or Connect
AppleInsider › Forums › General › General Discussion › Notes of interest for Apple's Q3 2008 financial results call
New Posts  All Forums:Forum Nav:

Notes of interest for Apple's Q3 2008 financial results call - Page 2

post #41 of 77
You guys are losing talking about SJ health.

The lead story and EPS avg that every subsequent story cited was Bloomberg's internal consensus of 1.24. If any of you had been reading AppleInsider today, the most generous EPS estimate available today or late yesterday was 1.20 (by the Bull Cross, not a juggernaut player, contributor from today). The most generous from the older school of Apple analysts was 1.10 (Shaw Wu)

What was the figure they supposedly didn't meet with 1.19? 1.24

When were all the search results relevant to the google query "apple 1.24 eps" published? After today's report.
It's diving because media 'agrees' it did not make the mark even though that number didn't exist prior. (As far as I can see - please link something to prove me wrong so I don't feel so depressed about capitalism)

They'll recover, but it's so ridiculously easy to short them if such things are fabricated.
post #42 of 77
Quote:
Originally Posted by foobar View Post

This always happens. People get scared about low guidance, and now they've got SJ's health to get scared about, too. AAPL is one stock to think long-term, otherwise you're gonna jump out of a window sooner or later.

Below $148 in after-hours... man, I wish I had a couple of million to drop on AAPL.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #43 of 77
Quote:
Originally Posted by probably View Post

You guys are losing talking about SJ health.

The lead story and EPS avg that every subsequent story cited was Bloomberg's internal consensus of 1.24. If any of you had been reading AppleInsider today, the most generous EPS estimate available today or late yesterday was 1.20 (by the Bull Cross, not a juggernaut player, contributor from today). The most generous from the older school of Apple analysts was 1.10 (Shaw Wu)

What was the figure they supposedly didn't meet with 1.19? 1.24

When were all the search results relevant to the google query "apple 1.24 eps" published? After today's report.
It's diving because media 'agrees' it did not make the mark even though that number didn't exist prior. (As far as I can see - please link something to prove me wrong so I don't feel so depressed about capitalism)

They'll recover, but it's so ridiculously easy to short them if such things are fabricated.

I'm not sure what point you're trying to make.

Consensus was 1.08, which they beat.

The stock got hammered because consensus for *next* quarter was 1.25 and apple gave guidance of 1.00.
post #44 of 77
Quote:
Originally Posted by johnqh View Post

Remember iPod Nano? It has same resolution as Video iPod.

How many people use iPod nano to watch video?

I think iPhone is hard enough to use for text input as it is if you're not the type to let typing errors slide or revert to IM-lingo, I just don't see iPhone nano working unless they revert to the standard 12 key entry, where you push a button a few times to get the letter you want.

Even then, iPhone nano doesn't say "product transition" to me. The only times I remember Apple using "transition" is the switch to Intel and the OS X introduction.
post #45 of 77
Quote:
Originally Posted by SpamSandwich View Post

Below $148 in after-hours... man, I wish I had a couple of million to drop on AAPL.

I think it's got further to fall. If SJ's poor health is confirmed look for AAPL to lose at least 50% of its value. Might drop 30%+ just on this rumour.

The buying opportunity is not just now.
post #46 of 77
So, just how bad would it be if Steve Jobs left Apple? A few months ago, it had me panicked, but I am starting to become more at ease with it now. "Replacing" SJ would be nearly impossible, but continuing to run the company and innovate is not 100% on his shoulders.
post #47 of 77
Quote:
Originally Posted by JeffDM View Post

How many people use iPod nano to watch video?

I do, and it's great.

Small screen wouldn't be good for touchscreen, though.
post #48 of 77
Quote:
Originally Posted by minderbinder View Post

I'm not sure what point you're trying to make.

Consensus was 1.08, which they beat.

The stock got hammered because consensus for *next* quarter was 1.25 and apple gave guidance of 1.00.

