So the stock is up over 10% after hours. Where do people think it's going to be by opening bell tomorrow.. surey it won't hold a 10% gain, there's gotta be some profit taking?
So the stock is up over 10% after hours. Where do people think it's going to be by opening bell tomorrow.. surey it won't hold a 10% gain, there's gotta be some profit taking?
Ill guess that half the gain in after hours will be lost shortly after the opening bell.
Conference call is going on. I have never seen Apple execs post so confidently about the next quarter (and future) in general. ( The next quarter may easily see $10B+ revenue, despite the conservative $9.2B estimate from the CFO.)
They still talk about high component prices potentially leading to lower gross margin for the Xmas quarter. DRAM and NAND flash prices are still falling down but they are worried about hard drive and LCD prices.
Handset sales are recognized over a 24-month time, or 8 quarters. (Given that Apple has recognized about $100 revenue per iPhone sold this quarter, Apple's total revenue per iPhone will be at least in the $800 range. Looks like the kick-backs from AT&T and others are more lucrative than a few hundred dollars.)
Question: iPhone pricing being higher in Europe and going up?
Answer: Europe prices include VAT and other duties.
Direct sales were 57% of company revenue.
Question on why Europe outgrew US 4-quarters in a row?
Answer: Europe did not have the typical "August" wall. New iMac and iPod announcements helped sales in September.
Question: What are the biggest drivers quarter over quarter? Answer: Holiday quarter is usually the biggest quarter for iPods. We are shipping the best iPod line-up ever. We saw iPhone sales accelerate after the price cuts.
Question: Japan?
Answer: Japan is the most challenging market. However, the new iMac was very well received. Units up 14% year over year while the overall PC market in Japan contracted 2%.
Question: How should we calibrate your guidance? (implying they estimate much less than the actual revenue for the past quarters)
Answer: We are very confident in our strategy. Everything is coming together quite well for us. We are very happy. (Polite way to say "we are sandbagging the next quarter"?)
Question: Any update in the Pro-segment?
Answer: We've seen an incredible growth in our video business driven by Final Cut Studio. (Kind of side-stepped on the impact of CS3)
Question: Does iPod touch cannibalize iPhone?
Answer: We don't have enough data.
Question: What is the size of Mac installed base? What percentage is on Tiger?
Answer: The vast majority of Macs shipped in the last 4 years (21 million) are able to run Leopard. When we announced Tiger, there were 15 million units eligible to run Tiger and we did $100M revenue during the first quarter of launch.
Question: Drivers for Mac momentum and market share shift?
Answer: We did have an incredible quarter on Mac. We sold twice as many Mac during the year as we did in 2004. We are shipping the best Mac line up in the history of the company. We have shipped 120M iPods, most of which were shipped to PC users who have never owned a Mac. This was the most successful back to schoold season we have ever had. 11 quarters out of the last 12, we have grown faster than the market.
Question: Will iPhone sales in Europe drive other products?
Answer: We are just launching and we will learn over time. However, Mac business has grown significantly in Europe, probably helped by iPod sales.
These are wonderful numbers. However, don't they pretty much imply that Apple is selling their hardware at much higher price points than they could? I wonder at the elasticity of demand involved in Apple forgoing some profit in order to more rapidly pick up market share.
Apple is doing what they should insofar as pricing goes. Their margins are very good, but not outragous. Other companies making hardware have even higher margins.
Apple could cut prices by a bit, and cut their net in half. That wouldn't mean much. Their overall net is around the 14.5% mark this quarter. Pretty good.
but if they cut 6% off the price of their products to drop the net to 7.75%, the net would be pretty low. It wouldn't help sales one bit, and would give the market jitters. The stock would drop, and pricing would be questioned.
Computers are LESS EXPENSIVE TODAY THAN THEY HAVE BEEN AT ANY TIME.
mdriftmeyer... yes, computers are cheaper than at any time before. Macs are not. I remember macs for under $1k not too long ago, and being that way for many many years. Now? Get a gimped mini, or spend over $1k. There is no compromise.
There will come a time soon when Apple will hit a wall where the luxury market can only take market share to a certain point. 90% of the market doesn't need or want quad cores with 4GB or RAM that they can edit HD video on. 90% want a computer that they can check email and ebay on. If you tell them a mythical $1000 mac could do this if one existed, they're still gonna go for the $400 PC instead everytime. 90% of the market.
