I don't think the iPod should discontinued nor do I make any such argument. The halo effect is still very much alive and well. The iPod does benefit Apple in a variety of ways, but its not longer Apple #1 source of revenue which happens to be the topic of this article.
Andy,
You took it personally. My post was in no way directed at you. And I drew nothing from your article suggesting an opinion that Apple has cause to discontinue the iPod.
If anything, my post was directed at Apple, should I be lucky enough that a key Apple employee should happen to read it.
If I wrote, ?Don?t discontinue the iPod,? there?s no ?Andy? in there anywhere.
In a too-long post (post #85) I offered an IMHO view of why iPod sales are flat. iPods sell like mad, but because of intense pressure from Wall Street, ?flat? doesn?t cut it.
The Street unrealistically expects a company to report uninterrupted quarterly growth over the corresponding quarter of the previous year ?to infinity and beyond.?
If your company is in perfect health, but you post a 1% decline in quarterly revenues/profits compared to the same quarter last year, The Street grossly overreacts and jumps to extreme conclusions like, ?the company is in decline,? or, ?the company is feeling the heat from the competition and this suggests the start of a trend that will continue.?
Then your company?s stock price quickly plummets by 25% or more. You get crucified!
So the iPod?s numbers are absolutely great, but The Street makes unrealistic demands that all of your product segments continuously grow, grow, grow.
By appearances, it would seem that Apple looks for new iPod buyers only in existing iPod owners. So they revamp the models to a high degree -- enough that existing iPod owners really want the new model. A slight features upgrade would not be motivating enough for existing iPod owners.
That continuum has led us to the current state of the nano -- a highly convergent product that now defies categorization. As I wrote in post #85, ?iPod? used to have a distinct meaning. Now, I don?t know what an iPod is. Is it a PIM? Is it a digital photo album? Is it a video camera? Is it a movie and video playback device? Is it a handheld game machine?
A product that stands for everything stands for nothing.
The assumption Apple seems to have made in only seeking new iPod buyers from existing iPod owners is that they have saturated the market. ?Everyone who would ever buy an iPod has one, and our only option is to constantly offer new models with features compelling enough that iPod owners in our saturated market want the new model.?
I don?t think the market for iPod buyers is saturated. There?s a whole globe out there. And I haven?t seen a ?silhouette? ad in years. Apple stopped advertising the iPod or even iTunes.
Probably two-and-a-half decades ago, Xerox believed they had saturated the market, and that every potential person or organization that would buy a Xerox copier had one. They found themselves with piles of cash on hand and didn?t know what to do. Xerox was SO successful that it resulted in failure.
Before the term ?photocopier? had been invented, copiers were called ?Xerox machines,? and Xerox became a verb. ?Could you Xerox four copies of this for me??
This is a rare marketing phenomenon when no one has a more convenient word to describe a product so they use the brand name generically: Kleenex (I don?t think I?ve ever uttered the words ?facial tissue,? and if I did, the other person probably said, ?Huh??, and I said, ?A Kleenex!?), Q-tips, Jell-O, Band-Aids, Frisbees, ChapStick, Popsicle, Saran Wrap, Post-Its, Rollerblades, Vaseline, Scotch Tape, White-Out, etc.
I remember reading that when someone bought from a Xerox competitor (call the company ?Repro?) one of their offerings that would much later be known as ?photocopiers,? people would actually say, ?I just bought a new Xerox machine by Repro.?
The meaning of ?Xerox? was so confining that attempts to grow revenues/profits (like I said, that The Street demands) by expanding into such areas as electronic typewriters, computer mainframes, desktops, printers, laser printers, fax machines, etc. there were no takers. No one seemed to want a computer from a photocopier maker.
Thankfully, Xerox poured some of that pile of cash on hand into the Xerox Palo Alto Research Center or Xerox PARC. Legendary!
Where would we be in computers today without Xerox PARC?
Xerox could have succeeded in any market they chose if only they were willing to take the Procter & Gamble approach. Just create a new brand name for whatever product in whatever field and never mention that Xerox is behind it. Simple.
IBM failed in computer printers until they stopped using the ?IBM? brand name and sold them under the Lexmark brand name, after which sales took off. (Then IBM foolishly sold the Lexmark division.)
But I don?t think every potential iPod buyer already has one. The market is not saturated. Apple?s target market should not be just existing iPod owners. They aren?t where Xerox found themselves. There?s a whole globe out there.
IMHO, in an example of ?Less is more,? Apple should try an iPod model between the shuffle and the nano, that is strictly a digital music playback and storage device.
THAT product would stand for something. THAT would be a product people would understand and could easily categorize in their minds.
I suggest Apple at least try, and see how it works.
Another thing is that if you have not bought into the iPhone/iPad ecosystems, or are in any way critical of any aspect of them, you are labeled a troll or Apple hater, even if you have a house full of other Apple products and have had for the last two decades. The iPhone has become a religion on here. They jokingly referred to it as the Jesus phone when it first launched but in all seriousness, that tongue in cheek phrase was so close to the mark it is no longer amusing. The only question in my mind is, is the church of iOS a cult or a religion?
someone's sig said something like : iOS is the way of the future, it is the new platform, OSX is just a platform for upgrading iOS.
unless Apple has somthing coming out thats big in its iMacs or Mac Pros, i think they will fall behind in this (more in workstations (i.e. Mac Pros))
i have to admit that sig is one of the funnier ones i have seen
whoever's it is please keep it (also i would like a copy XD)
I have successfully been patient enough to skip over buying an iPod. Once the iPhone came out it was clear that the iPod was soon to be superfluous, and the iPad confirmed it. The thing that strikes me is that Apple always comes out with too many versions of the same thing - it's confusing to consumers.
I have successfully been patient enough to skip over buying an iPod. Once the iPhone came out it was clear that the iPod was soon to be superfluous, and the iPad confirmed it. The thing that strikes me is that Apple always comes out with too many versions of the same thing - it's confusing to consumers.
Ironically, when Apple CEO Gilbert Amelio bought NeXT for $430 million, and brought Steve Jobs on as ?Advisor to the CEO,? Amelio (who, in addition to paying $430 million for NeXT, gave Jobs a generous 1.5 million shares of Apple stock as compensation for his part-time advisory role at Apple), Jobs systematically plotted to undermine Amelio by bad-mouthing him behind his back, lobbying the Board of Directors to fire Amelio, and secretly selling his 1.5 million shares of Apple stock, which made news, to damage the company and further undermine Amelio (Amelio asked Jobs directly if it was him, and Jobs lied until pressed by Amelio into sheepishly admitting it was he who sold 1.5 million shares in one transaction) until the Board fired him, and then Jobs "reluctantly" (LOL) agreed to serve as "interim CEO," then feigned that he wanted no part of being Apple's permanent CEO, then perpetrated a ruse by setting up a straw-man committee to ostensibly search for a suitable CEO (and rejected every candidate the committee came up with -- wonder why?), then after much time, pretended to relent and reluctantly say, "OK. OK. <sigh> I will agree to be CEO. Consarnit!", one of Amelio?s approaches as CEO was to pare down the number of different Mac models, some of which had only slightly different specs. This lack of clear definition between Mac models and their overlap, had hurt Apple by confusing potential buyers so much that they didn?t buy at all.
After his successful Shakespearean coup, Jobs continued Amelio?s approach and pared down the line even more.
The industrial design for the iMac had been done by Jonathan Ive prior to Jobs? return to Apple, and the guts of the iMac were almost complete in Apple?s ?MacNC? project for a Mac model customized for Internet use -- again -- before Jobs? return.
I love Steve, but it is hard to argue against the apparent evidence that he is as evil as he is good.
I mean how do you reconcile his pronouncements that his aim with the technology products he grants from on high (e.g. "The computer for the rest of us.") is an altruistic desire to serve and empower mankind, with the fact that one-on-one he treats people like sh*t?
