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Fiscal Q1 2012: Apple's biggest earnings blowout in history - Page 2

post #41 of 89
Quote:
Originally Posted by jason98 View Post

The problem is that the subsequent quarters are not going to be that great. That's what the Street is perhaps afraid of. 4s holiday demand will run out of juice and then Apple will be left in the vacuum for 2-3 quarters in a row until iPhone 5 is out.

Late Q1, early Q2 should see the release of iPad3 and the release of iPhone should follow 1 Quarter later ... the last iPhone Steve really worked on ... I just don't see the foot coming off the gas anytime soon.
post #42 of 89
Quote:
Originally Posted by Constable Odo View Post

If the share price is going to continue to fall, it won't matter to shareholders how much revenue Apple is pulling in. I'm not blaming Apple for the situation, I'm only saying that bullish outlooks mean nothing if shareholders continue to see bearish results. When it comes to Apple, Wall Street continues to look years into the future so that they can devalue the company despite current record earnings. You might say that Apple is being priced to fail which makes very little logical sense, but if the people running Wall Street are represented by John Corzine, then it's perfectly clear. My case in point is that Apple is performing far better than the financial institutions that are claiming Apple's future growth potential is rather limited. What right have they got to decide such a thing when their own institutions are in financial shambles? I don't believe they are qualified to accurately predict Apple's future.

Guys like Zaky and Dediu enjoy playing with numbers and that's all they see. The people that are actually controlling the market are not true numbers people. They're probably just high rolling gamblers or maybe there's no risk at all because they actually control the market to suit themselves. I'm not sure, but when a company's share price disconnects from fundamentals, then something is most definitely wrong. It wouldn't even make sense to build a successful company if that is the outcome. I've been Apple long since 2004 and I really shouldn't be griping since I've made money but it's getting annoying hearing these protests about the market cheating Apple shareholders because there probably won't be any changes made in the near future. Apple shareholders will just have to suck it up or look elsewhere for share gains.

I keep wondering if a large stock split, say, 10 for 1 would help. I realize that the total valuation remains the same... but it could change the number and profile of the shareholders.

As it is, I think the concentration of the shares allows a very few institutions to wield an inordinate influence on the share price.
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post #43 of 89
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Originally Posted by AjitMD View Post

The law of large numbers is affecting AAPL price. The market cap is huge and is already widely held with large % in most portfolios. It takes a lot of boost earnings. ETC ETC

Quote:
Originally Posted by Mister Snitch View Post

That's it in a nutshell. Who's left to buy? Moreover, as the market itself begins to tank, widely-held Apple must inevitably sink to the 'water level'.

Neither viewpoint is correct.

In terms of worldwide share of computers and phones, Apple is still quite small. So is the aggregate sales of tablets, since the market for that is barely getting going. There's potentially tremendous room for growth in all of its major segments.

Also, even if Apple (a la MSFT) were to just do sideways from here, say, simply growing at the long-run rate of inflation -- which Apple could, sleep-walking -- it would still command a higher multiple if you compared it to other similar assets.
post #44 of 89
Quote:
Originally Posted by wizard69 View Post

A prudent investor has to be cautious about Apple simply because it's size puts it in a unique position.

This statement means nothing. Care to explain?
post #45 of 89
Quote:
Originally Posted by Flaneur View Post

...

On topic, I agree with you that Apple's ongoing success, and its likely impetus in getting Samsung to expand in Texas, are the way economies do and should develop. I'm thinking that "the Apple effect" may soon be quantifiable in macroeconomic terms. There have to be secondary effects from putting a computer in everybody's pocket and hands.

The Texas manufacturing plant interest me, also...

I am under the impression, that semiconductor manufacturing, while not labor-intensive, requires the use of toxic chemicals and gasses. And, because of that, health and environmental regulations have made this type of manufacturing uncompetitive/unprofitable in the U.S.

I suspect that Apple paid for that plant and manufacturing equipment as part of the deal with Sammy... It is possible that Apple owns the entire facility (including land and improvements).

It would be interesting if Apple could use its financial muscle to get Government and Industry to negotiate a solution to bring high-paid manufacturing jobs back to the U.S... or at least stop the hemorrhaging.

It was not that long ago, that Apple proudly ran a large plant in Fremont, CA.

Apple to Close Fremont Plant, Lay Off 345
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post #46 of 89
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Originally Posted by Dick Applebaum View Post

The Texas manufacturing plant interest me, also...

I am under the impression, that semiconductor manufacturing, while not labor-intensive, requires the use of toxic chemicals and gasses. And, because of that, health and environmental regulations have made this type of manufacturing uncompetitive/unprofitable in the U.S.

I suspect that Apple paid for that plant and manufacturing equipment as part of the deal with Sammy... It is possible that Apple owns the entire facility (including land and improvements).

It would be interesting if Apple could use its financial muscle to get Government and Industry to negotiate a solution to bring high-paid manufacturing jobs back to the U.S... or at least stop the hemorrhaging.

It was not that long ago, that Apple proudly ran a large plant in Fremont, CA.

Apple to Close Fremont Plant, Lay Off 345

I'm quoting your whole post because of its challenge to everyone's journalistic tendencies.

