Case in point, the opening up of the 30-pin connector for third party accessories in iPhone OS 3.0, a move that I believe is destined to lead to all sorts of interesting hardware-software accessory innovations, in the process dwarfing the $2B+ iPod accessories industry, something that I blogged about in:
Exactly. This is a huge development which amazingly adds a whole new market for both the Touch and the iPhone. (I just hope they add Bluetooth support as well!) There are so many things where a display and a little processing power can make a dumb device very smart and useful and a "universal" interface makes it really easy to add the extra functionality. Right now, my only alternative is to bring a netbook to a job site.
Funny he still has a job. He speculates, is wrong and then criticizes because Apple didn't deliver, then he does it all over again. Every quarter, I can set my clock by it!
I will be getting whatever the new iPhone turns out to be. It is upgrade time for us original 1st Gen. purchasers, then next year my wife's 3G will be 2 years old and also time for an upgrade. I believe I can buy a new iPhone every year for as long as they release upgraded products.
1/10 of a MM thinner than 3G - give me a break, and drink some more Kool Aid.
I think apple will be happy to sustain their current momentum with 17 million units sold in the last two years. How you can be bearish about that kind of volume? Also 1/10th of a mm sounds ridiculous, divide a dime by 10 and thats what they are predicting its new form factor will be. Why not say same form factor.
Also I think they are pushing the phone to appeal to many different audiences, games,music,Internet,e-mail, universal remote,etc. it seems to be taking place of the center of your digital hub giving you access to control anything anywhere.
Among his feature predictions for the new model is a new 3.2 megapixel camera, better battery life for video playback, "a faster 3G chipset (HSUPA vs current HSDPA), improved graphics processor, video recording, more memory (16GB/32GB)" and an enclosure that's one-tenth of a millimeter thinner than the one employed by the iPhone 3G.
I've been saying for a year now that the iPhone was one-tenth of a millimeter too thick. Finally!!
Despite what you guys are saying, what he said makes sense.
I think you overestimate people. It always amazes me how many broke ass people have an iPhone and no matter what the current economic situation is I don't foresee people changing their habits on cell phone purchases. That said the only reason it wont boost momentum is due to market availability,not because of specific hardware improvements or current economic situations. The iPhone 3G is already available in 88 countries where the original iPhone wasn't.
I think you overestimate people. It always amazes me how many broke ass people have an iPhone and no matter what the current economic situation is I don't foresee people changing their habits on cell phone purchases. That said the only reason it wont boost momentum is due to market availability,not because of specific hardware improvements or current economic situations. The iPhone 3G is already available in 88 countries where the original iPhone wasn't.
I think that guys here just love having the fun of dumping on these people. While they make mistakes, they usually do a good enough job. And it's always required to remember that what is released in a press package, such as what this article comes from, the real information, and numbers, are in the paid report, or subscription, which is what companies are getting. If they weren't considered to be useful, and accurate enough over time, they would be out of business.
Despite what you guys are saying, what he said makes sense.
Actually, he is full of baloney. Last quarter, Apple earned about $.78/share in subscription earnings (that is, things that Apple has already sold and put the money in the bank but hasn't accounted for yet), and this number will be higher this quarter, essentially by definition. Apple has about $30B in cash. At a P/E of 15, I get that the subscription earnings plus the cash gives a stock value of $75. Just how much is this analyst expecting Apple to lose on the rest of its businesses this quarter to justify his $70 share price?
Where did you get the 78 cents? I didn't see an explicit number "carried in" when I looked. My calculations for the upcoming quarter are as follows:
I think that deferred revenue will add 0.995/share in revenue (6.2 B from balance sheet/7 quarters/890 M shares), and my deferred earnings calculation is this:
720 million - difference between last quarter GAAP and non-GAAP earnings. They sold 4.363 million iPhones that quarter, so each million iPhones results in $165 million in deferred earnings, or $23.57 million per quarter spread over 7 quarters.
Apple had sold 17 million iPhones before the current quarter started. Here, I have to make a simplification and assume that deferred earnings/iPhone are the same in the 1st gen, but since they only sold 1m phones, it is probably not important. 165/7x17/890 = 0.45c/share earnings carried into this quarter.
