobs' LOA. Maybe they told the analysts beforehand that they would not answer any such questions. Still surprising.

Originally Posted by melgross

At least you've still got it.

I'd rather be safe than sorry. You know how our conversation over this has gone throughout the years. Neither of us would like to see a really big purchase, though they could always make one that "surprises and delights". But they could make a number of smaller, but still large ones that do make sense. And no, I have no idea as to what they're thinking.

It now looks that if they make no large purchase this year, they could have, not $70 billion, but $80 billion; maybe even more. I can't see it getting to that point. But it's much more difficult for stockholders to force the issue than it was with Microsoft. There, the stock had not only stagnated, but was down in actual dollars, and much further down when inflation was taken into account. And I'm not talking about the absurd valuation they had before The Fall.

But, they will likely do something. I don't know if it was true about the CFO story, but it makes sense, considering who it was. Maybe not to replace Oppenheimer, but an additional high level position.

Of course, with that failing, assuming it was real, and Steve's new health issue, things could be derailed for a time.

Originally Posted by Paul94544

I didn't write that - I wrote that google pays them, that means money goes from google to carrier or manufacturer, its got nothing to do with ad revenue - if google shares some $ - so be it. I think you are splitting hairs here. the point is that google is paying to install OS either directly or indirectly. So please stop looking down in such a condescending manner at me !

My main point still stands I think which logically states that Google is giving it away and pays hardware makers to use it sometimes . This is not how MS Windows was sold. Windows was always paid for by the PC manufacturers and public alike though not at same rate. So comparing Android to the PC market and thus will finish off Apple in the same way in the 90's is logically erroneous.

So stop misquoting me please!

Originally Posted by penchanted

I keep trying to envision a sensible large purchase for Apple; the only thing that I can ever come up with is Sony. But, really, Apple likely doesn't want Sony, just Sony Music Entertainment and Sony Pictures Entertainment. Not to mention that such a purchase might create problems dealing with other content providers.

Originally Posted by nealg

Great growth overall, phenomenal growth in China which will be a very important market for Apple to continue to grow. Wasnt it the Lenovo CEO who said he was glad Apple wasnt paying attention to China as a market? He has to be sweating a bit right now.

Originally Posted by Dr Millmoss

A vote on the matter would be a squeaker.



Well, I'm happy they're not letting it ride on roulette wheels at Monte Carlo, or speculating in hog back futures.

The real forces to be reckoned with are the big institutional investors, not individual schmoes like us. If Apple does start pushing $80b plus, which seems almost certain by the end of the calendar year, the issue of dividends will be pushed by the big stockholders, and will be hard to resist, since they have blocks of voting shares that actually count.

Originally Posted by jragosta

No, it's not.

Water vapor is invisible. If you can see it, it has condensed into (liquid) droplets. Think 'cloud'.

Originally Posted by jason98

I wonder who they are going to buy. Got to be Nokia for all their IP.

Originally Posted by Paul94544

If you are a cell phone carrier and you need an OS to compete with the iPhone would you really trust a software company to develop the OS for it. OR would you prefer to develop it yourself?

In an ideal world of course you would prefer to have it in house - you would then not be beholden to the software company. You would have complete control of the software and be able to customize it for you own phones and not be at the mercy of said software company.

It must be rather galling to be forced to use someone else's OS for your phones. And be completely at the mercy of their development timelines and strategic objectives. As long as that OS is kept up to date and adds new fetaures on time and make sense you should be okay but still!

and to top it off that software company is giving the OS away to your nasty rivals too jeez, But again you really should have seen the iOS coming shouldn't you and not have painted yourself in this tight corner in the first place. well thats what come from gettin' complacent! Innovate or die