Look how you dug up an ancient story from the LA Times, and how great is that to see at the tap of a finger on your iPad? What can we find out about the Austin Samsung plant?

Should be really interesting, especially against the legal background, which seems not to matter at all between the two companies.
post #47 of 89
Quote:
Originally Posted by OriginalG View Post

they also pay a dividend

Driving the stock to a halt isn't going to force Apple's hand to provide a dividend. Go find some other stagnant stock ala Microsoft for such pleasure.
post #48 of 89
Quote:
Originally Posted by anantksundaram View Post

This statement means nothing. Care to explain?

My response directly below touches upon this but a truly huge Apple might as well change its logo from a apple to a bullseye. In any event some points below.
  1. Large companies are targets for lawyers. This drains money from a company like Apple. More importantly they will eventually loose a lawsuit that will cost them money.
  2. There seems to be a rather vocal crowd right now that sees success as some how evil. Apple doubling in size so that it is clearly the largest company in the world just gives these idiots something to focus on.
  3. In a very similar manner some in the political world see big companies as a "thing" to exercise their political power against. You will see people in politics attacking Apple simple because it is a big successful company. This is no different than what has happened to Exxon, IBM, Microsoft, AT&T and other companies over the years.
  4. Sheer size brings with it difficulties with respect to growth. Some of the factories in China employ more people than entire states have population wise in the USA. Doubling production is a huge capital investment and requires finding skilled workers. Yes Apple has lots of cash but they are not magicians and can not wave a wand to get instantly functional production facilities.
  5. As alluded to above the political climate against success is a problem. Apple could very well end up paying far more in taxes. This could be a huge issue if excessively sever.
  6. Apple has way to much invested in production in China which leaves them exposed in several ways. For one there is a backlash in the US against Chinese products. More significantly though is that China is becoming very aggressive militarily which could lead to war or tight sanctions against China. It is the old story about having all of your eggs in one basket.
  7. Apple is product thin in its two biggest growth areas. This being iPhone and iPad. Though I believe they will address this with more products soon, relying on a one size fits all strategy is a mistake when you are talking about billions of customers. Ultimately this means leaving an opening for competition that they should close themselves. Studies have shown that to much choice chases away customers but I suspect that the converse also happens, that is to little choice drives customers away. Apple hasn't demonstrated the aggressive product development needed to drive sales further.

These are just a few issues but if Apple wants to double sales they need to obviously increase production. In some cases they are already fully employing all of a contractors facilities so doubling production might mean investing in another processor factory with Samsung for example. They have the billions to do so but it isn't a shake and bake dinner. It is interesting that Apple has been rumored to be looking at production at TSMC with people taking this as a freeze in relations with Samsung. I rather see it as a prudent measure because they had a real possibility of outstripping Samsungs production capacity.

This is just one example of Apple having struggles that are a result of their sheer size. A small company that wants to double production often just buys a new machine and sticks it in a corner. To double A6 production they may have to build an entire factory. Which brings up another question, I wonder how much ownership Apple has in Samsungs new factory in Austin. I know a few years ago Samsung was looking for partners, it makes me wonder how much Apple owns of the operation.
post #49 of 89
Quote:
Originally Posted by jason98 View Post

The problem is that the subsequent quarters are not going to be that great. That's what the Street is perhaps afraid of. 4s holiday demand will run out of juice and then Apple will be left in the vacuum for 2-3 quarters in a row until iPhone 5 is out.

The holiday quarter is historically where most companies make their money. Apple is no different. However, if you're talking about YOY qtrs, Apple has consistently had record breaking quarters over the last several years. That's not about the change any time soon. Oh and prior to the iphone 4s, they still sold a record number of 4's in the Sept qtr last year.
post #50 of 89
Quote:
Originally Posted by wizard69 View Post

...

The problem for Apple is this, if you are one of the largest companies in America, maybe the world how do you realistically become 2X or 4X that size? It isn't easy in the best of times. However you also have a rather negative political and economic climate that you can't divorce from the discussion if you are reasonable.
...

Quote:
Originally Posted by Flaneur View Post

...

I think you are right that the valuation is now reasonable for most because no one can imagine where 2x or 4x growth is going to come from. Meanwhile Andy's three articles so far are trying to show how short-sighted the general view is.

Quote:
Originally Posted by wizard69 View Post

Short-sighted maybe but uncharted territory for sure. How does a company like Apple double in size in let's say five years. Small companies do so all the time with varied degrees of success but the record is pretty clean with respect to companies Apples size. So you can see there is reasonable concern.
...

Quote:
Originally Posted by wizard69 View Post

...

This is just one example of Apple having struggles that are a result of their sheer size. A small company that wants to double production often just buys a new machine and sticks it in a corner. To double A6 production they may have to build an entire factory. Which brings up another question, I wonder how much ownership Apple has in Samsungs new factory in Austin. I know a few years ago Samsung was looking for partners, it makes me wonder how much Apple owns of the operation.


Sorry for cutting up your posts this way... but I want to discuss size -- and the assertion that Apple is too big to maintain its growth rate.

First, what does size mean? Apple by many measures is a very small company.