A quote from an article I read (but unfortunately cannot cite following a browser crash) reads:
"But like many revolutionaries, Mr. Jobs appears to be one who loves the world and loathes people. He has been known to bring misery to people's lives, and not just book authors. His capacity for cruelty runs the gamut from verbal lashings of his own customers to rumored summary dismissals for the sin of having brought him the wrong brand of bottled water."
Individuals he accosts, berates, curses at, dresses-down, humiliates, insults, fires, but mankind he benevolently serves.
The two don't add up!
Par example, before his ouster, Steve Jobs berated one employee so viscously that the man physically attacked Jobs until a couple of employees pulled him off Steve.
Then the man left Apple, went nuts, and was arrested after several window panes of Jobs? mansion were shattered by rocks, and when police arrived, the ?mad man? was found sitting on the curb across from Jobs? mansion with a brown paper bag full of rocks.
Gilbert Amelio is a "brain," but even "brains" are stupid in some areas. Before he was appointed CEO, Amelio served on Apple's Board of Directors. Only a couple of years before Amelio was appointed Apple CEO, Steve Jobs contacted then Board member Amelio, and invited him to dinner at Steve's home.
When Steve Jobs wants to have a serious, consequential conversation with someone, he always says, "Let's go for a walk."
Well on their walk, Jobs urged Apple Board member Amelio to convince the rest of the Board to hire him (Steve) as CEO -- clearly indicating his interest in being CEO of Apple.
Then after becoming CEO, Amelio hires Jobs as a consultant and believes Steve when he insists he has no designs on being Apple CEO? I mean, Duh! Forgot all about "The Walk," did you Gil?
Also, Jobs has always resented Stephen Wozniak, probably for Woz?s prominent role in computer history that prevents the spotlight from being solely on Jobs.
After his coup d?état, Jobs contacted Wozniak, who, though he officially left the company some 30 years ago, had the status of an Apple employee and received a paycheck even though he did nothing at the company (until he advised CEO Gilbert Amelio), and Jobs said to Woz, ?Your services are no longer needed here.?
Now I don?t know if Woz remains an Apple employee who collects a paycheck, or if Jobs actually severed his ties to the company, including Woz?s status as an employee of Apple.
When Woz wrote an autobiography, he asked Steve Jobs if he would write the forward. Jobs refused.
Jobs has been screwing over Woz ever since before Apple when Steve Jobs was an employee at Atari and tasked with creating the ?Breakout? game.
Lacking engineering and programming skills, Jobs knew he couldn?t do it (but didn?t want Atari to know of his ineptitude).
So he asked Woz to design the Atari ?Breakout? game Jobs was assigned to create, on the promise that he would split what he was paid 50/50 with Woz.
Woz secretly spent five days creating ?Breakout.? As far as Atari knew, Jobs had done it, and was sure to take full credit, of course.
Jobs lied and told Woz he was paid $700, so he gave Woz $350. It was later learned that Atari paid Jobs $7,000, not $700. Word eventually reached Woz, and he was hurt.
When asked about it, the soft-hearted Woz says it was a long time ago and he has forgiven Jobs. Woz?s mistake was treating it like an isolated incident instead of a harbinger.
Jobs and Woz were friends right up until the second that he didn?t need Woz anymore, and then their friendship ended. Woz has said that at Apple, the two never met or spoke to each other. To Jobs, Woz was like a candy bar wrapper to be discarded when the contents are consumed.
The soft-hearted Woz is ever-forgiving of Jobs, even as Jobs continues to screw him over to this day.
Right after Apple's IPO, Woz was giving away thousands of shares to friends, family and some Apple employees.
Woz has continuously been donating money to philanthropic organizations ever since he became wealthy. Years ago, an article estimated Woz's net worth at $49 million. In a 2010 article, it said because of investments in anything from stock to the startup Oxygen TV network (which NBC bought for $925 million), his net worth is now above $100 million.
Coming full circle, Amelio and Jobs took the same approach in discontinuing Mac models and providing more delineation between models.
So it is puzzling that Jobs has allowed the distinctive iPod to become the current nano.
Consumers used to know what an iPod was, but with the present nano, it's now a foggy mismash of a product.
If a consumer can't answer a question as to what a product is, without expressing just one thought, the product is obviously unfocused.
The nano is a "this and a that and that and another thing."
If Apple can reclaim the iPod's singular definition, they can increase sales.
Given the size of our planet, I don't think the iPod market is saturated.
Apple just needs to remind itself what made the iPod a success in the first place, and restore the product's original tight focus. Return to basics.
defender
P.S. Despite all the criticism, Steve Jobs is actually one of my personal heroes, and his role in the success of Apple cannot be diminished. I mean, it's now the 2nd largest company in the world by market cap! I am just forever trying to figure out a very complex person and an obvious genius.
BTW, Dell is #126 in market cap. I think Dell should close down and give the money back to the shareholders.
In a too-long post (post #85) I offered an IMHO view of why iPod sales are flat. iPods sell like mad, but because of intense pressure from Wall Street, ?flat? doesn?t cut it.
The Street unrealistically expects a company to report uninterrupted quarterly growth over the corresponding quarter of the previous year ?to infinity and beyond.?
If your company is in perfect health, but you post a 1% decline in quarterly revenues/profits compared to the same quarter last year, The Street grossly overreacts and jumps to extreme conclusions like, ?the company is in decline,? or, ?the company is feeling the heat from the competition and this suggests the start of a trend that will continue.?
Then your company?s stock price quickly plummets by 25% or more. You get crucified!
So the iPod?s numbers are absolutely great, but The Street makes unrealistic demands that all of your product segments continuously grow, grow, grow.
I would be very careful here. I know quite a lot about the market's viewpoint on growth and particularly on Apple's growth. I've been trading and analyzing Apple for ages, and have consistently outperformed the street in my earnings estimates published at Fortune by Philip Elmer-Dewitt. I also called the top of this market (also published on Fortune on April 26th), and called the bottom of Apple strongly urging that Apple was a strong buy at in November of 2009 at $80. Only the second time I've ever publicly announced that Apple was the buy of the century. The other time was in July 2006 when Apple was trading at $54 before they reported Q3 earnings.
Here's what I would say about the street's view of growth. Wall Street doesn't expect that Apple should be able to show any growth at all in the iPod. In fact, analysts and money managers are perfectly content with slightly positive to slightly negative revenue growth for the iPod. Look at the last few quarters for example. iPod sales were basically slightly up to slightly down for the past few quarter. Yet, did you see anyone on Wall Street make a stink about it? Not really.
And this is precisely because Apple is able to demonstrate other avenues for growth. The whole point of my article. As long as a company can show that product X no longer has that great of an impact and that they have other products that are driving tremendous growth, they don't give a shit about product X. Take from this what you will, but I know exactly what I'm talking about here.
In general, I agree with Andy. If iPod revenues were subtracted from Apple's bottom line, the impact would be fairly significant, but that's not going to happen. However growth in revenue from this product line has become essentially irrelevant to Apple's earnings growth picture due largely to the iPhone and secondarily to the iPad. The caveat I'd add is that Apple is faced with the feat of pulling successively larger rabbits out of their hat on a regular basis (every year or so) or risk earnings growth flattening out. That could be disastrous for AAPL shareholders. So for investors, I think it is well worth considering what might be coming next to drive earnings. All we know is that it has to be about as big as the iPhone or the iPad if AAPL is going to continue to perform as in the recent past.
The iPod era of being Apple's main revenue driver is over. The end. I can't explain this in any simpler terms.
One problem is that you didn't show that the iPod was EVER a main driver of Apple's revenue.
And this overall discussion is pointless. Yes of course the iPod share has diminished since it has morphed into the iPhone and iPad. Ok, but so what? iPod was iPhone version 0.5 now we're on iPhone version 4. So, what's you're point? The platform has evolved, and its influence has increased.
