It's incorrect to say that the deferred revenue is pure profit. The deferred revenue has to offset the development costs which are amortized over the life of the products.
If you assume Apple's software margins are 50%, then only 50% of the deferred OS X revenue, for example, will become profit. The most of the rest will go to capitalized costs, mainly programmer's salaries.
You generally cannot capitalize salaries. You can capitalize freelancers and outside contractors.
Really it's evident you read headlines and a bit of the first paragraph and then race to the comments to express whatever thought jumps to your mind. That's why you always complain about irrelevant things without having the full picture.
No I read the article and my point still stands. The deferral is largely irrelevant as previous revenue has been deferred to this quarter. In any case the market is looking for future growth.
Also. Don't get so defensive DED, and at least post as yourself.
It´s the money that´s Apples biggest problem. Apples Business is worth much more than a PE of 13. But the PE is calculated against the whole of Apple, which means $150 of that is dead cash. And dead cash is punished in terms of PE. Had Apple done followed Icahn example, not only would AAPL increase its share price to 750 - that is just based on EPS model. But Apples business would also be priced at a much higher PE as well.
Make no mistake about it, excess cash is penalised by Wall Street. The current $150b is barely making 1% appreciation currently, that gives you a *terrible* PE sole based on the cash.
I´m sure Tim Cook and Apples board knows this, and will make adjustments come january 2014. They love sitting on cash, but they hate the fact that it´s starting to drag the PE/Business valuation down so much more. Time to take action.
If a company had $150B in cash and no earning would be a very weird beast.
Also, it's not about past earnings it's about expected future earnings (and obviously everyone is entitled to their own "expectations"). So if there were a company with a boatload of money in the bank but zero expected earnings, there would be something seriously wrong. That would mean that the core business had an on-going loss that exactly offset the massive investment earning from that cash. That would be a sick company and it's stock would fair poorly. Would it be worth "zero?" Of course not. If nothing else, someone could buy up the company, sell everything off, and keep the cash. So the share price would reflect that worst-case scenario.
I fully understand that company is "sick". It was a simplified thought experiment. Were that company trading at $140 with a billion stock outstanding you could buy $150B for $140B. If that's too out there imagine a company making no profit and zero margins - the market cares about profit more than revenue. There are other factors (brand etc) but in this, also simplified analysis, the $150B is priced in. Again, if it weren't, you could buy a loss making company for pennies even if it had $150B in cash. ( or securities etc).
And this price should not vary. It can't be based on sentiment - like brand or goodwill. Or estimations of future growth. It has to be always priced in. This isn't about DEDs article but the commentators encouraging a buy back. That's a loss of "firepower" to buy acquisitions, join patent consortiums and all for money which will effectively "disappear" into a stock price which won't even increase, only to appear as cash again if Apple issues new stock, which is a stupid way to acquire company's etc.
It´s the money that´s Apples biggest problem. Apples Business is worth much more than a PE of 13. But the PE is calculated against the whole of Apple, which means $150 of that is dead cash. And dead cash is punished in terms of PE. Had Apple done followed Icahn example, not only would AAPL increase its share price to 750 - that is just based on EPS model. But Apples business would also be priced at a much higher PE as well.
Make no mistake about it, excess cash is penalised by Wall Street. The current $150b is barely making 1% appreciation currently, that gives you a *terrible* PE sole based on the cash.
I´m sure Tim Cook and Apples board knows this, and will make adjustments come january 2014. They love sitting on cash, but they hate the fact that it´s starting to drag the PE/Business valuation down so much more. Time to take action.
Thanks. That's the first explanation which explains why cash may be worth less than stock. Cash doesn't earn that much cash and has negligible p/e.
So I have now changed my opinion. Apple should buy back with half it's reserves keeping the rest for firepower.
So I have now changed my opinion. Apple should buy back with half it's reserves keeping the rest for firepower.
Not so fast. Most of Apple's cash is abroad, and it would incur a massive (up to 35%) tax bill if brought back. That would be silly to do.
People are misrepresenting or misunderstanding the p/e argument. First, in any valuation, Step 0 is, you set the cash aside, and value only the operating asset; the cash, which is assumed to be worth no more than cash, is simply added back at the end to get the aggregate market cap. Any half-way decent analyst would take a that into account in his/her valuation.
Second, Apple's ex-cash p/e actually looks worse that the p/e including cash; i.e., the market is undervaluing Apple's operating assets even MORE than we think. Here's a simple example. Suppose a company has no debt (i.e., it's all equity financed), and it has a market cap of $150 that includes $50 in cash. In other words, its operating assets are valued by the market at $100. Assume the company has $10 in earnings, all of it from the operating assets (i.e., cash produces zero returns).
What is the company's p/e including cash? 150/10 = 15x.
What is its p/e if we exclude the cash? (150 - 50)/10 = 10x.
This is Apple's situation currently. Bottom line is, the market is placing a huge discount on Apple's ability to create value from future growth from its operating assets and innovation. In this context, a big cash pile can be a bad thing because it can exacerbate this perception: it can signal to the market that the company has no plans, ambition, or opportunities to invest to create value from future growth. (This latter point is the one important reason to give away the cash. However, I do not believe it applies to Apple.)
What we have here is a simple case of Apple being undervalued relative to its intrinsic value. It happens all the time. If you believe that to be the case, as I do (and as many value investors, such as Bill Miller at Legg Mason, do) just buy and hold, and forget about it for a few years. The rest is noise.