Why don't I remember this situation ever happening if they've been doing the whole super conservative/irrelevant guidance shtick for 8 quarters now.
post #49 of 77
Quote:
Originally Posted by minderbinder View Post

I don't really see how they're moving *away* from desktops, especially given the gain in sales this quarter.

Apple likes to say that the iMac and mini cover consumer needs, but they're lying and they know it. If they really want to gain some market share, a reasonably priced midtower would be one of the quickest ways to do it.

The argument against it is that it would hurt apple's margins. Now that apple has said they're willing to sacrifice margins to launch a new product, that argument is off the table.

The industry as a whole is moving away from desktops, especially the consumer segement. Yes, businesses still buy a lot of mini-towers because they are cheap and they have the IT staff to maintain and upgrade them. But business are a relatively small segement of Apple's business. So if you take that out of the equation, the overall industry sales are even more skewed towards increasing laptop sales.

As for market share, Apple's has been growing quite nicely lately. It is possible for market share to grow too rapidly. And after you and the other 7 people who have been constantly begging for a mini-tower make your purchases, it will no longer contribute to increased market share (I jest ). I just don't think it would make much difference in total Mac sales (ie, most mini-town sales would be in place of an iMac, mini, or laptop that would have been sold regardless). And it would hurt future sales because instead of buying a new Mac in three years you'd upgrade you mini-tower and keep it running for 8 years (like I did my Beige G3!).
post #50 of 77
I don't understand the iPhone nano thing's logistics. It would have to be a completely crippled version for that to make any sense.

iPhone is a defined platform. The size of the screen is crucial to the way it feels and operates. iPhone developers are not going to suddenly be obliged to create another variant of their app with a different device, feel and specs.

And what we have now with the App Store doesn't even scale yet. Our phones are still pretty rocky until the next firmware rev and without some revamping of the update push procedures, quality would always be so flaky.

Right?

To me it would be as ludicrous as there being two nintendo DS SKUs with an inch difference in screen size, but using the same carts. Is it equal gameplay if you play multiplayer? Do your tightened motor skills in handling a stylus (or in iPhone's case, finger) translate to the other device that's supposed to be the same platform?
post #51 of 77
Quote:
Originally Posted by merdhead View Post


The buying opportunity is not just now.

Everyone has been saying this for the past year or so with recent dips.
Regardless of Jobs health, it remains to be seen, if Apple will ever reach the lofty heights of $200+ as many analysts have predicted.
post #52 of 77
Quote:
Originally Posted by JeffDM View Post

How many people use iPod nano to watch video?

I think iPhone is hard enough to use for text input as it is if you're not the type to let typing errors slide or revert to IM-lingo, I just don't see iPhone nano working unless they revert to the standard 12 key entry, where you push a button a few times to get the letter you want.

Even then, iPhone nano doesn't say "product transition" to me. The only times I remember Apple using "transition" is the switch to Intel and the OS X introduction.

Relax, we are just guesstimating. No need to get so worked up.

A candy bar or flip phone, with T9 keypad will be fine for text input. After all, people have been texting for a decade before iPhone. Nobody presses multiple keys to get the letter anymore. T9 works well on most phones.

Other potentials - a handhelf game console for dirt cheap. After all, a lot of iPhone apps are games. Apple could sell one for $50 and I can see 1M to 2M sales at launch.
post #53 of 77
An iPhone nano makes no sense. The only thing they could do is maybe a slimmed down version without GPS, 2G and less memory, but even that doesn't make too much sense. The way that carrier subsidies work, there isn't really any logic behind making a "cheaper" version since the phone can be financed by the phone companies. They might make a premium version of the phone with extra memory or something else special, but not a cut down version.
post #54 of 77
Quote:
Originally Posted by minderbinder View Post

Apple's potential market IS everyone. They have been blowing off potential customers for years, and they have suffered for it.

And whatever they are doing "at this time" is now a moot point - they just said that they're doing something to change their product strategy - "but they've never done that before" doesn't apply.

