Or they just sold old stock that was sitting around on hand. Sales were non-existent before the launch of the 5, as everyone was waiting for the reveal to see if it was worth it, or the price drops on current models if it wasn't. Because of this, there was a lot of surplus 4 and 4S's sitting around in back rooms going into September. While they may count as sales for the carriers, phones shipped out in Q3 won't do much for Apple's Q4.
No offence... but anecdotal evidence (ie. 2 decades of running manufacturing companies) from somebody on the internet just doesn't cut it.
Right. So 20 years of earning millions of dollars for my employer is worthless, but we're supposed to listen to your uninformed, unsubstantiated nonsense instead.
I'm always surprised at how many more people cry manipulation when the stock is headed down as to when AAPL is headed up.
Well, okay, I'm not surprised...
The difference is that when it was rising, it was approaching a P/E comparable to the rest of the market so the rise was simply approaching a fair market value. The drop has been insane - with forward cash adjusted P/E around 7 - which is in the range you'd expect for a company that has no future at all.
I think you're wasting your time trying to explain to Tex how fixed costs for product manufacturing get amortized over the entire manufacturing lifespan.
The principle is simple. The longer you manufacture the same thing with the same investment, the lower the "per unit" portion of the investment because the capital investment (just like R&D) is amortized across all of the produced items. Even if all else remains equal - which it doesn't, because component costs and production efficiencies also factor into the cost structure - the per unit margin increases.
Shhhh...... Island apparently prefers to be uneducated. Don't confuse him with simple Business 101.
Right. So 20 years of earning millions of dollars for my employer is worthless, but we're supposed to listen to your uninformed, unsubstantiated nonsense instead.
Right pal.
For all we know you're some teenage little boy playing on his Mom's computer... and for all you know I run a fortune 500 company.
... and what unsubstantiated nonsense are you talking about? 1. I said I don't take your word for it. 2. I don't believe that margins would be greater, equal or less only. 3. That analysts might read the greater 4 and 4S numbers as lower margin items (notice I didn't say they were, I said that analysts might read it that way). Those are the only 3 things I said.
There are a number of things Apple could do today to ensure it doesn't relive its 1980s meltdown. It could for one open up its iOS so that other manufacturers could integrate it with their phone. This will bring a new line of customers into the iTunes orbit. It could also create a larger line of phones to fit a multitude of price points. After all, the iPhone is simply a delivery device for content—the more people you have on your network, the larger your revenue. If Apple continues on its current path, it could lose—a lot.
There is so much wrong with all of that. Bizarro world.
Right. So 20 years of earning millions of dollars for my employer is worthless, but we're supposed to listen to your uninformed, unsubstantiated nonsense instead.
Right pal.
... and what unsubstantiated nonsense are you talking about?
1. That I said I don't take your word for it. For all I know you're some teenage little boy playing on his Mom's computer... and for all you know I run a fortune 500 company. So, no offence, but I'm not about to believe some guy writing uninformed, unsubstantiated nonsense on a forum.
2. That I don't believe that margins would be greater. I believe equal or less only. I can't prove it in Apple's case but you can't prove that margins are greater either.
3. That analysts might read the greater 4 and 4S numbers as lower margin items (notice I didn't say they were, I said that analysts might read it that way). You yourself have intimated as much.
Those are the only 3 things I said. So which one were you talking about?
[So I guess you've got nothing... which is what I thought]
Older units = lower cost to consumer so lower gross revenues per unit, but higher margins on the unit.
Slightly true. Most calculations I've seen come up with just one or two percent higher margin on the older iPhones. This is because, while some parts do cost less, the assembly and royalties and Apple administrative costs pretty much stay the same.
Quote:
Originally Posted by focher
I think you're wasting your time trying to explain to Tex how fixed costs for product manufacturing get amortized over the entire manufacturing lifespan.
The principle is simple. The longer you manufacture the same thing with the same investment, the lower the "per unit" portion of the investment because the capital investment (just like R&D) is amortized across all of the produced items. Even if all else remains equal - which it doesn't, because component costs and production efficiencies also factor into the cost structure - the per unit margin increases.
The capital manufacturing investment part doesn't apply in this case, at least not to Apple. It would, of course, apply to the actual manufacturer... Foxconn.
Foxconn might pass on any savings over time, or they might've built that into the price per unit they charge Apple. (Most analyses I've read assume the BOM drops, but the assembly charge stays the same.)
Speaking of which, Bloomberg did a chart on how Apple's profit margins have risen over the years of the iPhone existence from 15% at the start to over 30% now, whereas Foxconn's have dropped from 2.7% down to a "mere 1.5%" today.
They sold more IP4s than 5's... Apple's tapped out the premium buyers already which means their margins will get killed. Great, so they probably announce mid 50's in IP sales, but margins are 35%... EPS will barely get above 12.
