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Apple telling suppliers to prep for mass production of smaller iPad - WSJ - Page 4

post #121 of 159
Quote:
Originally Posted by "Apple 
[" url="/t/151086/apple-telling-suppliers-to-prep-for-mass-production-of-smaller-ipad-wsj/80#post_2140284"]It's going to be a mini-iPad, so people are going to install iPad apps, not iPhone apps.

So?

Lots of apps are the same on the iPhone and iPad and they work just fine. Others are nearly the same with only minor tweaking by the developer.

The point is that the icons and other items on an iPhone are tiny - and lots of people run apps on iPhones, so there's no inherent reason why apps couldn't easily be run on a device 4 times the area.
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post #122 of 159

Apple will release a smaller iPad, that's a certainty, but the company is too savvy to position it in the same space as the iPad. I don't think it'll just be a 'smaller iPad'. It'll have it's own identity and target market.

 

Remember the iPad wasn't announced as a tablet. It was announced as a netbook replacement, and did it's job perfectly by pretty much taking over that segment and destroying the netbook.

 

So I think a smaller iPad will probably be positioned in a different space, namely the e-reader market. Think about it, while current iPad's e-reader features are advertised, they're not really given priority.

 

Now imagine a smaller iPad that's ultra light, ultra thin, super durable, and that possesses one new KILLER FEATURE, which I think will be e-reader specific. Like a color touchscreen that's readable in daylight. All of a sudden you have an e-reader that can surpass the Kindle on every level (better readability, better build quality, huge app selection, iTunes music/movie library). It'll also be a more focused device than the Nexus 7, which is a good thing.

 

So I predict Apple will announce "The world's best e-reader with the world's largest app store" come this fall.

post #123 of 159
Quote:
Originally Posted by SolipsismX View Post


And it's only $100 more than the 3.5" iPod Touch which has a lot more compromises in terms of HW.
Also note the $399 iPad 2 comes with 16GB whereas the Kindle Fire and Nexus 7 are only 8GB. For the an extra $50 you do get 16GB.
Now consider the current 7" tablets mentioned aren't profitable. Google has even stated that the Nexus 7 has no profit margin and yet it's only $50 less than the lowest reasonably priced 16GB 8" iPad. Apple is very efficient but there are limits to what they can do and I don't see an 8GB or 16GB 8" iPad at $199 and $249, respectively, as being feasible without a strong interest in reducing their profit margin significantly which I don't think will happen.
Now consider how a 8" tablet would affect Apple's tablet profits. Even if the margins are identical one for less money means less profit per unit. Since it's not likely people would buy an 8" and 10" tablet from Apple that means they need to have a good reason to make both. A couple reasons that come to mind are: they think they will sell so many that it will counteract any 10" iPad sales or they are afraid of the 7" tablet margin undermining their 10" iPad sales.

 

I think what is missed here is this. If there is a range of iPad minis, then only the lowest ranged version needs be break even, if it even is. The rest can have margins. This is in effect what Apple does anyway with higher end stuff, except it has margins through th efield. 
 
Bring people into the shop with a loss leader designed to stop Android encroaching on the low end, and then
 
1) Add 50-100 dollars per 8g up to 32g
1) add another $100 for the GPS chip.
 
The overall margins on the line remain healthy. 
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post #124 of 159
Quote:
Originally Posted by jragosta View Post


So?
Lots of apps are the same on the iPhone and iPad and they work just fine. Others are nearly the same with only minor tweaking by the developer.
The point is that the icons and other items on an iPhone are tiny - and lots of people run apps on iPhones, so there's no inherent reason why apps couldn't easily be run on a device 4 times the area.

Of course apps can be run on a 7.85" device,  both iPhone and iPad apps. As I pointed out in a different thread yesterday, there might be a few iPad apps that will seem cluttered on a smaller device than the original 9.7" that they were designed for. But it's totally doable, and those people with the smaller tablet, will just have to live with it.

post #125 of 159
When Google announced Nexus 7 and found out how short of a time period Asus was given to design and release, I thought Google took very seriously Gruber and other rumors of impending iPad mini back in April. Given that Apple most likely would not release iPad mini in June, the next most likely time is when the next iPhone is released in Sept/Oct and before holiday shopping starts. Since Apple will announce a week or two early, that really left very small window for Google to work with.

Why did Google do 7 inch instead of 10? I think 10 inch is the upper limit for useable tablet, and iPad is already there. At the bottom is iPod Touch. Google won't do a tablet the size of a smart phone, so that left 7 inch as the most logical choice. This is where Kindle Fire and Nook is at, so they know there is a market for it.