Quote:
The largest companies in the US based on the number of workers worldwide are not necessarily the biggest in terms of revenue, profits or business locations. Some are much more efficient than others. Apple has fewer than 50,000 workers, but is the largest American tech company. Hewlett-Packard, which is only slightly smaller in sales, has 324,000 people. Apple may be more efficiently run, but it is also in a relatively small number of businesses while H-P makes everything from printers to PCs and has large services, consulting, and software operations.

Americas Ten Largest Employers


Or go here and check on where Apple ranks by things like: Profits, Return on Revenues, Return on Shareholders' Equity

FORTUNE 500 Our annual ranking of America's largest corporations



I guess my question is what in particular about Apple is so big that it precludes it from maintaining its growth rate?
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post #51 of 89
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Originally Posted by wizard69 View Post

Even a 14 year old has the capacity to learn, so I expect you will see the light.

Are you making a personal reference to yourself with that title?
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post #52 of 89
Quote:
Originally Posted by jeffdm View Post

prospective.

Several of you need to cut out the political rants. Regardless of your viewpoint, if it's political, it doesn't need to be articulated anywhere on ai except political outsider. When i get back, i'll start deleting comments.

thank you, thank you!

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post #53 of 89
Quote:
Originally Posted by Dick Applebaum View Post

Sorry for cutting up your posts this way... but I want to discuss size -- and the assertion that Apple is too big to maintain its growth rate.

First, what does size mean? Apple by many measures is a very small company.



Americas Ten Largest Employers


Or go here and check on where Apple ranks by things like: Profits, Return on Revenues, Return on Shareholders' Equity

FORTUNE 500 Our annual ranking of America's largest corporations



I guess my question is what in particular about Apple is so big that it precludes it from maintaining its growth rate?

As I've said we are in uncharted territory here. In any event Apple is a very big company by a number of measures.

Take employment for example, you say 50,000 but I suspect it is more than that if stores and subsidiaries are included but that doesn't really matter. Why because so many of its contractors have thousands dedicated to just building products for Apple. Growth in the sense of shipping more product involves growing these resources. So while they aren't direct Apple employees they are a factor in its size and potential for growth.

On the flip side Apple has little in the way of products when you sit down and think about it. This is a double edge sword though. The lack of alternative products for grow means that a very few products have too be leveraged for all of that growth. So if you double iPhone production that means doubling everything in the supply chain to meet that growth. It is a challenge for sure but it can also be expensive especially if a product suddenly has a downturn in sales. Interestingly here Apple is doing one thing very right, they are getting as much production out of their designs as possible, keeping lines running for the same basic design for years where the rest of the cell industry might get months out of a basic design.

Another measure of size is influence on the industry. This is where Apple needs to be careful as influence can be taken negatively by some. I do believe the greatest threat to Apple is regulation due to unfounded fears of their size and influence. That and the current general stupidity with respect to profits means that Apple may have impediments put in place that nobody following the company wants to see. You may see Apple as small when you count employees but they are huge when it comes to market influence. Just look at what Mac OS, iPhone, ITunes, iPad and other Apple initiatives have done to their respective industries. The amount of grumbling about just iTunes is amazing.
post #54 of 89
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Originally Posted by Lochias View Post

You can point all you like, but most of us would defer to the dictionary. The Free Dictionary (online) says, "A lopsided victory or thorough defeat."

Others show, "an easy or one-sided victory," "a win by a large margin," etc.

Easy can be easier; large margins can be bigger. And lopsided can be ... well, you get the idea.

Educate us, Professor. Where do you get 'blowout' as so uniquely special??

These "word corrections" are frequent, and almost always incorrect. There's another incorrect "correction" in another new thread.
post #55 of 89
Quote:
Originally Posted by fathomsdeep View Post

Late Q1, early Q2 should see the release of iPad3

No way. It will be a 2S. No retina screen, just a speed bump.
post #56 of 89
Quote:
Originally Posted by Dick Applebaum View Post

I am under the impression, that semiconductor manufacturing, while not labor-intensive, requires the use of toxic chemicals and gasses. And, because of that, health and environmental regulations have made this type of manufacturing uncompetitive/unprofitable in the US

Wrong. Very wrong and silly.

I design semiconductor facilities and the EHS regulatory impact on the cost is not even at the "noise" level compared to total costs.

Why is the USA either the largest or second largest (valid arguments for both) manufacturing sector in the world? Because we are really, really, REALLY good at it. EHS (environmental, health and safety) regulations have almost no impact on costs. Labor costs are a major issue, but we WANT to pay US workers well. Remember Henry Ford.

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post #57 of 89
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Originally Posted by JONOROM View Post

Wrong. Very wrong and silly.

I don't mind being corrected for being wrong... but calling an honest impression "silly" is rude and unwarranted.

Quote:
I design semiconductor facilities and the EHS regulatory impact on the cost is not even at the "noise" level compared to total costs.

I have an association with semiconductor manufacturing going back to Hoffman Semiconductor in the 1960s (growing silicon ingots -- and matching lots for Zener diodes on a punched-card calculator) up until having the likes of Applied Materials, National Semi, Fairchild/Shlumberger as a major customers in the 1980s.

