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Notes of interest from Apple's Q108 quarterly conference call - Page 2

post #41 of 70
Quote:
Originally Posted by solipsism View Post

2) Your sig is way to big.


That's like the MacBook Air calling the iMac aluminum.
post #42 of 70
Quote:
Originally Posted by TBaggins View Post

Agreed. For whatever reason, $199 is just a much sexier pricepoint than $229. And its not like Apple's margins aren't fatter than Vida Guerra's ass.

Didn't you see the story that estimated that the original AppleTV margins to be about the lowest of Apple's entire product line?
post #43 of 70
Quote:
Originally Posted by JeffDM View Post

Didn't you see the story that estimated that the original AppleTV margins to be about the lowest of Apple's entire product line?


I was speaking of Apple's margins in general. The point is, having low margins on AppleTV isn't exactly going to bankrupt Apple. They get their big profits elsewhere.

And AppleTV needs all the help it can get, if it is to finally take off. \


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post #44 of 70
The entire Market is down over 15% since late October.

This is dragging all stocks downward.

Any hint at caution for guidance is causing the day traders and future traders to sell out early.

These are the same pukes who ran Google up to over 700 and now they are below 600.
post #45 of 70
Quote:
Originally Posted by TBaggins View Post

I was speaking of Apple's margins in general. The point is, having low margins on AppleTV isn't exactly going to bankrupt Apple. They get their big profits elsewhere.

And AppleTV needs all the help it can get, if it is to finally take off. \

I say it depends on Apple's profit on movie rentals. If they are good then we might see an even further price drop. I don't think $30 is going to make a break many sales. If the device appeals to them they will get it. The $70 price drop and rentals will surely help with that appeal.

PS: Love the Vida reference!
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post #46 of 70
Quote:
Originally Posted by solipsism View Post

I say it depends on Apple's profit on movie rentals. If they are good then we might see an even further price drop. I don't think $30 is going to make a break many sales. If the device appeals to them they will get it. The $70 price drop and rentals will surely help with that appeal.

PS: Love the Vida reference!


I dunno Solip... for whatever reason, $229 just sounds a lot more expensive than $199. I'm sure some marketing psychologist could explain exactly why a lot better than I could.

And I'm not sure Apple's going to make a big profit on movie rentals. Wouldn't the idea be to run that business the same way they've run the music store, i.e. at 'slightly above break even' (their words, not mine), with the main idea being to move hardware?

And yes, I love Vida too. Or parts of her, anyway.

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post #47 of 70
Quote:
Originally Posted by mdriftmeyer View Post

The entire Market is down over 15% since late October.

This is dragging all stocks downward.

Any hint at caution for guidance is causing the day traders and future traders to sell out early.

These are the same pukes who ran Google up to over 700 and now they are below 600.


Yup. Of course, in after hours trading, Apple is down 32 percent from its peak, i.e. is in worse shape than the market in general. And, of course, I didn't sell at 200 when I should've. Sigh.

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post #48 of 70
Quote:
Originally Posted by TBaggins View Post

I dunno Solip... for whatever reason, $229 just sounds a lot more expensive than $199. I'm sure some marketing psychologist could explain exactly why a lot better than I could.

And I'm not sure Apple's going to make a big profit on movie rentals. Wouldn't the idea be to run that business the same way they've run the music store, i.e. at 'slightly above break even' (their words, not mine), with the main idea being to move hardware?

People generalise. We group figures. And while our thoughts can be rational, how we feel does not follow rationality (though when they coincide it's great). Of course I'm generalising now though

So people unconsciously group $199 along the lines of "$100 to $200", where they might group $229 into the "$200 to $300". Which is a significant difference!

But are you arguing FOR a price drop ("$229 just sounds a lot more expensive") or AGAINST ("the main idea being to move hardware").

Personally, your AppleTV dropped from $300 to $230.... I just want ours to drop from A$450 to A$350 or so.
post #49 of 70
So, 18 billion in cash... can anybody give a few examples of interesting companies that could be bought with that money?

I know Microsoft would be a li'l more expensive...
post #50 of 70
Quote:
Originally Posted by Lorre View Post

So, 18 billion in cash... can anybody give a few examples of interesting companies that could be bought with that money?

I know Microsoft would be a li'l more expensive...

