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Earnings preview: Apple expected to report record iPad sales, first shrinking profit in a decade - Page 2

post #41 of 47
Quote:
Originally Posted by nw942 View Post

Here in the UK I don't see that many people with an iPhone 5.

 

Why do people keep coming out with lame arguments like this? Not everyone you see is using a brand new phone

 

iPhone 5 has only been around for only 6 months.

iPhone 4S for nearly 18 months.

And the 4 for nearly 3 years!

 

Even if the iPhone 5 had been selling really well, you should expect to see four, or even five, times as many older iPhones.

post #42 of 47
Quote:
Originally Posted by igriv View Post

Actually, Exxon has a fairly low market multiple because there is a lot of uncertainty in its business, and it is not perceived as having a lot of growth potential. Given that Apple's smartphone penetration is a lot less than 100%, it has a lot of upside, so if the management is not perceived as dropping the ball, it is quite reasonable for Apple to have a much higher multiple than XOM. (notice that the multiples of both are way below the S&P 500 average).

There's no reason to perceive the management as dropping the ball. In order to increase market volume, they have to lower prices, which isn't a guarantee of increasing profits. They already have 75% of the phone profits with 20% of the volume. 20% isn't that low either when Samsung only has 30%. I'd say that's pretty good management.

Volume growth and profit growth don't always come together as Q1 showed - 30% more phones, 50% more iPads, profit was the same. The iMac will have had a small impact and obviously the iPad mini has taken some of the iPad sales.

They really can't be doing a much better job than they are currently doing. People come out with suggestions that they should make a bigger/cheaper phone but don't address how that's going to grow their 75% profits. If it does grow profits, it can't be significantly.

Apple has very little profit growth potential except with the iPad and even there, they dominate the volume.
post #43 of 47
Quote:
Originally Posted by igriv View Post

At full penetration (whatever it is), the market is mature, so the only sales are from replacing old hardware, but Apple (and the industry) is very far away from this.

They should stay far away from this too because of the fact that it requires very low prices.

There are ~7 billion people. 50% are in poverty:

http://www.statisticbrain.com/world-poverty-statistics/

There were 1.6 billion phones shipped in 2012 (up from 1.5b in 2011), 700m smartphones of which Apple shipped 135m. Eventually, the smartphones will overtake the remaining 9b but Android devices will wipe those out more quickly than Apple (it looks like a ratio of 2:1 at present).

80% of the world lives on less than $10/day so 0.2 x 7b = 1.4b is a pretty good representation of the phone market.

This year, Apple's shipments have grown 30% so far. This gives them ~175m units in 2013 but profit is flat. In 2013, smartphones should be ~900m.

There's clearly volume growth but the profit growth hasn't shown itself.
Quote:
Originally Posted by igriv View Post

there is a lot of upside, but it is not clear that the Apple management knows how to get it.

You're talking about unit volume, not profits. Apple has 75% of the profits. You are suggesting they don't know how to ship another 560 million phones per year in order to get that last 25% profit. They know how to and they don't want to as they've said quite explicitly. Tim Cook specifically addressed this point in an interview by saying that if they wanted to they can ship the most units in any given category but that's not what they want to do. What's the point if you don't make significantly more profit?
post #44 of 47
Quote:
Originally Posted by icoco3 View Post

Why not post a graph showing income vs profit over the last number of years instead of stock price.  Gives the illusion they are loosing money while in reality, they keep making piles of profit...

Exactly. It's all perception. Public ownership is the playground of people that have no function in society but have managed to entrench themselves into a position of power and influence by being big mouthed opinion spouts. Impressions, opinions and claims are constantly swinging the stock voodoo up and down and none of it has anything to do with the actual performance of the company in question. It's a distortion for the interests of the analysts. Like news companies spouting the most obnoxious, meaningless but attention-getting stories, focusing on only the worst possible items of actual "news", just to get attention for viewership numbers and advertising.

What a great model for a society.
post #45 of 47
Quote:
Originally Posted by piot View Post

 

Why do people keep coming out with lame arguments like this? Not everyone you see is using a brand new phone

 

iPhone 5 has only been around for only 6 months.

iPhone 4S for nearly 18 months.

And the 4 for nearly 3 years!

 

Even if the iPhone 5 had been selling really well, you should expect to see four, or even five, times as many older iPhones.


If the iPhone 5 had been selling really well I would expect to see more people with them. Even with my anecdotal evidence.

 

Looks like the older models are still selling strongly.

 

Be interesting to know the breakdown of 5/4S/4 sales since the 5 launch, and how it compares with previous iPhone releases.

post #46 of 47
Quote:
Originally Posted by nw942 View Post

 

Be interesting to know the breakdown of 5/4S/4 sales since the 5 launch, and how it compares with previous iPhone releases.

 

http://allthingsd.com/20130422/legacy-iphones-are-helping-apple-hit-a-broader-market/

 

post #47 of 47
So this means, that when they have the most wanted(if you want tech specs) on the market getting more sales(from my family and friends) helps them nowhere?
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