Wow again! Just what is Apple going to do with all that cash? I remember when their cash pile was very nearly as big as their market cap, which made them vulnerable to hostile take-over bids. Those days are long-gone, so I suppose they can afford to just sit on it.
I sure hope they don't just sit on it but invest it. Either by buing smaller companies (Macromedia would have been such an opportunity) to soup up their software offering and/or by investing it into engineers to optimize the heck out of their OpenGL code, graphics drivers and Java implementation. Or pay someoone to make GCC not only work, but fast.
Some places where Apple could/might spend its cash horde include: TiVO ($500M), Burst (who they are currently engaged in a battle of lawyers with), Adobe (huge, but might be worth it)
Burst (who they are currently engaged in a battle of lawyers with)
Interesting idea. I wonder if they have people doing the numbers for hostile takeover bid vs patent legal battle.
Quote:
Originally posted by Chris Cuilla
Adobe (huge, but might be worth it)
What's the market cap of Adobe? This would have been quite an exciting thing before they merged with macromedia, now I'm not sure if it's financially or legally possible.
Apple doesn't Adobe anymore. And unless Apple really plans to provide a DVR and TiVo holds valid patents, they don't need TiVo. If Burst has valid patents, they might need Burst, given what is rumored that they want to do.
Apple should only purchase those companies (technologies) that have a technology that is vital to Apple's future vision, where that technology can't be developed in-house (i.e., huge barriers to market entry) or where it may become scarce/constrained due to competition. In other words, it has to be closely related to one of the more critical risks among the many that Apple lists in its 10Q or 10K filing.
To get a flavor for what this might be, look at what Apple has spent cash on over the years:
1. Prepaid 1.25M to secure a future line of NAND flash. This is vital to the future of the iPod division products and maybe even future Mac variants.
2. Company with MS file formats expertise; can't remember its name. Guess is that this is vital to iWork and maybe some server stuff, in case MS cuts off Office, including Entourage. With the current corporate dependence on Office formats and Exchange servers, Apple would be severely hurt if Office disappeared and Apple was unable to sell a replacement product for the Mac. At the time of the purchase, the previous agreement with MS had expired, but since MS recommitted at MWExpo for 5 more years, guess that this is no longer as important.
3. PowerSchool school mgmt software. Apple must've felt this was crucial to stop the education sales bleeding that was happening.
4. Emagic and a bunch of other multimedia creation companies. As "Creative" (film, audio, video, publishing) sales is a major part of Apple's vision, these companies provided Apple a jumpstart in providing tools to protect against Adobe abandoning the Mac, and to leapfrog/compete against/expand beyond Adobe. This same vision toward the consumer is embodied in iLife, which is now a major consumer selling point for the Mac.
Apple doesn't Adobe anymore. And unless Apple really plans to provide a DVR and TiVo holds valid patents, they don't need TiVo. If Burst has valid patents, they might need Burst, given what is rumored that they want to do.
Apple should only purchase those companies (technologies) that have a technology that is vital to Apple's future vision, where that technology can't be developed in-house (i.e., huge barriers to market entry) or where it may become scarce/constrained due to competition. In other words, it has to be closely related to one of the more critical risks among the many that Apple lists in its 10Q or 10K filing.
To get a flavor for what this might be, look at what Apple has spent cash on over the years:
1. Prepaid 1.25M to secure a future line of NAND flash. This is vital to the future of the iPod division products and maybe even future Mac variants.
2. Company with MS file formats expertise; can't remember its name. Guess is that this is vital to iWork and maybe some server stuff, in case MS cuts off Office, including Entourage. With the current corporate dependence on Office formats and Exchange servers, Apple would be severely hurt if Office disappeared and Apple was unable to sell a replacement product for the Mac. At the time of the purchase, the previous agreement with MS had expired, but since MS recommitted at MWExpo for 5 more years, guess that this is no longer as important.
3. PowerSchool school mgmt software. Apple must've felt this was crucial to stop the education sales bleeding that was happening.
