I don't want to argue with anyone who doesn't understands how valuations are done.
Go ahead and read couple of times What I wrote first, then come back to me again.
It's revenue growth that counts. Revenue growth ultimately translates into more earnings.
There is reason why Amazon has such a high valuations even with close to zero earnings.
That's Why they are called analysts and earnings millions for their analysis.
btw, Google's revenue doesn't included Motorola or Nest revenue in their report.
This is the exact reason why Google/Facebook etc are buying more companies.
When they think that they have saturated particular market, they need to look into new market for growth and that is What companies with money is doing.
Quote:
Originally Posted by sog35
First off revenue growth does not mean jack sheet if you are not increasing profit.
Second, don't take the BS non-GAAP Google numbers. GAAP is the standard for financial reporting and it blows my mind that Wall Street allows Google to use their own reporting standards. Google's non-GAAP reporting does not take into account stock compensation and losses from discountinued operations (aka Motorola) how convient. Lets look at GAAP Earnings per share growth.
Google
Q1 2013 - $4.97 earnings per share
Q1 2014 - $5.04 earnings per share
1.4% earnings growth
Apple
Q1 2013 (Dec Qtr) - $13.81 earnings per share
Q1 2014 (Dec Qtr) - $14.50 earnings per share
5.0% earnings growth
Now tell me which company is growing earnings?
Google is BUYING revenue with acquisitions but their earnings is stalling.
I guess I have a different level of acceptable risk and expectation of future returns than "big investment houses". Then again, that's why I made a mint on Apple by investing pre-iPhone and why I'm a serial entrepreneur and not a boring banker.
For an operations guy, Tim Cook's product update/launch timetable is totally puzzling.
They're all seemingly bunched in the 4th quarter of the calendar year for 2014 too. The problem is, consumer wallets have already seen nine months go by. Moreover, the global supply chain is frantically working its b*** off for everyone for the holiday season, increasing the chances of delays and stock-outs.
I could understand this happening in a transition year -- 2013 -- as Cook and his new team were being put in place and settling in, but it would have been nice to see some type of normalcy return in 2014.
Not impressed. Hopefully, 2015. :\
First: By my calculations, the year 2014 is less than 1/3 along -- yet many, like you, assume that there will be no new products -- seems a bit illogical.
Second: The 2014 WWDC Keynote will occur on June 2 (approximately mid-year) -- this. historically, is the venue for announcing new and updated products -- and sometimes new categories,
Third: Often Apple's products are dependent on new or leading-edge technology being available in large volumes (TouchID, 64-bit A7, Mac Pro, Thunderbolt 2, etc.). Sometimes, Apple's announce/release schedule is dependent upon other companies. Since Apple does not like to talk about products until/unless they know they can deliver the goods -- we can usually rely on a late (last-minute) announce/pre-order -- with a ramped up delivery in 2-6 months. This, opposed to the competition who pre-announces everything -- even though delivery may be years away (or never).
Fourth: Apple has been making some interesting investments in technology: acquisitions; plant and equipment; cloud/server farms; personnel; star-power talent (Burberry CEO Angela Ahrendts, former Yves St Laurent CEO Paul Deneve). I suspect that Apple will use these investments to create new categories/products and bring a new level of desirable, affordable, quality, practical technology to the market.
In other words: IMO, 2014 -- you ain't seen nothin' yet!
First: By my calculations, the year 2014 is less than 1/3 along -- yet many, like you, assume that there will be no new products -- seems a bit illogical.
Second: The 2014 WWDC Keynote will occur on June 2 (approximately mid-year) -- this. historically, is the venue for announcing new and updated products -- and sometimes new categories,
Third: Often Apple's products are dependent on new or leading-edge technology being available in large volumes (TouchID, 64-bit A7, Mac Pro, Thunderbolt 2, etc.). Sometimes, Apple's announce/release schedule is dependent upon other companies. Since Apple does not like to talk about products until/unless they know they can deliver the goods -- we can usually rely on a late (last-minute) announce/per-order -- with a ramped up delivery in 2-6 months. This, opposed to the competition who pre-announces everything -- even though delivery may be years away (or never).