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post #51 of 70
Quote:
Originally Posted by TBaggins View Post

I was speaking of Apple's margins in general. The point is, having low margins on AppleTV isn't exactly going to bankrupt Apple. They get their big profits elsewhere.

And AppleTV needs all the help it can get, if it is to finally take off. \

AppleTV already has low margins, so they were already following your suggestion.

I don't think Apple should be getting into the razor / handle deal. If AppleTV is going to hold its own, I don't think it should be artificially subsidized.
post #52 of 70
Quote:
Originally Posted by TenoBell View Post

Not really. Apple's earnings and growth have been impressive. Todays stock fall wasn't about the past quarter but about the future. Because of various factors in the market today investors are squeamish about future growth. Those doubts have little to do with the reality of Apple's future growth. Only the perception.

I tend to agree with this. The outlook is gloomy, not because of a "lacklustre" Macworld, but because everyone has less disposable income for buying fancy electroinc toys right now. People with sizeable loans in particular have seen interest payments increase markedly in recent months. (But hey, isn't that the whole point of interest rate hikes, to make people save instead of spend?)

That said, Apple stock has been overvalued through hype for some time. A correction was way overdue. There can be now doubt that Apple is an outstanding company with very bright prospects long-term, but this sustained hype based on guesswork is insane and succeeds only misleading people who know nothing about how the markets work. They're getting reamed by people who make a living by shorting stocks.

I think Gene Munster of Piper Jaffray is particularly guilty of creating false expectations more than just about anyone. He's made his own firm look pretty stupid as well as himself. It will be some time before Apple stock reaches $250. True, the markets are very volatile and have been so for some time. But, to me this suggests investor caution not bullish optimsim that borders on stupidity.

It may well be that Apple stocks sink to £130. My advice to any investor is HOLD not BUY. I don't think we'll have a true indication of where things are headed until after Easter.
post #53 of 70
Quote:
Originally Posted by JeffDM View Post

AppleTV already has low margins, so they were already following your suggestion.

Great. Now let's take it a step further. After all, no point in having a price that's 'just barely high enough' not to sell. \


Quote:
I don't think Apple should be getting into the razor / handle deal. If AppleTV is going to hold its own, I don't think it should be artificially subsidized.

I just think AppleTV needs all the help it can get, at least right now. Long-term, once its prospects are looking better, things can be tweaked.


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post #54 of 70
Quote:
Originally Posted by TBaggins View Post

Great. Now let's take it a step further. After all, no point in having a price that's 'just barely high enough' not to sell. \

I don't know what you're saying.

Quote:
I just think AppleTV needs all the help it can get, at least right now. Long-term, once its prospects are looking better, things can be tweaked.

What I'm saying is that it should stand on its own merits.

If they have to drop to little to no margin to get the hardware accepted, then maybe there's no value in the model. Apple makes most of its money on hardware. What is the value in making no money in the business?
post #55 of 70
Quote:
Originally Posted by TBaggins View Post

Great. Now let's take it a step further. After all, no point in having a price that's 'just barely high enough' not to sell. \

I just think AppleTV needs all the help it can get, at least right now. Long-term, once its prospects are looking better, things can be tweaked.

What you are suggestion sounds like a MS tactic: Using a loss leader to get control of a market before gouging your customers. Apple doesn't loss money on any item it sells and, as a stockholder, I don't want them to start. The AppleTV is a failure compared to other Apple products, but when compared to other stand-alone media extenders it was number one by a long shot. I've used plenty of the others, and while they supported more codecs they didn't stream content well at all and were a pain to setup and keep connected. It's speculated that Apple sold about 300-400k in the first 8.3 months (2007). Now that movie rentals are a go and the price has been lowered they will easily sell 1.4M in 2008 and perhaps 1M by WWDC 2008.
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post #56 of 70
Quote:
Originally Posted by TBaggins View Post

Why? The economy was a lot better under Hil's husband than it ever was under Dubya.


.

You may be forgetting the fact that the so-called surplus under Clinton wasn't really a surplus.

QUOTE: "...the $5.7 trillion national debt has been reduced by $360 billion in the last three years -- $223 billion this year alone."

http://archives.cnn.com/2000/ALLPOLI...inton.surplus/

Also, did Bill have to face up to the political aftermath of the secondary attack on the WTC? How do you think he would have reacted? Probably the same as Bush. He would have taken us into war also, and he probably also would have faced extreme pressure to attack Iraq from the Israeli lobby.

