Please explain how market share equates to margins? If you have low margins on a product how does selling more of it increase your margins? That's what people say about Amazon all the time. They sell hardware at cost and people say they'll make up for it with volume. What?
Don't feed the troll.
Analysts are funny. On one hand they complain about margins falling. On the other hand they complain that Apple doesn't sell cheap products with low margins.
And guess which one is driving Apple stock this morning. :rolleyes:
One minute Apple is doomed because Wall Street doesn't think Apple can survive their competitors race to the bottom in hardware. The next minute they think Apple is doomed because they don't innovate fast enough. Now Apple gets downgraded because of "margin pressures". Well which is it Wall Street? You want Apple to have cheaper prices, new products and high margins. That's impossible. Cheap hardware and high margins are at the opposite end of the spectrum and new products always have lower margins as manufacturing is more expensive initially. Especially any new products that involve brand new manufacturing processes.
The guidance is neutral to positive so I'm not sure what you're complaining about.
And there is certainly room for Apple to have a cheap product with good margins. Motorola is selling the Moto G for $180. It's an unbelievable phone for that price point and is better than the S4 mini and One mini which cost $400 and $430 respectively. Apple could match that phone in both hardware specs and build quality and sell it for $250. There you have the cheapest iPhone ever by a long shot (45% cheaper than the 4S) and it still has a profit margin of almost 39%.
Long time investor here. No big deal on todays downgrade. It's nothing but the big boys playing with the market because they need to buy back AAPL to replenish what they sold in Nov. 2013 for profit taking. For tax purpose, they have to wait 60 or 30 days to buy it back. While the little people are selling, the big boys will be buying up cheap shares of AAPL. As soon as the big boys replenish what they sold, and maybe more, AAPL will get an upgrade or will work its way back to 2013 close. They need to back back AAPL ASAP because any good news coming out of the China deal will cause AAPL to go up without any upgrade.
Now Apple gets downgraded because of "margin pressures". Well which is it Wall Street? You want Apple to have cheaper prices, new products and high margins. That's impossible. Cheap hardware and high margins are at the opposite end of the spectrum and new products always have lower margins as manufacturing is more expensive initially. Especially any new products that involve brand new manufacturing processes.
Yeah and at the same time Amazon is Wall Street's darling based on super high margins .... errrr .... strike that.
Then it must be innovation, like drones dropping packages on your heads, which btw is just around the corner.
Hmmmm... if they are doing very well for themselves then your pension must be doing very well too.
Some people have no clue how investment managers make money. All they know is that they are generally wealthy and assume that something nefarious must be happening. Little do they know that management fees are only taken when managers are making money for their clients too.
Um isn't looking at the bigger picture. He is going on the basis that there are a limited number of people buying an iPhone. Whilst that might be true on a single year basis, it is nowhere near the "mobile phone buying population" and 2 yearly contracts means half of the iPhone owners are looking to upgrade to the new phone anyway.
Apple are somewhat limited on other things like Macs and iPads because you aren't getting the newer version FOC so you tend to stick with what you have bought.
I'd like to see Apple branching into the wearable tech area and release a 4K standalone TV but I'd also like to see them do a dedicated gaming console to compete (and destroy) the Xbox and PS4. Oh, and an Apple camera (maybe call it Iris) so I can replace the Galaxy camera I bought recently (it was heavily discounted, a very good camera for the money, shame about the overly complicated OS and hard to use design).
Maynard Um... Right, I remember his laughable predictions from the past.
Kaspar, I know the negative stories generate more heat here, but how about maintaining an official database of analyst misfires? Philip Elmer DeWitt maintains a fantastic running account of their hits and misses. If you won't do it, ask Elmer if you can keep a copy here with a link back to his site?
Simply reposting analyst drivel without an "analyst scorecard" is less than useful.
Maynard Um... Right, I remember his laughable predictions from the past.
Kaspar, I know the negative stories generate more heat here, but how about maintaining an official database of analyst misfires? Philip Elmer DeWitt maintains a fantastic running account of their hits and misses. If you won't do it, ask Elmer if you can keep a copy here with a link back to his site?
Simply reposting analyst drivel without an "analyst scorecard" is less than useful.
Hindsight is 20/20. If you have connections providing information from deep within the supply chain and you're better at deciphering the information then by all means tell us about what is in store for Apple in 2014.
