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Rumor: Apple reduces iPad 2 orders by 25%, could drop price - Page 3

post #81 of 105
Quote:
Originally Posted by SpamSandwich View Post

Actually, they should be investigated by the SEC.

Spon on, Spam.
Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #82 of 105
Quote:
Originally Posted by walshbj View Post

According to CNBC JP Morgan is now trying to downplay the earlier report and they do NOT see a downturn. They must have opened whatever options contracts they were after this morning...

Very interesting Bren.
Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #83 of 105
Accusations of illegality is internet hardmanism. If you believe that these analysts are corrupt say so in your real name.

I think the kind of analysts who monitor supply chains are useful.
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post #84 of 105
Quote:
Originally Posted by ConradJoe View Post

Pretty much every company uses the same theory, which is that there exists a price point which will maximize total profits.

Premium brands realize that cutting prices will not maximize total profits, given the elasticity specific to the product in question. Crappy brands realize that raising prices will not maximize total profits, given the elasticity specific to the product in question.

Lower component costs do not result in lower selling prices unless the pricing change will maximize total profits. Your statement seems to depend on an assumption that a company will price things at a level lower than that which would maximize total profits, if, for example, the margin remains unchanged. Such a situation is rare, given that every company seeks to maximize total profits, and few would care that the margin is higher than it was prior to the cost reduction.

But if you disagree, tell me how Apple's theory is different from every other manufacturing company's. Do they not seek to maximize total profits?

You're arguing microeconomics 101 semantics. Every company seeks to maximize profits. But companies that manufacture "luxury" products set their price at what they think it's worth, and let demand find them. They don't chase demand down the price curve to the bottom. And companies that manufacture unique widgets that no one else can seem to duplicate aren't rigid slaves to the supply/demand price curve (see "monopolies" in your textbook).

Review the past decade of Apple financials. They don't cut prices just to spur demand (e.g. Mac). Especially when they already own the market (e.g. iPod, iPhone, and iPad). And while their prices obviously aren't pegged exactly to margins, you'll find a mix of pricing and innovation that maintains fairly consistent (and high) margins across all products and price points.
post #85 of 105
Quote:
Originally Posted by shawnb View Post

You're arguing microeconomics 101 semantics. Every company seeks to maximize profits. But companies that manufacture "luxury" products set their price at what they think it's worth, and let demand find them. They don't chase demand down the price curve to the bottom. And companies that manufacture unique widgets that no one else can seem to duplicate aren't rigid slaves to the supply/demand price curve (see "monopolies" in your textbook).

Review the past decade of Apple financials. They don't cut prices just to spur demand (e.g. Mac). Especially when they already own the market (e.g. iPod, iPhone, and iPad). And while their prices obviously aren't pegged exactly to margins, you'll find a mix of pricing and innovation that maintains fairly consistent (and high) margins across all products and price points.

Both thsee arguments are wrong because Apple has to worry about it's platform.
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post #86 of 105
Quote:
Originally Posted by asdasd View Post

Both thsee arguments are wrong because Apple has to worry about it's platform.

No clue what that means, their platform seems to be doing just fine.
post #87 of 105
Quote:
Originally Posted by shawnb View Post

You're arguing microeconomics 101 semantics. Every company seeks to maximize profits.

Dunno about semantics, other than establishing the meaning of the word "demand" as used in this context.

I agree with your second sentence, with the caveat that it applies to every rational for-profit company. Exceptions exist, such as hobby boutiques.


Quote:
Originally Posted by shawnb View Post

But companies that manufacture "luxury" products set their price at what they think it's worth, and let demand find them. They don't chase demand down the price curve to the bottom.

I don't really know what you mean by chasing demand down the price curve. But you seem to be saying that such companies do something other than attempt to set prices in a manner intended to maximize total profits. If you have any examples of such companies, I'd love to hear all about them. I am unaware of a single one. But I suppose stranger things are real, so maybe some companies that manufacture luxury goods intentionally price things in a way so as to get less profits. Who are these companies?



Quote:
Originally Posted by shawnb View Post

And companies that manufacture unique widgets that no one else can seem to duplicate aren't rigid slaves to the supply/demand price curve (see "monopolies" in your textbook).

This is just plain incorrect. In a monopoly situation, the demand curve has less elasticity than otherwise. Your use of "the supply/demand price curve" makes me think that you believe there to be one, inelastic demand curve. If so, you know little about elasticity of demand and how it affects the different curves for different products.

Quote:
Originally Posted by shawnb View Post

Review the past decade of Apple financials. They don't cut prices just to spur demand (e.g. Mac).

Product pricing is not included in a company's financials, but that is not important. What is important is that you think Apple sets prices at some level OTHER than that which will yield maximum total profits. I can't imagine that is correct. What evidence do you have that Apple sets prices higher or lower than the price that would yield maximum profits?

BTW, if you are just saying that Apple does not reduce prices when such reduction would result in lower profits, you are correct. But then again, such a point is trivial, given that no rational company does that, except for temporary strategies designed to boost market share, which are intended to maximize total profits in the long run.


Quote:
Originally Posted by shawnb View Post

Especially when they already own the market (e.g. iPod, iPhone, and iPad). And while their prices obviously aren't pegged exactly to margins, you'll find a mix of pricing and innovation that maintains fairly consistent (and high) margins across all products and price points.

See above, regarding monopoly pricing and elasticity of demand. This is an interesting topic. You might want to study up on elasticity of demand, and the factors that influence it.
post #88 of 105
Quote:
Originally Posted by shawnb View Post

No clue what that means, their platform seems to be doing just fine.