It will be interesting to see if Google can get a decent martket share before iPad mini comes out.

There is a big market for iPad mini. If released before holiday season, it will become the gift of choice and will catch on like Kindle Fire.
post #126 of 159
Quote:
Originally Posted by aaarrrgggh View Post

However, there clearly is a market for a smaller device.
Quote:
Originally Posted by jragosta View Post

…7" is the predominant size, so the market is substantial.
Quote:
Originally Posted by BUSHMAN4 View Post

Market is definitely there…
Quote:
Originally Posted by Sawdust View Post

…so they know there is a market for it.

My stars… Do any of you know sales numbers?
Quote:
Originally Posted by MeniThings View Post

Apple will release a smaller iPad, that's a certainty…

This is the best one. You can't possibly say this.

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post #127 of 159
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Originally Posted by Tallest Skil View Post

Quote:
Originally Posted by Sawdust View Post

…so they know there is a market for it.
My stars… Do any of you know sales numbers? .

The most recent numbers I've seen say that the Kindle Fire alone has more than 50% of the Android tablet market:

http://www.dailymobile.net/2012/04/28/does-size-matter-kindle-fire-captures-more-than-50-of-android-tablet-market/
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post #128 of 159
Quote:
Originally Posted by jragosta View Post


The most recent numbers I've seen say that the Kindle Fire alone has more than 50% of the Android tablet market:
http://www.dailymobile.net/2012/04/28/does-size-matter-kindle-fire-captures-more-than-50-of-android-tablet-market/

That may be true, but 100% of the Android market is still not a lot.

post #129 of 159
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Originally Posted by dm3 View Post

 

What apple tends to do is take an existing older product and lower its price. 

 

But remember that Apple dropped the numbering of the iPad models. The day the iPad (3) was released I had posted that this was a strong indicator that Apple didn't plan to set the roadmap for the iPad like they've been doing with the iPhone. That being to keep producing the older model as the "cheap" version. If there is no numbering of the iPad models, this would be very confusing to consumers. So it suggested that the cheaper version of the iPad was going to be something different, and therefore numbers weren't needed to differentiate between them. 

 

I suspect the continued sales of the iPad 2 was merely a stopgap until this smaller iPad was ready. Once it comes out the iPad 2 will be discontinued. Not only keeping the number of different models constant, but also opening up the iPad 2's price point for use by this new, smaller version. Otherwise there would be too much crowding at the low-end of the spectrum.

post #130 of 159
Quote:
Originally Posted by Tallest Skil View Post


 Apple also apparently has about 90% of the market that is actually being used. That tells me straight away what size people actually want.

 

Yes, because the one and only criteria for why people choose the tablet they buy is size. It has nothing to do with the operating system, the software and accessory ecosystem, all the apps and media they already have in iTunes because of the iPods and iPhones they've owned over the years.

 

</sarcasm>  :-)

 

This whole "there will never be a smaller iPad" argument reminds me of the "there will never be a Verizon iPhone" arguments people make not so long ago. And it's a lot of the same people who make both arguments (not saying you are one of them). For some reason some folks thinks Apple's current lineup is perfect and that they shouldn't continue to go after no markets their current lineup doesn't address. Not sure why anyone would ever think that was a good business strategy. Not that they should branch out in 100 different directions, but they can't sit still either.

post #131 of 159
Quote:
Originally Posted by "Apple 
[" url="/t/151086/apple-telling-suppliers-to-prep-for-mass-production-of-smaller-ipad-wsj/120#post_2140427"]That may be true, but 100% of the Android market is still not a lot.

Not a lot? In terms of sales numbers, most people put it at 30-35% - which means that Android sales are roughly 1/2 of iPad sales. If Apple captures a significant portion of that, it could easily add double digit percentages to iPad sales.

And, it's quite likely that an iPad Mini would grow the market for 7" devices, as well, so the numbers could be even higher.
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post #132 of 159

Look what has happened with Galaxy phones...they're immensely popular.

 

Sooner or later, a 7" tablet is going to catch on...like, maybe a Nexus 7, and it'll be immensely popular. Apple would be foolish to not be looking at this. So far, 7" Android tablets have been underpowered, poorly designed or strangled by book-reading skins that make them undesirable.