I see a parallel between this and the ongoing HD DVD battle. If Microsoft had replaced the onboard DVD drive with the HD-DVD in the x-box elite, they could have stood a good chance of ending this war. If Apple were to come out with a sub $1k mid tower today, they are similarly going to put some PC makers to bed. But, unfortunately, Apple isn't concerned with the market of commoners.
Given that the numbers are fantastic, Carins was the only analyst to "guess high" on EPS. Prior to their revision, the high estimate was $0.98.
My bet is that Apple hits $198 by the end of the week. Successful on every front imaginable. Japan was bad, but a little bit of sunshine coming through.
Mine as well. This means more investment into the Workstation/Desktop will happen seeing as the demand is escalating. The laptop has been taking the lead of importance and now it's time to even that out a bit more with an improved desktop strategy.
Hopefully, they expand the iPhone/iPod line up with the future PDA/Tablet system.
Jobs recently stated in an interview that the touch screen of the iPhone/iPodT introduced a whole new interface concept. They were very worried it might not take off, but thankfully it did, which could point to a touchscreen desktop in the future. We may soon interact with our computers in a whole new way.
mdriftmeyer... yes, computers are cheaper than at any time before. Macs are not. I remember macs for under $1k not too long ago, and being that way for many many years. Now? Get a gimped mini, or spend over $1k. There is no compromise.
There will come a time soon when Apple will hit a wall where the luxury market can only take market share to a certain point. 90% of the market doesn't need or want quad cores with 4GB or RAM that they can edit HD video on. 90% want a computer that they can check email and ebay on. If you tell them a mythical $1000 mac could do this if one existed, they're still gonna go for the $400 PC instead everytime. 90% of the market.
I see a parallel between this and the ongoing HD DVD battle. If Microsoft had replaced the onboard DVD drive with the HD-DVD in the x-box elite, they could have stood a good chance of ending this war. If Apple were to come out with a sub $1k mid tower today, they are similarly going to put some PC makers to bed. But, unfortunately, Apple isn't concerned with the market of commoners.
Buy a Mac mini.
Your reference to the eMac for $799 and a few other iterations that were underpowered and sold poorly shows that if one raises the power of the system beyond comparably built systems one can raise the margins above their competition.
Compare other AIO systems to the new iMac. What's the price breakdown?
Direct Sales being up 57% this quarter shows that the Apple Store plan and staff are able to educate people on these facts and more.
Jobs recently stated in an interview that the touch screen of the iPhone/iPodT introduced a whole new interface concept. They were very worried it might not take off, but thankfully it did, which could point to a touchscreen desktop in the future. We may soon interact with our computers in a whole new way.
This is an interesting point.
A number of people on these forums have been giving reasons why touch, or multi-touch would be bad for desktops, and portables.
Jobs had said in response to a question a few months ago, that he saw this for mobile applications, not really for computers as such.
But Jobs is known to change his mind when other facts come out. This could be happening now.
mdriftmeyer... yes, computers are cheaper than at any time before. Macs are not. I remember macs for under $1k not too long ago, and being that way for many many years. Now? Get a gimped mini, or spend over $1k. There is no compromise.
If there was still an eMac, it would probably be spec'ed just like the mini but with a screen.
In general, macs are still getting cheaper, particularly if you factor in inflation.
What is the hidden gem behind all these numbers is the "deferred revenue"...........Bottomline: Last quarter was actually much better than what the top-level numbers in the earning release says. It will be interesting to hear the questions from analysts in the conference call.
Some very nice observations. But market valuations are ultimately based on "free cash flows" (i.e., actual cash in versus cash out, or more generally operating cash flows net of investing cash flows, without considering financing cash flows). That is the metric that any serious analyst would use.
That said, markets do attach some value to revenue and income smoothing, and thus, conservative revenue recognition could help on the margins. But I would hope that Apple does not (and I expect it will not) get seduced by accounting veils such as revenue recognition.
The impressive thing is that these numbers are mainly being driven by newbies and entry-level consumers.
Most knowledgeable pros and prosumers have held off purchasing new machines this year in anticipation of Leopard and the product updates that will come soon afterward.
We're headed into a period of both Leopard availability and the Christmas shopping season.
The next quarter will be interesting, to say the least.
a question... WHO THE HELL IS BUYING ALL THESE MACHINES? They cost more than they have in years, and as far as I know, more people are hurting financially these days .
People who are tired of the false economy of buying a piece o' crap PC with a bloated 'free' OS that is anything but 'free'.
