Notes of interest for Apple's Q3 2008 financial results call

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Comments

  • Reply 41 of 76
    SpamSandwichSpamSandwich Posts: 31,491member
    Quote:
    Originally Posted by foobar View Post


    This always happens. People get scared about low guidance, and now they've got SJ's health to get scared about, too. AAPL is one stock to think long-term, otherwise you're gonna jump out of a window sooner or later.



    Below $148 in after-hours... man, I wish I had a couple of million to drop on AAPL.
  • Reply 42 of 76
    minderbinderminderbinder Posts: 1,703member
    Quote:
    Originally Posted by probably View Post


    You guys are losing talking about SJ health.



    The lead story and EPS avg that every subsequent story cited was Bloomberg's internal consensus of 1.24. If any of you had been reading AppleInsider today, the most generous EPS estimate available today or late yesterday was 1.20 (by the Bull Cross, not a juggernaut player, contributor from today). The most generous from the older school of Apple analysts was 1.10 (Shaw Wu)



    What was the figure they supposedly didn't meet with 1.19? 1.24



    When were all the search results relevant to the google query "apple 1.24 eps" published? After today's report.

    It's diving because media 'agrees' it did not make the mark even though that number didn't exist prior. (As far as I can see - please link something to prove me wrong so I don't feel so depressed about capitalism)



    They'll recover, but it's so ridiculously easy to short them if such things are fabricated.



    I'm not sure what point you're trying to make.



    Consensus was 1.08, which they beat.



    The stock got hammered because consensus for *next* quarter was 1.25 and apple gave guidance of 1.00.
  • Reply 43 of 76
    jeffdmjeffdm Posts: 12,949member
    Quote:
    Originally Posted by johnqh View Post


    Remember iPod Nano? It has same resolution as Video iPod.



    How many people use iPod nano to watch video?



    I think iPhone is hard enough to use for text input as it is if you're not the type to let typing errors slide or revert to IM-lingo, I just don't see iPhone nano working unless they revert to the standard 12 key entry, where you push a button a few times to get the letter you want.



    Even then, iPhone nano doesn't say "product transition" to me. The only times I remember Apple using "transition" is the switch to Intel and the OS X introduction.
  • Reply 44 of 76
    merdheadmerdhead Posts: 587member
    Quote:
    Originally Posted by SpamSandwich View Post


    Below $148 in after-hours... man, I wish I had a couple of million to drop on AAPL.



    I think it's got further to fall. If SJ's poor health is confirmed look for AAPL to lose at least 50% of its value. Might drop 30%+ just on this rumour.



    The buying opportunity is not just now.
  • Reply 45 of 76
    aaarrrggghaaarrrgggh Posts: 1,583member
    So, just how bad would it be if Steve Jobs left Apple? A few months ago, it had me panicked, but I am starting to become more at ease with it now. "Replacing" SJ would be nearly impossible, but continuing to run the company and innovate is not 100% on his shoulders.
  • Reply 46 of 76
    minderbinderminderbinder Posts: 1,703member
    Quote:
    Originally Posted by JeffDM View Post


    How many people use iPod nano to watch video?



    I do, and it's great.



    Small screen wouldn't be good for touchscreen, though.
  • Reply 47 of 76
    probablyprobably Posts: 139member
    Quote:
    Originally Posted by minderbinder View Post


    I'm not sure what point you're trying to make.



    Consensus was 1.08, which they beat.



    The stock got hammered because consensus for *next* quarter was 1.25 and apple gave guidance of 1.00.



    Why don't I remember this situation ever happening if they've been doing the whole super conservative/irrelevant guidance shtick for 8 quarters now.
  • Reply 48 of 76
    wigginwiggin Posts: 2,265member
    Quote:
    Originally Posted by minderbinder View Post


    I don't really see how they're moving *away* from desktops, especially given the gain in sales this quarter.



    Apple likes to say that the iMac and mini cover consumer needs, but they're lying and they know it. If they really want to gain some market share, a reasonably priced midtower would be one of the quickest ways to do it.



    The argument against it is that it would hurt apple's margins. Now that apple has said they're willing to sacrifice margins to launch a new product, that argument is off the table.



    The industry as a whole is moving away from desktops, especially the consumer segement. Yes, businesses still buy a lot of mini-towers because they are cheap and they have the IT staff to maintain and upgrade them. But business are a relatively small segement of Apple's business. So if you take that out of the equation, the overall industry sales are even more skewed towards increasing laptop sales.



