Want to make even more profit? Get tv shows and movies on international iTunes stores. Release the iPhone at the same time (or as close as possible) as in the U.S. Spend more marketing money outside of the U.S. Open more Apple stores outside of the U.S. (Ireland, please). Do more in general outside of the U.S. And finally, though it's never going to happen, stop selling products in Europe at nearly twice the price (£1 == $2, £1 != $1.25!)
I would say that video sales overseas is long over due, but video alone probably isn't a significant profit item.
The the main way that video sales might spur profits is if it increased the number of video devices sold.
Although 35.1 percent gross margin is great for the bottomline, it also indicates that some Apple products are perhaps a bit overpriced....Apple needs to introduce new models at slightly lower price points to continue market share growth...
Tim Cook made clear in the conference call that they do not expect margins to be 35% in the long run; the exceptionally high margins this quarter were due to some unexpected factors (e.g. low component pricing, etc.).
Incredibly, Mac sales accelerated versus the previous quarter (this quarter was up 36% YOY; previous quarters up 29% and 30% respectively), despite the fact that they had to compete with Microsoft's Vista mega-ad blitz/introduction. Market share gains will clearly continue even w/o new models at lower price points, but no doubt such models would increase market share gains even further.
imagine how much profit they would have made if they had SOME NEW PRODUCT RELEASES in the past 3 months
Apple doesn't seem to do any updates unless there is an update available for the basic hardware, namely the CPU and CPU chipset, which probably means that you might be waiting a month before there's enough for Apple to release.
Im going to get so flamed again, but why the fuck cannot Apple put this in a nice Apple case and flog it to me with OSX???? This system costs me £730 minus Operating System if I build it myself. Id willingly pay Apple a 30% premium on that - £1000 ($2000) to do it for me and sell me OSX. But its like banging your head against a brick wall - for Years.
Im going to get so flamed again, but why the fuck cannot Apple put this in a nice Apple case and flog it to me with OSX???? This system costs me £730 minus Operating System if I build it myself. Id willingly pay Apple a 30% premium on that - £1000 ($2000) to do it for me and sell me OSX. But its like banging your head against a brick wall - for Years.
Intel Quad @ 2.4 ghz
2gb Ram
X1650XT graphics
Because you would use the cheapest parts you could find in your box, and then blame Apple for it being buggy... Macs just work because Apple knows and tests everything in the box.
Apple is the King of integration because it does it all, and you have to pay alot more for that.
But to me (and you too or else you wouldn't be around here on a Mac board), it's worth every penny.
I too would LOVE Apple to build something like that. Then I wouldn't have bought my Mac Pro though (and I do love it so!), so maybe it's in their interest to not make one of those?
In looking at the iPhone, this seems to lend credence to the notion that AT&T is giving Apple a cut of the monthly subscriber charges -- definitely sweet music to the bottom line. This will get the Nokias and Motorolas of the world seething.
Maybe not. Nokia and Motorola et al already get their cash in the form of up-front subsidies. There's probably not a huge difference there at the end of the day.
What might be important is that Apple will have an incentive to keep us using the iPhone, whereas other manufacturers just want us to replace our handsets as often as possible.
Which fits well with the idea of a flexible interface and software updates rather than new hardware all the time.
iPhone question - During the call Peter O said that customers will benefit from free "software updates...". Could this mean that certain 3G features, especially the MUCH NEEDED upgrade from EDGE io HSDPA could be upgraded, like firmware? Is this kind of upgrade possible? Or would different hardware be necessary in the phone to support UMTS/HSDPA?
Honestly, I really don't know. It seems to be fear of cannibalising iMac and Mac Pro sales, but those are so piss-poor now, who cares?
exactly, the sales are reasonably crap, so it aint exactly canabalising anything, - and that system is better specced than a Mac Pro that costs me £1699 ($3400) - whats more someone is making profit on those prices, so it would cost Apple quite a bit less, probably £600 to build that system with OSX, so in theory, they'd be making 50%+ on such a system. Its just crazy. There is so much potential for marketshare growth with reasonably priced mid-specced machines - the sort of computers that 90% of us buy, yet from Apple there is nothing!!!
and that system is better specced than a Mac Pro that costs me £1699 ($3400)
That depends what you mean by "better specced". The Mac Pro is still easily worth it for what you get (compare its price to other branded workstation-class (i.e., with Xeon not Core 2 Duo processors) computers). Apple's problem is that they don't have any headless Macs that use the desktop Core 2 Duo. It beggars belief.
Rentals would be an additional sale for the iTunes Music Store, not for the AppleTV line item. Revenues for rentals would be recognized the same way that movie and music sales are recognized: at the time of rental/purchase.