4. Emagic and a bunch of other multimedia creation companies. As "Creative" (film, audio, video, publishing) sales is a major part of Apple's vision, these companies provided Apple a jumpstart in providing tools to protect against Adobe abandoning the Mac, and to leapfrog/compete against/expand beyond Adobe. This same vision toward the consumer is embodied in iLife, which is now a major consumer selling point for the Mac.
They also bought a small graphics chip design firm a few years ago.
apple doesn't want to make large purchases. They are debt free, and they seem to want to stay that way.
The were said to be in the bidding for Scientific Atlanta, which surprised me, but it could have been a good idea.
That's what I thought. when I was listening to the online call, I kept on getting phone calls, which distracted me, but I thought they said it was higher than that.
It closed just a hair above 76. But it was tanking because it was built up on analyst expectations that Apple would have revenue of 4.6-4.7 billion in this current quarter, and Apple is projecting only 4.3 billion.
If you think Apple is being conservative, and you figure it will blow past 4.3 billion to something like 4.7-4.8 billion, now would be a good time to buy.
BUY if you think that during the next 70 days, Intel-based Mac sales will take off due to pentup demand; Apple will introduce new smaller, colored iPod shuffles and the iPod boombox, bump up storage in the nanos, and add more Intel-based Mac models (12" and 17" MBP), etc.
SELL if you think the above will not happen or if you think PowerPC-based Mac sales will fall off very sharply, or music subscriptions or mobile phones will move people away from iPods and iTMS, etc.
Comments
Originally posted by Mr. H
Wow again!
I sure hope they don't just sit on it but invest it. Either by buing smaller companies (Macromedia would have been such an opportunity) to soup up their software offering and/or by investing it into engineers to optimize the heck out of their OpenGL code, graphics drivers and Java implementation. Or pay someoone to make GCC not only work, but fast.
Originally posted by melgross
software margins are about 70%, so that moves the figures out of proportion to the less that $300 million they brought in.
By the way. I added the figures and got a total of about $4.583 billion total.
What the hell did I miss? Or are some of the numbers here suspect?
Revenue is 1.724 (Mac)+ 2.906 (iPod)+ 1.119 (everything else) = 5.75 billion.
Of the 1.119, 491m was music, of which I allocated 220 to iTMS and 271 to iPod accessories. The remaining 628m is Mac peripherals/software/service.
Then I applied different margins to each of these to attempt to arrive at the reported gross margin of 1564m.
Originally posted by Chris Cuilla
Burst (who they are currently engaged in a battle of lawyers with)
Interesting idea. I wonder if they have people doing the numbers for hostile takeover bid vs patent legal battle.
Originally posted by Chris Cuilla
Adobe (huge, but might be worth it)
What's the market cap of Adobe? This would have been quite an exciting thing before they merged with macromedia, now I'm not sure if it's financially or legally possible.
ADBE approximately 20 Billion
Apple should only purchase those companies (technologies) that have a technology that is vital to Apple's future vision, where that technology can't be developed in-house (i.e., huge barriers to market entry) or where it may become scarce/constrained due to competition. In other words, it has to be closely related to one of the more critical risks among the many that Apple lists in its 10Q or 10K filing.
To get a flavor for what this might be, look at what Apple has spent cash on over the years:
1. Prepaid 1.25M to secure a future line of NAND flash. This is vital to the future of the iPod division products and maybe even future Mac variants.
2. Company with MS file formats expertise; can't remember its name. Guess is that this is vital to iWork and maybe some server stuff, in case MS cuts off Office, including Entourage. With the current corporate dependence on Office formats and Exchange servers, Apple would be severely hurt if Office disappeared and Apple was unable to sell a replacement product for the Mac. At the time of the purchase, the previous agreement with MS had expired, but since MS recommitted at MWExpo for 5 more years, guess that this is no longer as important.
3. PowerSchool school mgmt software. Apple must've felt this was crucial to stop the education sales bleeding that was happening.
4. Emagic and a bunch of other multimedia creation companies. As "Creative" (film, audio, video, publishing) sales is a major part of Apple's vision, these companies provided Apple a jumpstart in providing tools to protect against Adobe abandoning the Mac, and to leapfrog/compete against/expand beyond Adobe. This same vision toward the consumer is embodied in iLife, which is now a major consumer selling point for the Mac.