Never been involved in facility design... but I suspect I was in Clean Rooms while you were still in grade school (obviously not learning any manners).

Quote:
Why is the USA either the largest or second largest (valid arguments for both) manufacturing sector in the world? Because we are really, really, REALLY good at it. EBS regulations have almost no impact on costs. Labor costs are a major issue, but we WANT to pay US workers well. Remember Henry Ford.

Do you have any links to support your assertions -- as they are contrary to what I hear?
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post #58 of 89
Quote:
Originally Posted by Dick Applebaum View Post

I don't mind being corrected for being wrong... but calling an honest impression "silly" is just rude.



I have an association with semiconductor manufacturing going back to Hoffman Semiconductor in the 1960s (growing silicon ingots -- and matching lots for Zener diodes on a punched-card calculator) up until having the likes of Applied Materials, National Semi, Fairchild/Shlumberger as a major customers in the 1980s.

Never been involved in facility design... but I suspect I was in Clean Rooms while you were still in grade school (obviously not learning any manners).



Do you have any links to support your assertions -- as they are contrary to what I hear?

High school, not grade school. Sorry about the "silly" but it appeared to be oft-repeated right-wing propaganda. You have made clear that it is not.

Worked on my first semiconductor facility design in 1983. Working on one now. Properly handing Arsine (the most toxic of the gasses) may add a million dollars to a facility that will cost a billion dollars to build even before you install the tools, which cost much, much more. But I don't think even in China they take shortcuts with Arsine. In fact, my impression (having never worked on one but seen the designs) is that fabs in the third world are built to templates that are almost clones of those in the USA, whatever the local regulations may be.

Regarding my assertion that we have the largest or second largest manufacturing sector, there has been lots of press but this one is interesting:

http://www.seeitmarket.com/u-s-still...making-things/

Note that our electronics industry is FIVE TIMES as big as China's.

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post #59 of 89
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Originally Posted by wizard69 View Post

As I've said we are in uncharted territory here. In any event Apple is a very big company by a number of measures.

Take employment for example, you say 50,000 but I suspect it is more than that if stores and subsidiaries are included but that doesn't really matter. Why because so many of its contractors have thousands dedicated to just building products for Apple. Growth in the sense of shipping more product involves growing these resources. So while they aren't direct Apple employees they are a factor in its size and potential for growth.

On the flip side Apple has little in the way of products when you sit down and think about it. This is a double edge sword though. The lack of alternative products for grow means that a very few products have too be leveraged for all of that growth. So if you double iPhone production that means doubling everything in the supply chain to meet that growth. It is a challenge for sure but it can also be expensive especially if a product suddenly has a downturn in sales. Interestingly here Apple is doing one thing very right, they are getting as much production out of their designs as possible, keeping lines running for the same basic design for years where the rest of the cell industry might get months out of a basic design.

Another measure of size is influence on the industry. This is where Apple needs to be careful as influence can be taken negatively by some. I do believe the greatest threat to Apple is regulation due to unfounded fears of their size and influence. That and the current general stupidity with respect to profits means that Apple may have impediments put in place that nobody following the company wants to see. You may see Apple as small when you count employees but they are huge when it comes to market influence. Just look at what Mac OS, iPhone, ITunes, iPad and other Apple initiatives have done to their respective industries. The amount of grumbling about just iTunes is amazing.

Very well stated! +1
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post #60 of 89
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Originally Posted by JONOROM View Post


Regarding my assertion that we have the largest or second largest manufacturing sector, there has been lots of press but this one is interesting:

http://www.seeitmarket.com/u-s-still...making-things/

Note that our electronics industry is FIVE TIMES as big as China's.

Just wanted to clarify, when we talk about the US manufacturing sector being first or second in the world, we are talking about the value of the products produced, not the number of people employed.

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post #61 of 89
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Originally Posted by JONOROM View Post

High school, not grade school. Sorry about the "silly" but it appeared to be oft-repeated right-wing propaganda. You have made clear that it is not.

Worked on my first semiconductor facility design in 1983. Working on one now. Properly handing Arsine (the most toxic of the gasses) may add a million dollars to a facility that will cost a billion dollars to build even before you install the tools, which cost much, much more. But I don't think even in China they take shortcuts with Arsine. In fact, my impression (having never worked on one but seen the designs) is that fabs in the third world are built to templates that are almost clones of those in the USA, whatever the local regulations may be.

Regarding my assertion that we have the largest or second largest manufacturing sector, there has been lots of press but this one is interesting:

http://www.seeitmarket.com/u-s-still...making-things/

Note that our electronics industry is FIVE TIMES as big as China's.

OK... On even keel!

That link is interesting... It shows that "Office, Accounting & Computing Machinery"
Manufacturing is 53% in US vs 10% in China...

I find that impossible to believe. IBM may still manufacture [mostly] in the US but I can't think of any computer company doing manufacturing here.

(I worked for IBM for 16 1/2 years in maimframe Computer Market Support)



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post #62 of 89
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Originally Posted by Gatorguy View Post

Very well stated! +1

Totally disagree. Sounds like a used car salesman ramblings. No real facts. Conjecture of what ifs and 'the sky is falling'.
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post #63 of 89
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Originally Posted by Dick Applebaum View Post

OK... On even keel!