BTW MacOS 9's influence has been waning recently too. Maybe covering that would get you some similar headlines. :-)
I would be very careful here. I know quite a lot about the market's viewpoint on growth and particularly on Apple's growth. I've been trading and analyzing Apple for ages, and have consistently outperformed the street in my earnings estimates published at Fortune by Philip Elmer-Dewitt. I also called the top of this market (also published on Fortune on April 26th), and called the bottom of Apple strongly urging that Apple was a strong buy at in November of 2009 at $80. Only the second time I've ever publicly announced that Apple was the buy of the century. The other time was in July 2006 when Apple was trading at $54 before they reported Q3 earnings.
Here's what I would say about the street's view of growth. Wall Street doesn't expect that Apple should be able to show any growth at all in the iPod. In fact, analysts and money managers are perfectly content with slightly positive to slightly negative revenue growth for the iPod. Look at the last few quarters for example. iPod sales were basically slightly up to slightly down for the past few quarter. Yet, did you see anyone on Wall Street make a stink about it? Not really.
And this is precisely because Apple is able to demonstrate other avenues for growth. The whole point of my article. As long as a company can show that product X no longer has that great of an impact and that they have other products that are driving tremendous growth, they don't give a shit about product X. Take from this what you will, but I know exactly what I'm talking about here.
Quote:
Originally Posted by andyzaky
I would be very careful here. I know quite a lot about the market's viewpoint on growth and particularly on Apple's growth. I've been trading and analyzing Apple for ages, and have consistently outperformed the street in my earnings estimates published at Fortune by Philip Elmer-Dewitt. I also called the top of this market (also published on Fortune on April 26th), and called the bottom of Apple strongly urging that Apple was a strong buy at in November of 2009 at $80. Only the second time I've ever publicly announced that Apple was the buy of the century. The other time was in July 2006 when Apple was trading at $54 before they reported Q3 earnings.
Here's what I would say about the street's view of growth. Wall Street doesn't expect that Apple should be able to show any growth at all in the iPod. In fact, analysts and money managers are perfectly content with slightly positive to slightly negative revenue growth for the iPod. Look at the last few quarters for example. iPod sales were basically slightly up to slightly down for the past few quarter. Yet, did you see anyone on Wall Street make a stink about it? Not really.
And this is precisely because Apple is able to demonstrate other avenues for growth. The whole point of my article. As long as a company can show that product X no longer has that great of an impact and that they have other products that are driving tremendous growth, they don't give a shit about product X. Take from this what you will, but I know exactly what I'm talking about here.
Andy,
I had begun a reply to your post back on July 5th or 6th. My Safari was in the throes of a very bad flu and would crash many times an hour when you I something as simple as scroll too fast or type too fast.
In the middle of a lengthy post in the AppleInsider forums, Safari would crash, and all was lost.
I?d relaunch Safari, call back the page from history, and the typing field I had spent so much time writing in was as blank as a piece of copier paper straight from the ream.
(Curiously, Mozilla-based browsers that crashed, would allow me to call back the page from history, and the writing field was still filled up to the last keystroke I had made before the crash! Huh!)
So, I decided to start using TextEdit to write my posts, and then cut-and-paste them into the reply field in the AppleInsider forums, apply any typographical embellishments, smilies, etc. and then hit ?Submit.?
I got distracted by a shiny object and never completed my post to you, but decided to rekindle some of the points I made way back them that I probably did not to a very good job of conveying.
So you?ll know this about me, I am not 100% ?Wall Street illiterate,? though my knowledge, expertise, experience, and above all, perspective, cannot hold a candle to yours, (investing is one area where perspective ranks uncommonly high in importance).
I was a day-trader in the mid-nineties when the dot-com bubble was still liquid soap, and I really ?raked it in? for a while. (Remember? During that period when it was hard to make a mistake? It required effort?) Truthfully, though, I cannot honestly lay claim to any conscious timing skills (though I?d like to). It was all basically fortuitous; I got in at the right moment out of sheer luck, and I got out at a pretty good time through sheer luck, as well.
I was advised by all the books I?d read to stay clear of IPOs, but wanted to get in on YHOO?s. YHOO offered its IPO shares at a price of $13. But the first share traded upon the opening bell that day cost $23.50. I watched it chart upward all morning and early afternoon, and then decided to throw caution to the wind, and I bought a chunk at somewhere near $41 (in one of my very few ?market? orders).
Then I watched for the rest of the day as the stock plummeted from an intraday high of $43 to a close of $33. I felt like a dunce, but held onto the shares anyway. It had four or so 2-for-1 splits, and, I think, one 3-for-2, but (on a non split-adjusted basis, which makes my numbers look bigger! ) I entered a sell order price of $400. It reached $400, the sell order executed, and I was rolling in dough (relatively -- most likely smalltime by your standards. Also, it was largely ?on paper.?). Then I watched as, after I had sold it, it hit a high of $500.13 (on a non split-adjusted basis). Given my nature, I was all consumed by the additional profits I missed, instead of the huge gains I had made. It was all indefensible emotion and greed. (?Now if I?d only shorted YHOO at $400....?)
I held other issues, e.g. Ciscso, Akamai, and made some coin -- plus some under-$10 issues. I did get on the amusement ride at the right time with AMZN, but completely missed out on EBAY, as I held the incorrect belief that the business model was unsustainable long-term, and that barriers-to-entry were too low for potential competitors to ravage the company.
I also missed out entirely on GOOG. Oh, well.
Don?t worry, I had some impressive losses to my credit, and they were usually victims of my emotions. I had read so many books, that I could recite all the trading rules by heart, but observing them is a whole other story. We?re not all Mr. Spocks.
One book gave a piece of valuable advice that I think played an important role in my general success. The book essentially said, unlike the age-old caution given to companies to concentrate on their winners and not their losers, or not allow their priorities to succumb to ?the squeaky wheel gets the grease? losing practice, in trading, I was told, the opposite is true.
At all costs, guard your capital with the fierceness of a junkyard dog.
In trading, the ?squeaky wheel? should get the grease, or rather, the majority of your attention and concern should be on minimizing (yet accepting) losses, and preserving precious capital. This requires a closer watch on losing picks than on winning ones.
Keep all eyes on your losers, and cut and run early. Minimize the loss and choke it down. Let your winners run and they'll take care of themselves; you tend to the losers. Preservation of investing capital is paramount.
I?ve gone on too long, but, to finish up, I am no longer a trader but a buy-and-hold investor. I scooped up some shares of AAPL in the Fall of 2006 at around $76 (not the best entry point, but I?ll take it) and still have them. I also picked up a little bit of Citigroup at $3.50, because I intend to hang onto it and basically forget about it for a long time. (I also hold a little YUM and COST.)
This loooooooooooong description is to let you know that I am not a complete Wall Street dummy -- maybe 99% a dummy, but not 100%.
(I also hold the unwavering, extreme position -- that I have yet to find one person who agrees with -- that NO public company should EVER offer a dividend. Sure, shareholders love their cash dividend checks that come regularly in the mail or their DRIPs, but I believe 100% that if a company instead took any net profits it made in a financial reporting period and reinvested them in the company, in R&D, marketing, human talent, plant & equipment, manufacturing capacity, more modern and efficient equipment, used them to acquire a small, innovative and compatible company, with talent and IP that fortifies their core competency -- or in a poor economic climate, temporarily parked earnings in conservative investments in real estate, debt or equity instruments, that shareholders would ultimately make more money on profits from appreciation in the price of the stock issue itself than they would in dividends. Unfortunately, this is unprovable.)
I decided to resurrect the post I started on July 5th or 6th, because of what?s now most commonly known as ?Antennagate.?
The point that you missed in your reply to my post (which is my fault for not making clear), is that the iPod is more than just a part of Apple?s current product lineup. The iPod is not a number or a percentage. Long ago, it took on qualities -- though intangible -- are no less important than a revenue/profit share percentage, or a unit or profit growth figure.