 

I agree with one of the early posters that a 5" or 6" iPod might be preferable to a mini iPad. I really like my 5" Galaxy Player. Something like it with Apple's style would be cool.
 

post #133 of 159
Quote:
Originally Posted by jragosta View Post

The most recent numbers I've seen say that the Kindle Fire alone has more than 50% of the Android tablet market:

So that's presently 15% of the actual market. Doesn't sound like something Apple would shoot for.
Quote:
Originally Posted by Wiggin View Post

This whole "there will never be a smaller iPad" argument reminds me of the "there will never be a Verizon iPhone" arguments people make not so long ago.

No one intelligent would have ever said that. A Verizon iPhone was inevitable. People saying there will never be a smaller iPad are like those of us who knew there would never be a smaller iPhone.

And Apple certainly proved us wrong, because as we all know, a 3.5" screen is far too big!

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post #134 of 159
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Originally Posted by Tallest Skil View Post

So that's presently 15% of the actual market. Doesn't sound like something Apple would shoot for.!

Apple's initial target was 1% of the cell phone market.
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post #135 of 159
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Originally Posted by jragosta View Post

Apple's initial target was 1% of the cell phone market.

Don't kid yourself. Jobs knew they'd get much more than that.

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post #136 of 159
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Originally Posted by jragosta View Post


Apple's initial target was 1% of the cell phone market.

 

Exactly, so they are more than covered with their current marketshare, no need to worry about competitors and their pieces of the pie. Precisely what TS suggested.

post #137 of 159
Quote:
Originally Posted by Tallest Skil View Post

Don't kid yourself. Jobs knew they'd get much more than that.

Probably, but they're quite happy with 5-7% of the cell phone market. What makes you so certain that 15% more of the tablet market wouldn't be of interest?
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post #138 of 159
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Originally Posted by jragosta View Post

Probably, but they're quite happy with 5-7% of the cell phone market. What makes you so certain that 15% more of the tablet market wouldn't be of interest?

The other 70% (shipped) that they already have locked down with one model. Apple only has 70% of the PMP market, and that's with four.

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post #139 of 159
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Originally Posted by BuddyRevell View Post


You may be right. Hell, there may not be a forthcoming smaller iPad at all and they simply generated this rumor specifically to hinder the Nexus 7 launch.

Likewise it tells the world not to buy the iPad 3 because there is a bigger iPod touch coming.

 

Do you think Apple wants to spite its face by cutting off its nose.

 

Apple have more vested interest to keep making great products than us gossiping except those who own Apple share.

post #140 of 159
Quote:
Originally Posted by Tallest Skil View Post


So that's presently 15% of the actual market. Doesn't sound like something Apple would shoot for.
No one intelligent would have ever said that. A Verizon iPhone was inevitable. People saying there will never be a smaller iPad are like those of us who knew there would never be a smaller iPhone.
And Apple certainly proved us wrong, because as we all know, a 3.5" screen is far too big!

 

Quote:
Originally Posted by johndoe98 View Post

 

Exactly, so they are more than covered with their current marketshare, no need to worry about competitors and their pieces of the pie. Precisely what TS suggested.

 

Quote:
Originally Posted by jragosta View Post


Probably, but they're quite happy with 5-7% of the cell phone market. What makes you so certain that 15% more of the tablet market wouldn't be of interest?

 

 

Once again the Apple doesn't care about Market Share meme rears it's ugly head. Apple fans tend to do this because

 

1) Its been the excuse for the Mac. Profits, not shares!

2) Some like the privileged ghetto. Keep the masses away. 

 

TS is an odd follower of a company like Apple. It's quite innovative, but its clear that TS does not like change. He doesn't get market share either. When I suggested that the 3GS would still sell after the 4S was announced he didn't get that any sales at all of the 3GS  would add to market share. You see; in the past they had this years model, and last years model, and thats all they are ever going to do. Ridiculous.

 

First things first. Apple would not be getting just 15% of the overall tablet market. It's entry into the mini-Tablet market would actually expand that market. Given the price the minis will be most of the market in the future. And yes people will have both in certain circumstances. A tablet, a mini-tablet and a laptop would be cheaper than a laptop a few years ago.

 

most importantly. Number 2. Apple are interested in market share. We know this because they say it. At the release of the 4S Cook made a point of not showing Apple's percentage of the smartphone market but their percentage of the overall market - then 5%. He said the rest was to aim for. He could not have made it more clear.

 

Also Apple talk up their market stats all the time, percentage of the music player market, percentage of app revenue, iTunes percentage of downloads, iPad market share. At least they do it when they are in the lead. 

 

So no they are not happy with the iPad starting with 90% of the tablet market and continuing to fall while they keep margins high. They want to maintain dominance.