Sure, their "potential" market is 5 billion people (or whatever the population of Earth currently is). But their "target" market is something substantially smaller than that. Bill Gates is a potential customer, but do you think Steve's trying to build a computer that Bill would buy? And I don't see the evidence of the suffering you are referring to.

Also, not sure if it was your comment or someone else's, Apple has in the past warned of lower margins due to new product ramp up. I believe they gave similar guidance last summer, if I recall correctly. This is likely their annual iPod refresh, perhaps with a "tablet" expanding the iPod touch line.
post #55 of 77
Quote:
Originally Posted by aaarrrgggh View Post

So, just how bad would it be if Steve Jobs left Apple? A few months ago, it had me panicked, but I am starting to become more at ease with it now. "Replacing" SJ would be nearly impossible, but continuing to run the company and innovate is not 100% on his shoulders.

If AAPL dropped in value by 1/2 due to SJ's health, it would behoove anyone with a brain to load up on AAPL with every penny they had.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #56 of 77
Quote:
Originally Posted by satchmo View Post

Everyone has been saying this for the past year or so with recent dips.
Regardless of Jobs health, it remains to be seen, if Apple will ever reach the lofty heights of $200+ as many analysts have predicted.

It's already touched $202 and I'm sure it'll top it again, but with a bear market and questions over SJ's health it won't be just now. If it ever hit $100 I'd buy, if I were in the market for it.
post #57 of 77
Quote:
Originally Posted by merdhead View Post

An iPhone nano makes no sense. The only thing they could do is maybe a slimmed down version without GPS, 2G and less memory, but even that doesn't make too much sense. The way that carrier subsidies work, there isn't really any logic behind making a "cheaper" version since the phone can be financed by the phone companies. They might make a premium version of the phone with extra memory or something else special, but not a cut down version.

The problem with the "iPhone nano" theory is that it doesn't go far enough in stripping out iPhone features. Instead, think "iPhone shuffle." Apple's first attempt at an iTunes phone was a partnership with Motorola which created a dud. It was basically a standard crappy cell phone with an iTunes player. But Apple now has the leverage now to create standard phone and be able to tell the carrier to NOT put their usual crappy OS and interface on it. A standard flip phone with a clean interface, seemless integration with my Address Book and iCal (and Outlook for PC users) and 1-2 GB to store songs to shuffle, and you could have a winner. Every phone already has a contacts list and most (all?) have a calendar. People generally manually enter the contacts and completely ignore the calendar. Apple could change that.
post #58 of 77
Quote:
Originally Posted by johnqh View Post

It could be an iPhone Nano (let's say "FREE with 2-year contract"), an Apple TV Take 3 (with DVD player and Tivo-like recording), or something completely different.

An iPhone Nano will make sense. Keep in mind how the iPhone revenue is recognized - the initial price is recognized right away, but the carrier subsidies are recognized over two years. So, if there is an "iPhone Nano" which is free with contract, Apple won't recognize any revenue upfront.

My guess for a new product which substantially effects the margins is a low-cost lappy
- say, Atom-based, to compete with the eeePCs
- it's got to have a substantially lower margin to effect the overall margins significantly.
- also it needs to be released soon!
post #59 of 77
Quote:
Originally Posted by probably View Post

Why don't I remember this situation ever happening if they've been doing the whole super conservative/irrelevant guidance shtick for 8 quarters now.

While I don't remember a dip this big, it is very common for apple to have a great quarter but the stock price dips anyway.

Quote:
Originally Posted by Wiggin View Post

I just don't think it would make much difference in total Mac sales (ie, most mini-town sales would be in place of an iMac, mini, or laptop that would have been sold regardless). And it would hurt future sales because instead of buying a new Mac in three years you'd upgrade you mini-tower and keep it running for 8 years (like I did my Beige G3!).

See, I think it would help future sales for that exact reason - right now PC owners may be willing to make the switch but not willing to buy a machine they know they will have to replace in 3 years. Having a mac user who upgrades less often is still better than a PC user who never makes the switch.