Analysts -- especially those who participate in Apple?s earnings conference calls -- are paragons of emotion?s role in the workings of ?Wall Street.?
Analysts at major brokerage firms, who are supposed to be more fundamentally-oriented and data-focused, are actually sometimes even more emotional than traders in the pit at the Chicago Merc!
Though they may be delivered in a sober and dispassionate manner, the questions themselves are too often reflective of the overblown, sensationalized stories swarming the media.
Obviously, a number of milestone, outrageously successful product form the base of the pedestal on which Apple now stands. If analysts can remember that far back, Apple owed most of its early recovery to the iMac, and soon the iMac became an icon for Apple?s storybook comeback.
Then Apple took the planet by storm with the iPod.
A subsequent steady increase in sales of the Mac were theorized to be the result of a ?halo effect? the iPod had, which conferred certain positive attributes on the Mac and Apple -- an innovator, a company uniquely focused on the future, a technology pioneer, a leader who?s followed by its competitors in the industry, and let?s not forget, the company that made such a compact, gorgeous, simple little pocket device that some say, along with iTunes and the iTunes Store, drastically overhauled the entire music industry as we had always known it.
My point is about the total picture: the vast context in which the iPod is viewed. Writers have declared the iPod now an official part of Americana. They have declared it a cultural icon, even a cultural phenomenon. The iPod has been called ?trendy.? Like clothing, this gadget, the iPod, has "fashion." It?s been said that the iPod has chic and status, and if you owned a competitor?s digital music player, you weren?t on the cutting edge of style. There was the iPod, and then a marketplace filled with non-iPods, and people wanted iPods.
So back on the 5th or 6th, when I started this, I wanted to suggest that people listen to the questions asked by analysts during the upcoming Q3 earnings conference call, and make note of the reactions after an Apple official gives a very direct and comprehensive explanation in answer to the question about the iPod. Then in a manner concealing all emotion, another analyst will basically ask the same question, rephrased. In what one would think would be a complete and satisfactory answer, the Apple representative will respond in a measured, systematic way. Then yet another iPod question will come with but a slight difference. I would not be surprised if an analysts -- the self-promoter, Joe Battipaglia-type, hoping to see his name in ink the next day -- will ask a deliberately dramatic questions like, ?Isn?t the iPod the linchpin holding the whole company together? Isn?t it central to the digital content ecosystem that Apple derives so much revenue from? If you pull out this linchpin, will the company fall like a house of cards??
People will groan at the totally out-of-place melodrama, but watch that analyst be the one quoted the next day in a media hungry for sensationalism. (Which sells traditional media, and helps their financial picture, so they can cheat death for another day.)
NOW, HOWEVER, we can ALL forget about the iPod in the Q3 call. It?ll be antenna, antenna, antenna. A detailed, specific, comprehensive answer will be provided in response to an antenna question, and the next question will be another antenna question. They?ll come in almost interminable waves, and wordings will differ, but the same redundant antenna questions will be asked.
If, in response the questions about criticisms or controversies, one's answer is an attempt to de-escalate the fervor surrounding these criticisms and controversies, analysts will smell blood in that water, consider the question unanswered, or answered evasively and then the feeding frenzy will ensue.
During the 1992 Democratic Primary, in which Governor Bill Clinton and a lot of other Democratic hopefuls ran, all were asked if they?d ever smoked marijuana. The candidates that gave an open, honest admissions to having smoked it, totally eliminated it as an issue. Reporters were left (for once) speechless, with no followup questions. They wandered away from the candidate like zombies, not knowing where to go, what to do.
Only one Democratic Primary candidate gave an evasive, dodgy, crafty, almost comical and some say intellectually insulting response to the same question that amounted to an admixture of admission and denial. Simultaneously, I did and I didn?t.
The first example is how to disarm throngs of badgering reporters with some directness, pure honesty, genuineness and openness. You?ve revealed all! They?ve got nothin?, and they leave you alone after that. (Plus, the story quickly goes away.)
The second example is how to respond to a question in a way that sets reporters? hair on fire and triggers a media feeding frenzy, and the issue and the evasive, non-answer greatly elongate what might have been an almost unnoticeably brief news cycle.
Because the question hasn?t been answered, it does not stop being asked.
(BTW, David Letterman?s handling of his recent scandal took the best possible approach; Tiger Woods? treatment of his matter did not.)
I?ll be paying close attention to the degree of openness and complete revelation on the part of Apple?s participants in the call, and how their answers affect the issue and subsequent questions. Does it ease the issue to any degree, or only elevate the issue more than before.
It?ll be interesting.
Apple execs in on the conference call can do one of two things:
In answer to a question about the iPhone 4 "Antennagate" affair, an Apple representative can give and indirect, abstruse, oblique, evasive, disingenuous, artful, crafty response, in which it is obvious to anyone listening that key information is being omitted and central facts are being withheld, and that Apple representative will touch off a media firestorm. An issue about a product defect is then transformed into a Nixonian coverup and a scandal with intrigue and many angles.
Or, in answer to a question about the iPhone 4 "Antennagate" affair, an Apple representative can be as straight, direct, open, honest, revelatory, complete and transparent as possible, disarm the pointed questioners, help diffuse the issue, and make enormous strides toward steadily reducing the story's prominence in the media, once there is little to write about since the many questions have been answered with directness, and the uncertainly and suspicions of a coverup no longer have any basis.
But, importantly, no amount lower than 100% openness, forthrightness and a willingness to entertain any question will suffice.
We'll see tomorrow how Apple makes its own bed.
Let's hope they take the approach that works, an not an approach that produces an apparition of the ghost of Richrd Nixon.
We'll see in September how it all is gonna shape... Yet, the design of the recent iPhone, tethered so tightly to radio, suggests iTouch may now be living its last year. Just until the 3G casing is discontinued...
We'll see in September how it all is gonna shape... Yet, the design of the recent iPhone, tethered so tightly to radio, suggests iTouch may now be living its last year. Just until the 3G casing is discontinued...
That's a very interesting point - would an iPod Touch keep the SS perimeter? It wouldn't need it per sé but would it be an issue if it was retained as a cosmetic family tie? Probably not. The only question would perhaps be "Will it be advantageous to have a visual difference between the two?"
I don't know the answer but would guess that they could happily co-exist looking for the most part to be indistinguishable from each other, much like the 3G/3Gs and current Touch.
My honest expectation is that the Touch will continue to be sold alongside the iP4, filling the niche it currently does. I think Apple will be leery of adding too much iPhonesque functionality to it though, given the possibility of its cannibalising iP4 sales.
That's a very interesting point - would an iPod Touch keep the SS perimeter? It wouldn't need it per sé but would it be an issue if it was retained as a cosmetic family tie? Probably not. The only question would perhaps be "Will it be advantageous to have a visual difference between the two?"
I don't know the answer but would guess that they could happily co-exist looking for the most part to be indistinguishable from each other, much like the 3G/3Gs and current Touch.
My honest expectation is that the Touch will continue to be sold alongside the iP4, filling the niche it currently does. I think Apple will be leery of adding too much iPhonesque functionality to it though, given the possibility of its cannibalising iP4 sales.
But as you say, we'll see.
And I can not in all honesty believe in too much glorious future of iTouch.
iPad 2 with truly terrifying set of sophisticated features will hopefully be here in some months to finally compel both normal people and technology enthusiasts. Customers say they want this toy.
If they follow their usual product update cycle, the 3GS, and thus 3G casing, will be discontinued in 2011. And for reason: the casing --- while being quite slick one --- becomes simply and plainly outdated.
Theoretically, they can replace UMTS antenna of the 4 with some sort of plastic bezel for iTouch. The problem is the board design, relaying on compact size of radio chipset, does not look much allowing for easy replacement of that with NAND memory modules...
iPod is not sales determinant for Apple anymore. For the better or for the worse, we're not in 2006. Whence incertitude on whether they would invest in supporting the unpopular product, which requires unique manufacturing process.