Edited by asdasd - 7/5/12 at 8:33am
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post #141 of 159
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Originally Posted by asdasd View Post

 

So no they are not happy with the iPad starting with 90% of the tablet market and continuing to fall while they keep margins high. They want to maintain dominance.

 

So which is it... do they want to keep margins high or do they want to maintain dominance (ie. market share)? You seem to infer both in these two statements.

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post #142 of 159
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Originally Posted by island hermit View Post

 

So which is it... do they want to keep margins high or do they want to maintain dominance (ie. market share)? You seem to infer both in these two statements.

 

I would be implying, you would infer. I think they will sacrifice margins. 

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post #143 of 159
Quote:
Originally Posted by asdasd View Post

 

So no they are not happy with the iPad starting with 90% of the tablet market and continuing to fall while they keep margins high. They want to maintain dominance.

 

Quote:
Originally Posted by asdasd View Post

 

I would be implying, you would infer. I think they will sacrifice margins. 

 

I don't think so. Yes they've been about market share on one side and margins on the other. But I don't think they've ever been about sacrificing margins to gain market share. Price points for older models go down because production costs go down. That increases market share while maintaining margins.

 

I don't see them introducing an iPad Mini for lower margins to continue dominating the tablet space. They'd only introduce it if the margins were still there. And a $200 iPad Mini would not meet their margins. Maybe at $350. But I don't think that price point would significantly deter Android 7" tablet sales for $200. I just don't think they care about how Android is doing.

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post #144 of 159
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Originally Posted by alcstarheel View Post


I don't think so. Yes they've been about market share on one side and margins on the other. But I don't think they've ever been about sacrificing margins to gain market share. Price points for older models go down because production costs go down. That increases market share while maintaining margins.

I don't see them introducing an iPad Mini for lower margins to continue dominating the tablet space. They'd only introduce it if the margins were still there. And a $200 iPad Mini would not meet their margins. Maybe at $350. But I don't think that price point would significantly deter Android 7" tablet sales for $200. I just don't think they care about how Android is doing.

They can sell the iPad 2 at $399 and make a decent profit, so I don't see why they couldn't make a decent profit on an 8" iPad Mini, particularly if it uses technology similar to the iPad 2 (because it's pushing a lot less pixels than the iPad 3, it wouldn't need as good a GPU, for example).

And a $299 iPad Mini would take quite a bit of business away from a $199 Android device. More people would pay a $100 premium than would pay a $200 premium for the iPad 2. Plus, whether people here are willing to admit it or not, there are some people who actually prefer the smaller size and would buy an iPad even at a significant premium if it were available at 7-8".
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post #145 of 159
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Originally Posted by asdasd View Post

…its clear that TS does not like change.

Is it, now. lol.gif
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When I suggested that the 3GS would still sell after the 4S was announced he didn't get that any sales at all of the 3GS  would add to market share.

Please refresh me, did you claim they'd drop the 4 and keep the 3GS or just add the 3GS?

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post #146 of 159
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Originally Posted by island hermit View Post

So which is it... do they want to keep margins high or do they want to maintain dominance (ie. market share)? You seem to infer both in these two statements.

Why can't they do both?

Look at the iPad 10". Apple's margins are very healthy due to their incredible supply chain. It's nearly impossible to find a decent tablet for significantly less. Yet Apple has an overwhelming market dominance.

Why can't that apply to the 7", as well? Now, I don't really expect that Apple is going to get to $199, but they could make good margins at $249 to $299 and I suspect that their market position would be great, even at that level of price premium.
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post #147 of 159
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Originally Posted by asdasd View Post

 

I would be implying, you would infer. I think they will sacrifice margins. 

 

Really? They haven't so far... as your statement shows. In almost 30 years of Mac production they never wavered on margins. I don't see it.

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post #148 of 159
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Originally Posted by jragosta View Post


Why can't they do both?
Look at the iPad 10". Apple's margins are very healthy due to their incredible supply chain. It's nearly impossible to find a decent tablet for significantly less. Yet Apple has an overwhelming market dominance.
Why can't that apply to the 7", as well? Now, I don't really expect that Apple is going to get to $199, but they could make good margins at $249 to $299 and I suspect that their market position would be great, even at that level of price premium.

 

I agree with you. Asdasd seemed to be saying two things at the same time and I was trying to get a clarification.

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post #149 of 159
I think it will be more likely by called Ipod than Ipad. Maybe even Ipod G(ame) because that's what it essentially is. I perfect gaming console. Podcasting is out, gaming is in. And for those who don't want to game it still can do all other things the Ipad an.
post #150 of 159
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Originally Posted by gelp View Post

I think it will be more likely by called Ipod than Ipad. Maybe even Ipod G(ame) because that's what it essentially is. I perfect gaming console. Podcasting is out, gaming is in. And for those who don't want to game it still can do all other things the Ipad an.