So 3 million iPhones would also result in $23.57*3/890 = 8c /share earnings in the quarter they were sold in.
Deferred Revenue per iPhone = 6.2B/17M = $364, $52.10 recognized per 7 quarters of deferment, and they also recognize 1/7 of that in the current quarter. So 3 million phones would add 17.56 cents in revenue to the quarter.
--
So my earnings prediction is
0.85 legacy product sales down by 15% or so from a year ago +
Actually, he is full of baloney. Last quarter, Apple earned about $.78/share in subscription earnings (that is, things that Apple has already sold and put the money in the bank but hasn't accounted for yet), and this number will be higher this quarter, essentially by definition. Apple has about $30B in cash. At a P/E of 15, I get that the subscription earnings plus the cash gives a stock value of $75. Just how much is this analyst expecting Apple to lose on the rest of its businesses this quarter to justify his $70 share price?
If you read my first post, that was the one thing I disagreed with.
Yes, I rushed through my calculation, and it's wrong. However, the deferred revenue is a big number--on the order of .50 to .75/share. I believe that Apple's own reporting is appr. 0.31/share for sales during the last two quarters (calculated by subtracting GAAP from non-GAAP earnings). Apple doesn't really provide enough information to get this number right, and it might be bigger. Apple's price might fall to $70, but I think that the Dow will be at 5500 if that happens.
An HSDPA phone should be firmware up-datable to HSUPA -- if not, shame on Apple! By the same token, it was sad that the 1st. Gen. iPhone was not up-datable to 3G -- it's called planned obsolescence, and I strongly frown upon it!
do you frown upon all other phone manufacturers? (or manufacturers of any kind, for that matter)
the great thing about the current iPhone is that it won't be rendered completely obsolete by a new model - the new OS will give 3G owners added longevity.
0.85 legacy product sales down by 15% or so from a year ago +
0.45 carried in +
0.08 iPhone sales rec. in quarter
-----
1.38
I did the math a little differently, starting with 2007Q2 (pre iPhone) and backing out some of the iPod sales, but I think you are pretty darn close-- maybe 2-3 cents high. Estimates on the street range from 0.95 to 1.23 (average 1.08).
I'd say there is a much better chance that Apple will be up 30% than down 30% in the next 12 months from everything I have seen... and that is in a bad economy! There is room for another 50% when things start picking up again... eventually.
Comments
Case in point, the opening up of the 30-pin connector for third party accessories in iPhone OS 3.0, a move that I believe is destined to lead to all sorts of interesting hardware-software accessory innovations, in the process dwarfing the $2B+ iPod accessories industry, something that I blogged about in:
Exactly. This is a huge development which amazingly adds a whole new market for both the Touch and the iPhone. (I just hope they add Bluetooth support as well!) There are so many things where a display and a little processing power can make a dumb device very smart and useful and a "universal" interface makes it really easy to add the extra functionality. Right now, my only alternative is to bring a netbook to a job site.
I will be getting whatever the new iPhone turns out to be. It is upgrade time for us original 1st Gen. purchasers, then next year my wife's 3G will be 2 years old and also time for an upgrade. I believe I can buy a new iPhone every year for as long as they release upgraded products.
1/10 of a MM thinner than 3G - give me a break, and drink some more Kool Aid.
Also I think they are pushing the phone to appeal to many different audiences, games,music,Internet,e-mail, universal remote,etc. it seems to be taking place of the center of your digital hub giving you access to control anything anywhere.
Among his feature predictions for the new model is a new 3.2 megapixel camera, better battery life for video playback, "a faster 3G chipset (HSUPA vs current HSDPA), improved graphics processor, video recording, more memory (16GB/32GB)" and an enclosure that's one-tenth of a millimeter thinner than the one employed by the iPhone 3G.
I've been saying for a year now that the iPhone was one-tenth of a millimeter too thick. Finally!!
:d
Wow- gutsy outlook. Abramsky is one useful tool.
Canada: We love you, but your bank is wrong.
Hell, you even needed AT&T "Canada" to even be connected to the rest of the IT backbone.
Despite what you guys are saying, what he said makes sense.
I think you overestimate people. It always amazes me how many broke ass people have an iPhone and no matter what the current economic situation is I don't foresee people changing their habits on cell phone purchases. That said the only reason it wont boost momentum is due to market availability,not because of specific hardware improvements or current economic situations. The iPhone 3G is already available in 88 countries where the original iPhone wasn't.