The revenue recognition over a longer period of time actually has to do with some accounting rules. You cannot recognize all revenue for a widget up front, if you are going to add significant new functionality to that sold widget further down the line.The rules state that if you are going to continue to add functionality via software or firmware updates, you need to recognize the revenue in smaller chunks over a longer period of time. This is the reason that they had to make people pay the $1.99 for the 802.11n upgrade - they added significant new functionality and/or utility that was not there before. They charged the $1.99 because they had to - it likely cost them more than that just to set up the accounting system to track all of those $1.99 purchases. So the move to this accounting method for AppleTV and the iPhone simply means that they intend to add new features in the future (as he stated in the phone call).
They do the same thing with OS X, Microsoft does the same thing with Windows, many other software companies (Adobe among them) recognize revenue over a longer period of time.
Quote:
Originally Posted by GaussianBlur
In listening to the analyst call, they remarked on the use of an accounting methodology whereby revenue is being recognized for both the iPhone and (curiously) Apple TV over a 24 month period. In looking at the iPhone, this seems to lend credence to the notion that AT&T is giving Apple a cut of the monthly subscriber charges -- definitely sweet music to the bottom line. This will get the Nokias and Motorolas of the world seething.
Now, Apple TV having the same accounting treatment is curious... Might this be a harbinger for the video rental model?
In listening to the analyst call, they remarked on the use of an accounting methodology whereby revenue is being recognized for both the iPhone and (curiously) Apple TV over a 24 month period.
Now, Apple TV having the same accounting treatment is curious... Might this be a harbinger for the video rental model?
As a matter of note, Peter Oppenheimer's (CFO) rationale for this treatment is that Apple will provide progressive software updates over the course of time that warrant the spread of income in this fashion. One analyst made note that the iPod, which also gets software updates, does not get this treatment.
Whether it's one scenario or the other, it bodes well for us Apple fans... but i'm hoping it means HD rentals...
He only said that they would be accounting for the income on a subscription basis, not that they would actually be receiving income that way. It could just be an accounting trick to avoid the $3 updates they got panned for. [Edit: Ozoner said it first and much more eloquently] They were very evasive about what it actually meant.
I'm not saying it won't happen, just that we shouldn't read too much into it
Oh, forgot to say that desktop sales are still seriously underwhelming whilst portable sales are rocketing. I think they said near the beginning of the conference call that laptop units grew at 79% year-over-year!! When are Apple going to get with the program with desktops?
They essentially don't sell desktops. One SFF machine using notebook parts, a notebook permanently assembled into its docking station and a pro workstation uinsg workstation parts.
Eh...best ASPs and margins in the business without the overhead of increased logistics and support of a larger userbase while delivering good growth. The tower folks shouldn't hold their breath.
Holy ****! AAPL up 2.28%!!! AMZN up 26.97%!!!! Wow!
Spam.
$101 in after hours trading. Tomorrow is a key day for the stock to see whether the Hedge funds continue their downward pressure on the stock price via option contracts. The Bookies, er the Hedgies, win both ways using a strategy that allows them to make money on their Apple stock holdings and option contracts as long as the stock price is held at a their pre-determined price. This is how the Hedge fund managers control the market and make a billion plus a year. You gotta just love this country. Calling Gordon Gecko.
and are also hard at work on some other amazing new products in our pipeline."
Don't get too over-excited at the quote. This is the standard boilerplate uttered at every conference call and keynote. Yes, they are really working on cool stuff, but the statement itself isn't anything new.
Im going to get so flamed again, but why the fuck cannot Apple put this in a nice Apple case and flog it to me with OSX???? This system costs me £730 minus Operating System if I build it myself. Id willingly pay Apple a 30% premium on that - £1000 ($2000) to do it for me and sell me OSX. But its like banging your head against a brick wall - for Years.
Intel Quad @ 2.4 ghz
2gb Ram
X1650XT graphics
You CANNOT be fucking serious. 3000 posts and you still have no idea how Apple works.
In listening to the analyst call, they remarked on the use of an accounting methodology whereby revenue is being recognized for both the iPhone and (curiously) Apple TV over a 24 month period. In looking at the iPhone, this seems to lend credence to the notion that AT&T is giving Apple a cut of the monthly subscriber charges -- definitely sweet music to the bottom line. This will get the Nokias and Motorolas of the world seething.
Now, Apple TV having the same accounting treatment is curious... Might this be a harbinger for the video rental model?
As a matter of note, Peter Oppenheimer's (CFO) rationale for this treatment is that Apple will provide progressive software updates over the course of time that warrant the spread of income in this fashion. One analyst made note that the iPod, which also gets software updates, does not get this treatment.
Whether it's one scenario or the other, it bodes well for us Apple fans... but i'm hoping it means HD rentals...
I don't think so. I think this is probably related to the same accounting guidance that caused Apple to charge for the 802.11n software update.