Originally posted by Mr. H
Interesting idea. I wonder if they have people doing the numbers for hostile takeover bid vs patent legal battle.
It's only hostile if there aren't enough zeroes between the first number and the decimal point.
Originally posted by mark2005
Revenue is 1.724 (Mac)+ 2.906 (iPod)+ 1.119 (everything else) = 5.75 billion.
Of the 1.119, 491m was music, of which I allocated 220 to iTMS and 271 to iPod accessories. The remaining 628m is Mac peripherals/software/service.
Then I applied different margins to each of these to attempt to arrive at the reported gross margin of 1564m.
The number given above in the article for iPod sales is $1.74 billion, not $2.9.
Where did you get that figure. I haven't gone to Apple's site. I just got home a short while ago.
Originally posted by mark2005
Apple doesn't Adobe anymore. And unless Apple really plans to provide a DVR and TiVo holds valid patents, they don't need TiVo. If Burst has valid patents, they might need Burst, given what is rumored that they want to do.
Apple should only purchase those companies (technologies) that have a technology that is vital to Apple's future vision, where that technology can't be developed in-house (i.e., huge barriers to market entry) or where it may become scarce/constrained due to competition. In other words, it has to be closely related to one of the more critical risks among the many that Apple lists in its 10Q or 10K filing.
To get a flavor for what this might be, look at what Apple has spent cash on over the years:
1. Prepaid 1.25M to secure a future line of NAND flash. This is vital to the future of the iPod division products and maybe even future Mac variants.
2. Company with MS file formats expertise; can't remember its name. Guess is that this is vital to iWork and maybe some server stuff, in case MS cuts off Office, including Entourage. With the current corporate dependence on Office formats and Exchange servers, Apple would be severely hurt if Office disappeared and Apple was unable to sell a replacement product for the Mac. At the time of the purchase, the previous agreement with MS had expired, but since MS recommitted at MWExpo for 5 more years, guess that this is no longer as important.
3. PowerSchool school mgmt software. Apple must've felt this was crucial to stop the education sales bleeding that was happening.
4. Emagic and a bunch of other multimedia creation companies. As "Creative" (film, audio, video, publishing) sales is a major part of Apple's vision, these companies provided Apple a jumpstart in providing tools to protect against Adobe abandoning the Mac, and to leapfrog/compete against/expand beyond Adobe. This same vision toward the consumer is embodied in iLife, which is now a major consumer selling point for the Mac.
They also bought a small graphics chip design firm a few years ago.
apple doesn't want to make large purchases. They are debt free, and they seem to want to stay that way.
The were said to be in the bidding for Scientific Atlanta, which surprised me, but it could have been a good idea.
Originally posted by melgross
The number given above in the article for iPod sales is $1.74 billion, not $2.9.
Where did you get that figure. I haven't gone to Apple's site. I just got home a short while ago.
The AppleInsider article is wrong. iPod sales was an incredible $2.906 billion.
See http://images.apple.com/pr/pdf/q106data_sum.pdf
Originally posted by mark2005
The AppleInsider article is wrong. iPod sales was an incredible $2.906 billion.
See http://images.apple.com/pr/pdf/q106data_sum.pdf
That's what I thought. when I was listening to the online call, I kept on getting phone calls, which distracted me, but I thought they said it was higher than that.
Originally posted by Aquatic
So why is stock tanking? 77 now.
It closed just a hair above 76. But it was tanking because it was built up on analyst expectations that Apple would have revenue of 4.6-4.7 billion in this current quarter, and Apple is projecting only 4.3 billion.
If you think Apple is being conservative, and you figure it will blow past 4.3 billion to something like 4.7-4.8 billion, now would be a good time to buy.
BUY if you think that during the next 70 days, Intel-based Mac sales will take off due to pentup demand; Apple will introduce new smaller, colored iPod shuffles and the iPod boombox, bump up storage in the nanos, and add more Intel-based Mac models (12" and 17" MBP), etc.
SELL if you think the above will not happen or if you think PowerPC-based Mac sales will fall off very sharply, or music subscriptions or mobile phones will move people away from iPods and iTMS, etc.