I want Apple to crush Android. Not scrape by. This was crap.
That's impossible! How can Apple outsell 3000 OEMs with their fabs on obscure countries that do not care about human rights? They have 1 single line, and they can't even keep up with demand! Right know, Apple is full gas and making 11 billion per quarter of net profit per quarter because of iOS and it's ecosystem.
Outselling android? Impossible. That would mean 90 billion per quarter from iOS. They would need to find a way to sell 300 million devices per quarter to go head to head and, guess what? The industry would collapse. I don't want that.
Mini eating into the iPad? Yeah... sure. I think that contradicts what you said in the first paragraph.
The problem is that that the mini is a better product than the main iPad. I have the latter and I got my sister the mini for Christmas. I prefer the mini. The weight in particular.
It's hard to make that mistake with the iPhone. Just restrict the lower end to 3G for now , etc.
Yep. This has been explained many times, including by Oppenheimer in the 2012 Q4 earnings call. The simultaneous launch of so many products in parallel required a heavy capital investment. This has created a temporary pressure on gross margins. As the products continue to sell, that margin improves because the capital investment is amortized over a larger volume of units.
You need to rethink your position that 38% gross margins is a temporarily low margin.
This is a different market from 2011 and 2012. Don't expect it to rise. Apple is not expecting it to rise per their own guidance.
it's very improbable that Apple will introduce a new product with such differentiation that it can demand those same high margins as the iPhones in the past, WHILE ALSO snuffing out all competition.
However, even if you were to surrender that point...don't be alarmed. The extremely low share price & PE is still unreasonable.
Many investors are happy to buy stock in the hopes that they will sell it for more in the future. In fact, since historically capital gains were taxed at a lower rate than dividends, many people preferred that.
There are plenty of companies which do not pay dividends who have done well. In fact, one could look at Apple. Until last summer, they never paid a dividend - and had one of the largest stock run-ups in history. Today, they're a dividend-paying stock and their shares are down about 40% from their peak.
A rational market cap is the NPV of all expected future payouts. Any other definition is irrational. A company that never intends to pay out any cash has no value. That does not mean that a company that currently does not pay out cash has no value.
To bring it back to the original point, increased earnings should not imply increased stock price. Increased earnings may reflect decreased expected future payouts. Of course Graham's statement always holds true, paraphrased, in the short term the stock market is a popularity content, in the long run it's a scale.
It's absolutely true when you grow past a certain market cap.
No dividend no investors. A healthy dividend is how Microsoft maintains their market cap.
Sorry, but you're just plain wrong. Apple's market cap was higher than any company in the world last year - and they weren't offering dividends. Many large companies don't pay dividends - Google. Amazon. Berkshire Hathaway. Merck. Amgen.
There's absolutely nothing that says a company can't attract investors without dividends. In fact, history shows otherwise.
Not even close. You obviously need to stop talking about financial matters since you don't have a clue what you're talking about.
A ponzi scheme is a company which keeps taking money from new investors so it can pay existing investors a dividend or other payout. If a company is not paying a dividend, it isn't a Ponzi scheme.
Seems to me that the change is more about Tim Cook publicly calling them out over their ridiculously overinflated estimates that the analysts knew would never be reached and then them scamming doom and gloom over that
Cooks comments were a challenge to them to be more thoughtful etc and they took it.
The problem is that that the mini is a better product than the main iPad. I have the latter and I got my sister the mini for Christmas. I prefer the mini. The weight in particular.
It's hard to make that mistake with the iPhone. Just restrict the lower end to 3G for now , etc.
Yes, and the CC confirmed that for Jul-Dec qtr, the # of minis to regular iPads would've been even greater if it weren't for supply constraint. Mini demand is high. Guidance shows GM fairly conservative, probably partly in regards to anticipated higher mix of Minis as opposed to regular iPads.
If economy were sky high, things might be different (regardless that I also think that the mini is actually better/lighter/smaller)...if economy were great, Apple would be able to introduce higher end (and more innovative) products which typically come with higher GMs. But that's not the case. And competition has done a great job at copying at the expense of Apple.