Fourth: Apple has been making some interesting investments in technology: acquisitions; plant and equipment; cloud/server farms; personnel; star-power talent (Burberry CEO Angela Ahrendts, former Yves St Laurent CEO Paul Deneve). I suspect that Apple will use these investments to create new categories/products and bring a new level of desirable, affordable, quality, practical technology to the market.
In other words: IMO, 2014 -- you ain't seen nothin' yet!
I don't think Anan said there wouldn't be anything in 2014.
What was said is that a few of us think that this boom bust cycle of announcing everything in the 4th/1st fiscal quarters is not the right way to go.
[SIZE=14px]Except for Apple fans like us who have an idea of what might be on tap and when (since we avidly follow and speculate on all this stuff), most people don't wait around, keeping hundreds of dollars in reserve, expecting some ephemeral/rumored product or update to arrive from 'Apple'. [/SIZE]
[SIZE=14px]Just ask around.[/SIZE]
I guess I don't understand why the Dec qtr is the largest qtr by volume and $$$ if only Apple fans buy then. I never knew there were so many Apple fans and those same people upgrade everything every year. /s
First: By my calculations, the year 2014 is less than 1/3 along -- yet many, like you, assume that there will be no new products -- seems a bit illogical.
Second: The 2014 WWDC Keynote will occur on June 2 (approximately mid-year) -- this. historically, is the venue for announcing new and updated products -- and sometimes new categories,
Third: Often Apple's products are dependent on new or leading-edge technology being available in large volumes (TouchID, 64-bit A7, Mac Pro, Thunderbolt 2, etc.). Sometimes, Apple's announce/release schedule is dependent upon other companies. Since Apple does not like to talk about products until/unless they know they can deliver the goods -- we can usually rely on a late (last-minute) announce/per-order -- with a ramped up delivery in 2-6 months. This, opposed to the competition who pre-announces everything -- even though delivery may be years away (or never).
Fourth: Apple has been making some interesting investments in technology: acquisitions; plant and equipment; cloud/server farms; personnel; star-power talent (Burberry CEO Angela Ahrendts, former Yves St Laurent CEO Paul Deneve). I suspect that Apple will use these investments to create new categories/products and bring a new level of desirable, affordable, quality, practical technology to the market.
In other words: IMO, 2014 -- you ain't seen nothin' yet!
I don't think Anan said there wouldn't be anything in 2014.
What was said is that a few of us think that this boom bust cycle of announcing everything in the 4th/1st fiscal quarters is not the right way to go.
And Google's monopoly in search is no longer relevant:
Facebook has its own search feature without Google
Twitter has its own search feature
Apple App store also.
And Yahoo is trying to be the default search on iOS devices.
The last one alone could take away 20% of Google's revenues."
See this is where the exact problem is
You think this, this, this will happen and that's why X stock will go down.
This,this and this new product will come and Y stock will go up.
If Apple shows new stream of revenue, they will have growth and stock will go up.
If Google gets suffocated in their growth, their stock will go down, but none of those two have happened until this very latest Quarter of 2014. (As Well in last 1.5 years)
Analyst don't work that way, They look at hard facts. When it happens, stock may respond.
I guess I don't understand why the Dec qtr is the largest qtr by volume and $$$ if only Apple fans buy then. I never knew there were so many Apple fans and those same people upgrade everything every year. /s
Cut the "/s", and figure out basic arithmetic.
"Largest quarter by volume" ? 100%.
"Largest" ? It couldn't have been ever larger if spaced better...
[SIZE=14px]Except for Apple fans like us who have an idea of what might be on tap and when (since we avidly follow and speculate on all this stuff), most people don't wait around, keeping hundreds of dollars in reserve, expecting some ephemeral/rumored product or update to arrive from 'Apple'. [/SIZE]
[SIZE=14px]Just ask around.[/SIZE]
I guess I don't understand why the Dec qtr is the largest qtr by volume and $$$ if only Apple fans buy then. I never knew there were so many Apple fans and those same people upgrade everything every year. /s
Like it or not, individuals ar the only buyers of Apple products. More and more enterprises (governments, large business, education, health, etc.) are buying (or underwriting BYOD) iPhones and iPads for business use. Tim said recently that over 95% of the Fortune 100 were evaluating or buying iPads. Normally, enterprise sales mean that large purchases are subject to the enterprises' budget cycle.