Hope they keep the classic. Love the storage capacity.
I wish they would merge the two and make a thick Touch with a hard drive...
We both may be disappointed, if the rumors are true and Apple starts pushing the cloud/streaming model (which honestly doesn't make sense to me with all the bandwidth data caps being proposed)...
I wish they would merge the two and make a thick Touch with a hard drive...
The design flaw like that will blow everyone out of the water much more than their iP4 antenna solution does. Palm's proven a decade ago it's absolutely impractical to have a HD in a handset.
Comments
To Defenderjarvis:
I don't think the iPod should discontinued nor do I make any such argument. The halo effect is still very much alive and well. The iPod does benefit Apple in a variety of ways, but its not longer Apple #1 source of revenue which happens to be the topic of this article.
Andy,
You took it personally. My post was in no way directed at you. And I drew nothing from your article suggesting an opinion that Apple has cause to discontinue the iPod.
If anything, my post was directed at Apple, should I be lucky enough that a key Apple employee should happen to read it.
If I wrote, ?Don?t discontinue the iPod,? there?s no ?Andy? in there anywhere.
In a too-long post (post #85) I offered an IMHO view of why iPod sales are flat. iPods sell like mad, but because of intense pressure from Wall Street, ?flat? doesn?t cut it.
The Street unrealistically expects a company to report uninterrupted quarterly growth over the corresponding quarter of the previous year ?to infinity and beyond.?
If your company is in perfect health, but you post a 1% decline in quarterly revenues/profits compared to the same quarter last year, The Street grossly overreacts and jumps to extreme conclusions like, ?the company is in decline,? or, ?the company is feeling the heat from the competition and this suggests the start of a trend that will continue.?
Then your company?s stock price quickly plummets by 25% or more. You get crucified!
So the iPod?s numbers are absolutely great, but The Street makes unrealistic demands that all of your product segments continuously grow, grow, grow.
By appearances, it would seem that Apple looks for new iPod buyers only in existing iPod owners. So they revamp the models to a high degree -- enough that existing iPod owners really want the new model. A slight features upgrade would not be motivating enough for existing iPod owners.
That continuum has led us to the current state of the nano -- a highly convergent product that now defies categorization. As I wrote in post #85, ?iPod? used to have a distinct meaning. Now, I don?t know what an iPod is. Is it a PIM? Is it a digital photo album? Is it a video camera? Is it a movie and video playback device? Is it a handheld game machine?
A product that stands for everything stands for nothing.
The assumption Apple seems to have made in only seeking new iPod buyers from existing iPod owners is that they have saturated the market. ?Everyone who would ever buy an iPod has one, and our only option is to constantly offer new models with features compelling enough that iPod owners in our saturated market want the new model.?
I don?t think the market for iPod buyers is saturated. There?s a whole globe out there. And I haven?t seen a ?silhouette? ad in years. Apple stopped advertising the iPod or even iTunes.
Probably two-and-a-half decades ago, Xerox believed they had saturated the market, and that every potential person or organization that would buy a Xerox copier had one. They found themselves with piles of cash on hand and didn?t know what to do. Xerox was SO successful that it resulted in failure.
Before the term ?photocopier? had been invented, copiers were called ?Xerox machines,? and Xerox became a verb. ?Could you Xerox four copies of this for me??
This is a rare marketing phenomenon when no one has a more convenient word to describe a product so they use the brand name generically: Kleenex (I don?t think I?ve ever uttered the words ?facial tissue,? and if I did, the other person probably said, ?Huh??, and I said, ?A Kleenex!?), Q-tips, Jell-O, Band-Aids, Frisbees, ChapStick, Popsicle, Saran Wrap, Post-Its, Rollerblades, Vaseline, Scotch Tape, White-Out, etc.
I remember reading that when someone bought from a Xerox competitor (call the company ?Repro?) one of their offerings that would much later be known as ?photocopiers,? people would actually say, ?I just bought a new Xerox machine by Repro.?
The meaning of ?Xerox? was so confining that attempts to grow revenues/profits (like I said, that The Street demands) by expanding into such areas as electronic typewriters, computer mainframes, desktops, printers, laser printers, fax machines, etc. there were no takers. No one seemed to want a computer from a photocopier maker.
Thankfully, Xerox poured some of that pile of cash on hand into the Xerox Palo Alto Research Center or Xerox PARC. Legendary!
Where would we be in computers today without Xerox PARC?
Xerox could have succeeded in any market they chose if only they were willing to take the Procter & Gamble approach. Just create a new brand name for whatever product in whatever field and never mention that Xerox is behind it. Simple.
IBM failed in computer printers until they stopped using the ?IBM? brand name and sold them under the Lexmark brand name, after which sales took off. (Then IBM foolishly sold the Lexmark division.)
But I don?t think every potential iPod buyer already has one. The market is not saturated. Apple?s target market should not be just existing iPod owners. They aren?t where Xerox found themselves. There?s a whole globe out there.
IMHO, in an example of ?Less is more,? Apple should try an iPod model between the shuffle and the nano, that is strictly a digital music playback and storage device.
THAT product would stand for something. THAT would be a product people would understand and could easily categorize in their minds.
I suggest Apple at least try, and see how it works.
defender
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Well said, you and Zc456.
Another thing is that if you have not bought into the iPhone/iPad ecosystems, or are in any way critical of any aspect of them, you are labeled a troll or Apple hater, even if you have a house full of other Apple products and have had for the last two decades. The iPhone has become a religion on here. They jokingly referred to it as the Jesus phone when it first launched but in all seriousness, that tongue in cheek phrase was so close to the mark it is no longer amusing. The only question in my mind is, is the church of iOS a cult or a religion?
someone's sig said something like : iOS is the way of the future, it is the new platform, OSX is just a platform for upgrading iOS.
unless Apple has somthing coming out thats big in its iMacs or Mac Pros, i think they will fall behind in this (more in workstations (i.e. Mac Pros))
i have to admit that sig is one of the funnier ones i have seen
whoever's it is please keep it (also i would like a copy XD)
http://www.daisybrain.wordpress.com
A friend asked me if he should get a iPod nano. I told him spend a tiny bit more and get an iPhone 4.
A tiny bit more? How is +$60 a month for the next two years, "a tiny bit more"?
I have successfully been patient enough to skip over buying an iPod. Once the iPhone came out it was clear that the iPod was soon to be superfluous, and the iPad confirmed it. The thing that strikes me is that Apple always comes out with too many versions of the same thing - it's confusing to consumers.
http://www.daisybrain.wordpress.com
Word! You said it!
Confusing customers with your product offerings is one of the worst things a company can do.
WARNING! WARNING! Deplorable digression imminent! Lock phasers:
Ironically, when Apple CEO Gilbert Amelio bought NeXT for $430 million, and brought Steve Jobs on as ?Advisor to the CEO,? Amelio (who, in addition to paying $430 million for NeXT, gave Jobs a generous 1.5 million shares of Apple stock as compensation for his part-time advisory role at Apple), Jobs systematically plotted to undermine Amelio by bad-mouthing him behind his back, lobbying the Board of Directors to fire Amelio, and secretly selling his 1.5 million shares of Apple stock, which made news, to damage the company and further undermine Amelio (Amelio asked Jobs directly if it was him, and Jobs lied until pressed by Amelio into sheepishly admitting it was he who sold 1.5 million shares in one transaction) until the Board fired him, and then Jobs "reluctantly" (LOL) agreed to serve as "interim CEO," then feigned that he wanted no part of being Apple's permanent CEO, then perpetrated a ruse by setting up a straw-man committee to ostensibly search for a suitable CEO (and rejected every candidate the committee came up with -- wonder why?), then after much time, pretended to relent and reluctantly say, "OK. OK. <sigh> I will agree to be CEO. Consarnit!", one of Amelio?s approaches as CEO was to pare down the number of different Mac models, some of which had only slightly different specs. This lack of clear definition between Mac models and their overlap, had hurt Apple by confusing potential buyers so much that they didn?t buy at all.