This probably Means Apple is building in hardware support for certain functionality that will not be supported in software at product launch. And that a software update will expose these significant new capabilities. If the earnings are planned to be stated in sync with the software updates, Apple doesn't have to take odd tax charges or charge customers for the software updates.
Comments
Want to make even more profit? Get tv shows and movies on international iTunes stores. Release the iPhone at the same time (or as close as possible) as in the U.S. Spend more marketing money outside of the U.S. Open more Apple stores outside of the U.S. (Ireland, please). Do more in general outside of the U.S. And finally, though it's never going to happen, stop selling products in Europe at nearly twice the price (£1 == $2, £1 != $1.25!)
I would say that video sales overseas is long over due, but video alone probably isn't a significant profit item.
The the main way that video sales might spur profits is if it increased the number of video devices sold.
Although 35.1 percent gross margin is great for the bottomline, it also indicates that some Apple products are perhaps a bit overpriced....Apple needs to introduce new models at slightly lower price points to continue market share growth...
Tim Cook made clear in the conference call that they do not expect margins to be 35% in the long run; the exceptionally high margins this quarter were due to some unexpected factors (e.g. low component pricing, etc.).
Incredibly, Mac sales accelerated versus the previous quarter (this quarter was up 36% YOY; previous quarters up 29% and 30% respectively), despite the fact that they had to compete with Microsoft's Vista mega-ad blitz/introduction. Market share gains will clearly continue even w/o new models at lower price points, but no doubt such models would increase market share gains even further.
imagine how much profit they would have made if they had SOME NEW PRODUCT RELEASES in the past 3 months
Apple doesn't seem to do any updates unless there is an update available for the basic hardware, namely the CPU and CPU chipset, which probably means that you might be waiting a month before there's enough for Apple to release.
Intel Quad @ 2.4 ghz
2gb Ram
X1650XT graphics
Im going to get so flamed again, but why the fuck cannot Apple put this in a nice Apple case and flog it to me with OSX????
Honestly, I really don't know. It seems to be fear of cannibalising iMac and Mac Pro sales, but those are so piss-poor now, who cares?
Im going to get so flamed again, but why the fuck cannot Apple put this in a nice Apple case and flog it to me with OSX???? This system costs me £730 minus Operating System if I build it myself. Id willingly pay Apple a 30% premium on that - £1000 ($2000) to do it for me and sell me OSX. But its like banging your head against a brick wall - for Years.
Intel Quad @ 2.4 ghz
2gb Ram
X1650XT graphics
Because you would use the cheapest parts you could find in your box, and then blame Apple for it being buggy... Macs just work because Apple knows and tests everything in the box.
Apple is the King of integration because it does it all, and you have to pay alot more for that.
But to me (and you too or else you wouldn't be around here on a Mac board), it's worth every penny.
I too would LOVE Apple to build something like that. Then I wouldn't have bought my Mac Pro though (and I do love it so!), so maybe it's in their interest to not make one of those?
In looking at the iPhone, this seems to lend credence to the notion that AT&T is giving Apple a cut of the monthly subscriber charges -- definitely sweet music to the bottom line. This will get the Nokias and Motorolas of the world seething.
Maybe not. Nokia and Motorola et al already get their cash in the form of up-front subsidies. There's probably not a huge difference there at the end of the day.
What might be important is that Apple will have an incentive to keep us using the iPhone, whereas other manufacturers just want us to replace our handsets as often as possible.
Which fits well with the idea of a flexible interface and software updates rather than new hardware all the time.
Get the iPhone strategy yet?
Honestly, I really don't know. It seems to be fear of cannibalising iMac and Mac Pro sales, but those are so piss-poor now, who cares?
exactly, the sales are reasonably crap, so it aint exactly canabalising anything, - and that system is better specced than a Mac Pro that costs me £1699 ($3400) - whats more someone is making profit on those prices, so it would cost Apple quite a bit less, probably £600 to build that system with OSX, so in theory, they'd be making 50%+ on such a system. Its just crazy. There is so much potential for marketshare growth with reasonably priced mid-specced machines - the sort of computers that 90% of us buy, yet from Apple there is nothing!!!
and that system is better specced than a Mac Pro that costs me £1699 ($3400)
That depends what you mean by "better specced". The Mac Pro is still easily worth it for what you get (compare its price to other branded workstation-class (i.e., with Xeon not Core 2 Duo processors) computers). Apple's problem is that they don't have any headless Macs that use the desktop Core 2 Duo. It beggars belief.
Everything's coming up roses, folks.
The revenue recognition over a longer period of time actually has to do with some accounting rules. You cannot recognize all revenue for a widget up front, if you are going to add significant new functionality to that sold widget further down the line.The rules state that if you are going to continue to add functionality via software or firmware updates, you need to recognize the revenue in smaller chunks over a longer period of time. This is the reason that they had to make people pay the $1.99 for the 802.11n upgrade - they added significant new functionality and/or utility that was not there before. They charged the $1.99 because they had to - it likely cost them more than that just to set up the accounting system to track all of those $1.99 purchases. So the move to this accounting method for AppleTV and the iPhone simply means that they intend to add new features in the future (as he stated in the phone call).