The economy has been damaged thanks to our involvement in this war, and certainly the sub-prime mess is a severe drag on the economy. "Dubya" doesn't have an exclusive on myopia. I would have expected a theoretical "third term" Clinton to offer to bail out Americans, costing everyone additional billions and sending our economy into an extended tailspin. The apparent recession we are entering into now is merely cyclical anyway, so it could take anywhere from 1 to 2 years to crawl back.

Since we are where we are... we only have to look forward to the future.

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post #57 of 70
Quote:
Originally Posted by SpamSandwich View Post

You may be forgetting the fact that the so-called surplus under Clinton wasn't really a surplus.

QUOTE: "...the $5.7 trillion national debt has been reduced by $360 billion in the last three years -- $223 billion this year alone."

Wait a minute, what? That quote and story affirms that it was a budget surplus. I've not seen anyone try to say that Billy paid off the entire federal debt. Those are two different things. You do need a long series of budget surpluses to pay off the federal debt though.

Quote:
Originally Posted by SpamSandwich View Post

Also, did Bill have to face up to the political aftermath of the secondary attack on the WTC? How do you think he would have reacted? Probably the same as Bush. He would have taken us into war also, and he probably also would have faced extreme pressure to attack Iraq from the Israeli lobby.

We don't know if the US would have gone to war with a power that wasn't behind the attack. We don't know if Billy would have fabricated or deliberately misinterpret "evidence" of Iraqi nuclear research. I doubt that he would have gone in without UN approval. So there's quite a chain of "ifs". I wasn't a fan of his (I voted for the other guy, really), but the whole chain of reasoning that he would have done anything like that seems suspect.
post #58 of 70
I have another point on this... our economy is highly cyclical and barring catastrophic events, it tends to follow regular, almost predictable up and down trends. Would anyone dispute that Clinton had the good fortune to catch the economy on the upswing? I tend to not believe that presidents and political parties are that important to the overall health of the economy, except for the damaging effects of trade policies and overtaxation.

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post #59 of 70
Quote:
Originally Posted by SpamSandwich View Post

I have another point on this... our economy is highly cyclical and barring catastrophic events, it tends to follow regular, almost predictable up and down trends. Would anyone dispute that Clinton had the good fortune to catch the economy on the upswing? I tend to not believe that presidents and political parties are that important to the overall health of the economy, except for the damaging effects of trade policies and overtaxation.

I think it's plausible to say that. I think Alan Greenspan had more to do with economic stability than any of the politics. And now we don't have him doing that work anymore, which could be part of the problem. I think the massive deficit spending / steeply rising debt isn't helping either.
post #60 of 70
Quote:
Originally Posted by SpamSandwich View Post

[Bill Clinton] would have taken us into war also, and he probably also would have faced extreme pressure to attack Iraq from the Israeli lobby.


Clinton would've taken us into war? In Afghanistan, sure, that's where Bin Laden was. But Iraq? You must be joking. That was a neocon inside job, and Bill's no neocon. Israeli lobby? Pffft. Clinton was far less knee-jerk pro-Israel than Bush ever thought of being.

Face it, the Bush/Cheney administration has been an utter disaster, the '90s seems like 'the good ol' days' in comparison, and if you could ever run an election of Bill versus Dubya, Bill would landslide him.

If you doubt that, my condolences.


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post #61 of 70
Quote:
Originally Posted by JeffDM View Post

I don't know what you're saying.

Its a variant on Thomas Friedman's famous line, "just enough troops to lose." In this case, it's a price "just high enough to lose."


Quote:
What I'm saying is that it should stand on its own merits.

If they have to drop to little to no margin to get the hardware accepted, then maybe there's no value in the model.

They've already dropped the price to a low margin. What I'm saying is, if you're going to do that, at least make sure that strategy works.


Quote:
Apple makes most of its money on hardware. What is the value in making no money in the business?

You'd have to ask Steve that. Apple thinks the AppleTV important enough, likely in the long-term, to forego making much profit on it now.

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post #62 of 70
Quote:
They've already dropped the price to a low margin. What I'm saying is, if you're going to do that, at least make sure that strategy works.

The strategy will work by securing content that people will want to watch.