After his successful Shakespearean coup, Jobs continued Amelio?s approach and pared down the line even more.
The industrial design for the iMac had been done by Jonathan Ive prior to Jobs? return to Apple, and the guts of the iMac were almost complete in Apple?s ?MacNC? project for a Mac model customized for Internet use -- again -- before Jobs? return.
I love Steve, but it is hard to argue against the apparent evidence that he is as evil as he is good.
I mean how do you reconcile his pronouncements that his aim with the technology products he grants from on high (e.g. "The computer for the rest of us.") is an altruistic desire to serve and empower mankind, with the fact that one-on-one he treats people like sh*t?
A quote from an article I read (but unfortunately cannot cite following a browser crash) reads: Individuals he accosts, berates, curses at, dresses-down, humiliates, insults, fires, but mankind he benevolently serves.
The two don't add up!
Par example, before his ouster, Steve Jobs berated one employee so viscously that the man physically attacked Jobs until a couple of employees pulled him off Steve.
Then the man left Apple, went nuts, and was arrested after several window panes of Jobs? mansion were shattered by rocks, and when police arrived, the ?mad man? was found sitting on the curb across from Jobs? mansion with a brown paper bag full of rocks.
Gilbert Amelio is a "brain," but even "brains" are stupid in some areas. Before he was appointed CEO, Amelio served on Apple's Board of Directors. Only a couple of years before Amelio was appointed Apple CEO, Steve Jobs contacted then Board member Amelio, and invited him to dinner at Steve's home.
When Steve Jobs wants to have a serious, consequential conversation with someone, he always says, "Let's go for a walk."
Well on their walk, Jobs urged Apple Board member Amelio to convince the rest of the Board to hire him (Steve) as CEO -- clearly indicating his interest in being CEO of Apple.
Then after becoming CEO, Amelio hires Jobs as a consultant and believes Steve when he insists he has no designs on being Apple CEO? I mean, Duh! Forgot all about "The Walk," did you Gil?
Also, Jobs has always resented Stephen Wozniak, probably for Woz?s prominent role in computer history that prevents the spotlight from being solely on Jobs.
After his coup d?état, Jobs contacted Wozniak, who, though he officially left the company some 30 years ago, had the status of an Apple employee and received a paycheck even though he did nothing at the company (until he advised CEO Gilbert Amelio), and Jobs said to Woz, ?Your services are no longer needed here.?
Now I don?t know if Woz remains an Apple employee who collects a paycheck, or if Jobs actually severed his ties to the company, including Woz?s status as an employee of Apple.
When Woz wrote an autobiography, he asked Steve Jobs if he would write the forward. Jobs refused.
Jobs has been screwing over Woz ever since before Apple when Steve Jobs was an employee at Atari and tasked with creating the ?Breakout? game.
Lacking engineering and programming skills, Jobs knew he couldn?t do it (but didn?t want Atari to know of his ineptitude).
So he asked Woz to design the Atari ?Breakout? game Jobs was assigned to create, on the promise that he would split what he was paid 50/50 with Woz.
Woz secretly spent five days creating ?Breakout.? As far as Atari knew, Jobs had done it, and was sure to take full credit, of course.
Jobs lied and told Woz he was paid $700, so he gave Woz $350. It was later learned that Atari paid Jobs $7,000, not $700. Word eventually reached Woz, and he was hurt.
When asked about it, the soft-hearted Woz says it was a long time ago and he has forgiven Jobs. Woz?s mistake was treating it like an isolated incident instead of a harbinger.
Jobs and Woz were friends right up until the second that he didn?t need Woz anymore, and then their friendship ended. Woz has said that at Apple, the two never met or spoke to each other. To Jobs, Woz was like a candy bar wrapper to be discarded when the contents are consumed.
The soft-hearted Woz is ever-forgiving of Jobs, even as Jobs continues to screw him over to this day.
Right after Apple's IPO, Woz was giving away thousands of shares to friends, family and some Apple employees.
Woz has continuously been donating money to philanthropic organizations ever since he became wealthy. Years ago, an article estimated Woz's net worth at $49 million. In a 2010 article, it said because of investments in anything from stock to the startup Oxygen TV network (which NBC bought for $925 million), his net worth is now above $100 million.
Coming full circle, Amelio and Jobs took the same approach in discontinuing Mac models and providing more delineation between models.
So it is puzzling that Jobs has allowed the distinctive iPod to become the current nano.
Consumers used to know what an iPod was, but with the present nano, it's now a foggy mismash of a product.
If a consumer can't answer a question as to what a product is, without expressing just one thought, the product is obviously unfocused.
The nano is a "this and a that and that and another thing."
If Apple can reclaim the iPod's singular definition, they can increase sales.
Given the size of our planet, I don't think the iPod market is saturated.
Apple just needs to remind itself what made the iPod a success in the first place, and restore the product's original tight focus. Return to basics.
defender
P.S. Despite all the criticism, Steve Jobs is actually one of my personal heroes, and his role in the success of Apple cannot be diminished. I mean, it's now the 2nd largest company in the world by market cap! I am just forever trying to figure out a very complex person and an obvious genius.
BTW, Dell is #126 in market cap. I think Dell should close down and give the money back to the shareholders.
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Andy,
In a too-long post (post #85) I offered an IMHO view of why iPod sales are flat. iPods sell like mad, but because of intense pressure from Wall Street, ?flat? doesn?t cut it.
The Street unrealistically expects a company to report uninterrupted quarterly growth over the corresponding quarter of the previous year ?to infinity and beyond.?
If your company is in perfect health, but you post a 1% decline in quarterly revenues/profits compared to the same quarter last year, The Street grossly overreacts and jumps to extreme conclusions like, ?the company is in decline,? or, ?the company is feeling the heat from the competition and this suggests the start of a trend that will continue.?
Then your company?s stock price quickly plummets by 25% or more. You get crucified!
So the iPod?s numbers are absolutely great, but The Street makes unrealistic demands that all of your product segments continuously grow, grow, grow.
I would be very careful here. I know quite a lot about the market's viewpoint on growth and particularly on Apple's growth. I've been trading and analyzing Apple for ages, and have consistently outperformed the street in my earnings estimates published at Fortune by Philip Elmer-Dewitt. I also called the top of this market (also published on Fortune on April 26th), and called the bottom of Apple strongly urging that Apple was a strong buy at in November of 2009 at $80. Only the second time I've ever publicly announced that Apple was the buy of the century. The other time was in July 2006 when Apple was trading at $54 before they reported Q3 earnings.
Here's what I would say about the street's view of growth. Wall Street doesn't expect that Apple should be able to show any growth at all in the iPod. In fact, analysts and money managers are perfectly content with slightly positive to slightly negative revenue growth for the iPod. Look at the last few quarters for example. iPod sales were basically slightly up to slightly down for the past few quarter. Yet, did you see anyone on Wall Street make a stink about it? Not really.
And this is precisely because Apple is able to demonstrate other avenues for growth. The whole point of my article. As long as a company can show that product X no longer has that great of an impact and that they have other products that are driving tremendous growth, they don't give a shit about product X. Take from this what you will, but I know exactly what I'm talking about here.
The iPod era of being Apple's main revenue driver is over. The end. I can't explain this in any simpler terms.
One problem is that you didn't show that the iPod was EVER a main driver of Apple's revenue.
And this overall discussion is pointless. Yes of course the iPod share has diminished since it has morphed into the iPhone and iPad. Ok, but so what? iPod was iPhone version 0.5 now we're on iPhone version 4. So, what's you're point? The platform has evolved, and its influence has increased.