That's what their "innovation" results in... selling recycled garbage even Apple fanatics are sick of and can't afford to buy anymore.
well, I guess everyone needs to shut up about cheap phones - half the people buying iphones at verizon are buying the cheaper 99 or free version.
Quote:
Originally Posted by island hermit
??
Are you saying that it is now obvious that a lot of people want a cheaper phone?
Quote:
Originally Posted by Tallest Skil
Rather that it seems obvious people are quite all right paying for the iPhone as-is.
Probably the fact that the iPhone has a unified look and experience no matter which model you get.
Average consumers have a hard time telling a 4 apart from a 5 (sad I know) much less a 4 from 4S. Now people of al budgets can get the "iPhone" they always wanted and dreamed of having for any price. And I'm sure 90% of people that bought 4/4Ss were first timers or Android/RIM switchers so it's all good.
As was explained earlier this probably isn't hurting their profits, but I do wonder if the production cuts for iPhone 5 were because the 4/4S are still selling so robustly killing some of the demand they expected for the 5?
As was explained earlier this probably isn't hurting their profits, but I do wonder if the production cuts for iPhone 5 were because the 4/4S are still selling so robustly killing some of the demand they expected for the 5?
Maybe it doesn't hurt their profits but if it's true what you are saying, that the older phones are killing the demand for the newest one, then it could become a problem in the long run. Probably not yet, because they still sell a whole lot of new phones. But as soon as the demand for new phones starts declining and you sell more old ones then you'd have a problem. In my opinion the newest phone should always be the best selling one.
But as soon as the demand for new phones starts declining and you sell more old ones then you'd have a problem. In my opinion the newest phone should always be the best selling one.
And at "around 50%" the iPhone 5 is "the best selling one".
Comments
Or they just sold old stock that was sitting around on hand. Sales were non-existent before the launch of the 5, as everyone was waiting for the reveal to see if it was worth it, or the price drops on current models if it wasn't. Because of this, there was a lot of surplus 4 and 4S's sitting around in back rooms going into September. While they may count as sales for the carriers, phones shipped out in Q3 won't do much for Apple's Q4.
Right. So 20 years of earning millions of dollars for my employer is worthless, but we're supposed to listen to your uninformed, unsubstantiated nonsense instead.
Go figure.
The difference is that when it was rising, it was approaching a P/E comparable to the rest of the market so the rise was simply approaching a fair market value. The drop has been insane - with forward cash adjusted P/E around 7 - which is in the range you'd expect for a company that has no future at all.
Shhhh...... Island apparently prefers to be uneducated. Don't confuse him with simple Business 101.
Quote:
Originally Posted by jragosta
Right. So 20 years of earning millions of dollars for my employer is worthless, but we're supposed to listen to your uninformed, unsubstantiated nonsense instead.
Right pal.
For all we know you're some teenage little boy playing on his Mom's computer... and for all you know I run a fortune 500 company.
... and what unsubstantiated nonsense are you talking about? 1. I said I don't take your word for it. 2. I don't believe that margins would be greater, equal or less only. 3. That analysts might read the greater 4 and 4S numbers as lower margin items (notice I didn't say they were, I said that analysts might read it that way). Those are the only 3 things I said.
So, no offence intended, but go f*ck yourself.
Quote:
Originally Posted by Rogifan
But, but, but Fortune says Apple needs to license iOS and build a bunch of iPhones at different price points to survive,
http://tech.fortune.cnn.com/2013/01/17/apple-risks-repeating-the-1980s/
There are a number of things Apple could do today to ensure it doesn't relive its 1980s meltdown. It could for one open up its iOS so that other manufacturers could integrate it with their phone. This will bring a new line of customers into the iTunes orbit. It could also create a larger line of phones to fit a multitude of price points. After all, the iPhone is simply a delivery device for content—the more people you have on your network, the larger your revenue. If Apple continues on its current path, it could lose—a lot.
There is so much wrong with all of that. Bizarro world.
Strange ... post has tendency to disappear when it burns other posters
Quote:
Originally Posted by jragosta
Right. So 20 years of earning millions of dollars for my employer is worthless, but we're supposed to listen to your uninformed, unsubstantiated nonsense instead.
Right pal.
... and what unsubstantiated nonsense are you talking about?
1. That I said I don't take your word for it. For all I know you're some teenage little boy playing on his Mom's computer... and for all you know I run a fortune 500 company. So, no offence, but I'm not about to believe some guy writing uninformed, unsubstantiated nonsense on a forum.
2. That I don't believe that margins would be greater. I believe equal or less only. I can't prove it in Apple's case but you can't prove that margins are greater either.
