Apple needs to ramp-up the "It just works." I enjoy my Apple products and they work great for the most part but I have had issues at one time or the other with all of them but my iPad. Good for me I'm tech savvy or it would be a bigger issue as I'm sure it has been for other consumers.
OK, people are dumb. If anybody thinks the market is rational, have them take a look at Apple and they should be cured. Respectable results are no longer anywhere near good enough for Apple investors. If only they held Apple to the same standard that Amazon investors use.
Apple can't charge $600 for an iPhone in China and take any appreciable amount of the market. I think what we are seeing is saturation of the iPhone in its target market. Everyone that has the money to buy an iPhone has bought one. If Apple refuses to expand its market, it will stop growing. Apple may be fine with that, but many investors have a problem with it.
I don't think anyone really knows what Apple should do about its high priced high margin iPhone. Do you risk compressing margins further by releasing an inferior device? They may take market share, but make less money. In the long term will they become irrelevant because they will price themselves out of the market? It is a really tough call. Call it either way and you'll have a 50:50 chance of being right.
Personally, I'm looking for growth in iPad and Mac. The iPad actually competes fairly well on price. The iPad is also more important from the standpoint of a software platform. I think Apple will benefit from Microsoft causing additional fragmenting of this market. iPad should continue to reign supreme. I'm confident Apple will also continue to advance this space with better screens and processors, better battery life, and smaller form factor.
The problem is even when apple are selling it at $600 they still cant satisfies demand. And that is excluding all iPhone isn't working on China Mobile 3G Network. With better roll out, better prepared production line, TSD-CDMA capable iPhone, and apple promise of China being 1st on the release list. I am pretty sure 5s will hit a new height for Apple. And may be the fastest production iPhone and biggest roll out in Phone history.
They only let down will be their Software, which i think is starting to lag behind Android. I hope iOS 7 will close that gap or even leap ahead.
After that, I think Apple may have trouble going even higher...... unless there is another revolutionary product comes out.....
How big is China and does it really need a cheap iPhone?
Chinese per capita annual disposable income is around $3000, which doesn't sound like much. However, the top 10% pull in about 30% the total income, meaning their average is more like $9,000 (I could be a bit out because disposable income is the only average I could find for recent years, and people with higher incomes also have higher disposable incomes). $9k doesn't sound huge but in China it buys more than in the US and remember this is disposable income (per capita so an average household of 3 in this category would have $27000), so there is some discretion in how it's spent.
So China has a market of about 100-million people who can afford an iPhone at current prices. As another indicator, new car sales are currently running at around 19-million a year (vs. 15-million in the US), so there are plenty of people in China who could pay out a few hundred dollars for a phone if they wanted to.
The potential market would be a lot bigger if Apple produced a really cheap phone but if the Chinese economy continues to grow and some of the gross inequality is eliminated, wouldn't you rather be an aspirational brand for the emerging recently poor than a junk brand that those doing better would like to leave behind?
If you buy a cheap $100 Android phone because you don't have the money for an expensive one, you will get used to Android OS and ecosystem and next time, when you will have the money for an expensive phone you will not switch to Apple, you will buy an expensive Android phone. Market share DOES MATTER! People don't like to learn new stuff. See how many people still hang on Windows XP because they don't like or don't want to learn Windows 7 or 8.
Well... they had to learn Android in the first place... coming from a flip-phone or no phone.
I understand what you're saying... but still. I'd hardly call iOS "difficult to use" and if you've mastered Android first, iOS will be cake.
And let's be honest... those $100 phones running Gingerbread aren't exactly a joy to use
If they buy a cheap $100 phone because that's all they can afford... they're probably not spending a lot of money on apps and games. Probably not music either. In other words... they are NOT invested in the platform. And how many Android phones are simply used as feature phones? Basic calling and texting.
The cost to switch will be minimal or non-existent and not very hard to do. (they might already have an iTunes account... those iPods were pretty popular)
I've seen PLENTY of people switch from Android to the iPhone. I can't even begin to tell you how many people I know who jumped on the Droid train years ago... or had some other Android phone in 2010-2011. But a staggering amount of them are now using iPhones.
Hell... I've seen people go from flip-phone, to Blackberry, to Android, to iPhone. Switching platforms happens more than you think.
A lot of my friends are on Verizon... and many of them had the Droid X. In its day it was Verizon's flagship phone (for about a week until the next Droid came out)
Again... they couldn't wait until their contract was up to get an iPhone. They hated their old Droid. Switching to the iPhone wasn't difficult to do and it made them much happier.