BTW MacOS 9's influence has been waning recently too. Maybe covering that would get you some similar headlines. :-)
I would be very careful here. I know quite a lot about the market's viewpoint on growth and particularly on Apple's growth. I've been trading and analyzing Apple for ages, and have consistently outperformed the street in my earnings estimates published at Fortune by Philip Elmer-Dewitt. I also called the top of this market (also published on Fortune on April 26th), and called the bottom of Apple strongly urging that Apple was a strong buy at in November of 2009 at $80. Only the second time I've ever publicly announced that Apple was the buy of the century. The other time was in July 2006 when Apple was trading at $54 before they reported Q3 earnings.
Here's what I would say about the street's view of growth. Wall Street doesn't expect that Apple should be able to show any growth at all in the iPod. In fact, analysts and money managers are perfectly content with slightly positive to slightly negative revenue growth for the iPod. Look at the last few quarters for example. iPod sales were basically slightly up to slightly down for the past few quarter. Yet, did you see anyone on Wall Street make a stink about it? Not really.
And this is precisely because Apple is able to demonstrate other avenues for growth. The whole point of my article. As long as a company can show that product X no longer has that great of an impact and that they have other products that are driving tremendous growth, they don't give a shit about product X. Take from this what you will, but I know exactly what I'm talking about here.
I would be very careful here. I know quite a lot about the market's viewpoint on growth and particularly on Apple's growth. I've been trading and analyzing Apple for ages, and have consistently outperformed the street in my earnings estimates published at Fortune by Philip Elmer-Dewitt. I also called the top of this market (also published on Fortune on April 26th), and called the bottom of Apple strongly urging that Apple was a strong buy at in November of 2009 at $80. Only the second time I've ever publicly announced that Apple was the buy of the century. The other time was in July 2006 when Apple was trading at $54 before they reported Q3 earnings.
Here's what I would say about the street's view of growth. Wall Street doesn't expect that Apple should be able to show any growth at all in the iPod. In fact, analysts and money managers are perfectly content with slightly positive to slightly negative revenue growth for the iPod. Look at the last few quarters for example. iPod sales were basically slightly up to slightly down for the past few quarter. Yet, did you see anyone on Wall Street make a stink about it? Not really.
And this is precisely because Apple is able to demonstrate other avenues for growth. The whole point of my article. As long as a company can show that product X no longer has that great of an impact and that they have other products that are driving tremendous growth, they don't give a shit about product X. Take from this what you will, but I know exactly what I'm talking about here.
Andy,
I had begun a reply to your post back on July 5th or 6th. My Safari was in the throes of a very bad flu and would crash many times an hour when you I something as simple as scroll too fast or type too fast.
In the middle of a lengthy post in the AppleInsider forums, Safari would crash, and all was lost.
I?d relaunch Safari, call back the page from history, and the typing field I had spent so much time writing in was as blank as a piece of copier paper straight from the ream.
(Curiously, Mozilla-based browsers that crashed, would allow me to call back the page from history, and the writing field was still filled up to the last keystroke I had made before the crash! Huh!)
So, I decided to start using TextEdit to write my posts, and then cut-and-paste them into the reply field in the AppleInsider forums, apply any typographical embellishments, smilies, etc. and then hit ?Submit.?
I got distracted by a shiny object and never completed my post to you, but decided to rekindle some of the points I made way back them that I probably did not to a very good job of conveying.
So you?ll know this about me, I am not 100% ?Wall Street illiterate,? though my knowledge, expertise, experience, and above all, perspective, cannot hold a candle to yours, (investing is one area where perspective ranks uncommonly high in importance).
I was a day-trader in the mid-nineties when the dot-com bubble was still liquid soap, and I really ?raked it in? for a while. (Remember? During that period when it was hard to make a mistake? It required effort?) Truthfully, though, I cannot honestly lay claim to any conscious timing skills (though I?d like to). It was all basically fortuitous; I got in at the right moment out of sheer luck, and I got out at a pretty good time through sheer luck, as well.
I was advised by all the books I?d read to stay clear of IPOs, but wanted to get in on YHOO?s. YHOO offered its IPO shares at a price of $13. But the first share traded upon the opening bell that day cost $23.50. I watched it chart upward all morning and early afternoon, and then decided to throw caution to the wind, and I bought a chunk at somewhere near $41 (in one of my very few ?market? orders).
Then I watched for the rest of the day as the stock plummeted from an intraday high of $43 to a close of $33. I felt like a dunce, but held onto the shares anyway. It had four or so 2-for-1 splits, and, I think, one 3-for-2, but (on a non split-adjusted basis, which makes my numbers look bigger!
I held other issues, e.g. Ciscso, Akamai, and made some coin -- plus some under-$10 issues. I did get on the amusement ride at the right time with AMZN, but completely missed out on EBAY, as I held the incorrect belief that the business model was unsustainable long-term, and that barriers-to-entry were too low for potential competitors to ravage the company.
I also missed out entirely on GOOG. Oh, well.
Don?t worry, I had some impressive losses to my credit, and they were usually victims of my emotions. I had read so many books, that I could recite all the trading rules by heart, but observing them is a whole other story. We?re not all Mr. Spocks.
One book gave a piece of valuable advice that I think played an important role in my general success. The book essentially said, unlike the age-old caution given to companies to concentrate on their winners and not their losers, or not allow their priorities to succumb to ?the squeaky wheel gets the grease? losing practice, in trading, I was told, the opposite is true.
At all costs, guard your capital with the fierceness of a junkyard dog.
In trading, the ?squeaky wheel? should get the grease, or rather, the majority of your attention and concern should be on minimizing (yet accepting) losses, and preserving precious capital. This requires a closer watch on losing picks than on winning ones.
Keep all eyes on your losers, and cut and run early. Minimize the loss and choke it down. Let your winners run and they'll take care of themselves; you tend to the losers. Preservation of investing capital is paramount.
I?ve gone on too long, but, to finish up, I am no longer a trader but a buy-and-hold investor. I scooped up some shares of AAPL in the Fall of 2006 at around $76 (not the best entry point, but I?ll take it) and still have them. I also picked up a little bit of Citigroup at $3.50, because I intend to hang onto it and basically forget about it for a long time. (I also hold a little YUM and COST.)
This loooooooooooong description is to let you know that I am not a complete Wall Street dummy -- maybe 99% a dummy, but not 100%.
(I also hold the unwavering, extreme position -- that I have yet to find one person who agrees with -- that NO public company should EVER offer a dividend. Sure, shareholders love their cash dividend checks that come regularly in the mail or their DRIPs, but I believe 100% that if a company instead took any net profits it made in a financial reporting period and reinvested them in the company, in R&D, marketing, human talent, plant & equipment, manufacturing capacity, more modern and efficient equipment, used them to acquire a small, innovative and compatible company, with talent and IP that fortifies their core competency -- or in a poor economic climate, temporarily parked earnings in conservative investments in real estate, debt or equity instruments, that shareholders would ultimately make more money on profits from appreciation in the price of the stock issue itself than they would in dividends. Unfortunately, this is unprovable.)
I decided to resurrect the post I started on July 5th or 6th, because of what?s now most commonly known as ?Antennagate.?
The point that you missed in your reply to my post (which is my fault for not making clear), is that the iPod is more than just a part of Apple?s current product lineup. The iPod is not a number or a percentage. Long ago, it took on qualities -- though intangible -- are no less important than a revenue/profit share percentage, or a unit or profit growth figure.
Analysts -- especially those who participate in Apple?s earnings conference calls -- are paragons of emotion?s role in the workings of ?Wall Street.?
Analysts at major brokerage firms, who are supposed to be more fundamentally-oriented and data-focused, are actually sometimes even more emotional than traders in the pit at the Chicago Merc!
Though they may be delivered in a sober and dispassionate manner, the questions themselves are too often reflective of the overblown, sensationalized stories swarming the media.
Obviously, a number of milestone, outrageously successful product form the base of the pedestal on which Apple now stands. If analysts can remember that far back, Apple owed most of its early recovery to the iMac, and soon the iMac became an icon for Apple?s storybook comeback.