3. That analysts might read the greater 4 and 4S numbers as lower margin items (notice I didn't say they were, I said that analysts might read it that way). You yourself have intimated as much.
Those are the only 3 things I said. So which one were you talking about?
[So I guess you've got nothing... which is what I thought]
I guess that means don't make personal attacks or deal with the consequences.
Quote:
Originally Posted by SolipsismX
I guess that means don't make personal attacks or deal with the consequences.
Just for the record. It wasn't a personal attack in the technical sense.
... but saying someone is uneducated is actually a personal attack. Just for the record.
Burned
well, I guess everyone needs to shut up about cheap phones - half the people buying iphones at verizon are buying the cheaper 99 or free version.
Quote:
Originally Posted by bleh1234
Burned
Naw. Burned is when you can no longer post.
Quote:
Originally Posted by agramonte
well, I guess everyone needs to shut up about cheap phones - half the people buying iphones at verizon are buying the cheaper 99 or free version.
??
Are you saying that it is now obvious that a lot of people want a cheaper phone?
Originally Posted by island hermit
Are you saying that it is now obvious that a lot of people want a cheaper phone?
Rather that it seems obvious people are quite all right paying for the iPhone as-is.
Quote:
Originally Posted by Tallest Skil
Rather that it seems obvious people are quite all right paying for the iPhone as-is.
I don't think that was ever in question in the U.S.
Quote:
Originally Posted by battiato1981
Older units = lower cost to consumer so lower gross revenues per unit, but higher margins on the unit.
Slightly true. Most calculations I've seen come up with just one or two percent higher margin on the older iPhones. This is because, while some parts do cost less, the assembly and royalties and Apple administrative costs pretty much stay the same.
Quote:
Originally Posted by focher
I think you're wasting your time trying to explain to Tex how fixed costs for product manufacturing get amortized over the entire manufacturing lifespan.
The principle is simple. The longer you manufacture the same thing with the same investment, the lower the "per unit" portion of the investment because the capital investment (just like R&D) is amortized across all of the produced items. Even if all else remains equal - which it doesn't, because component costs and production efficiencies also factor into the cost structure - the per unit margin increases.
The capital manufacturing investment part doesn't apply in this case, at least not to Apple. It would, of course, apply to the actual manufacturer... Foxconn.
Foxconn might pass on any savings over time, or they might've built that into the price per unit they charge Apple. (Most analyses I've read assume the BOM drops, but the assembly charge stays the same.)
Speaking of which, Bloomberg did a chart on how Apple's profit margins have risen over the years of the iPhone existence from 15% at the start to over 30% now, whereas Foxconn's have dropped from 2.7% down to a "mere 1.5%" today.
http://online.wsj.com/article/SB10001424127887323485704578257393880660184.html?mod=wsj_share_tweet
They sold more IP4s than 5's... Apple's tapped out the premium buyers already which means their margins will get killed. Great, so they probably announce mid 50's in IP sales, but margins are 35%... EPS will barely get above 12.
That's what their "innovation" results in... selling recycled garbage even Apple fanatics are sick of and can't afford to buy anymore.
Quote:
Originally Posted by agramonte
well, I guess everyone needs to shut up about cheap phones - half the people buying iphones at verizon are buying the cheaper 99 or free version.
Quote:
Originally Posted by island hermit
??
Are you saying that it is now obvious that a lot of people want a cheaper phone?
Quote:
Originally Posted by Tallest Skil
Rather that it seems obvious people are quite all right paying for the iPhone as-is.
Probably the fact that the iPhone has a unified look and experience no matter which model you get.
Average consumers have a hard time telling a 4 apart from a 5 (sad I know) much less a 4 from 4S. Now people of al budgets can get the "iPhone" they always wanted and dreamed of having for any price. And I'm sure 90% of people that bought 4/4Ss were first timers or Android/RIM switchers so it's all good.
As was explained earlier this probably isn't hurting their profits, but I do wonder if the production cuts for iPhone 5 were because the 4/4S are still selling so robustly killing some of the demand they expected for the 5?
Quote:
Originally Posted by blackbook
As was explained earlier this probably isn't hurting their profits, but I do wonder if the production cuts for iPhone 5 were because the 4/4S are still selling so robustly killing some of the demand they expected for the 5?
Maybe it doesn't hurt their profits but if it's true what you are saying, that the older phones are killing the demand for the newest one, then it could become a problem in the long run. Probably not yet, because they still sell a whole lot of new phones. But as soon as the demand for new phones starts declining and you sell more old ones then you'd have a problem. In my opinion the newest phone should always be the best selling one.
Quote:
Originally Posted by changeover
But as soon as the demand for new phones starts declining and you sell more old ones then you'd have a problem. In my opinion the newest phone should always be the best selling one.
And at "around 50%" the iPhone 5 is "the best selling one".