    As for market share, Apple's has been growing quite nicely lately. It is possible for market share to grow too rapidly. And after you and the other 7 people who have been constantly begging for a mini-tower make your purchases, it will no longer contribute to increased market share (I jest ). I just don't think it would make much difference in total Mac sales (ie, most mini-town sales would be in place of an iMac, mini, or laptop that would have been sold regardless). And it would hurt future sales because instead of buying a new Mac in three years you'd upgrade you mini-tower and keep it running for 8 years (like I did my Beige G3!).
  • Reply 49 of 76
    probablyprobably Posts: 139member
    I don't understand the iPhone nano thing's logistics. It would have to be a completely crippled version for that to make any sense.



    iPhone is a defined platform. The size of the screen is crucial to the way it feels and operates. iPhone developers are not going to suddenly be obliged to create another variant of their app with a different device, feel and specs.



    And what we have now with the App Store doesn't even scale yet. Our phones are still pretty rocky until the next firmware rev and without some revamping of the update push procedures, quality would always be so flaky.



    Right?



    To me it would be as ludicrous as there being two nintendo DS SKUs with an inch difference in screen size, but using the same carts. Is it equal gameplay if you play multiplayer? Do your tightened motor skills in handling a stylus (or in iPhone's case, finger) translate to the other device that's supposed to be the same platform?
  • Reply 50 of 76
    satchmosatchmo Posts: 2,699member
    Quote:
    Originally Posted by merdhead View Post




    The buying opportunity is not just now.



    Everyone has been saying this for the past year or so with recent dips.

    Regardless of Jobs health, it remains to be seen, if Apple will ever reach the lofty heights of $200+ as many analysts have predicted.
  • Reply 51 of 76
    johnqhjohnqh Posts: 242member
    Quote:
    Originally Posted by JeffDM View Post


    How many people use iPod nano to watch video?



    I think iPhone is hard enough to use for text input as it is if you're not the type to let typing errors slide or revert to IM-lingo, I just don't see iPhone nano working unless they revert to the standard 12 key entry, where you push a button a few times to get the letter you want.



    Even then, iPhone nano doesn't say "product transition" to me. The only times I remember Apple using "transition" is the switch to Intel and the OS X introduction.



    Relax, we are just guesstimating. No need to get so worked up.



    A candy bar or flip phone, with T9 keypad will be fine for text input. After all, people have been texting for a decade before iPhone. Nobody presses multiple keys to get the letter anymore. T9 works well on most phones.



    Other potentials - a handhelf game console for dirt cheap. After all, a lot of iPhone apps are games. Apple could sell one for $50 and I can see 1M to 2M sales at launch.
  • Reply 52 of 76
    merdheadmerdhead Posts: 587member
    An iPhone nano makes no sense. The only thing they could do is maybe a slimmed down version without GPS, 2G and less memory, but even that doesn't make too much sense. The way that carrier subsidies work, there isn't really any logic behind making a "cheaper" version since the phone can be financed by the phone companies. They might make a premium version of the phone with extra memory or something else special, but not a cut down version.
  • Reply 53 of 76
    wigginwiggin Posts: 2,265member
    Quote:
    Originally Posted by minderbinder View Post


    Apple's potential market IS everyone. They have been blowing off potential customers for years, and they have suffered for it.



    And whatever they are doing "at this time" is now a moot point - they just said that they're doing something to change their product strategy - "but they've never done that before" doesn't apply.



    Sure, their "potential" market is 5 billion people (or whatever the population of Earth currently is). But their "target" market is something substantially smaller than that. Bill Gates is a potential customer, but do you think Steve's trying to build a computer that Bill would buy? And I don't see the evidence of the suffering you are referring to.



    Also, not sure if it was your comment or someone else's, Apple has in the past warned of lower margins due to new product ramp up. I believe they gave similar guidance last summer, if I recall correctly. This is likely their annual iPod refresh, perhaps with a "tablet" expanding the iPod touch line.
  • Reply 54 of 76
    SpamSandwichSpamSandwich Posts: 31,491member
    Quote:
    Originally Posted by aaarrrgggh View Post


    So, just how bad would it be if Steve Jobs left Apple? A few months ago, it had me panicked, but I am starting to become more at ease with it now. "Replacing" SJ would be nearly impossible, but continuing to run the company and innovate is not 100% on his shoulders.



    If AAPL dropped in value by 1/2 due to SJ's health, it would behoove anyone with a brain to load up on AAPL with every penny they had.
  • Reply 55 of 76
    merdheadmerdhead Posts: 587member
    Quote:
    Originally Posted by satchmo View Post


    Everyone has been saying this for the past year or so with recent dips.

    Regardless of Jobs health, it remains to be seen, if Apple will ever reach the lofty heights of $200+ as many analysts have predicted.



    It's already touched $202 and I'm sure it'll top it again, but with a bear market and questions over SJ's health it won't be just now. If it ever hit $100 I'd buy, if I were in the market for it.
  • Reply 56 of 76
    wigginwiggin Posts: 2,265member
    Quote:
    Originally Posted by merdhead View Post


    An iPhone nano makes no sense. The only thing they could do is maybe a slimmed down version without GPS, 2G and less memory, but even that doesn't make too much sense. The way that carrier subsidies work, there isn't really any logic behind making a "cheaper" version since the phone can be financed by the phone companies. They might make a premium version of the phone with extra memory or something else special, but not a cut down version.