If you don't think it will help sales much, then why do the budget desktops still sell so many on the PC side? As desktops go, don't they vastly sell any of the desktop form factors apple sells?

Quote:
Originally Posted by Wiggin View Post

Sure, their "potential" market is 5 billion people (or whatever the population of Earth currently is). But their "target" market is something substantially smaller than that.

Their potential market is people who buy computers - that's over ten times their current market. Right now their market share is growing, but it's still low (7% market share sure looks like evidence of suffering to me) - it's great to see them improving but there's no question that there's room for improvement.
post #60 of 77
Quote:
Originally Posted by merdhead View Post

An iPhone nano makes no sense. The only thing they could do is maybe a slimmed down version without GPS, 2G and less memory, but even that doesn't make too much sense. The way that carrier subsidies work, there isn't really any logic behind making a "cheaper" version since the phone can be financed by the phone companies. They might make a premium version of the phone with extra memory or something else special, but not a cut down version.

Do you even know how big the cell phone market is? Apple's unit sales, comparing to Nokia, is peanuts.

Take a look at any cell phone carrier's website, and see how many free (or almost free)-with-contract cell phones they have.

iPhone is simply too big for many people, especially Asia. Keep in mind, American lifestyle (commute in cars) is not the only lifestyle in the world. When you live by taking subway and bus, iPhone is too big to hang around the neck for girls (cell phone is a fashion element for girls in many countries), and too big to put in a pocket for the guys.

Even if iPhone Nano is not the "production in transition" here, sooner or later there will be an iPhone Nano. Count on it.
post #61 of 77
Quote:
Originally Posted by samurai1999 View Post

My guess for a new product which substantially effects the margins is a low-cost lappy
- say, Atom-based, to compete with the eeePCs
- it's got to have a substantially lower margin to effect the overall margins significantly.
- also it needs to be released soon!

Actually, I think EeePC market segment is a potential. However, if that's the product-transition, it wouldn't have such a big impact on the EPS estimate.

Even if Apple sells it at $300 and it costs $400 to build (unlikely), to reduce the earning by 200M, Apple would sell 2M units, and that would add $600M to the revenue.

Instead, what we are seeing is that the earning estimate is reduced significantly, without apparent additional driver for the revenue.
post #62 of 77
Quote:
Originally Posted by johnqh View Post

Do you even know how big the cell phone market is? Apple's unit sales, comparing to Nokia, is peanuts.

Take a look at any cell phone carrier's website, and see how many free (or almost free)-with-contract cell phones they have.

iPhone is simply too big for many people, especially Asia. Keep in mind, American lifestyle (commute in cars) is not the only lifestyle in the world. When you live by taking subway and bus, iPhone is too big to hang around the neck for girls (cell phone is a fashion element for girls in many countries), and too big to put in a pocket for the guys.

Even if iPhone Nano is not the "production in transition" here, sooner or later there will be an iPhone Nano. Count on it.

So you're arguing that Apple will produce an iPhone nano because everyone else does? Because we all know that Apple follows everyone else and have no problem compromising the design of their products in doing so.

There are other questions: why would Apple want to play in the lower end where there are big, established players and the margins are thin? Apple has an established strategy of skiming the cream of the market at the high end with fat gross margins. Who gives a toss about the number of units they ship if the don't make a decent profit on them and it hurts their brand?

What you're suggesting would be pretty stupid for Apple.
post #63 of 77
Quote:
Originally Posted by merdhead View Post

There are other questions: why would Apple want to play in the lower end where there are big, established players and the margins are thin?

Because they want to expand market share? In other words, growth. And they have pretty much said that they expect their margins to go down, which implies they are getting into a market with narrower margins.

Quote:
Originally Posted by merdhead View Post

Apple has an established strategy of skiming the cream of the market at the high end with fat gross margins. Who gives a toss about the number of units they ship if the don't make a decent profit on them and it hurts their brand?

Because a smaller profit can be decent, especially if quantity goes up. And who says it would hurt their brand?