<span style="line-height:1.231;">A rational market cap is the NPV of all expected future payouts. Any other definition is irrational. </span>
<span style="line-height:1.231;">A company that never intends to pay out any cash has no value. That does not mean that a company that currently does not pay out cash has no value.</span>
That's an absurd definition. So by your definition, Berkshire Hathaway, Merck, Amgen, Google, and Amazon have no value at all since they don't pay dividends and have publicly stated that they never intend to. And Apple had no value last year (when the market cap was $600 B or so) but it is suddenly valuable today (when the market cap is $400 B or so) because it's paying dividends.
That's so wrong it's hard to believe anyone could espouse such a concept.
In reality, the market value approaches the NPV of TOTAL RETURN of the stock (which is dividends AND capital gains). There are other factors like risk involved, but the essence is that people invest on the basis of their investment being worth more tomorrow than today. That can be capital gains just as easily as it can be dividends.
Indeed, negavite growth is not normal, it just plain sucks. And the thing that really enrages me is TC didnt do a single thing for the stock on the call, with the pile cash they add they could have double the dividend to support investors. With 4% yield, value and income funds would have jump in to counter the carnage of all the growth stocks dumping Apple like its the plege.
Get used to it. Because doing things designed to make more money for investors is likely part of that 'revenue for revenue's sake' that Cook said will not happen on his watch (just as it didn't under Steve).
I am seeing more and more analysts call for Tim Cook's head. They want him to resign or be fired and think Forestall should be brought back because Apple needs a visionary like Jobs again and Cook isn't up to the task. I think Tim is a good C.E.O. and he has made some missteps but is up to the task and needs to stay right where he is.
One thing that is concerning is that over 70% of people around the world get no phone subsidies. Zero, zilch, nada. So even a $450 old iPhone is still expensive. Apple doesn't need to make a cheap crappy iPhone, but they could consider at least a cheaper iPhone for that market. Even in America subsidies are now a lot tighter than the old days. ETF's are up, upgrade waits are longer, T-Mobile has introduced cheaper plans for people that bring their own device without a subsidy. The iPhone does fantastic when it cost the same $199 price as an Android, but not so great when you have to pay $800 vs $400 for a similar experience and specs. Had the U.S. carriers continued their old upgrade policies I think Apple would have easily beat 50M iPhone sales. I used to be able to get a new phone once a year but now have to wait 18 months.
I am not sure how Apple can turn around this massive stock decline anytime soon. I sure hope they do since I own a lot of shares. I think they will have to come out with something brand new like they did with the iPad. It doesn't have to be nearly as successful and probably nothing could, but something to get people excited again. Perhaps it might even be iOS 7 where we might see some massive improvements and possibilities that leave Android in the dust. Perhaps it might be with cars where an iOS A/V nav system is introduced and is so good that every new car buyer views it as a must have option. Even better if they allowed it for after market sales as well since I just bought a new car but would probably love an iOS system better than the one in my car. None of us know for sure, but don't ever bet against Apple.
Anybody know if Tim Cook is a Railroad Tycoon player? Cuz it seems like AAPL's using my tried and true RRT strategy: artificially limit revenue across sequential quarters by inhibiting production, driving the stock down from its highs, then initiating a buyback of stock with capital on hand.
Anybody know if Tim Cook is a Railroad Tycoon player? Cuz it seems like AAPL's using my tried and true RRT strategy: artificially limit revenue across sequential quarters by inhibiting production, driving the stock down from its highs, then initiating a buyback of stock with capital on hand.
I sure hope so. A buyback would halt the decline real quick. He needs to do something and hope they have a great plan in place otherwise we might be looking at breaking the $399 barrier next.
I sincerely hope -- for your sake -- you're not invested in the market (at least, not directly).
The stock market pays my bills, university tuition, and my capital keeps growing. I doubled up last year, and am already up around 15% this year... Although I somewhat regret selling my RIM shares when I did...
Are you suggesting that non-dividend-paying stocks have no value!?
When growth slows and the company becomes 'mature', then dividends and buybacks are incentive for investors to hold on or buy more shares. Otherwise they sell, take their profit, and move on to the next company.
The problem is that that the mini is a better product than the main iPad. I have the latter and I got my sister the mini for Christmas. I prefer the mini. The weight in particular.
It's hard to make that mistake with the iPhone. Just restrict the lower end to 3G for now , etc.
I get what you are saying but it reminds me too much of Spindler's Performa strategy from the 90s.
Comments
Quote:
Originally Posted by asdasd
Did you mean "seen"?