Bottom line... the average user has little to no difficulty switching platforms... and the budget-conscious $100 phone user will even less of an aversion to switch.
So that's phones... let's talk about computers...
Yes... people "hang on" to XP for a variety of reasons. If you're in the enterprise... it could be IT policy.
At home... you might keep using the old XP computer you already have. But when you buy a new computer... sorry... it has Windows 7 on it. Most people don't "upgrade" their old computers at home anyway... and they especially don't "downgrade" a brand new machine to XP.
I'm actually surprised seeing XP's numbers today... it's gotta be mostly enterprise customers. I can't imagine a home user NOT buying a new computer because it doesn't have XP on it...
They're missing out... Windows 7 is pretty cool 8-)
But for me, my new growth stock is TSLA. Musk might actually be even more of a visionary than Jobs. The guy has actually taken 3 companies to billion dollar valuations from virtually nothing. And all in markets where he would face remarkable and entrenched resistance.
Another problem with Apple is that they have lost Steve Jobs, their visionary. Once you've lost your visionary, you will never get another one! Geniuses, visionaries, don't work for other companies! They work for themselves. Try to imagine Elon Musk working for Apple!
The problem is even when apple are selling it at $600 they still cant satisfies demand. And that is excluding all iPhone isn't working on China Mobile 3G Network. With better roll out, better prepared production line, TSD-CDMA capable iPhone, and apple promise of China being 1st on the release list. I am pretty sure 5s will hit a new height for Apple. And may be the fastest production iPhone and biggest roll out in Phone history.
They only let down will be their Software, which i think is starting to lag behind Android. I hope iOS 7 will close that gap or even leap ahead.
After that, I think Apple may have trouble going even higher...... unless there is another revolutionary product comes out.....
I'm starting to have doubts about Apple's software approach too. I needed to write a simple Mac app that's mostly user interface and despite my aversion to proprietary tools decided to give Cocoa a look. After a few weeks of frustration at working through incomplete examples, tutorials that are out of date and failure to get past a simple user interface that didn't hook up with the app logic, I switched to using a cross-platform toolkit, Qt. It's not great but adequate for my purposes. I didn't expect getting into Cocoa to be trivial (learning Objective-C is no big deal, I learn new languages all the time) but it was a lot worse than I imagined. The real problem Apple has is they have accumulated cruft through several layers of OS X development on top of which they have added iOS with significant differences in some details of how apps have to work.
Far from iOS representing throwing out the old, it includes too much of the old.
Apple's main mistake was to cave in for investors' requests for dividends. The moment a company does that, they burst the speculation bubble. Microsoft did the same and it went bad for them; Apple should have learned that lesson. Jobs understood it; Cook doesn't. The void created by Jobs' death is now beginning to be fully realized.
I keep seeing comments about growth being flat. Where are people getting that from? This quarter revenue was 54B, the same quarter last year it was 46B. That's not flat. . Yes profit was flat but Apple introduced a lot of new stuff at the end of 2012 whereas in 2011 all we had was the 4S, so obviously costs are going to be higher, driving down margins and profit.
There is no denying the results are very poor. 0% profit growth.
right! $13B profit is CHUMP CHANGE! why, it's only 93% of Google's total revenues for the same quarter!! it's only about 100X more than Amazon's profits!!! the total 2012 profit for Apple is only the greatest ever in world corporate history! but that was ... months ago ... and what about the rest of the universe???
so obviously dump Apple and buy Google and Amazon! please, do that. you deserve it.
OK, people are dumb. If anybody thinks the market is rational, have them take a look at Apple and they should be cured. Respectable results are no longer anywhere near good enough for Apple investors. If only they held Apple to the same standard that Amazon investors use.
they aren't investors. they are speculators. there is a huge difference.
right! $13B profit is CHUMP CHANGE! why, it's only 93% of Google's total revenues for the same quarter!! it's only about 1000X more than Amazon's profits!!! the total 2012 profit for Apple is only the greatest ever in world corporate history! but that was months ago ... and what about the rest of the universe???
so obviously dump Apple and buy Google and Amazon! please, do that. you deserve it.
I'm waiting for Wall Street to hammer Amazon for no profit growth. Of course I know, fat chance of that.
If you buy a cheap $100 Android phone because you don't have the money for an expensive one, you will get used to Android OS and ecosystem and next time, when you will have the money for an expensive phone you will not switch to Apple, you will buy an expensive Android phone. Market share DOES MATTER! People don't like to learn new stuff. See how many people still hang on Windows XP because they don't like or don't want to learn Windows 7 or 8.