That link is interesting... It shows that "Office, Accounting & Computing Machinery"
Manufacturing is 53% in US vs 10% in China...

I find that impossible to believe. IBM may still manufacture [mostly] in the US but I can't think of any computer company doing manufacturing here.

(I worked for IBM for 16 1/2 years in maimframe Computer Market Support)




Is this output per person or gross output rankings?
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post #64 of 89
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Originally Posted by wizard69 View Post

The lack of alternative products for grow means that a very few products have too be leveraged for all of that growth.

Too few products that are in too dominant a position?

Well, take the Macintosh for one. 15% of Apple's revenue (about $6B this quarter, ~$30B for the 2012) and only 5% of the world market. Lots of room for growth. Growing a steady double digits when rest of the the industry is stalled. If you include the iPad as a computer (and the president of HP does) then next year Apple will be largest manufacturer of computers in the world. Together they will sell about $70B. And STILL with only 5% of the market (NIC iPad).

AND Apple has...
The highest quality computers by far
The broadest product line-up
The best and newest technologies
Incredible retail outlets
The best service in the industry, by far
Benefiting from the halo effect of other Apple products
The most respected brand
TONS of room for growth

It would be crazy to think that this single sector (computers) could not double or better by 2014, to $140B+. Bigger by far than Apple is this year. With just one segment of the business.

I think I just put a big hole in your arguement. No?

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post #65 of 89
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Originally Posted by JONOROM View Post

Just wanted to clarify, when we talk about the US manufacturing sector being first or second in the world, we are talking about the value of the products produced, not the number of people employed.

Ahh... Thanks for that (see my last post).

I think that that's the a big part of the US's problem -- oversimplifying here:

Big US $ contracts foreign manufacturers to make products that are sold to others for big $

That's great for us, the shareholders.

I am a firm believer in the free market -- but where is the place in the US for a worker to start with an entry job or choose a career?

We can aspire to, but cannot all start as Industry moguls with $ Billions at our disposal.
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post #66 of 89
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Originally Posted by Dick Applebaum View Post

Ahh... Thanks for that (see my last post).

I think that that's the a big part of the US's problem -- oversimplifying here:

Big US $ contracts foreign manufacturers to make products that are sold to others for big $

That's great for us, the shareholders.

I am a firm believer in the free market -- but where is the place in the US for a worker to start with an entry job or choose a career?

We can aspire to, but cannot all start as Industry moguls with $ Billions at our disposal.

Agree. Not sure that the quoted $1.82T of US manufacturing subtracts OEM parts sourced overseas, but I would certainly hope so. GIGO otherwise.

A manufacturing job used to be the best road to a middle class life in the USA. It helped create stable communities and families. I now reside in Detroit (my heart is still in Cambridge). Since 1970 80% of the manufacturing jobs (and the families and their homes) have vanished here.

Very sad. I don't know what replaces it. Certainly not a job at WallMart.

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post #67 of 89
Quote:
Originally Posted by JONOROM View Post

Too few products that are in too dominant a position?

It would be crazy to think that this single sector (computers) could not double or better by 2014, to $140B+. Bigger by far than Apple is this year. With just one segment of the business.

I think I just put a big hole in your arguement. No?

I agree that the few number of products is an advantage for Apple -- SJ-101 Discard Legacy Baggage At The Earliest Opportunity. This gives Apple an agility to take advantage (risks) when opportunities appear.

The last thing, I think, is Apple people are continuously looking around for things that irritate them or piss them off. Then they analyze "what can I do to this to make my (and everyone else's) life better?"

This is an inexhaustible source of opportunities for Apple -- it is what they do better than anyone.

Ask yourself... Who is going to obsolete the post-pc Tablet computer... You already know the answer -- and Apple is already working on it!
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post #68 of 89
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Originally Posted by Dick Applebaum View Post

I keep wondering if a large stock split, say, 10 for 1 would help. I realize that the total valuation remains the same... but it could change the number and profile of the shareholders.

As it is, I think the concentration of the shares allows a very few institutions to wield an inordinate influence on the share price.

There's probably some truth to that. Institutions hold a large fraction of Apple's stock and private individuals tend to stay away from very expensive shares. If Apple split 10:1, it MIGHT lead to more private investors, although it's tough to be sure - and even tougher to quantify.

However, if they did that, imagine all the trolls here going nuts. "Apple used to be at 360 and now it's only at $40. What a failure......"

Quote:
Originally Posted by anantksundaram View Post

Neither viewpoint is correct.

In terms of worldwide share of computers and phones, Apple is still quite small. So is the aggregate sales of tablets, since the market for that is barely getting going. There's potentially tremendous room for growth in all of its major segments.

Also, even if Apple (a la MSFT) were to just do sideways from here, say, simply growing at the long-run rate of inflation -- which Apple could, sleep-walking -- it would still command a higher multiple if you compared it to other similar assets.

That's the point that often gets missed. Even if Apple wasn't growing at all (or if you completely discount future growth), it's share price is still far too low.