They do the same thing with OS X, Microsoft does the same thing with Windows, many other software companies (Adobe among them) recognize revenue over a longer period of time.
In listening to the analyst call, they remarked on the use of an accounting methodology whereby revenue is being recognized for both the iPhone and (curiously) Apple TV over a 24 month period. In looking at the iPhone, this seems to lend credence to the notion that AT&T is giving Apple a cut of the monthly subscriber charges -- definitely sweet music to the bottom line. This will get the Nokias and Motorolas of the world seething.
Now, Apple TV having the same accounting treatment is curious... Might this be a harbinger for the video rental model?
In listening to the analyst call, they remarked on the use of an accounting methodology whereby revenue is being recognized for both the iPhone and (curiously) Apple TV over a 24 month period.
Now, Apple TV having the same accounting treatment is curious... Might this be a harbinger for the video rental model?
As a matter of note, Peter Oppenheimer's (CFO) rationale for this treatment is that Apple will provide progressive software updates over the course of time that warrant the spread of income in this fashion. One analyst made note that the iPod, which also gets software updates, does not get this treatment.
Whether it's one scenario or the other, it bodes well for us Apple fans... but i'm hoping it means HD rentals...
He only said that they would be accounting for the income on a subscription basis, not that they would actually be receiving income that way. It could just be an accounting trick to avoid the $3 updates they got panned for. [Edit: Ozoner said it first and much more eloquently] They were very evasive about what it actually meant.
I'm not saying it won't happen, just that we shouldn't read too much into it
Oh, forgot to say that desktop sales are still seriously underwhelming whilst portable sales are rocketing. I think they said near the beginning of the conference call that laptop units grew at 79% year-over-year!! When are Apple going to get with the program with desktops?
They essentially don't sell desktops. One SFF machine using notebook parts, a notebook permanently assembled into its docking station and a pro workstation uinsg workstation parts.
Eh...best ASPs and margins in the business without the overhead of increased logistics and support of a larger userbase while delivering good growth. The tower folks shouldn't hold their breath.
Vinea
Holy ****! AAPL up 2.28%!!! AMZN up 26.97%!!!! Wow!
Spam.
$101 in after hours trading. Tomorrow is a key day for the stock to see whether the Hedge funds continue their downward pressure on the stock price via option contracts. The Bookies, er the Hedgies, win both ways using a strategy that allows them to make money on their Apple stock holdings and option contracts as long as the stock price is held at a their pre-determined price. This is how the Hedge fund managers control the market and make a billion plus a year. You gotta just love this country. Calling Gordon Gecko.
imagine how much profit they would have made if they had SOME NEW PRODUCT RELEASES in the past 3 months
I know of $1300 bucks that are going into the corporate coffers next week.
and are also hard at work on some other amazing new products in our pipeline."
Don't get too over-excited at the quote. This is the standard boilerplate uttered at every conference call and keynote. Yes, they are really working on cool stuff, but the statement itself isn't anything new.
Im going to get so flamed again, but why the fuck cannot Apple put this in a nice Apple case and flog it to me with OSX???? This system costs me £730 minus Operating System if I build it myself. Id willingly pay Apple a 30% premium on that - £1000 ($2000) to do it for me and sell me OSX. But its like banging your head against a brick wall - for Years.
Intel Quad @ 2.4 ghz
2gb Ram
X1650XT graphics
You CANNOT be fucking serious. 3000 posts and you still have no idea how Apple works.
In listening to the analyst call, they remarked on the use of an accounting methodology whereby revenue is being recognized for both the iPhone and (curiously) Apple TV over a 24 month period. In looking at the iPhone, this seems to lend credence to the notion that AT&T is giving Apple a cut of the monthly subscriber charges -- definitely sweet music to the bottom line. This will get the Nokias and Motorolas of the world seething.
Now, Apple TV having the same accounting treatment is curious... Might this be a harbinger for the video rental model?
As a matter of note, Peter Oppenheimer's (CFO) rationale for this treatment is that Apple will provide progressive software updates over the course of time that warrant the spread of income in this fashion. One analyst made note that the iPod, which also gets software updates, does not get this treatment.
Whether it's one scenario or the other, it bodes well for us Apple fans... but i'm hoping it means HD rentals...
I don't think so. I think this is probably related to the same accounting guidance that caused Apple to charge for the 802.11n software update.
This probably Means Apple is building in hardware support for certain functionality that will not be supported in software at product launch. And that a software update will expose these significant new capabilities. If the earnings are planned to be stated in sync with the software updates, Apple doesn't have to take odd tax charges or charge customers for the software updates.