To be fair the market overall is down today - both Google and Amazon are down almost 1%, so Apple being down might not be completely tied to the WF downgrade.
Maynard Um... Right, I remember his laughable predictions from the past.
Kaspar, I know the negative stories generate more heat here, but how about maintaining an official database of analyst misfires? Philip Elmer DeWitt maintains a fantastic running account of their hits and misses. If you won't do it, ask Elmer if you can keep a copy here with a link back to his site?
Simply reposting analyst drivel without an "analyst scorecard" is less than useful.
Here is what Maynard Um posted on October 8, 2013 about. Apple...
Wells Fargo's Maynard Um forecasts that Apple's GM could reach 40% by March.
"iPhone launch quarters typically have accounting headwinds that ease in "s" cycles; historically, "s" versions drive better gross margins. Historically, the quarter of an iPhone launch has seen accounting gross margin headwinds (which, in our opinion, makes Apple's September quarter gross margins more impressive). If our accounting reversal assumptions are correct and assuming 5s/c mix goes to two-thirds of iPhone volumes, we believe December corporate gross margins could be 39.6% (versus our 38.3% estimate)--or $0.56 in incremental EPS--without calculating any potential incremental benefits from deferred margin on component sale or warranty accruals.
The March quarter could see even greater upside potential as warranty accruals have typically seen material decreases per unit in the third quarter following an "s" version launch, which could lead to the March quarter corporate gross margin hitting 40% (versus our 38.5% estimate)--a level not seen since September 2012. While the reversals of these can vary, if we just take a holistic step back, we note that gross margins have gone up by an average of 225bps in the two quarters of launch in an "s" cycle versus the two quarters of launch in a new form factor iPhone where gross margins have decreased by an average of 225bps. Gross margin improvements, particularly if they get to 40%+ would, in our opinion, dispel high-end smartphone commoditization fears."
As someone who has been involved in K-12 education technology for 35 years, the "unnoticed challenge" to Apple and the value of its stock is coming from the Google Chromebook.
Schools are moving very rapidly to the Chromebook at the expense of iPads, MacBooks and iMacs. (Windows based hardware is heavily impacted too.) I have seen other comments in other threads that are dismissive of the Chromebook and the Google School, but let me assure you that there is a revolution underway in K-12.
Apple Education Reps are scrambling to try to preserve their sales in the education market. Apple realizes it too and the evidence is in their pricing structure. When iWork was introduced schools could license 500 copies for $250. Over time Apple raised that volume price to $25 per copy which was still less than Office at $43 per copy. Now to compete with Google, the new version Pages, Keynote and Numbers are free.
The only other rapid change in school technology that I can compare this to in my career was way back when VHS tapes and TVs replaced 16mm films and projectors.
That’s more like it, two different opinions and two different recommendations. Beautifully points out the crapshoot nature of the stock market. Step right up ladies and gentlemen. Place your bets on the Wall Street Roulette Wheel. It was good year for my retirement account that I’m now using. It makes my financial advisor look like a frickn’s genius. The balance is higher even after receiving monthly checks. Now let’s what he looks like after the shit hits the fan sometime on the future. Then he’ll probably look like a moron who missed the correction.
The Wall Street Casino is open but remember, the house always wins!
As someone who has been involved in K-12 education technology for 35 years, the "unnoticed challenge" to Apple and the value of its stock is coming from the Google Chromebook.
Schools are moving very rapidly to the Chromebook at the expense of iPads, MacBooks and iMacs. (Windows based hardware is heavily impacted too.) I have seen other comments in other threads that are dismissive of the Chromebook and the Google School, but let me assure you that there is a revolution underway in K-12.
Apple Education Reps are scrambling to try to preserve their sales in the education market. Apple realizes it too and the evidence is in their pricing structure. When iWork was introduced schools could license 500 copies for $250. Over time Apple raised that volume price to $25 per copy which was still less than Office at $43 per copy. Now to compete with Google, the new version Pages, Keynote and Numbers are free.
The only other rapid change in school technology that I can compare this to in my career was way back when VHS tapes and TVs replaced 16mm films and projectors.
Complete nonsense. You have absolutely no objective evidence for your claim. None. The sales figures don’t agree. Complete baloney from a zero day troll touting the latest Apple killer product.