Just bought some puts on Amazon, though. Any bad news is going to hammer their stock pretty hard.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #69 of 89
Quote:
Originally Posted by jragosta View Post

Just bought some puts on Amazon, though. Any bad news is going to hammer their stock pretty hard.

I agree totally about Amazon: the valuation is fairly ridiculous, and I can see nothing in their future growth opportunities that suggests anything radically different or game-changing.

I wish I had the risk tolerance to deal with puts. Even though your prediction is right and I think you're going to make out well.
post #70 of 89
Quote:
Originally Posted by wizard69 View Post

[*]Large companies are targets for lawyers. This drains money from a company like Apple. More importantly they will eventually loose a lawsuit that will cost them money. [*]There seems to be a rather vocal crowd right now that sees success as some how evil. Apple doubling in size so that it is clearly the largest company in the world just gives these idiots something to focus on. [*]In a very similar manner some in the political world see big companies as a "thing" to exercise their political power against. You will see people in politics attacking Apple simple because it is a big successful company. This is no different than what has happened to Exxon, IBM, Microsoft, AT&T and other companies over the years.

Lawyers, undefined 'vocal crowds', and 'people in politics' are not a threat to Apple. Do you see any organized groups that represent any of these constituencies arming themselves against the company? If so, who? Where?

And, if there aren't any, you do realize that your suggestion in tantamount to saying that Apple must self-censor its growth. In other words, you think Apple will one day stop growing because of some threats (as yet undefined), and if that threat were not there now, it could be there tomorrow, so they should go ahead and stop growing anyway?


Quote:
Originally Posted by wizard69 View Post

[*]Sheer size brings with it difficulties with respect to growth. Some of the factories in China employ more people than entire states have population wise in the USA. Doubling production is a huge capital investment and requires finding skilled workers. Yes Apple has lots of cash but they are not magicians and can not wave a wand to get instantly functional production facilities.

Yes, managing quality and the supply chain could be an issue at this scale, especially if one has to double capacity.

But this is where Tim Cook's background and experience could be a huge asset. By all accounts, he is a master supply chain manager, and brings tremendous skills in building operational excellence. These sorts of things have been scaled before. No one would have predicted five years ago that we would see assembly shop the size of today's Foxconn, employing one million people. Yet, it has happened.

Why is it impossible to imagine a Foxconn facility with two million employees? Or, say, another Foxconn-type company with a million employees? Also, don't forget that Apple's gains in share will come partly at the expense of others in the industry losing share, freeing up both human and physical capital, and creating slack in the supply chain.


Quote:
Originally Posted by wizard69 View Post

[*]Apple has way to much invested in production in China which leaves them exposed in several ways. For one there is a backlash in the US against Chinese products. More significantly though is that China is becoming very aggressive militarily which could lead to war or tight sanctions against China. It is the old story about having all of your eggs in one basket.

In today's global economy, nobody -- least of all, the US -- can afford to go to war with China, and China cannot afford to go to war with anyone. If that were to happen, it's not just Apple that will shut down. So will hundreds of other companies all over the US and the world, including the Dells, the HPs, the GEs, the Walmarts, the Targets, hundreds of Chinese companies, and so forth. Half the shelves in this country would be bare. In fact, Apple will be the least of our problems if something like that were to happen!

You are simply making alarmist predictions.

Moreover, Apple has already begun to diversify out of China, e.g., look at their move into Brazil. They could yet move to Mexico, or even back to the US.

I could go on similarly about your other points, but hope you get the drift. Companies don't plan their future based on worst-case scenarios. If they did, no one would invest, and if they did not invest, they would not grow. Most human beings have a more optimistic (and less bleak) view of the world than you do. And, thank goodness for that.
post #71 of 89
A blowout is a disaster, right? You know, when you go on a date and your date blows you out as in blows you out of the water as in explodes and sinks? That has been how the term blowout has been used in English since ships shot cannon at each other and used explosive shells that sometimes hit the gunpowder store and literally blew the boat out of the water.

Please remember not many other countries talk like you.
post #72 of 89
Quote:
Originally Posted by jragosta View Post

Dividends are one of those things that sounds better on paper than in reality. For a utility, they make a lot of sense. For a rapidly growing market leader? Not so much.

One of AAPL's true problems is there is almost nobody left to buy. If they add a dividend then funds that hold dividend stocks can now buy AAPL. I am not a 'dividend guy' myself but in the case of AAPL a modest dividend would help the stock price.

I personally think a modest share buyback is in order right now.
post #73 of 89
Quote:
Originally Posted by BeltsBear View Post

One of AAPL's true problems is there is almost nobody left to buy. If they add a dividend then funds that hold dividend stocks can now buy AAPL. I am not a 'dividend guy' myself but in the case of AAPL a modest dividend would help the stock price.

I personally think a modest share buyback is in order right now.

The "true problem" lies not with AAPL but with the market. Apple deserves a much higher valuation. But I don't think Apple needs to play the game that other CEOs make of trying to massage the investor community through gimmicks such as dividends and stock buybacks. And yes, I call them gimmicks. As I see it, when a company begins to pay dividends or do stock buybacks, management could be saying one or both of the following: (a) We have a lot of confidence in our earnings and to show that, we're going to regularly pay a portion of our profits to shareholders; (b) We don't see any other ways of investing our profits in the business so we're just going to give it back to shareholders. Companies want to give the impression that the main reason they're paying dividends is because of reason (a) indicated previously but oftentimes, it's reason (b).