Also smartphone user who have realized that a million features that take you a half hour to get to isn't very 'smart'.
Comments
So the stock is up over 10% after hours. Where do people think it's going to be by opening bell tomorrow.. surey it won't hold a 10% gain, there's gotta be some profit taking?
Ill guess that half the gain in after hours will be lost shortly after the opening bell.
They still talk about high component prices potentially leading to lower gross margin for the Xmas quarter. DRAM and NAND flash prices are still falling down but they are worried about hard drive and LCD prices.
Handset sales are recognized over a 24-month time, or 8 quarters. (Given that Apple has recognized about $100 revenue per iPhone sold this quarter, Apple's total revenue per iPhone will be at least in the $800 range. Looks like the kick-backs from AT&T and others are more lucrative than a few hundred dollars.)
Question: iPhone pricing being higher in Europe and going up?
Answer: Europe prices include VAT and other duties.
Direct sales were 57% of company revenue.
Question on why Europe outgrew US 4-quarters in a row?
Answer: Europe did not have the typical "August" wall. New iMac and iPod announcements helped sales in September.
Question: What are the biggest drivers quarter over quarter? Answer: Holiday quarter is usually the biggest quarter for iPods. We are shipping the best iPod line-up ever. We saw iPhone sales accelerate after the price cuts.
Question: Japan?
Answer: Japan is the most challenging market. However, the new iMac was very well received. Units up 14% year over year while the overall PC market in Japan contracted 2%.
Question: How should we calibrate your guidance? (implying they estimate much less than the actual revenue for the past quarters)
Answer: We are very confident in our strategy. Everything is coming together quite well for us. We are very happy. (Polite way to say "we are sandbagging the next quarter"?)
Question: Any update in the Pro-segment?
Answer: We've seen an incredible growth in our video business driven by Final Cut Studio. (Kind of side-stepped on the impact of CS3)
Question: Does iPod touch cannibalize iPhone?
Answer: We don't have enough data.
Question: What is the size of Mac installed base? What percentage is on Tiger?
Answer: The vast majority of Macs shipped in the last 4 years (21 million) are able to run Leopard. When we announced Tiger, there were 15 million units eligible to run Tiger and we did $100M revenue during the first quarter of launch.
Question: Drivers for Mac momentum and market share shift?
Answer: We did have an incredible quarter on Mac. We sold twice as many Mac during the year as we did in 2004. We are shipping the best Mac line up in the history of the company. We have shipped 120M iPods, most of which were shipped to PC users who have never owned a Mac. This was the most successful back to schoold season we have ever had. 11 quarters out of the last 12, we have grown faster than the market.
Question: Will iPhone sales in Europe drive other products?
Answer: We are just launching and we will learn over time. However, Mac business has grown significantly in Europe, probably helped by iPod sales.
These are wonderful numbers. However, don't they pretty much imply that Apple is selling their hardware at much higher price points than they could? I wonder at the elasticity of demand involved in Apple forgoing some profit in order to more rapidly pick up market share.
Apple is doing what they should insofar as pricing goes. Their margins are very good, but not outragous. Other companies making hardware have even higher margins.
Apple could cut prices by a bit, and cut their net in half. That wouldn't mean much. Their overall net is around the 14.5% mark this quarter. Pretty good.
but if they cut 6% off the price of their products to drop the net to 7.75%, the net would be pretty low. It wouldn't help sales one bit, and would give the market jitters. The stock would drop, and pricing would be questioned.
So no, I think they've got it where it should be.
Even though I can't get the audio from Apple. The call seems to be on schedule. Reporting of it is on Macworld, here:
http://www.macworld.com/news/2007/10...rage/index.php
Computers are LESS EXPENSIVE TODAY THAN THEY HAVE BEEN AT ANY TIME.
mdriftmeyer... yes, computers are cheaper than at any time before. Macs are not. I remember macs for under $1k not too long ago, and being that way for many many years. Now? Get a gimped mini, or spend over $1k. There is no compromise.
There will come a time soon when Apple will hit a wall where the luxury market can only take market share to a certain point. 90% of the market doesn't need or want quad cores with 4GB or RAM that they can edit HD video on. 90% want a computer that they can check email and ebay on. If you tell them a mythical $1000 mac could do this if one existed, they're still gonna go for the $400 PC instead everytime. 90% of the market.
I see a parallel between this and the ongoing HD DVD battle. If Microsoft had replaced the onboard DVD drive with the HD-DVD in the x-box elite, they could have stood a good chance of ending this war. If Apple were to come out with a sub $1k mid tower today, they are similarly going to put some PC makers to bed. But, unfortunately, Apple isn't concerned with the market of commoners.