Complete nonsense. You have absolutely no objective evidence for your claim. None. The sales figures don’t agree. Complete baloney from a zero day troll touting the latest Apple killer product.
2,000 public school systems and private schools have adopted Chromebooks. That was last February. 2,000 is surely a drop in the bucket, but the rate is what should be examined. That number was a 100% increase from the number 3 months prior.
Hindsight is 20/20. If you have connections providing information from deep within the supply chain and you're better at deciphering the information then by all means tell us about what is in store for Apple in 2014.
That's the point. You can't determine anything from one particular data point. So why even try?
Comments
Don't feed the troll.
Analysts are funny. On one hand they complain about margins falling. On the other hand they complain that Apple doesn't sell cheap products with low margins.
The guidance is neutral to positive so I'm not sure what you're complaining about.
And there is certainly room for Apple to have a cheap product with good margins. Motorola is selling the Moto G for $180. It's an unbelievable phone for that price point and is better than the S4 mini and One mini which cost $400 and $430 respectively. Apple could match that phone in both hardware specs and build quality and sell it for $250. There you have the cheapest iPhone ever by a long shot (45% cheaper than the 4S) and it still has a profit margin of almost 39%.
Long time investor here. No big deal on todays downgrade. It's nothing but the big boys playing with the market because they need to buy back AAPL to replenish what they sold in Nov. 2013 for profit taking. For tax purpose, they have to wait 60 or 30 days to buy it back. While the little people are selling, the big boys will be buying up cheap shares of AAPL. As soon as the big boys replenish what they sold, and maybe more, AAPL will get an upgrade or will work its way back to 2013 close. They need to back back AAPL ASAP because any good news coming out of the China deal will cause AAPL to go up without any upgrade.
Now Apple gets downgraded because of "margin pressures". Well which is it Wall Street? You want Apple to have cheaper prices, new products and high margins. That's impossible. Cheap hardware and high margins are at the opposite end of the spectrum and new products always have lower margins as manufacturing is more expensive initially. Especially any new products that involve brand new manufacturing processes.
Yeah and at the same time Amazon is Wall Street's darling based on super high margins .... errrr .... strike that.
Then it must be innovation, like drones dropping packages on your heads, which btw is just around the corner.
Some people have no clue how investment managers make money. All they know is that they are generally wealthy and assume that something nefarious must be happening. Little do they know that management fees are only taken when managers are making money for their clients too.
Apple stock is going to stay in the toilet and I don't see any
problem with it.
Apple is in good company with others who are lacklustre for WS analysts as they are delivering high earnings year after year after year….
Um isn't looking at the bigger picture. He is going on the basis that there are a limited number of people buying an iPhone. Whilst that might be true on a single year basis, it is nowhere near the "mobile phone buying population" and 2 yearly contracts means half of the iPhone owners are looking to upgrade to the new phone anyway.
Apple are somewhat limited on other things like Macs and iPads because you aren't getting the newer version FOC so you tend to stick with what you have bought.
I'd like to see Apple branching into the wearable tech area and release a 4K standalone TV but I'd also like to see them do a dedicated gaming console to compete (and destroy) the Xbox and PS4. Oh, and an Apple camera (maybe call it Iris) so I can replace the Galaxy camera I bought recently (it was heavily discounted, a very good camera for the money, shame about the overly complicated OS and hard to use design).
Kaspar, I know the negative stories generate more heat here, but how about maintaining an official database of analyst misfires? Philip Elmer DeWitt maintains a fantastic running account of their hits and misses. If you won't do it, ask Elmer if you can keep a copy here with a link back to his site?
Simply reposting analyst drivel without an "analyst scorecard" is less than useful.
If Wall Street is a joke then why does anyone care about it?
People like humor. It’s sort of great.
Ya gotta start throwin’ /s’ on these.
Maynard Um... Right, I remember his laughable predictions from the past.
Kaspar, I know the negative stories generate more heat here, but how about maintaining an official database of analyst misfires? Philip Elmer DeWitt maintains a fantastic running account of their hits and misses. If you won't do it, ask Elmer if you can keep a copy here with a link back to his site?
Simply reposting analyst drivel without an "analyst scorecard" is less than useful.
Hindsight is 20/20. If you have connections providing information from deep within the supply chain and you're better at deciphering the information then by all means tell us about what is in store for Apple in 2014.