When I worked for IBM, we were very aware of these budget cycles and planned our sell/install efforts around them. I suspect that enterprises' budget cycles will increasingly skew iPad and iPhone purchases.
This may be a bit off-topic for this thread, but Apple's business may be evolving into an [B]XaaS[/B] business -- as are many other tech businesses.
Consider The sales of iTunes Software and Services:
[QUOTE]On a yearly basis iTunes/Software/Services is nearly half of Google’s core business and growing slightly faster.
The iTunes “empire” of content and services would be ranked as number 130 in the Fortune 500 ranking of companies (slightly below Alcoa and above Eli Lilly).[/QUOTE]
To some extent, Apple already offers [B]XaaS[/B] with iCloud Apps and storage, iTunes Match, Streaming, etc.
What if Apple were to offer [B]SHaaS[/B], (SHopping as a Service) using iTunes to browse/shop/buy/pay for services, general merchandise and hard goods?
Some US carriers are offering a kind of "upgrade insurance" with their iPhone subsidies -- where for a nominal monthly fee you can upgrade more frequently without additional fees.
What if Apple were to offer [B]HWaaS[/B] (HardWare as a Service) -- where you buy an iPhone or iPad (and, possibly Macs) for a low-monthly charge (billed and financed through iTunes) which includes the cell/WiFi/etc. carrier services plan -- and the ability upgrade to new models as they became available?
Finally, with Apple wearables, likely, coming this year or next -- it is conceivable that most Apple customers will have BTLE/WiFi/Cell/GPS radios on their person at all times. In effect, everybody could become an iBeacon -- continuously generating location information useful for navigation, tracking and marketing.
What if Apple were to [B][I][COLOR=blue]pay its customers[/COLOR][/I][/B] (through iTunes credits) to anonymously (or identifiably) gather this data for purposes of marketing and/or customized personal services?
Analyst don't work that way, They look at hard facts. When it happens, stock may respond.
Originally Posted by shahhet2
That's Why they are called analysts and earnings millions for their analysis.
I don't disagree that analysts look at facts but for every analyst that recommends a "buy" there are as many that recommend a sell/hold. That tells me that one analyst happens to be right and one happens to be wrong. Maybe that's why the average engineer makes more than the average analyst?
Or are you advising us to just listen to the analysts who earn millions and to ignore the others?
Or should we just listen to the analysts that are right all the time? /s
Hmmm...I don't hear you shouting support for the analyst that has a $745 target on aapl.
edit: I don't think any of us disagree that analysts impact the market, but you seem to only be cherry-picking reasons why we should be accepting this analysts analysis.
Comments
I don't want to argue with anyone who doesn't understands how valuations are done.
Go ahead and read couple of times What I wrote first, then come back to me again.
It's revenue growth that counts. Revenue growth ultimately translates into more earnings.
There is reason why Amazon has such a high valuations even with close to zero earnings.
That's Why they are called analysts and earnings millions for their analysis.
btw, Google's revenue doesn't included Motorola or Nest revenue in their report.
This is the exact reason why Google/Facebook etc are buying more companies.
When they think that they have saturated particular market, they need to look into new market for growth and that is What companies with money is doing.
First off revenue growth does not mean jack sheet if you are not increasing profit.
Second, don't take the BS non-GAAP Google numbers. GAAP is the standard for financial reporting and it blows my mind that Wall Street allows Google to use their own reporting standards. Google's non-GAAP reporting does not take into account stock compensation and losses from discountinued operations (aka Motorola) how convient. Lets look at GAAP Earnings per share growth.