I want Apple to crush Android. Not scrape by. This was crap.
That's impossible! How can Apple outsell 3000 OEMs with their fabs on obscure countries that do not care about human rights? They have 1 single line, and they can't even keep up with demand! Right know, Apple is full gas and making 11 billion per quarter of net profit per quarter because of iOS and it's ecosystem.
Outselling android? Impossible. That would mean 90 billion per quarter from iOS. They would need to find a way to sell 300 million devices per quarter to go head to head and, guess what? The industry would collapse. I don't want that.
Sorry for my english.
The problem is that that the mini is a better product than the main iPad. I have the latter and I got my sister the mini for Christmas. I prefer the mini. The weight in particular.
It's hard to make that mistake with the iPhone. Just restrict the lower end to 3G for now , etc.
75 million iOS devices is not crushing Android?
Quote:
Originally Posted by focher
Yep. This has been explained many times, including by Oppenheimer in the 2012 Q4 earnings call. The simultaneous launch of so many products in parallel required a heavy capital investment. This has created a temporary pressure on gross margins. As the products continue to sell, that margin improves because the capital investment is amortized over a larger volume of units.
You need to rethink your position that 38% gross margins is a temporarily low margin.
This is a different market from 2011 and 2012. Don't expect it to rise. Apple is not expecting it to rise per their own guidance.
it's very improbable that Apple will introduce a new product with such differentiation that it can demand those same high margins as the iPhones in the past, WHILE ALSO snuffing out all competition.
However, even if you were to surrender that point...don't be alarmed. The extremely low share price & PE is still unreasonable.
Quote:
Originally Posted by jragosta
That's absolutely false.
Many investors are happy to buy stock in the hopes that they will sell it for more in the future. In fact, since historically capital gains were taxed at a lower rate than dividends, many people preferred that.
There are plenty of companies which do not pay dividends who have done well. In fact, one could look at Apple. Until last summer, they never paid a dividend - and had one of the largest stock run-ups in history. Today, they're a dividend-paying stock and their shares are down about 40% from their peak.
A rational market cap is the NPV of all expected future payouts. Any other definition is irrational. A company that never intends to pay out any cash has no value. That does not mean that a company that currently does not pay out cash has no value.
To bring it back to the original point, increased earnings should not imply increased stock price. Increased earnings may reflect decreased expected future payouts. Of course Graham's statement always holds true, paraphrased, in the short term the stock market is a popularity content, in the long run it's a scale.
Sorry, but you're just plain wrong. Apple's market cap was higher than any company in the world last year - and they weren't offering dividends. Many large companies don't pay dividends - Google. Amazon. Berkshire Hathaway. Merck. Amgen.
There's absolutely nothing that says a company can't attract investors without dividends. In fact, history shows otherwise.
Not even close. You obviously need to stop talking about financial matters since you don't have a clue what you're talking about.
A ponzi scheme is a company which keeps taking money from new investors so it can pay existing investors a dividend or other payout. If a company is not paying a dividend, it isn't a Ponzi scheme.
Cooks comments were a challenge to them to be more thoughtful etc and they took it.
Quote:
Originally Posted by asdasd
The problem is that that the mini is a better product than the main iPad. I have the latter and I got my sister the mini for Christmas. I prefer the mini. The weight in particular.
It's hard to make that mistake with the iPhone. Just restrict the lower end to 3G for now , etc.
Yes, and the CC confirmed that for Jul-Dec qtr, the # of minis to regular iPads would've been even greater if it weren't for supply constraint. Mini demand is high. Guidance shows GM fairly conservative, probably partly in regards to anticipated higher mix of Minis as opposed to regular iPads.
If economy were sky high, things might be different (regardless that I also think that the mini is actually better/lighter/smaller)...if economy were great, Apple would be able to introduce higher end (and more innovative) products which typically come with higher GMs. But that's not the case. And competition has done a great job at copying at the expense of Apple.
That's an absurd definition. So by your definition, Berkshire Hathaway, Merck, Amgen, Google, and Amazon have no value at all since they don't pay dividends and have publicly stated that they never intend to. And Apple had no value last year (when the market cap was $600 B or so) but it is suddenly valuable today (when the market cap is $400 B or so) because it's paying dividends.
That's so wrong it's hard to believe anyone could espouse such a concept.