It would be foolish to call it an iPod.

The iPod is perceived primarily as a music and video playing device. The iPad is perceived as a general purpose device that does all sorts of things - playing games, accessing the web, reading books, doing email, etc.

While the iPod Touch does most of the things the iPad does, it is still perceived (and marketed) as a media consumption device. It's on Apple's iPod page which covers the iPod shuffle and Apple TV (which is also primarily a media consumption device).

A 7-8" tablet is far more like the 10" iPad than it is like a 3.5" iPod Touch. Calling a 7-8" tablet an iPod would blur the lines beyond all recognition.


Furthermore, the iPod name is fading and the iPad name is on a great trajectory. If you're going to release a new product, it makes more sense to release it into a booming market than a dying one.
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post #151 of 159

This actually makes sense, it fills the gap in terms of price and screen size...

 

$199  3.5"   iPod touch (iPad nano)

$349  7.85" iPad mini

$499  9.7"   iPad

post #152 of 159
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Originally Posted by gelp View Post

I think it will be more likely by called Ipod than Ipad. Maybe even Ipod G(ame) because that's what it essentially is. I perfect gaming console. Podcasting is out, gaming is in. And for those who don't want to game it still can do all other things the Ipad an.

 

iPoad

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post #153 of 159

...iPwnd

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post #154 of 159
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Originally Posted by Gatorguy View Post

...iPwnd

 

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post #155 of 159
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Originally Posted by island hermit View Post

I agree with you. Asdasd seemed to be saying two things at the same time and I was trying to get a clarification.

I don't think any reasonable person would not understand the argument.

Apple rarely mentions margins except in conference calls where they have to. Even then they guide lower on margins then they actually achieve sometimes by as much as 10%. They never crow about margins. As a company I don't think they care. Others put up the stats showing Apple at 80% of profits. Not apple. Apple shows the 5% of total market share and say the rest is up for grabs.

2) as I said Apple have have different versions of their lower end devices, from the lowest with no margins to the highest with more memory or GPS chips all gaining margins per device. Overall margins remain healthy.

They do this with the iPod touch, an iPhone with a retina display without the phone radio chip and gps. Sells for buttons at the lower end but the too end earns the margins.

The iPod touch on its own cant compete with mini tablets because it isn't one.
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post #156 of 159
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Originally Posted by asdasd View Post


I don't think any reasonable person would not understand the argument.
Apple rarely mentions margins except in conference calls where they have to. Even then they guide lower on margins then they actually achieve sometimes by as much as 10%. They never crow about margins. As a company I don't think they care. Others put up the stats showing Apple at 80% of profits. Not apple. Apple shows the 5% of total market share and say the rest is up for grabs.
2) as I said Apple have have different versions of their lower end devices, from the lowest with no margins to the highest with more memory or GPS chips all gaining margins per device. Overall margins remain healthy.
They do this with the iPod touch, an iPhone with a retina display without the phone radio chip and gps. Sells for buttons at the lower end but the too end earns the margins.
The iPod touch on its own cant compete with mini tablets because it isn't one.

 

Tim Cook's name is synonymous with fat margins in the computer industry.

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post #157 of 159
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Originally Posted by asdasd View Post

They never crow about margins. As a company I don't think they care.

 

You have no idea how much they care.  Quarterly reports are the key indicator of the company's success in the marketplace and the stock price is where it is today because Apple has reported improved earnings with each successive quarter.  Earnings as in profits - which are the product of their margins.  Apple is not running a charity; it's a company driven by earnings and it doesn't have the luxury of giving away product.  No quicker way to a $300 share price than couple of quarters of declining profits.

post #158 of 159
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Originally Posted by Venerable View Post

 

You have no idea how much they care.  Quarterly reports are the key indicator of the company's success in the marketplace and the stock price is where it is today because Apple has reported improved earnings with each successive quarter.  Earnings as in profits - which are the product of their margins.  Apple is not running a charity; it's a company driven by earnings and it doesn't have the luxury of giving away product.  No quicker way to a $300 share price than couple of quarters of declining profits.

 

Actually, I do know how much they care. Apple's margins are among the best in the industry. That tells me everything i need to know about how much Apples cares about margins.

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post #159 of 159

Of course, Apple sees Android about to grab the market share of tablets like they have with smartphones and they decided to copy.....

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