Google
Q1 2013 - $4.97 earnings per share
Q1 2014 - $5.04 earnings per share
1.4% earnings growth
Apple
Q1 2013 (Dec Qtr) - $13.81 earnings per share
Q1 2014 (Dec Qtr) - $14.50 earnings per share
5.0% earnings growth
Now tell me which company is growing earnings?
Google is BUYING revenue with acquisitions but their earnings is stalling.
I guess I have a different level of acceptable risk and expectation of future returns than "big investment houses". Then again, that's why I made a mint on Apple by investing pre-iPhone and why I'm a serial entrepreneur and not a boring banker.
Good point, although I think that number should be higher but I agree they are looking a little ahead.
First: By my calculations, the year 2014 is less than 1/3 along -- yet many, like you, assume that there will be no new products -- seems a bit illogical.
Second: The 2014 WWDC Keynote will occur on June 2 (approximately mid-year) -- this. historically, is the venue for announcing new and updated products -- and sometimes new categories,
Third: Often Apple's products are dependent on new or leading-edge technology being available in large volumes (TouchID, 64-bit A7, Mac Pro, Thunderbolt 2, etc.). Sometimes, Apple's announce/release schedule is dependent upon other companies. Since Apple does not like to talk about products until/unless they know they can deliver the goods -- we can usually rely on a late (last-minute) announce/pre-order -- with a ramped up delivery in 2-6 months. This, opposed to the competition who pre-announces everything -- even though delivery may be years away (or never).
Fourth: Apple has been making some interesting investments in technology: acquisitions; plant and equipment; cloud/server farms; personnel; star-power talent (Burberry CEO Angela Ahrendts, former Yves St Laurent CEO Paul Deneve). I suspect that Apple will use these investments to create new categories/products and bring a new level of desirable, affordable, quality, practical technology to the market.
In other words: IMO, 2014 -- you ain't seen nothin' yet!
First: By my calculations, the year 2014 is less than 1/3 along -- yet many, like you, assume that there will be no new products -- seems a bit illogical.
Second: The 2014 WWDC Keynote will occur on June 2 (approximately mid-year) -- this. historically, is the venue for announcing new and updated products -- and sometimes new categories,
Third: Often Apple's products are dependent on new or leading-edge technology being available in large volumes (TouchID, 64-bit A7, Mac Pro, Thunderbolt 2, etc.). Sometimes, Apple's announce/release schedule is dependent upon other companies. Since Apple does not like to talk about products until/unless they know they can deliver the goods -- we can usually rely on a late (last-minute) announce/per-order -- with a ramped up delivery in 2-6 months. This, opposed to the competition who pre-announces everything -- even though delivery may be years away (or never).
Fourth: Apple has been making some interesting investments in technology: acquisitions; plant and equipment; cloud/server farms; personnel; star-power talent (Burberry CEO Angela Ahrendts, former Yves St Laurent CEO Paul Deneve). I suspect that Apple will use these investments to create new categories/products and bring a new level of desirable, affordable, quality, practical technology to the market.
In other words: IMO, 2014 -- you ain't seen nothin' yet!
I don't think Anan said there wouldn't be anything in 2014.
What was said is that a few of us think that this boom bust cycle of announcing everything in the 4th/1st fiscal quarters is not the right way to go.
I guess I don't understand why the Dec qtr is the largest qtr by volume and $$$ if only Apple fans buy then. I never knew there were so many Apple fans and those same people upgrade everything every year. /s
In which quarter is June? September? October?
In which quarter is June? September? October?
I said September and October.
Is this not when the products that constitute 90% of Apple's revenue are announced. Within a one month span.
And Google's monopoly in search is no longer relevant:
Facebook has its own search feature without Google
Twitter has its own search feature
Apple App store also.
And Yahoo is trying to be the default search on iOS devices.
The last one alone could take away 20% of Google's revenues."
See this is where the exact problem is
You think this, this, this will happen and that's why X stock will go down.
This,this and this new product will come and Y stock will go up.
If Apple shows new stream of revenue, they will have growth and stock will go up.