Here is what Maynard Um posted on October 8, 2013 about. Apple...
Wells Fargo's Maynard Um forecasts that Apple's GM could reach 40% by March.
"iPhone launch quarters typically have accounting headwinds that ease in "s" cycles; historically, "s" versions drive better gross margins. Historically, the quarter of an iPhone launch has seen accounting gross margin headwinds (which, in our opinion, makes Apple's September quarter gross margins more impressive). If our accounting reversal assumptions are correct and assuming 5s/c mix goes to two-thirds of iPhone volumes, we believe December corporate gross margins could be 39.6% (versus our 38.3% estimate)--or $0.56 in incremental EPS--without calculating any potential incremental benefits from deferred margin on component sale or warranty accruals.
The March quarter could see even greater upside potential as warranty accruals have typically seen material decreases per unit in the third quarter following an "s" version launch, which could lead to the March quarter corporate gross margin hitting 40% (versus our 38.5% estimate)--a level not seen since September 2012. While the reversals of these can vary, if we just take a holistic step back, we note that gross margins have gone up by an average of 225bps in the two quarters of launch in an "s" cycle versus the two quarters of launch in a new form factor iPhone where gross margins have decreased by an average of 225bps. Gross margin improvements, particularly if they get to 40%+ would, in our opinion, dispel high-end smartphone commoditization fears."
As someone who has been involved in K-12 education technology for 35 years, the "unnoticed challenge" to Apple and the value of its stock is coming from the Google Chromebook.
Schools are moving very rapidly to the Chromebook at the expense of iPads, MacBooks and iMacs. (Windows based hardware is heavily impacted too.) I have seen other comments in other threads that are dismissive of the Chromebook and the Google School, but let me assure you that there is a revolution underway in K-12.
Apple Education Reps are scrambling to try to preserve their sales in the education market. Apple realizes it too and the evidence is in their pricing structure. When iWork was introduced schools could license 500 copies for $250. Over time Apple raised that volume price to $25 per copy which was still less than Office at $43 per copy. Now to compete with Google, the new version Pages, Keynote and Numbers are free.
The only other rapid change in school technology that I can compare this to in my career was way back when VHS tapes and TVs replaced 16mm films and projectors.
The Wall Street Casino is open but remember, the house always wins!
As someone who has been involved in K-12 education technology for 35 years, the "unnoticed challenge" to Apple and the value of its stock is coming from the Google Chromebook.
Schools are moving very rapidly to the Chromebook at the expense of iPads, MacBooks and iMacs. (Windows based hardware is heavily impacted too.) I have seen other comments in other threads that are dismissive of the Chromebook and the Google School, but let me assure you that there is a revolution underway in K-12.
Apple Education Reps are scrambling to try to preserve their sales in the education market. Apple realizes it too and the evidence is in their pricing structure. When iWork was introduced schools could license 500 copies for $250. Over time Apple raised that volume price to $25 per copy which was still less than Office at $43 per copy. Now to compete with Google, the new version Pages, Keynote and Numbers are free.
The only other rapid change in school technology that I can compare this to in my career was way back when VHS tapes and TVs replaced 16mm films and projectors.
Complete nonsense. You have absolutely no objective evidence for your claim. None. The sales figures don’t agree. Complete baloney from a zero day troll touting the latest Apple killer product.
People like humor. It’s sort of great.
It's the reason I keep coming back to AI.
Schools are moving very rapidly to the Chromebook at the expense of iPads, MacBooks and iMacs.
Total lies.
…let me assure you that there is a revolution underway in K-12.
Let me assure you that you couldn’t be further from the truth if you weren’t being paid.
lol, no.
Except thousands of schools still use overhead projectors because they’re the simplest non-idiotic way to present something interactive.
Complete nonsense. You have absolutely no objective evidence for your claim. None. The sales figures don’t agree. Complete baloney from a zero day troll touting the latest Apple killer product.
http://googleenterprise.blogspot.ca/2013/02/a-look-back-at-2012-expansion-of.html
2,000 public school systems and private schools have adopted Chromebooks. That was last February. 2,000 is surely a drop in the bucket, but the rate is what should be examined. That number was a 100% increase from the number 3 months prior.
That's the point. You can't determine anything from one particular data point. So why even try?