Then Apple took the planet by storm with the iPod.
A subsequent steady increase in sales of the Mac were theorized to be the result of a ?halo effect? the iPod had, which conferred certain positive attributes on the Mac and Apple -- an innovator, a company uniquely focused on the future, a technology pioneer, a leader who?s followed by its competitors in the industry, and let?s not forget, the company that made such a compact, gorgeous, simple little pocket device that some say, along with iTunes and the iTunes Store, drastically overhauled the entire music industry as we had always known it.
My point is about the total picture: the vast context in which the iPod is viewed. Writers have declared the iPod now an official part of Americana. They have declared it a cultural icon, even a cultural phenomenon. The iPod has been called ?trendy.? Like clothing, this gadget, the iPod, has "fashion." It?s been said that the iPod has chic and status, and if you owned a competitor?s digital music player, you weren?t on the cutting edge of style. There was the iPod, and then a marketplace filled with non-iPods, and people wanted iPods.
So back on the 5th or 6th, when I started this, I wanted to suggest that people listen to the questions asked by analysts during the upcoming Q3 earnings conference call, and make note of the reactions after an Apple official gives a very direct and comprehensive explanation in answer to the question about the iPod. Then in a manner concealing all emotion, another analyst will basically ask the same question, rephrased. In what one would think would be a complete and satisfactory answer, the Apple representative will respond in a measured, systematic way. Then yet another iPod question will come with but a slight difference. I would not be surprised if an analysts -- the self-promoter, Joe Battipaglia-type, hoping to see his name in ink the next day -- will ask a deliberately dramatic questions like, ?Isn?t the iPod the linchpin holding the whole company together? Isn?t it central to the digital content ecosystem that Apple derives so much revenue from? If you pull out this linchpin, will the company fall like a house of cards??
People will groan at the totally out-of-place melodrama, but watch that analyst be the one quoted the next day in a media hungry for sensationalism. (Which sells traditional media, and helps their financial picture, so they can cheat death for another day.)
NOW, HOWEVER, we can ALL forget about the iPod in the Q3 call. It?ll be antenna, antenna, antenna. A detailed, specific, comprehensive answer will be provided in response to an antenna question, and the next question will be another antenna question. They?ll come in almost interminable waves, and wordings will differ, but the same redundant antenna questions will be asked.
If, in response the questions about criticisms or controversies, one's answer is an attempt to de-escalate the fervor surrounding these criticisms and controversies, analysts will smell blood in that water, consider the question unanswered, or answered evasively and then the feeding frenzy will ensue.
During the 1992 Democratic Primary, in which Governor Bill Clinton and a lot of other Democratic hopefuls ran, all were asked if they?d ever smoked marijuana. The candidates that gave an open, honest admissions to having smoked it, totally eliminated it as an issue. Reporters were left (for once) speechless, with no followup questions. They wandered away from the candidate like zombies, not knowing where to go, what to do.
Only one Democratic Primary candidate gave an evasive, dodgy, crafty, almost comical and some say intellectually insulting response to the same question that amounted to an admixture of admission and denial. Simultaneously, I did and I didn?t.
The first example is how to disarm throngs of badgering reporters with some directness, pure honesty, genuineness and openness. You?ve revealed all! They?ve got nothin?, and they leave you alone after that. (Plus, the story quickly goes away.)
The second example is how to respond to a question in a way that sets reporters? hair on fire and triggers a media feeding frenzy, and the issue and the evasive, non-answer greatly elongate what might have been an almost unnoticeably brief news cycle.
Because the question hasn?t been answered, it does not stop being asked.
(BTW, David Letterman?s handling of his recent scandal took the best possible approach; Tiger Woods? treatment of his matter did not.)
I?ll be paying close attention to the degree of openness and complete revelation on the part of Apple?s participants in the call, and how their answers affect the issue and subsequent questions. Does it ease the issue to any degree, or only elevate the issue more than before.
It?ll be interesting.
Apple execs in on the conference call can do one of two things:
In answer to a question about the iPhone 4 "Antennagate" affair, an Apple representative can give and indirect, abstruse, oblique, evasive, disingenuous, artful, crafty response, in which it is obvious to anyone listening that key information is being omitted and central facts are being withheld, and that Apple representative will touch off a media firestorm. An issue about a product defect is then transformed into a Nixonian coverup and a scandal with intrigue and many angles.
Or, in answer to a question about the iPhone 4 "Antennagate" affair, an Apple representative can be as straight, direct, open, honest, revelatory, complete and transparent as possible, disarm the pointed questioners, help diffuse the issue, and make enormous strides toward steadily reducing the story's prominence in the media, once there is little to write about since the many questions have been answered with directness, and the uncertainly and suspicions of a coverup no longer have any basis.
But, importantly, no amount lower than 100% openness, forthrightness and a willingness to entertain any question will suffice.
We'll see tomorrow how Apple makes its own bed.
Let's hope they take the approach that works, an not an approach that produces an apparition of the ghost of Richrd Nixon.
defender
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We'll see in September how it all is gonna shape... Yet, the design of the recent iPhone, tethered so tightly to radio, suggests iTouch may now be living its last year. Just until the 3G casing is discontinued...
Umm...
We'll see in September how it all is gonna shape... Yet, the design of the recent iPhone, tethered so tightly to radio, suggests iTouch may now be living its last year. Just until the 3G casing is discontinued...
That's a very interesting point - would an iPod Touch keep the SS perimeter? It wouldn't need it per sé but would it be an issue if it was retained as a cosmetic family tie? Probably not. The only question would perhaps be "Will it be advantageous to have a visual difference between the two?"
I don't know the answer but would guess that they could happily co-exist looking for the most part to be indistinguishable from each other, much like the 3G/3Gs and current Touch.
My honest expectation is that the Touch will continue to be sold alongside the iP4, filling the niche it currently does. I think Apple will be leery of adding too much iPhonesque functionality to it though, given the possibility of its cannibalising iP4 sales.
But as you say, we'll see.
That's a very interesting point - would an iPod Touch keep the SS perimeter? It wouldn't need it per sé but would it be an issue if it was retained as a cosmetic family tie? Probably not. The only question would perhaps be "Will it be advantageous to have a visual difference between the two?"
I don't know the answer but would guess that they could happily co-exist looking for the most part to be indistinguishable from each other, much like the 3G/3Gs and current Touch.
My honest expectation is that the Touch will continue to be sold alongside the iP4, filling the niche it currently does. I think Apple will be leery of adding too much iPhonesque functionality to it though, given the possibility of its cannibalising iP4 sales.
But as you say, we'll see.
And I can not in all honesty believe in too much glorious future of iTouch.
iPad 2 with truly terrifying set of sophisticated features will hopefully be here in some months to finally compel both normal people and technology enthusiasts. Customers say they want this toy.
If they follow their usual product update cycle, the 3GS, and thus 3G casing, will be discontinued in 2011. And for reason: the casing --- while being quite slick one --- becomes simply and plainly outdated.
Theoretically, they can replace UMTS antenna of the 4 with some sort of plastic bezel for iTouch. The problem is the board design, relaying on compact size of radio chipset, does not look much allowing for easy replacement of that with NAND memory modules...
iPod is not sales determinant for Apple anymore. For the better or for the worse, we're not in 2006. Whence incertitude on whether they would invest in supporting the unpopular product, which requires unique manufacturing process.
Hope they keep the classic. Love the storage capacity.
I wish they would merge the two and make a thick Touch with a hard drive...
We both may be disappointed, if the rumors are true and Apple starts pushing the cloud/streaming model (which honestly doesn't make sense to me with all the bandwidth data caps being proposed)...
I wish they would merge the two and make a thick Touch with a hard drive...
The design flaw like that will blow everyone out of the water much more than their iP4 antenna solution does. Palm's proven a decade ago it's absolutely impractical to have a HD in a handset.