Notes of interest from Apple's Q1 2013 conference call - Page 2

Facebook made the stupid mistake of doing what Aol did, its not building itself a giant moat, facebook is a google wannabe but it can't be google because google is already google. 

 

With google you are competing with "Free" (not really free, you pay with personal data), facebook is also "free" but google has a higher return on the free stuff. Google free gets you (youtube, gmail, maps, search, android ect..) facebook free gets you well not that much. 

I don't where it was in the CC, but swear I heard that Q1 2013 was $8 billion in expenses towards manufacturing equipment alone.  Can someone expand on that?!  If so, that seems more than the normal.  From that, we might see if TC is either a genius or just a risky spender.  I think the former.

Apple's suite of products with a total refresh just delivered a lackluster quarter, and only new products will help. A few competitors going under would help, too

Apple's valuation is exactly where you'd expect for a mega cap consumer goods company.  Most other mature companies with similar valuations (Exxon Mobil, Royal Dutch Shell) have P/E ratios around where Apple's is (a little lower actually). 

 

As another poster has said, Apple has somewhat reached a sort of market saturation - most people in 'developed' markets, if they can afford an iProduct and want one, odds are they already have one.  They'll still replace their products, but that doesn't really drive growth.  In China you have Lenovo, ZTE and Huawei coming out with some pretty decent products, and of course Samsung is in the mix too - why buy an iPhone when you can buy an equivalent phone for half the price? 

 

Apple is by no means in trouble, but their market cap has been adjusted to reflect a mature business, as opposed to the exponential growth that Apple had experienced in the last few years. 

Highest revenue and profits Apple has ever delivered and it's lackluster? I understand that Apple's mindshare is so large that if Tim Cook stubs his toe the stock drops a couple percent but the most successful public company in the world reporting it's even more successful than before is some how doom and gloom? What gives?

Expectations were higher than reality.  Their stock price of 750 assumed world domination, and they disappointed... 

Agreed, but in my cliché graveyard, I would bury "long in the tooth" right next to "bells and whistles."

By what signs shall we know Him? His granola in the evening?

Again, not record breaking enough. The profitable calendar year in corporate history is not good enough for failed business owners ie analysts.

 

That lo, when findeth he a point of humor, doth flies from his mouth its contents, described by he as such depending on sun's locale.

 

Also anti-Apple crusading.

Take a look at the growth numbers put up when Steve was around. These are pathetic by comparison

They reported growth. In some areas lots of growth. What you're focusing on but not acknowledging is YoY net profit growth comparing a 14 week to a 13 week quarter with a huge number of number products on the market.

There were plenty of quarters under Steve Jobs that had less of YoY rise in total net profits so why pooh pooh Apple for having record-breaking revenue, record-breaking profits, and record-breaking iOS-based device sales. There is no public company in the history of the world that has made more revenue in a quarter than Apple has made and is the 4th highest profitable company in the history of the world with no signs of dropping and we're to believe Apple is doomed? WTF?!
Edited by SolipsismX - 1/23/13 at 7:59pm

Yes a few percent points profit growth. That's orders of magnitude less than it used to be, and the Xmas quarter is their best quarter.

1) Why can't anyone use orders of magnitude correctly.

2) So profit growth is less extreme than it has been in the past? Why not look at the many already stated reasons why it was going to happen and note that even Apple stated a much lower profit margin instead of making it look like Apple failed? What's your agenda for not looking that whole? I can assure you Apple will be here a year from now.

3) It's funny that people keep saying that Apple can't survive without this of that cheap product but those same people seem to be shocked that when you saturate a market and grow into the larger partition of the market pyramid your profit margins and profit per unit are likely to drop. I'm not saying you have said that, but others have.

4) It seems Apple can't win with some people no matter how successful they are. I guess we'll have to just all wait and be impressed that Amazon was able to squeeze out a 1% net profit after a net loss last time.
Edited by SolipsismX - 1/23/13 at 8:11pm

just COOincidence

I doubt it is such a concern for the company. The iPhone is not the only product they sell in the USA.

Nice; having the Dutch courts using iPads during these Samsung patent cases.

@techstrumpler: I stopped using the subsidized plan and just pay full retail price by ordering straight from Apple. Once people figure out they pay more through a phoneplan they'll do the same. So I really hope other telco's will follow T-Mobiles plan!

"Apple was hardest hit by year over year revenue increases of 10 percent in Japan, 11 percent in Europe, and 15 percent in the Americas."

What is this supposed to mean? Are they talking about taxes?

 

Good memory.  Close.  In late 2011, Apple predicted they'd spend $8 billion in all of 2012 on M&E.  Almost $1B would be on their stores.   The other $7B would be for tooling and testing equipment, new facilities like the spaceship, and on data centers.  Analysts vary on the allocation.

 

 

It also would free up a lot of money.   Carriers can easily have over a half billion dollars tied up in iPhone subsidies alone, which are basically an interest free loan that drags down the carrier's available cash.   Better to offer an outright loan.

 

I was confused about that as well. You don't use "hardest hit" for anything good… ever.

 

I don't even see those percentages anywhere in the transcripts.

 

Perhaps it was a cut & paste error?