In reality, the market value approaches the NPV of TOTAL RETURN of the stock (which is dividends AND capital gains). There are other factors like risk involved, but the essence is that people invest on the basis of their investment being worth more tomorrow than today. That can be capital gains just as easily as it can be dividends.
Because they are Apple. Flat, non falling earnings, and slow but steady growth is fine for everyone else. But not Apple. Why? Because they are Apple.
Get used to it. Because doing things designed to make more money for investors is likely part of that 'revenue for revenue's sake' that Cook said will not happen on his watch (just as it didn't under Steve).
If that bothers you, sell now.
One thing that is concerning is that over 70% of people around the world get no phone subsidies. Zero, zilch, nada. So even a $450 old iPhone is still expensive. Apple doesn't need to make a cheap crappy iPhone, but they could consider at least a cheaper iPhone for that market. Even in America subsidies are now a lot tighter than the old days. ETF's are up, upgrade waits are longer, T-Mobile has introduced cheaper plans for people that bring their own device without a subsidy. The iPhone does fantastic when it cost the same $199 price as an Android, but not so great when you have to pay $800 vs $400 for a similar experience and specs. Had the U.S. carriers continued their old upgrade policies I think Apple would have easily beat 50M iPhone sales. I used to be able to get a new phone once a year but now have to wait 18 months.
I am not sure how Apple can turn around this massive stock decline anytime soon. I sure hope they do since I own a lot of shares. I think they will have to come out with something brand new like they did with the iPad. It doesn't have to be nearly as successful and probably nothing could, but something to get people excited again. Perhaps it might even be iOS 7 where we might see some massive improvements and possibilities that leave Android in the dust. Perhaps it might be with cars where an iOS A/V nav system is introduced and is so good that every new car buyer views it as a must have option. Even better if they allowed it for after market sales as well since I just bought a new car but would probably love an iOS system better than the one in my car. None of us know for sure, but don't ever bet against Apple.
Anybody know if Tim Cook is a Railroad Tycoon player? Cuz it seems like AAPL's using my tried and true RRT strategy: artificially limit revenue across sequential quarters by inhibiting production, driving the stock down from its highs, then initiating a buyback of stock with capital on hand.
Quote:
Originally Posted by godrifle
Anybody know if Tim Cook is a Railroad Tycoon player? Cuz it seems like AAPL's using my tried and true RRT strategy: artificially limit revenue across sequential quarters by inhibiting production, driving the stock down from its highs, then initiating a buyback of stock with capital on hand.
I sure hope so. A buyback would halt the decline real quick. He needs to do something and hope they have a great plan in place otherwise we might be looking at breaking the $399 barrier next.
Quote:
Originally Posted by igxqrrl
A company that has as a policy never returning a single penny to investors has no value to those investors, even if it's raking in profits.
I thought you were making sense, until this.
Are you suggesting that non-dividend-paying stocks have no value!?
Quote:
Originally Posted by Mikeb85
It's absolutely true when you grow past a certain market cap.
No dividend no investors. A healthy dividend is how Microsoft maintains their market cap.
A stock that grows forever is a ponzi scheme.
I sincerely hope -- for your sake -- you're not invested in the market (at least, not directly).
Quote:
Originally Posted by herbapou
youre obviously have no clue at all on how stocks are price....
Please tell us, oh Great One.....
Quote:
Originally Posted by anantksundaram
I sincerely hope -- for your sake -- you're not invested in the market (at least, not directly).
The stock market pays my bills, university tuition, and my capital keeps growing. I doubled up last year, and am already up around 15% this year... Although I somewhat regret selling my RIM shares when I did...
Quote:
Originally Posted by anantksundaram
I thought you were making sense, until this.
Are you suggesting that non-dividend-paying stocks have no value!?
When growth slows and the company becomes 'mature', then dividends and buybacks are incentive for investors to hold on or buy more shares. Otherwise they sell, take their profit, and move on to the next company.
Quote:
Originally Posted by asdasd
The problem is that that the mini is a better product than the main iPad. I have the latter and I got my sister the mini for Christmas. I prefer the mini. The weight in particular.
It's hard to make that mistake with the iPhone. Just restrict the lower end to 3G for now , etc.
I get what you are saying but it reminds me too much of Spindler's Performa strategy from the 90s.