This logic is SO wrong I wonder what's your occupation. My friend bought a cheap Android phone when the money's tight. Last year he got promotion, guess what phone he bought. I give you a hint: it doesn't run Android.
I think it's clear that the market doesn't have faith in Cook. He just lacks charisma and Apple hasn't had a blowout product announcement in a long time.
What would Apple's stock price be if they had a single disastrous iPhone launch (think "you're holding it wrong"...but that turns out to be a real flaw")? That risk is exactly why AAPL's PE is "ridiculously low".
Amazon is no where as dependent on any single market as Apple is on the iPhone. So naturally, if iPhone sales miss, the stock will tank. AAPL is really an iPhone growth story.
4. Look at the end of subsidies at T-Mobile USA. These are all real threats to Apple in the long run. The latter particularly so. Phone subsidies are virtually a direct transfer of profits from the telcos to Apple. Telcos and their shareholders resent being held hostage and forced to pay Apple exorbitant subsidies when there are similar hardware devices for less than the cost of the subsidy. There's a real risk that more telcos will follow T-Mobile's lead. What would be your projection for the stock price if more telcos balked at subsidies or decided they would sharply limit them (say $300 for 2 years...making Nexus 4 free and making the iPhone 5 $350 for 2 years)?
A story from Romania. Two years ago, when I bought my 16Gb iPhone 4 from Orange, I payed 200 Euro with a 2 years contract of 29 Euro. Next year, the iPhone 4S was sold at the same price with the same contract but also the other two big networks, Vodafone and Cosmote, has started selling the iPhone 4S for the same price. But this year was different. The 16Gb iPhone 5 is now 369 Euro with a 2 years contract of 31 Euro. And all three networks has raised the price at the same time. NO MORE SUBSIDIES!
Or you could buy the 16Gb iPhone 5 with a 23 Euros contract for... 499 Euro! At the same time you can buy the Samsung Galaxy S3 for 149 Euro with a 31 Euro contract or a HTC One X for 100 Euro with the same contract.
So, you have to chose between an iPhone 5 at 369 Euro or a Samsung Galaxy S3 at 149 Euro or a HTC One X at 100 Euro. The monthly average income is here about 300 Euro. Guess what phone people chose? Almost nobody buys iPhones anymore, but I see a lot of Galaxy S3 everywhere.
How big is China and does it really need a cheap iPhone?
Chinese per capita annual disposable income is around $3000, which doesn't sound like much. However, the top 10% pull in about 30% the total income, meaning their average is more like $9,000 (I could be a bit out because disposable income is the only average I could find for recent years, and people with higher incomes also have higher disposable incomes). $9k doesn't sound huge but in China it buys more than in the US and remember this is disposable income (per capita so an average household of 3 in this category would have $27000), so there is some discretion in how it's spent.
So China has a market of about 100-million people who can afford an iPhone at current prices. As another indicator, new car sales are currently running at around 19-million a year (vs. 15-million in the US), so there are plenty of people in China who could pay out a few hundred dollars for a phone if they wanted to.
The potential market would be a lot bigger if Apple produced a really cheap phone but if the Chinese economy continues to grow and some of the gross inequality is eliminated, wouldn't you rather be an aspirational brand for the emerging recently poor than a junk brand that those doing better would like to leave behind?
The more important statistic is that China's middle class is larger than the entire US population. China is already Apple's second largest market and on its way to becoming the largest.
There is no denying the results are very poor. 0% profit growth.
There's no denying that you don't know what you're talking about.
One week fewer than last year and flat profit - so profit was up 8% per week. Sales were up far more than that. Most of their competitors are suffering. And Apple warned investors that profit would be hit this quarter by billions of dollars in investment in new products that would generate profits that hit the bottom line next year.
Would it have been nice if Apple had increased profits by 50% again? Sure. But saying that the results are a disaster is just plain ridiculous.
Comments
The problem is even when apple are selling it at $600 they still cant satisfies demand. And that is excluding all iPhone isn't working on China Mobile 3G Network. With better roll out, better prepared production line, TSD-CDMA capable iPhone, and apple promise of China being 1st on the release list. I am pretty sure 5s will hit a new height for Apple. And may be the fastest production iPhone and biggest roll out in Phone history.
They only let down will be their Software, which i think is starting to lag behind Android. I hope iOS 7 will close that gap or even leap ahead.
