Apple's investments in infrastructure, tooling, retail to jump to $15 billion in 2016

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Comments

  • Reply 41 of 79
    asciiascii Posts: 5,941member
    Quote:

    Originally Posted by digitalclips View Post





    The cost of developing and then building self driving, VTO flying, six seater personal vehicles isn't cheap!



    Well there definitely must be some new product coming, because the incremental changes to the existing lines wouldn't have cost that much to work out.

  • Reply 42 of 79
    MacProMacPro Posts: 18,012member
    ascii wrote: »

    Well there definitely must be some new product coming, because the incremental changes to the existing lines wouldn't have cost that much to work out.

    Hey I jest but I I do hope too :)
  • Reply 43 of 79
    danox wrote: »


    Nothing wrong with Captain slow, it's his ex co-host on Top Gear

    One, he's also the new co-host. On Amazon's new version of Top Gear. Two, he's a pretty cool guy too, positively mild compared to some of the cr4p hosts we see on US television.
  • Reply 44 of 79
    hmmhmm Posts: 3,405member
    Quote:

    Originally Posted by Rogifan View Post





    And some clown over at the Forbes contributor network says Apple should pay a dividend to the government because all the technology in iPhones came from government research. image

    That sounds like a pretty random comment. It's also not a true assessment. Research funding is not exclusively from government sources. Some of it is private. Universities also license patents that arise from various research, which funds more research. In that sense they may encounter liabilities directly or through the supply chain due to technology that incorporates the results of specific research. The research that resulted in such a patent or prior research that made it possible may have been funded either entirely or partly by government sources. You would have to look it up. It's actually good if licensing pays for further research regardless of who funded the original project. It means less of it may be funded through government sources.

     

    TLDR version, don't worry about random Forbes contributor nonsense.

  • Reply 45 of 79
    jfanningjfanning Posts: 3,384member
    beltsbear wrote: »
    Because the way the economy works, you will get benefit in the end.  Germans understand this and buy their own products even at a higher cost without being forced to.  Ford knew if he paid his employees well, the benefits would come around and they did. 

    ok, let me rephrase that, as a non-american, why should my prices go up to benefit some random american?
  • Reply 46 of 79
    jfanningjfanning Posts: 3,384member
    Is that THE jfanning from Mac Rumors?

    Yeah I would be, but I don't think I have posted anything there for years

    edit: Yip, I just checked, three years to be exact
  • Reply 47 of 79
    ksecksec Posts: 1,549member
    There is nothing really new. The year before a new iPhone design has always seen a spike in R&D. If you add the TV or Cars they might or might not be working on. This seems reasonable. Lets not forget if they spend the same on Datacenter and Retail as last year, The extra are purely going to iPhone maufacturing and secret project R&D.

    Compared to the last iPhone redesign, the 6 wasn't that revolutionary, the big screen was the biggest selling point. The iPhone 7 will likely be very compelling. Down payment on TSMC 16nm FFC ( slightly better then the FF+ used in 6s ), modem , antenna and unibody redesign.
  • Reply 48 of 79
    Could it be that the train has long left the station for people buying Apple stock these days in the hope they'd make significant profit? You can compare to other stock as long as you like, Apple will always be in the current ballpark, call it under evaluated or whatever. Ok, maybe if they really really disrupt the automotive market. But other than that, for non stockholders it should not be relevant, how the stock is doing, as Apple itself is doing very wel, no?
  • Reply 49 of 79
    radarthekatradarthekat Posts: 2,973moderator
    beltsbear wrote: »
    Because the way the economy works, you will get benefit in the end.  Germans understand this and buy their own products even at a higher cost without being forced to.  Ford knew if he paid his employees well, the benefits would come around and they did. 

    That's artificial, and therefore isn't sustainable against competitive forces. Not a good idea.
  • Reply 50 of 79
    radarthekatradarthekat Posts: 2,973moderator
    Could it be that the train has long left the station for people buying Apple stock these days in the hope they'd make significant profit? You can compare to other stock as long as you like, Apple will always be in the current ballpark, call it under evaluated or whatever. Ok, maybe if they really really disrupt the automotive market. But other than that, for non stockholders it should not be relevant, how the stock is doing, as Apple itself is doing very wel, no?

    The buybacks and dividends continue to put a floor under the share price, with that floor slowly rising. This last quarter, the company bought back 122 million shares at an average price of $114.75. While 122 million fewer shares does t move the needle all that much in terms of EPS growth, that's just one quarter's worth of buybacks. It's an ongoing steady process that has moved the needle overall. But back to the share price floor, Apple paying an average price of $114.75 is a clear signal to the market that the company's management has reason to believe the shares are undervalued at that price.