My bet is that Apple hits $198 by the end of the week. Successful on every front imaginable. Japan was bad, but a little bit of sunshine coming through.
Mine as well. This means more investment into the Workstation/Desktop will happen seeing as the demand is escalating. The laptop has been taking the lead of importance and now it's time to even that out a bit more with an improved desktop strategy.
Hopefully, they expand the iPhone/iPod line up with the future PDA/Tablet system.
Jobs recently stated in an interview that the touch screen of the iPhone/iPodT introduced a whole new interface concept. They were very worried it might not take off, but thankfully it did, which could point to a touchscreen desktop in the future. We may soon interact with our computers in a whole new way.
mdriftmeyer... yes, computers are cheaper than at any time before. Macs are not. I remember macs for under $1k not too long ago, and being that way for many many years. Now? Get a gimped mini, or spend over $1k. There is no compromise.
There will come a time soon when Apple will hit a wall where the luxury market can only take market share to a certain point. 90% of the market doesn't need or want quad cores with 4GB or RAM that they can edit HD video on. 90% want a computer that they can check email and ebay on. If you tell them a mythical $1000 mac could do this if one existed, they're still gonna go for the $400 PC instead everytime. 90% of the market.
I see a parallel between this and the ongoing HD DVD battle. If Microsoft had replaced the onboard DVD drive with the HD-DVD in the x-box elite, they could have stood a good chance of ending this war. If Apple were to come out with a sub $1k mid tower today, they are similarly going to put some PC makers to bed. But, unfortunately, Apple isn't concerned with the market of commoners.
Buy a Mac mini.
Your reference to the eMac for $799 and a few other iterations that were underpowered and sold poorly shows that if one raises the power of the system beyond comparably built systems one can raise the margins above their competition.
Compare other AIO systems to the new iMac. What's the price breakdown?
Direct Sales being up 57% this quarter shows that the Apple Store plan and staff are able to educate people on these facts and more.
Everything is up except Japan. down 11%....................... What happened in Japan?
Who cares!
Jobs recently stated in an interview that the touch screen of the iPhone/iPodT introduced a whole new interface concept. They were very worried it might not take off, but thankfully it did, which could point to a touchscreen desktop in the future. We may soon interact with our computers in a whole new way.
This is an interesting point.
A number of people on these forums have been giving reasons why touch, or multi-touch would be bad for desktops, and portables.
Jobs had said in response to a question a few months ago, that he saw this for mobile applications, not really for computers as such.
But Jobs is known to change his mind when other facts come out. This could be happening now.
Who cares!
I'm sure Apple cares.
mdriftmeyer... yes, computers are cheaper than at any time before. Macs are not. I remember macs for under $1k not too long ago, and being that way for many many years. Now? Get a gimped mini, or spend over $1k. There is no compromise.
If there was still an eMac, it would probably be spec'ed just like the mini but with a screen.
In general, macs are still getting cheaper, particularly if you factor in inflation.
What is the hidden gem behind all these numbers is the "deferred revenue"...........Bottomline: Last quarter was actually much better than what the top-level numbers in the earning release says. It will be interesting to hear the questions from analysts in the conference call.
Some very nice observations. But market valuations are ultimately based on "free cash flows" (i.e., actual cash in versus cash out, or more generally operating cash flows net of investing cash flows, without considering financing cash flows). That is the metric that any serious analyst would use.
That said, markets do attach some value to revenue and income smoothing, and thus, conservative revenue recognition could help on the margins. But I would hope that Apple does not (and I expect it will not) get seduced by accounting veils such as revenue recognition.
I'm sure Apple cares.
Perhaps. But it sure does not sound like they are doing much -- if anything -- about it.
Most knowledgeable pros and prosumers have held off purchasing new machines this year in anticipation of Leopard and the product updates that will come soon afterward.
We're headed into a period of both Leopard availability and the Christmas shopping season.
The next quarter will be interesting, to say the least.
a question... WHO THE HELL IS BUYING ALL THESE MACHINES? They cost more than they have in years, and as far as I know, more people are hurting financially these days .
People who are tired of the false economy of buying a piece o' crap PC with a bloated 'free' OS that is anything but 'free'.
Also smartphone user who have realized that a million features that take you a half hour to get to isn't very 'smart'.
Eventually, quality will out.