Apple should concentrate on what they do best-design and sell great products. If investors think AAPL isn't worth their money, let them invest in something else.

Warren Buffett owns Berkshire-Hathaway. In the 1990s, Berkshire stock was trading in the thousands of dollars. It's now trading at over $100,000. Berkshire stock has never split and Warren gave a reason for it. He wanted investors in Berkshire to be partners, not speculators. He wanted investors to commit to Berkshire for the long term. Very reluctantly, he created another class of Berkshire stock but that too is not day-trader material. He split the new class of Berkshire stock only to finance an acquisition, but he firmly believes that Berkshire Hathaway shareholders should be like partners, not speculators.

As a public company, Apple has to play the game of satisfying Wall Street. But they should not go to the extent of pandering to Wall Street at the expense of their business. It hasn't paid to bet against Apple. Let those who bet against Apple find out the hard way.
post #74 of 89
Quote:
Originally Posted by wizard69 View Post

My response directly below touches upon this but a truly huge Apple might as well change its logo from a apple to a bullseye. In any event some points below.
  1. Large companies are targets for lawyers. This drains money from a company like Apple. More importantly they will eventually loose a lawsuit that will cost them money.
  2. There seems to be a rather vocal crowd right now that sees success as some how evil. Apple doubling in size so that it is clearly the largest company in the world just gives these idiots something to focus on.
  3. In a very similar manner some in the political world see big companies as a "thing" to exercise their political power against. You will see people in politics attacking Apple simple because it is a big successful company. This is no different than what has happened to Exxon, IBM, Microsoft, AT&T and other companies over the years.
  4. Sheer size brings with it difficulties with respect to growth. Some of the factories in China employ more people than entire states have population wise in the USA. Doubling production is a huge capital investment and requires finding skilled workers. Yes Apple has lots of cash but they are not magicians and can not wave a wand to get instantly functional production facilities.
  5. As alluded to above the political climate against success is a problem. Apple could very well end up paying far more in taxes. This could be a huge issue if excessively sever.
  6. Apple has way to much invested in production in China which leaves them exposed in several ways. For one there is a backlash in the US against Chinese products. More significantly though is that China is becoming very aggressive militarily which could lead to war or tight sanctions against China. It is the old story about having all of your eggs in one basket.
  7. Apple is product thin in its two biggest growth areas. This being iPhone and iPad. Though I believe they will address this with more products soon, relying on a one size fits all strategy is a mistake when you are talking about billions of customers. Ultimately this means leaving an opening for competition that they should close themselves. Studies have shown that to much choice chases away customers but I suspect that the converse also happens, that is to little choice drives customers away. Apple hasn't demonstrated the aggressive product development needed to drive sales further.

These are just a few issues but if Apple wants to double sales they need to obviously increase production. In some cases they are already fully employing all of a contractors facilities so doubling production might mean investing in another processor factory with Samsung for example. They have the billions to do so but it isn't a shake and bake dinner. It is interesting that Apple has been rumored to be looking at production at TSMC with people taking this as a freeze in relations with Samsung. I rather see it as a prudent measure because they had a real possibility of outstripping Samsungs production capacity.

This is just one example of Apple having struggles that are a result of their sheer size. A small company that wants to double production often just buys a new machine and sticks it in a corner. To double A6 production they may have to build an entire factory. Which brings up another question, I wonder how much ownership Apple has in Samsungs new factory in Austin. I know a few years ago Samsung was looking for partners, it makes me wonder how much Apple owns of the operation.

Wow! Really?

This is the most pessimistic, fear mongering, weak minded, intangible, non rationale "argument" I've ever seen.

Problem right now is that AAPL supporters have nothing but logic, facts, statistics, and rationale to back up their investments while AAPL detractors have nothing but fear mongering, "bring the big guy down 'cause I ain't getting anything from him" hyperbole to fall back on. Problem is, both influence the Stock movement, but rationale will prevail. When AAPL was worth $50 Bill, they said "no way can they grow to $100 Bill", when it was 100, they said the same thing about 200, etc., etc., etc., etc.

APPLE/AAPL is in a transitional period, i.e there's a microscope on them, lots of pessimistic "click bait" to try and scare people. The company itself is incredibly growing and strengthening, nothing near hinting any signs any "pullback", however strong logistics saying the opposite. The Stock is priced as if Apple is going on hiatus for several years. Let Apple be Apple, and let the cobwebs fly off the Stock and watch greasy Wall Streeters have no choice but to stop the old game of "how can we put fear around AAPL".