After that, I think Apple may have trouble going even higher...... unless there is another revolutionary product comes out.....
How big is China and does it really need a cheap iPhone?
Chinese per capita annual disposable income is around $3000, which doesn't sound like much. However, the top 10% pull in about 30% the total income, meaning their average is more like $9,000 (I could be a bit out because disposable income is the only average I could find for recent years, and people with higher incomes also have higher disposable incomes). $9k doesn't sound huge but in China it buys more than in the US and remember this is disposable income (per capita so an average household of 3 in this category would have $27000), so there is some discretion in how it's spent.
So China has a market of about 100-million people who can afford an iPhone at current prices. As another indicator, new car sales are currently running at around 19-million a year (vs. 15-million in the US), so there are plenty of people in China who could pay out a few hundred dollars for a phone if they wanted to.
The potential market would be a lot bigger if Apple produced a really cheap phone but if the Chinese economy continues to grow and some of the gross inequality is eliminated, wouldn't you rather be an aspirational brand for the emerging recently poor than a junk brand that those doing better would like to leave behind?
Well... they had to learn Android in the first place... coming from a flip-phone or no phone.
I understand what you're saying... but still. I'd hardly call iOS "difficult to use" and if you've mastered Android first, iOS will be cake.
And let's be honest... those $100 phones running Gingerbread aren't exactly a joy to use
If they buy a cheap $100 phone because that's all they can afford... they're probably not spending a lot of money on apps and games. Probably not music either. In other words... they are NOT invested in the platform. And how many Android phones are simply used as feature phones? Basic calling and texting.
The cost to switch will be minimal or non-existent and not very hard to do. (they might already have an iTunes account... those iPods were pretty popular)
I've seen PLENTY of people switch from Android to the iPhone. I can't even begin to tell you how many people I know who jumped on the Droid train years ago... or had some other Android phone in 2010-2011. But a staggering amount of them are now using iPhones.
Hell... I've seen people go from flip-phone, to Blackberry, to Android, to iPhone. Switching platforms happens more than you think.
A lot of my friends are on Verizon... and many of them had the Droid X. In its day it was Verizon's flagship phone (for about a week until the next Droid came out)
Again... they couldn't wait until their contract was up to get an iPhone. They hated their old Droid. Switching to the iPhone wasn't difficult to do and it made them much happier.
Bottom line... the average user has little to no difficulty switching platforms... and the budget-conscious $100 phone user will even less of an aversion to switch.
So that's phones... let's talk about computers...
Yes... people "hang on" to XP for a variety of reasons. If you're in the enterprise... it could be IT policy.
At home... you might keep using the old XP computer you already have. But when you buy a new computer... sorry... it has Windows 7 on it. Most people don't "upgrade" their old computers at home anyway... and they especially don't "downgrade" a brand new machine to XP.
I'm actually surprised seeing XP's numbers today... it's gotta be mostly enterprise customers. I can't imagine a home user NOT buying a new computer because it doesn't have XP on it...
They're missing out... Windows 7 is pretty cool 8-)
Quote:
Originally Posted by Jetz
But for me, my new growth stock is TSLA. Musk might actually be even more of a visionary than Jobs. The guy has actually taken 3 companies to billion dollar valuations from virtually nothing. And all in markets where he would face remarkable and entrenched resistance.
Another problem with Apple is that they have lost Steve Jobs, their visionary. Once you've lost your visionary, you will never get another one! Geniuses, visionaries, don't work for other companies! They work for themselves. Try to imagine Elon Musk working for Apple!
Quote:
Originally Posted by ksec
The problem is even when apple are selling it at $600 they still cant satisfies demand. And that is excluding all iPhone isn't working on China Mobile 3G Network. With better roll out, better prepared production line, TSD-CDMA capable iPhone, and apple promise of China being 1st on the release list. I am pretty sure 5s will hit a new height for Apple. And may be the fastest production iPhone and biggest roll out in Phone history.
They only let down will be their Software, which i think is starting to lag behind Android. I hope iOS 7 will close that gap or even leap ahead.
After that, I think Apple may have trouble going even higher...... unless there is another revolutionary product comes out.....
I'm starting to have doubts about Apple's software approach too. I needed to write a simple Mac app that's mostly user interface and despite my aversion to proprietary tools decided to give Cocoa a look. After a few weeks of frustration at working through incomplete examples, tutorials that are out of date and failure to get past a simple user interface that didn't hook up with the app logic, I switched to using a cross-platform toolkit, Qt. It's not great but adequate for my purposes. I didn't expect getting into Cocoa to be trivial (learning Objective-C is no big deal, I learn new languages all the time) but it was a lot worse than I imagined. The real problem Apple has is they have accumulated cruft through several layers of OS X development on top of which they have added iOS with significant differences in some details of how apps have to work.