I have seen demand for Android apps first in the large app developer I am working for. So "fine" is not good enough. Apple had a good percentage of the profits in the early 90's too.

Time to put away Econ 101.
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post #89 of 105

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Edited by MacRulez - 5/4/12 at 12:38pm
post #90 of 105
Quote:
Originally Posted by asdasd View Post


Time to put away Econ 101.

For many, it seems as if it is time to finally pick it up...
post #91 of 105
Quote:
Originally Posted by ConradJoe View Post

For many, it seems as if it is time to finally pick it up...

Lol. So no counter argument against the claim that a company which has to build a platform may not follow the same criteria as the mythical companies of Econ 101. What does Econ 101 say about very large companies which refuse to pay dividends. That's not a rhethoricak question so let me answer it - the stock stagnates or falls. Not happening for Apple.

The fact is that no company - least of all Apple - follows the simple rules taught to undergraduates. And people don't follow simplistic economic rules either.

If for instance, Apple could make more money by selling Windows machines, they wouldn't.

Apple are aware of the platform issue which is why they are, most probably, going to introduce low entry level phones in a week, or two.
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post #92 of 105
Quote:
Originally Posted by asdasd View Post

Lol. So no counter argument against the claim that a company which has to build a platform may not follow the same criteria as the mythical companies of Econ 101. What does Econ 101 say about very large companies which refuse to pay dividends. That's not a rhethoricak question so let me answer it - the stock stagnates or falls. Not happening for Apple.

The fact is that no company - least of all Apple - follows the simple rules taught to undergraduates. And people don't follow simplistic economic rules either.

If for instance, Apple could make more money by selling Windows machines, they wouldn't.

Apple are aware of the platform issue which is why they are, most probably, going to introduce low entry level phones in a week, or two.

My remark wasn't aimed towards you. And I don't know what they are teaching undergrads these days. But at any rate, I think we might agree more than we disagree.

Tell me more about "the platform issue". I'm not sure what you mean, but if you mean that building a brand can be very important for companies that market directly to consumers, then we agree.
post #93 of 105
Apologies then.

No secret about platform. iOS is a platform and it needs a healthy market share to attract devs. I know that paid iOS apps are eating androids lunch but most apps I see being commissioned these days are by companies looking to increase brand awareness. In those categories Android is becoming the platform of choice. Apple need to keep, or increase share even if they have to cut margin to do it.
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post #94 of 105
This is what investment banks do BTW to drop the stock price for their clients. Great buying opportunity before AAPL announces earnings next month.
post #95 of 105
Quote:
Originally Posted by asdasd View Post

Apologies then.

No secret about platform. iOS is a platform and it needs a healthy market share to attract devs. I know that paid iOS apps are eating androids lunch but most apps I see being commissioned these days are by companies looking to increase brand awareness. In those categories Android is becoming the platform of choice. Apple need to keep, or increase share even if they have to cut margin to do it.

It's not easy to compare paid apps between the two since the revenue is derived differently. Many of the more popular paid apps for iOS are free to the user in the Android Market.
Take a look at the various Android Market "top-x" lists to see how many are familiar.

https://market.android.com/
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post #96 of 105
Quote:
Originally Posted by asdasd View Post

Apologies then.

No secret about platform. iOS is a platform and it needs a healthy market share to attract devs. I know that paid iOS apps are eating androids lunch but most apps I see being commissioned these days are by companies looking to increase brand awareness. In those categories Android is becoming the platform of choice. Apple need to keep, or increase share even if they have to cut margin to do it.

I'd like to see where you get your information regarding brand awareness. Android developers don't select that os to increase brand awareness... I'm sure that either iOS or Android will give them equal brand awareness at this point.

Android is becoming the os of choice for developers because of the lack of restrictions required in development.

Apple's overall iOS market share is greater than 28% but Apple will still have an even steeper hill to climb if it allows Android to grow unabated... but I'm sure the time to worry hasn't quite arrived yet... and Apple will not sit still.
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post #97 of 105
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post #98 of 105
Quote:
Originally Posted by MacRulez View Post

Ah yes, the vast conspiracy. Thanks for reminding us.

Sarcasm?
Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #99 of 105
Quote:
Originally Posted by iCarbon View Post

There is something deeply fishy with these reports.

A Shift from 17 to 13 million is a huge alteration -- and not the kind of screw-up we've ever seen from Tim Cook. I can only imagine two possible explanations:

1. the report is complete BS spread by someone selling AAPL short.
2. they actually will update the iPad this quarter... something I highly doubt (they rarely deviate from their product release cycle that much, and would gain little as the iPad 2 is still selling well).

Indeed. Going into the holiday quarter and iPad production being reduced? Utter rubbish. Either there will be a new iPad 3 or everything about this report is nonsense. This holiday quarter will be, yet again, Apple's best ever in spite of the financial sky falling down on everyone's heads.
post #100 of 105
Quote:
Originally Posted by Gatorguy View Post

Gosh, missed this from mid-August: Apple supposedly dumping LG and turning to Samsung (and CMI) for remaining iPad2 display needs? LG reportedly having too many quality issues.

http://www.itproportal.com/2011/08/1...isplay-issues/

Gosh, I guess you also missed the report that LG resolved those issues.
post #101 of 105
Quote:
Originally Posted by anonymouse View Post

Gosh, I guess you also missed the report that LG resolved those issues.

Correct, I missed that too. Link to the story?
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post #102 of 105
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post #103 of 105
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post #104 of 105
Quote:
Originally Posted by Gatorguy View Post

Correct, I missed that too. Link to the story?


http://www.digitimes.com/news/a20110909PD201.html
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post #105 of 105
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