I think you overestimate people. It always amazes me how many broke ass people have an iPhone and no matter what the current economic situation is I don't foresee people changing their habits on cell phone purchases. That said the only reason it wont boost momentum is due to market availability,not because of specific hardware improvements or current economic situations. The iPhone 3G is already available in 88 countries where the original iPhone wasn't.
I think that guys here just love having the fun of dumping on these people. While they make mistakes, they usually do a good enough job. And it's always required to remember that what is released in a press package, such as what this article comes from, the real information, and numbers, are in the paid report, or subscription, which is what companies are getting. If they weren't considered to be useful, and accurate enough over time, they would be out of business.
Despite what you guys are saying, what he said makes sense.
Actually, he is full of baloney. Last quarter, Apple earned about $.78/share in subscription earnings (that is, things that Apple has already sold and put the money in the bank but hasn't accounted for yet), and this number will be higher this quarter, essentially by definition. Apple has about $30B in cash. At a P/E of 15, I get that the subscription earnings plus the cash gives a stock value of $75. Just how much is this analyst expecting Apple to lose on the rest of its businesses this quarter to justify his $70 share price?
I think that deferred revenue will add 0.995/share in revenue (6.2 B from balance sheet/7 quarters/890 M shares), and my deferred earnings calculation is this:
720 million - difference between last quarter GAAP and non-GAAP earnings. They sold 4.363 million iPhones that quarter, so each million iPhones results in $165 million in deferred earnings, or $23.57 million per quarter spread over 7 quarters.
Apple had sold 17 million iPhones before the current quarter started. Here, I have to make a simplification and assume that deferred earnings/iPhone are the same in the 1st gen, but since they only sold 1m phones, it is probably not important. 165/7x17/890 = 0.45c/share earnings carried into this quarter.
So 3 million iPhones would also result in $23.57*3/890 = 8c /share earnings in the quarter they were sold in.
Deferred Revenue per iPhone = 6.2B/17M = $364, $52.10 recognized per 7 quarters of deferment, and they also recognize 1/7 of that in the current quarter. So 3 million phones would add 17.56 cents in revenue to the quarter.
--
So my earnings prediction is
0.85 legacy product sales down by 15% or so from a year ago +
0.45 carried in +
0.08 iPhone sales rec. in quarter
-----
1.38
Actually, he is full of baloney. Last quarter, Apple earned about $.78/share in subscription earnings (that is, things that Apple has already sold and put the money in the bank but hasn't accounted for yet), and this number will be higher this quarter, essentially by definition. Apple has about $30B in cash. At a P/E of 15, I get that the subscription earnings plus the cash gives a stock value of $75. Just how much is this analyst expecting Apple to lose on the rest of its businesses this quarter to justify his $70 share price?
If you read my first post, that was the one thing I disagreed with.
But, your numbers are off as well.
If the latter, then it does not seem to be particularly useful or compelling. Move along.....
It is the right thing to do.
Apple's price might fall to $70, but I think that the Dow will be at 5500 if that happens.
Excellent point.
Whatever it is it will sell like hot cakes.
An HSDPA phone should be firmware up-datable to HSUPA -- if not, shame on Apple! By the same token, it was sad that the 1st. Gen. iPhone was not up-datable to 3G -- it's called planned obsolescence, and I strongly frown upon it!
do you frown upon all other phone manufacturers? (or manufacturers of any kind, for that matter)
the great thing about the current iPhone is that it won't be rendered completely obsolete by a new model - the new OS will give 3G owners added longevity.
So my earnings prediction is
0.85 legacy product sales down by 15% or so from a year ago +
0.45 carried in +
0.08 iPhone sales rec. in quarter
-----
1.38
I did the math a little differently, starting with 2007Q2 (pre iPhone) and backing out some of the iPod sales, but I think you are pretty darn close-- maybe 2-3 cents high. Estimates on the street range from 0.95 to 1.23 (average 1.08).
I'd say there is a much better chance that Apple will be up 30% than down 30% in the next 12 months from everything I have seen... and that is in a bad economy! There is room for another 50% when things start picking up again... eventually.