People said they'd never make the mini because it would hurt margins and the brand. Same with the ipod shuffle. Why NOT create phones corresponding to the nano or shuffle? It did wonders for them on the iPod side of the business.
post #64 of 77
Quote:
Originally Posted by minderbinder View Post

Because they want to expand market share? In other words, growth. And they have pretty much said that they expect their margins to go down, which implies they are getting into a market with narrower margins.



Because a smaller profit can be decent, especially if quantity goes up. And who says it would hurt their brand?

People said they'd never make the mini because it would hurt margins and the brand. Same with the ipod shuffle. Why NOT create phones corresponding to the nano or shuffle? It did wonders for them on the iPod side of the business.

They went into the lower end with the iPod because they ran out of market at the high end. They have plenty of room in the high end of the phone market, and it's a completely different market. The iPod market had no established players who had most of the market share. By your logic they would compete in the low end PC and laptop market, which they don't.
post #65 of 77
Quote:
Originally Posted by merdhead View Post

So you're arguing that Apple will produce an iPhone nano because everyone else does? Because we all know that Apple follows everyone else and have no problem compromising the design of their products in doing so.

There are other questions: why would Apple want to play in the lower end where there are big, established players and the margins are thin? Apple has an established strategy of skiming the cream of the market at the high end with fat gross margins. Who gives a toss about the number of units they ship if the don't make a decent profit on them and it hurts their brand?

What you're suggesting would be pretty stupid for Apple.

No, I am saying whatever this product is, the revenue is deferred.

An iPhone nano could be free with contract, but Apple will recognize $300 over two years, and it costs $100 to $150 to make. That is hardly "low-margin" to me.

Take a look at Nokia's financials (it is about the same as Apple). Low-end doesn't mean low-margin.

Another potential is new AppleTV with DVR and DVD with the same business model as iPhone - cable companies give it away for free with 2-year contract, but Apple recognize $300 revenue over 2 years and shut off streaming video competitors.
post #66 of 77
Quote:
Originally Posted by minderbinder View Post

7% market share sure looks like evidence of suffering to me

Except that it's over twice the 3% they were at not too long ago... everything's relative. In that perspective, 7% is anything but evidence of suffering. They've doubled their market share in just a few years. That's a roaring success in anybody's book!
post #67 of 77
Quote:
Originally Posted by johnqh View Post

Relax, we are just guesstimating. No need to get so worked up.

A candy bar or flip phone, with T9 keypad will be fine for text input. After all, people have been texting for a decade before iPhone. Nobody presses multiple keys to get the letter anymore. T9 works well on most phones.

I didn't say multiple keys, the same key multiple times. I'm not sure if pressing multiple keys ever caught on.
post #68 of 77
Quote:
Originally Posted by SpamSandwich View Post

Although your negativity usually grates on me, there may be more truth to this rumor than we know because there is no outright denial forthcoming. Oy!

In my experience, a denial usually means the rumour is true!
post #69 of 77
Quote:
Originally Posted by minderbinder View Post

Right now their market share is growing, but it's still low (7% market share sure looks like evidence of suffering to me)

I'm surprised you say this at all. Luxury brands don't need to sell as many to make a handy profit, move off luxury, then you're in Wal-Mart territory of very tiny margins. I imagine that Apple is making as much net profit as Dell or HP does but without having to sell to the razor-thin margins of the budget computers.

BTW: 8.5% now, at least in the US.
post #70 of 77
As of now, the 'bid' is a ridiculous $30 lower than the 'ask.'

You figure it out!
post #71 of 77
Just finished reading conference call transcript. There is one clue to what this "product transition" may be:
------
"Andy Hargreaves - Pacific Crest Securities

Could you just touch on CapEx? It jumped quite a bit in the quarter. Could you talk about what the spending was on and is the target still $1.25 billion in the year?