Far from iOS representing throwing out the old, it includes too much of the old.
Quote:
Originally Posted by arch
There is no denying the results are very poor. 0% profit growth.
right! $13B profit is CHUMP CHANGE! why, it's only 93% of Google's total revenues for the same quarter!! it's only about 100X more than Amazon's profits!!! the total 2012 profit for Apple is only the greatest ever in world corporate history! but that was ... months ago ... and what about the rest of the universe???
so obviously dump Apple and buy Google and Amazon! please, do that. you deserve it.
Quote:
Originally Posted by Retrogusto
OK, people are dumb. If anybody thinks the market is rational, have them take a look at Apple and they should be cured. Respectable results are no longer anywhere near good enough for Apple investors. If only they held Apple to the same standard that Amazon investors use.
they aren't investors. they are speculators. there is a huge difference.
This logic is SO wrong I wonder what's your occupation. My friend bought a cheap Android phone when the money's tight. Last year he got promotion, guess what phone he bought. I give you a hint: it doesn't run Android.
Quote:
Originally Posted by ruel24
I think it's clear that the market doesn't have faith in Cook. He just lacks charisma and Apple hasn't had a blowout product announcement in a long time.
Sorry, but use your brain a little.
iPhone - 2007
iPad - 2010
now - january 2013. see?
Quote:
Originally Posted by Jetz
What would Apple's stock price be if they had a single disastrous iPhone launch (think "you're holding it wrong"...but that turns out to be a real flaw")? That risk is exactly why AAPL's PE is "ridiculously low".
Amazon is no where as dependent on any single market as Apple is on the iPhone. So naturally, if iPhone sales miss, the stock will tank. AAPL is really an iPhone growth story.
the "mac" is bigger than google.
the "iPad" is bigger than microsoft.
the "iPod" is bigger than Dell.
What are you afraid of?
Quote:
Originally Posted by Jetz
4. Look at the end of subsidies at T-Mobile USA. These are all real threats to Apple in the long run. The latter particularly so. Phone subsidies are virtually a direct transfer of profits from the telcos to Apple. Telcos and their shareholders resent being held hostage and forced to pay Apple exorbitant subsidies when there are similar hardware devices for less than the cost of the subsidy. There's a real risk that more telcos will follow T-Mobile's lead. What would be your projection for the stock price if more telcos balked at subsidies or decided they would sharply limit them (say $300 for 2 years...making Nexus 4 free and making the iPhone 5 $350 for 2 years)?
A story from Romania. Two years ago, when I bought my 16Gb iPhone 4 from Orange, I payed 200 Euro with a 2 years contract of 29 Euro. Next year, the iPhone 4S was sold at the same price with the same contract but also the other two big networks, Vodafone and Cosmote, has started selling the iPhone 4S for the same price. But this year was different. The 16Gb iPhone 5 is now 369 Euro with a 2 years contract of 31 Euro. And all three networks has raised the price at the same time. NO MORE SUBSIDIES!
Or you could buy the 16Gb iPhone 5 with a 23 Euros contract for... 499 Euro! At the same time you can buy the Samsung Galaxy S3 for 149 Euro with a 31 Euro contract or a HTC One X for 100 Euro with the same contract.
So, you have to chose between an iPhone 5 at 369 Euro or a Samsung Galaxy S3 at 149 Euro or a HTC One X at 100 Euro. The monthly average income is here about 300 Euro. Guess what phone people chose? Almost nobody buys iPhones anymore, but I see a lot of Galaxy S3 everywhere.
Quote:
Originally Posted by arch
There is no denying the results are very poor. 0% profit growth.
That's being stupid.
13 weeks vs 14 weeks, billions and billions invested.
The more important statistic is that China's middle class is larger than the entire US population. China is already Apple's second largest market and on its way to becoming the largest.
There's no denying that you don't know what you're talking about.
One week fewer than last year and flat profit - so profit was up 8% per week. Sales were up far more than that. Most of their competitors are suffering. And Apple warned investors that profit would be hit this quarter by billions of dollars in investment in new products that would generate profits that hit the bottom line next year.
Would it have been nice if Apple had increased profits by 50% again? Sure. But saying that the results are a disaster is just plain ridiculous.