    Given the above, here is how you make outsized returns on Apple. Go out nine months and buy yourself all the June $110/115 debit call spreads you can afford. That trade had a closing net value of about $2.90 on Friday. If the stock, come next June's expiration, is at or above $115, the trade will be at max value of $5. That's a 72% gain on invested capital. There are even better returns that can be had, but this example is a fairly safe bet with a very good return; you don't even need the stock to go up. Your patience will be well rewarded.
  • Reply 51 of 79
    flaneurflaneur Posts: 4,506member

    Large scale manufacturing of tens of millions of devices in a very secretive, annual release cycle isn't coming to the USA for a number of reasons, and higher priced labor is only a minor part of it. The US labor pool is lacking willing, capable labor for large scale manufacturing of devices, but more importantly is completely lacking tool and die technicians who build and run factories, along with the entire supply chain of component manufacturing to supply it. You'd have to replicate what China built over the past 30 years, except China already did it and we would now be competing against a 30 year head start.

    It's like saying why doesn't Peoria get into movies and put Hollywood out of business, or why doesn't Detroit just attract startups and tech companies like Silicon Valley. There is no element of what works in China here in the US: no interest in building infrastructure, no interest in educating a workforce, no existing community of 100s of millions of people working upward to become part of a new middle class. Just a "hope" that the US can get "jobs" if some big company decided to make it happen. 

    Small scale precision manufacturing can be done here, like the Mac Pro. The sort of hand selected, component binning used in iOS device manufacturing would require not just the construction of a new factory, but of a series of factories producing everything from screws to precision parts for robots. 

    The area where Apple could get into domestic manufacturing might be in vehicles, because the US does have a domestic market for that already, as well as a series of supply chain manufacturers. Also, because of their weight and size, it can make more sense to build here rather than ship them from overseas plants. Even Toyota, BMW and VW, etc, have brought their manufacturing to the US for some of those reasons. But the conditions supporting car manufacturing are very different from the hand assembly now being used to manufacture most consumer electronics, which hasn't been in the US since the 80s. 

    ^^^A definitive statement on this subject. Forget Peoria, not even Chicago could become another Hollywood.

    "It's the ecosystem, stupid" — that should be the stock response to the bring-the-jobs-back dreamers, where electronics are concerned. China may have a 30-year lead, but Asia as a whole has a 50-year lead when it comes to consumer electronics, except for chips.

    With cars, it's different. There still is a (barely) functioning ecosystem in the US, though many of the hard parts come from Asia now. European car manufacturers source from Asia, Mexico and Brazil as well.
  • Reply 52 of 79
    Thanks for the great article DED. I can only think that Wall Street's issues can only come from a lack of insight about what is happening in the world. I went to Kyoto this year which was overrun with Chinese tourists. I personally saw a sample size of thousands of travelling mainland Chinese...it would not be an exaggeration to say that 90% were holding iPhone 6 (6s was not out at that time).

    The bottom line is that owning an iPhone is the sign of your entry into the middle class worldwide. It is not owning a car, a home, etc.

    I think the Wall Street worldview keeps them cognitely blind from seeing what is happening.

    They are right iPhone sales will one day flatten. But we have yet to reach "peak iPhone" perhaps 2-3 years from now.

    MSFT will never make the profit that selling $200-400 software brought them no matter how well they kick it in the cloud. Google can only add so many youtube ads & engage in creative accounting for a short period of time.

    APPL will ultimately win by being smart and selling products to people that love them. And their services will compete with Amazon, MSFT and Google.

    But the idea that the proceeding companies will make an iPhone killer is unlikely (at least anytime soon).

    Apple investors just need a little faith.
  • Reply 53 of 79
    At this point, with US workers beaten down to minimum wage, they have to start bringing production back. Extremely important to national security. And if they can't stop leaking IP to Chinese firms they're going to get their clock cleaned. The only way to plug the leaks is to bring it all back home.
  • Reply 54 of 79

    It has to be done one niche at a time. You build up areas of competency over time. And certainly assembly is portable.

     

    About corporate taxes and offshore profits. It's pretty simple. If you want to sell into the American market, bring the profits home. If not, you're banned. You want to do inversion mergers? Fine. Expect to pay stiff tariffs to sell your products in the US. It's time we fought back. We do not have to be helpless. 

     

    That's how you modernize corporate tax policy. America should not be run for the sole benefit of the investor class.

  • Reply 55 of 79
    paul94544paul94544 Posts: 1,027member

    Large scale manufacturing of tens of millions of devices in a very secretive, annual release cycle isn't coming to the USA for a number of reasons, and higher priced labor is only a minor part of it. The US labor pool is lacking willing, capable labor for large scale manufacturing of devices, but more importantly is completely lacking tool and die technicians who build and run factories, along with the entire supply chain of component manufacturing to supply it. You'd have to replicate what China built over the past 30 years, except China already did it and we would now be competing against a 30 year head start.