If Google gets suffocated in their growth, their stock will go down, but none of those two have happened until this very latest Quarter of 2014. (As Well in last 1.5 years)
Analyst don't work that way, They look at hard facts. When it happens, stock may respond.
In which quarter is June? September? October?
I am guessing that something announced in June will likely not be ready to ship until Sept (or thereabouts).
I guess I don't understand why the Dec qtr is the largest qtr by volume and $$$ if only Apple fans buy then. I never knew there were so many Apple fans and those same people upgrade everything every year. /s
Cut the "/s", and figure out basic arithmetic.
"Largest quarter by volume" ? 100%.
"Largest" ? It couldn't have been ever larger if spaced better...
What does Horace Dediu say?
So, you don't think that there will be any iPhone or iPad announcements between June 2 (WWDC) and September?
Like it or not, individuals ar the only buyers of Apple products. More and more enterprises (governments, large business, education, health, etc.) are buying (or underwriting BYOD) iPhones and iPads for business use. Tim said recently that over 95% of the Fortune 100 were evaluating or buying iPads. Normally, enterprise sales mean that large purchases are subject to the enterprises' budget cycle.
When I worked for IBM, we were very aware of these budget cycles and planned our sell/install efforts around them. I suspect that enterprises' budget cycles will increasingly skew iPad and iPhone purchases.
What is this 100%? I don't even know what you're trying to say in your second comment.
So, you don't think that there will be any iPhone or iPad announcements between June 2 (WWDC) and September?
I'll answer that with a question:
Do you think that Apple will release any iPhone or iPads between June 2 and September?
Consider The sales of iTunes Software and Services:
[QUOTE]On a yearly basis iTunes/Software/Services is nearly half of Google’s core business and growing slightly faster.
The iTunes “empire” of content and services would be ranked as number 130 in the Fortune 500 ranking of companies (slightly below Alcoa and above Eli Lilly).[/QUOTE]
[IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/42101/width/500/height/1000[/IMG]
[IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/42099/width/500/height/1000[/IMG]
http://www.asymco.com/2014/02/10/fortune-130/
To some extent, Apple already offers [B]XaaS[/B] with iCloud Apps and storage, iTunes Match, Streaming, etc.
What if Apple were to offer [B]SHaaS[/B], (SHopping as a Service) using iTunes to browse/shop/buy/pay for services, general merchandise and hard goods?
Some US carriers are offering a kind of "upgrade insurance" with their iPhone subsidies -- where for a nominal monthly fee you can upgrade more frequently without additional fees.
What if Apple were to offer [B]HWaaS[/B] (HardWare as a Service) -- where you buy an iPhone or iPad (and, possibly Macs) for a low-monthly charge (billed and financed through iTunes) which includes the cell/WiFi/etc. carrier services plan -- and the ability upgrade to new models as they became available?
Finally, with Apple wearables, likely, coming this year or next -- it is conceivable that most Apple customers will have BTLE/WiFi/Cell/GPS radios on their person at all times. In effect, everybody could become an iBeacon -- continuously generating location information useful for navigation, tracking and marketing.
What if Apple were to [B][I][COLOR=blue]pay its customers[/COLOR][/I][/B] (through iTunes credits) to anonymously (or identifiably) gather this data for purposes of marketing and/or customized personal services?
Yes!
Yes!
Interesting. Considering that Apple hasn't done that in quite a while.
Analyst don't work that way, They look at hard facts. When it happens, stock may respond.
That's Why they are called analysts and earnings millions for their analysis.
I don't disagree that analysts look at facts but for every analyst that recommends a "buy" there are as many that recommend a sell/hold. That tells me that one analyst happens to be right and one happens to be wrong. Maybe that's why the average engineer makes more than the average analyst?
Or are you advising us to just listen to the analysts who earn millions and to ignore the others?
Or should we just listen to the analysts that are right all the time? /s
Hmmm...I don't hear you shouting support for the analyst that has a $745 target on aapl.
edit: I don't think any of us disagree that analysts impact the market, but you seem to only be cherry-picking reasons why we should be accepting this analysts analysis.