Quote:
You'd have to ask Steve that. Apple thinks the AppleTV important enough, likely in the long-term, to forego making much profit on it now.

The problem with your line of thinking is that after dropping the price. Its difficult to impossible to raise it again. People will only look for it to drop further.
post #63 of 70
Quote:
Originally Posted by TenoBell View Post

The strategy will work by securing content that people will want to watch.

We'll see....


Quote:
The problem with your line of thinking is that after dropping the price. Its difficult to impossible to raise it again. People will only look for it to drop further.

And the problem with your line of thinking is that if AppleTV can't get off the ground, there may be no AppleTV to raise or lower prices on, period.


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post #64 of 70
Quote:
Originally Posted by TBaggins View Post

And the problem with your line of thinking is that if AppleTV can't get off the ground, there may be no AppleTV to raise or lower prices on, period.

You are really set on that $30. It wont make or break the AppleTV!

They sold 300 to 400k in 8.3 months without any movie rentals and at a $300 pricepoint. It is the best selling standalone media esxtender. They now have movie rentals and have lowered the price $70. That is significant.
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post #65 of 70
Quote:
Originally Posted by solipsism View Post

You are really set on that $30. It wont make or break the AppleTV!

They sold 300 to 400k in 8.3 months without any movie rentals and at a $300 pricepoint. It is the best selling standalone media esxtender. They now have movie rentals and have lowered the price $70. That is significant.


Well, Apple seems to be unimpressed with those results, if you listened to the keynote. Jobs stated "we've all failed", lumping AppleTV, take 1 in with all the other media boxes that didn't take off. That's why there's an ATV, Take 2.

Do I think $70 and movie rentals will be enough to take the ATV where Apple wants it to be? You know my answer already.

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post #66 of 70
Quote:
Originally Posted by TBaggins View Post

Well, Apple seems to be unimpressed with those results, if you listened to the keynote. Jobs stated "we've all failed", lumping AppleTV, take 1 in with all the other media boxes that didn't take off. That's why there's an ATV, Take 2.

Do I think $70 and movie rentals will be enough to take the ATV where Apple wants it to be? You know my answer already.

.

I thought his exact words were "we all missed" and that people wanted "movies movies movies". Regardless of what he said, I think the rentals will be a hit and the price lowering is to compete with all the new services coming out this year. CES was filled with media extenders.
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post #67 of 70
Quote:
Originally Posted by solipsism View Post

I thought his exact words were "we all missed"

How is that much better?

Btw, the full quote is, "we've all missed. No one has succeeded yet."

So what happens when you DON'T SUCCEED? That's right, you....


.
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post #68 of 70
Quote:
Originally Posted by TBaggins View Post

Clinton would've taken us into war? In Afghanistan, sure, that's where Bin Laden was. But Iraq? You must be joking. That was a neocon inside job, and Bill's no neocon. Israeli lobby? Pffft. Clinton was far less knee-jerk pro-Israel than Bush ever thought of being.

Face it, the Bush/Cheney administration has been an utter disaster, the '90s seems like 'the good ol' days' in comparison, and if you could ever run an election of Bill versus Dubya, Bill would landslide him.

If you doubt that, my condolences.


.

I'm no neo-con, and I'm certainly no fan of our current administration. However, looking into the mists of time pining over the Clinton years is just time wasted. Neither Democrats nor Republicans fill the needs of our country right now. Their concerns go as far as getting elected or re-elected.

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post #69 of 70
Quote:
Originally Posted by SpamSandwich View Post

I'm no neo-con, and I'm certainly no fan of our current administration. However, looking into the mists of time pining over the Clinton years is just time wasted. Neither Democrats nor Republicans fill the needs of our country right now. Their concerns go as far as getting elected or re-elected.


Well, sad to say, Ron Paul has no chance of getting elected. The ppl who do:

Barack Obama
Hillary Clinton
John Edwards (longshot)
Mitt Romney
John McCain
Mike Huckabee
Rudy Guiliani (now a longshot)
Michael Bloomberg (if he runs)


Pick one, because those are the only ppl who have any real chance of becoming Prez. And any of them is going to be better than Bush/Cheney, at least. Of course, that ain't sayin' much.

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post #70 of 70
Hi folks! Just a friendly reminder that while the state of the economy in broad terms is relevant to discussing Apple's stock performance, politics belong next door in Apple Outsider.

Thank you.
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