    It's like saying why doesn't Peoria get into movies and put Hollywood out of business, or why doesn't Detroit just attract startups and tech companies like Silicon Valley. There is no element of what works in China here in the US: no interest in building infrastructure, no interest in educating a workforce, no existing community of 100s of millions of people working upward to become part of a new middle class. Just a "hope" that the US can get "jobs" if some big company decided to make it happen. 

    Small scale precision manufacturing can be done here, like the Mac Pro. The sort of hand selected, component binning used in iOS device manufacturing would require not just the construction of a new factory, but of a series of factories producing everything from screws to precision parts for robots. 

    The area where Apple could get into domestic manufacturing might be in vehicles, because the US does have a domestic market for that already, as well as a series of supply chain manufacturers. Also, because of their weight and size, it can make more sense to build here rather than ship them from overseas plants. Even Toyota, BMW and VW, etc, have brought their manufacturing to the US for some of those reasons. But the conditions supporting car manufacturing are very different from the hand assembly now being used to manufacture most consumer electronics, which hasn't been in the US since the 80s. 

    Holy crap batman , a grammatically correct, well reasoned and cognitive well written rebuttal. So unusual among a sea of uneducated yobish opinionated drivel that we usually get, thankyou!
  • Reply 56 of 79
    paul94544paul94544 Posts: 1,027member
    The buybacks and dividends continue to put a floor under the share price, with that floor slowly rising. This last quarter, the company bought back 122 million shares at an average price of $114.75. While 122 million fewer shares does t move the needle all that much in terms of EPS growth, that's just one quarter's worth of buybacks. It's an ongoing steady process that has moved the needle overall. But back to the share price floor, Apple paying an average price of $114.75 is a clear signal to the market that the company's management has reason to believe the shares are undervalued at that price.

    Given the above, here is how you make outsized returns on Apple. Go out nine months and buy yourself all the June $110/115 debit call spreads you can afford. That trade had a closing net value of about $2.90 on Friday. If the stock, come next June's expiration, is at or above $115, the trade will be at max value of $5. That's a 72% gain on invested capital. There are even better returns that can be had, but this example is a fairly safe bet with a very good return; you don't even need the stock to go up. Your patience will be well rewarded.

    Why not just sell $115 put out to next summer then buy a 114 or other strike price PUT to protect it that way you get some money up front, if at any point between now and then the stock goes up much above 115 then buy the 115 put back, thus taking some profit and getting out of the trade and moving on then if the stock drops below the lower PUT sell that back at a profit too

    It's called a bull put spread with up front credit due to spread. Bull put spreads only require a limited amount of buying power for big gains too
  • Reply 57 of 79
    paul94544paul94544 Posts: 1,027member
    kinomedia wrote: »
    At this point, with US workers beaten down to minimum wage, they have to start bringing production back. Extremely important to national security. And if they can't stop leaking IP to Chinese firms they're going to get their clock cleaned. The only way to plug the leaks is to bring it all back home.

    Sorry to burst you bubble by quoting actual facts - USA minimum wages are still much much more than Chinese wages so your idea won't fly, current min wages in China are still less than $2 per hour, dang! I guess I'm right in saying that's why you ain't in charge of manufacturing for a corporation here? Like say Tim Cook!
  • Reply 58 of 79
    Originally Posted by SpamSandwich View Post

    Only if robots would handle the "labor". US wages are cost prohibitive compared to China or elsewhere.

     

    So have tariffs make Chinese labor cost-prohibitive.

  • Reply 59 of 79
    So have tariffs make Chinese labor cost-prohibitive.

    Then there's the problem with the RMB being roughly 1/7th the value of the Dollar due to currency manipulation (which is not to say that the US dollar is not also manipulated).
  • Reply 60 of 79
    paul94544paul94544 Posts: 1,027member
    hmm wrote: »
    That sounds like a pretty random comment. It's also not a true assessment. Research funding is not exclusively from government sources. Some of it is private. Universities also license patents that arise from various research, which funds more research. In that sense they may encounter liabilities directly or through the supply chain due to technology that incorporates the results of specific research. The research that resulted in such a patent or prior research that made it possible may have been funded either entirely or partly by government sources. You would have to look it up. It's actually good if licensing pays for further research regardless of who funded the original project. It means less of it may be funded through government sources.

    TLDR version, don't worry about random Forbes contributor nonsense.

    You don't actually expect a factually coherent sentence from someone with no credibility like rogifan do you? People like him have an m.o. That reads , type something as fast as possible based on no evidence, some silly notion based on flatulence, hit submit without re-reading, then go back to watching re-runs of some 70s show.
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