Peter Oppenheimer

Our capital expenditures in the June quarter were $304 million. We spent $113 million in our retail stores and $191 million outside of our retail stores, in our IT areas, facilities, and some of our manufacturing. And we do anticipate CapEx for fiscal 08 being $1.2 billion, about $400 million in retail and $800 million in the other parts of our business."
------
Capital expenditure jumping from $190M to $800M?
Doesn't sound like a new hardware product.
Since Apple outsources its manufacturing it can't be tooling cost, and since its unlikely they would build/buy new engineering facilities the same quarter the product is coming out and was in development a few years, this appears like an investment in IT, eg a server farm?

Servers for HD movies? App store? Expansion of mobile me capabilities, like voice over IP?
post #72 of 77
Apple's Professional Cinema Entertainment Displays. They can be used for their entire product line and HDTV.
post #73 of 77
Quote:
Originally Posted by MacOld View Post

Just finished reading conference call transcript. There is one clue to what this "product transition" may be:
------
"Andy Hargreaves - Pacific Crest Securities

Could you just touch on CapEx? It jumped quite a bit in the quarter. Could you talk about what the spending was on and is the target still $1.25 billion in the year?

Peter Oppenheimer

Our capital expenditures in the June quarter were $304 million. We spent $113 million in our retail stores and $191 million outside of our retail stores, in our IT areas, facilities, and some of our manufacturing. And we do anticipate CapEx for fiscal ’08 being $1.2 billion, about $400 million in retail and $800 million in the other parts of our business."
------
Capital expenditure jumping from $190M to $800M?
Doesn't sound like a new hardware product.
Since Apple outsources its manufacturing it can't be tooling cost, and since its unlikely they would build/buy new engineering facilities the same quarter the product is coming out and was in development a few years, this appears like an investment in IT, eg a server farm?

Servers for HD movies? App store? Expansion of mobile me capabilities, like voice over IP?

Sure it sounds like a New Hardware Manufacturing/Design/Testing Facility that allows them to develop Prototypes and control end-to-end prototyping of a variety of solutions, more rapidly than dealing with Outsourcing, while keeping the projects "under wraps." The consolidation of Real Estate properties around the campus offers many buildings already quite capable of being augmented to do just this--think NeXT Hardware Manufacturering, on a small scale, for rapid prototyping, testing and then control group studies.
post #74 of 77
Profits up 31%, sales up double digits in almost all areas, new products ready to go...... and the stock drops.

Wall Street bugs the h*** out of me.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
post #75 of 77
Quote:
Originally Posted by johnqh

For the next months, AppleInsider will be devoted to figure out what "product transition" is.

The MacBook G6
post #76 of 77
There are currently 909 App Store apps on iTunes. That is pretty damn impressive for 12 days. I wonder what it will be like in 6 months. How do other mobile platforms stack up in comparison?

Note: many of these have duplicate competitors and some are a free and paid version by the developer, but that is the norm across any platform.
Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
Reply
Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
Reply
post #77 of 77
Quote:
Originally Posted by MacOld View Post

Just finished reading conference call transcript. There is one clue to what this "product transition" may be:
------
"Andy Hargreaves - Pacific Crest Securities

Could you just touch on CapEx? It jumped quite a bit in the quarter. Could you talk about what the spending was on and is the target still $1.25 billion in the year?

Peter Oppenheimer

Our capital expenditures in the June quarter were $304 million. We spent $113 million in our retail stores and $191 million outside of our retail stores, in our IT areas, facilities, and some of our manufacturing. And we do anticipate CapEx for fiscal ’08 being $1.2 billion, about $400 million in retail and $800 million in the other parts of our business."
------
Capital expenditure jumping from $190M to $800M?
Doesn't sound like a new hardware product.
Since Apple outsources its manufacturing it can't be tooling cost, and since its unlikely they would build/buy new engineering facilities the same quarter the product is coming out and was in development a few years, this appears like an investment in IT, eg a server farm?

Servers for HD movies? App store? Expansion of mobile me capabilities, like voice over IP?

$190M is a QUARTER figure, $800M is for the FY, putting them in the same ballpark on average.
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: General Discussion
AppleInsider › Forums › General › General Discussion › Notes of interest for Apple's Q3 2008 financial results call