    The problem with the "iPhone nano" theory is that it doesn't go far enough in stripping out iPhone features. Instead, think "iPhone shuffle." Apple's first attempt at an iTunes phone was a partnership with Motorola which created a dud. It was basically a standard crappy cell phone with an iTunes player. But Apple now has the leverage now to create standard phone and be able to tell the carrier to NOT put their usual crappy OS and interface on it. A standard flip phone with a clean interface, seemless integration with my Address Book and iCal (and Outlook for PC users) and 1-2 GB to store songs to shuffle, and you could have a winner. Every phone already has a contacts list and most (all?) have a calendar. People generally manually enter the contacts and completely ignore the calendar. Apple could change that.
  • Reply 57 of 76
    Quote:
    Originally Posted by johnqh View Post


    It could be an iPhone Nano (let's say "FREE with 2-year contract"), an Apple TV Take 3 (with DVD player and Tivo-like recording), or something completely different.



    An iPhone Nano will make sense. Keep in mind how the iPhone revenue is recognized - the initial price is recognized right away, but the carrier subsidies are recognized over two years. So, if there is an "iPhone Nano" which is free with contract, Apple won't recognize any revenue upfront.



    My guess for a new product which substantially effects the margins is a low-cost lappy

    - say, Atom-based, to compete with the eeePCs

    - it's got to have a substantially lower margin to effect the overall margins significantly.

    - also it needs to be released soon!
  • Reply 58 of 76
    minderbinderminderbinder Posts: 1,703member
    Quote:
    Originally Posted by probably View Post


    Why don't I remember this situation ever happening if they've been doing the whole super conservative/irrelevant guidance shtick for 8 quarters now.



    While I don't remember a dip this big, it is very common for apple to have a great quarter but the stock price dips anyway.



    Quote:
    Originally Posted by Wiggin View Post


    I just don't think it would make much difference in total Mac sales (ie, most mini-town sales would be in place of an iMac, mini, or laptop that would have been sold regardless). And it would hurt future sales because instead of buying a new Mac in three years you'd upgrade you mini-tower and keep it running for 8 years (like I did my Beige G3!).



    See, I think it would help future sales for that exact reason - right now PC owners may be willing to make the switch but not willing to buy a machine they know they will have to replace in 3 years. Having a mac user who upgrades less often is still better than a PC user who never makes the switch.



    If you don't think it will help sales much, then why do the budget desktops still sell so many on the PC side? As desktops go, don't they vastly sell any of the desktop form factors apple sells?



    Quote:
    Originally Posted by Wiggin View Post


    Sure, their "potential" market is 5 billion people (or whatever the population of Earth currently is). But their "target" market is something substantially smaller than that.



    Their potential market is people who buy computers - that's over ten times their current market. Right now their market share is growing, but it's still low (7% market share sure looks like evidence of suffering to me) - it's great to see them improving but there's no question that there's room for improvement.
  • Reply 59 of 76
    johnqhjohnqh Posts: 242member
    Quote:
    Originally Posted by merdhead View Post


    An iPhone nano makes no sense. The only thing they could do is maybe a slimmed down version without GPS, 2G and less memory, but even that doesn't make too much sense. The way that carrier subsidies work, there isn't really any logic behind making a "cheaper" version since the phone can be financed by the phone companies. They might make a premium version of the phone with extra memory or something else special, but not a cut down version.



    Do you even know how big the cell phone market is? Apple's unit sales, comparing to Nokia, is peanuts.



    Take a look at any cell phone carrier's website, and see how many free (or almost free)-with-contract cell phones they have.



    iPhone is simply too big for many people, especially Asia. Keep in mind, American lifestyle (commute in cars) is not the only lifestyle in the world. When you live by taking subway and bus, iPhone is too big to hang around the neck for girls (cell phone is a fashion element for girls in many countries), and too big to put in a pocket for the guys.



    Even if iPhone Nano is not the "production in transition" here, sooner or later there will be an iPhone Nano. Count on it.
  • Reply 60 of 76
    johnqhjohnqh Posts: 242member
    Quote:
    Originally Posted by samurai1999 View Post


    My guess for a new product which substantially effects the margins is a low-cost lappy

    - say, Atom-based, to compete with the eeePCs

    - it's got to have a substantially lower margin to effect the overall margins significantly.

    - also it needs to be released soon!



    Actually, I think EeePC market segment is a potential. However, if that's the product-transition, it wouldn't have such a big impact on the EPS estimate.



    Even if Apple sells it at $300 and it costs $400 to build (unlikely), to reduce the earning by 200M, Apple would sell 2M units, and that would add $600M to the revenue.



    Instead, what we are seeing is that the earning estimate is reduced significantly, without apparent additional driver for the revenue.
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