Apple's Execs just had sizable Stock grants sent their way, and this is a capable team who will push for the worlds HEALTHIEST, richest, and most successful company to continue as it always has. Nobody likes working hard to lose money, and despite what fear-mongerers might have you believe, with every source that claims "competition" as some sort of end for Apple, as if they're forced to close their glass doors, Apple's team are a capable bunch who won't "sit back and let it happen". Disney CEO and new Apple Board Member, Bob Iger, just bought over $1 Million worth of AAPL Stock at $375-ish. Maybe he has a good hunch about Apple's future?
post #75 of 89
Wall Street is treating Apple as an aberration. Where every company were lapping up to Wall Street's guidance and wisdom, Apple is the only odd man out. Apple prospered and the companies that followed Wall Street's wisdom have to pay the piper and lost their shirts off their backs. And boy, Wall Street really hates Apple. Apple not only beats Wall Street, but it also rubs Wall Street in the nose. Apple is the rare company on Wall Street that has zero debt. That means Wall Street banks do not earn a single cent from Apple for fat fees and consultancy fees.

Wall Street has not only destroyed many companies but it has also destroyed the economies of the Western world. Yet they were powerful enough to get bail-out money from the bureaucrats at public expense. Except for Bernard Madoff who suckered many of the smart people from Wall Street to invest in his Ponzi schemes (HSBC and Citibank are some of the greedy victims) I have not heard of anyone from the rogue banks being jailed. The same people are still running the show with the same behavior.

As for the careerist Wall Street analysts, they have time and time again screwed up and always missed out on Apple. It is because they are beholden to Wall Street and so do not dare to go against the sacrosanct Wall Street's orthodoxy. They will be punished if they do. For more detail on this part, please download and listen to the podcast titled "Exile on Wall Street" on WYNC's Leonard Lopate Show from the iTunes Podcast store. Wall Street analyst Mike Mayo, who worked at six Wall Street firms, analyzing banks and protesting against bad practices for two decades, discusses the role of finance and banks in the US. In Exile on Wall Street: One Analysts Fight to Save Wall Street.
post #76 of 89
Quote:
Originally Posted by Eideard View Post

Why compare Apple to an enterprise that's in worldwide decline?

Apple was also in decline until Steve Jobs returned.
post #77 of 89
Quote:
Originally Posted by vsp View Post

Wall Street is treating Apple as an aberration. Where every company were lapping up to Wall Street's guidance and wisdom, Apple is the only odd man out. Apple prospered and the companies that followed Wall Street's wisdom have to pay the piper and lost their shirts off their backs. And boy, Wall Street really hates Apple.... SNIP...

Blah blah blah blah. We all are looking for a target to shoot at for messing up Apple's performance. I've finally come to realize that it is Apple's very strength as a company that makes it possible for options traders to control it so much. Here's an article I read on Seeking Alpha that begins to explain what's going on with Apple. As best I can kluge my way through it, the hedge funds control it about 80% of the time, except when there is big news/earnings, then the open market comes through. The p/e will remain compressed for some time before the price breaks through to another plateau. Understand, they can't do this with an inherently weak stock like Amazon. It's neither good nor bad, it simply is.

I wish for a 10-1 split, it would be neutral to the stock price, yet be a strong psychological factor to get more people in the stock, and just maybe bring the valuation up a bit.

However, back in the day, remember when Microsoft stock split and split and split, to the point where if you had owned a single share from the early days you could retire a millionaire on it? Apple has far surpassed them. It should be the stock for this generation, yet due to the very sophistication of the market it is not. Sheesh, if it were valued freely, like an Amazon, it would be worth 3,000 a share!!!! I've read that the price would have to rise to $467 just to keep the current p/e ratio after earnings are reported for this quarter!

Ohhh, for the love of Pete I wish the stock were worth that much. It should rise $100 every year with no problems, but I wish there were a way to get the real valuation of the company in the share price to sell it, so that it isn't necessary to option the stock just to get any return from it. I don't want to be an options trader and I don't want to wait years and years either.
What is really factored into the price is a kind of perpetual sense of disbelief that any company could be as good as Apple is. ~Retrogusto
Reply
What is really factored into the price is a kind of perpetual sense of disbelief that any company could be as good as Apple is. ~Retrogusto
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post #78 of 89
Quote:
Originally Posted by Johnny Mozzarella View Post

Apple was also in decline until Steve Jobs returned.

And that means what, now? Apple 1.0 and Apple 2.0 are very different beasts.
post #79 of 89
Quote:
Originally Posted by Godzilla View Post

And that means what, now? Apple 1.0 and Apple 2.0 are very different beasts.

I think that we need to establish more distinction between stages of Apple if we're effectively going to talk about the post-Steve era.

If you want to use the 'version numbers' analogy, I propose we do it this way:

Apple 1.0: Original Steve (before ousting)
Apple 2.0: InterSteve (Scully, Amelio, and all that nonsense)
Apple 3.0: Second Steve
Apple 4.0: Post-Steve (today and beyond)

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
Reply
post #80 of 89
Quote:
Originally Posted by Tallest Skil View Post

I think that we need to establish more distinction between stages of Apple if we're effectively going to talk about the post-Steve era.

If you want to use the 'version numbers' analogy, I propose we do it this way:

Apple 1.0: Original Steve (before ousting)
Apple 2.0: InterSteve (Scully, Amelio, and all that nonsense)
Apple 3.0: Second Steve
Apple 4.0: Post-Steve (today and beyond)



I think that now should be Apple 3P. P for post-Steve.

4.0 will begin once each product has been refreshed, because Steve was involved with the next ones. after that...
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