To add to the above, at the end of the day, there is no getting around the fact that Apple has to do a far better job of communicating to, and managing the the expectations of, the market. To keep saying 'incredible' gazillions of times or just referring to 'some incredible products we are working on and have in the pipeline' is just trite. Every company says that.
Someone at Apple -- at a minimum, the CFO -- has to communicate grander sense of its vision. Say what you will about Amazon (I happen to think its valuation is nuts), but Bezos is a master at that.
You write a lot of great stuff. But on this one, you're out to lunch, especially when you make sweeping statements like the one I've underlined above.
Please learn the difference between value (what Constable Odo is implicitly referring to), and price (which is what you're referring to). In a market that is efficient, the two should, indeed, be equal.
I said the current stock price is "not a 'true' valuation of the company" in the context of changing stock prices. If AAPL is $500, you can calculate a market cap, but if you started buying up those shares with a $500B war chest, that would dynamically change the valuation of the company. So it’s not a true, fixed value, but rather just an extrapolation of market valuation based on the latest stock price multiplied by outstanding shares. Apple’s market valuation jumped back and forth between ~$380B and $700B over the past year. That’s a pretty shifty "truth." Reality is that value and price are different, and the whole game is trying to outthink others on either a short term of day trading, a medium term of shifting around stock, or as a long term investment, each of which is played very differently. And all the games are going on at once, making things look pretty irrational at any given moment.
I said the current stock price is "not a 'true' valuation of the company" in the context of changing stock prices. If AAPL is $500, you can calculate a market cap, but if you started buying up those shares with a $500B war chest, that would dynamically change the valuation of the company. So it’s not a true, fixed value, but rather just an extrapolation of market valuation based on the latest stock price multiplied by outstanding shares. Apple’s market valuation jumped back and forth between ~$380B and $700B over the past year. That’s a pretty shifty "truth." Reality is that value and price are different, and the whole game is trying to outthink others on either a short term of day trading, a medium term of shifting around stock, or as a long term investment, each of which is played very differently. And all the games are going on at once, making things look pretty irrational at any given moment.
You appear to be conflating 'true' with 'fixed.' Value changes all the time, as new information comes in, new realities emerge.
The fact that Apple's stock price fell was predictable. It is quite consistent with Apple's fundamentals: Apple's earnings fell approximately 10% during 2012-13, along with the market's sense (rightly or wrongly -- rightly, in my view) that increasing competition from Samsung was lowering margins and that (again, rightly or wrongly -- wrongly in my view) Apple had stopped 'innovating.' Put everything together, and add to it the fact that the 'wins' needed to sustain stock price growth at Apple's market cap are dramatically higher (i.e., the fact that a $40B gain in revenue when you're a $80B company is a 100% gain, while a $40B gain when you're $480B company is an 8.3% gain), and we can understand why the stock price fell.
Granted, the $700/share (not 'B') on the upside and $380/share on the downside might both have been over-reactions, but the 'market' got Apple's fundamentals directionally right. That is simply a fact.
Your conspiracy theories about things being a 'game' are just that: conspiracy theories. People bandy that around all the time, with zero evidence. You, of all people, who excoriate others for forming judgments without facts should not throw opinions around without evidence.
As an aside, day trading in Apple's stock amounts to a hill of beans in terms of either price or value. Moreover, Apple is far from the only stock to get day-traded. So that point is not at all relevant.
You appear to be conflating 'true' with 'fixed.' Value changes all the time, as new information comes in, new realities emerge.
The fact that Apple's stock price fell was predictable. It is quite consistent with Apple's fundamentals: Apple's earnings fell approximately 10% during 2012-13, along with the market's sense (rightly or wrongly -- rightly, in my view) that increasing competition from Samsung was lowering margins and that (again, rightly or wrongly -- wrongly in my view) Apple had stopped 'innovating.' Put everything together, and add to it the fact that the 'wins' needed to sustain stock price growth at Apple's market cap are dramatically higher (i.e., the fact that a $40B gain in revenue when you're a $80B company is a 100% gain, while a $40B gain when you're $480B company is an 8.3% gain), and we can understand why the stock price fell.
Granted, the $700/share (not 'B') on the upside and $380/share on the downside might both have been over-reactions, but the 'market' got Apple's fundamentals directionally right. That is simply a fact.
Your conspiracy theories about things being a 'game' are just that: conspiracy theories. People bandy that around all the time, with zero evidence. You, of all people, who excoriate others for forming judgments without facts should not throw opinions around without evidence.
As an aside, day trading in Apple's stock amounts to a hill of beans in terms of either price or value. Moreover, Apple is far from the only stock to get day-traded. So that point is not at all relevant.
You keep using phrases that have never been used in the way you are inventing. Saying the various ways to play the stock market are overlapping games is not in any imaginable way a "conspiracy theory." Consult a dictionary. But your other facts are all wrong too.
Apple’s margins are far higher than Samsung, 2x or more. The idea that Apple had shifting margins (certainly not plunging) as it introduced new products and earned "only" $37B in FY 2013 compared to $41.6B in FY 2012 does not support a nearly halving of its market capitalization.
"Might have been over-reaction" might be a huge understatement. Look at 2008 and tell us if the market "got Apple's fundamentals directionally right," given they they were all over the place, and had absolutely nothing to do with Apple’s fundamentals.
Additionally, Apple’s big drop since Sept 2012 didn’t occur after lower results came in, but occured BEFORE (-31% over the blockbuster winter Q1 13 quarter) Apple released HIGHER Q1 results and continued trending downward after it released the highest Q1 results ever. The stock has since recovered as Apple released LOWER Q2/Q3/Q4 earnings.
So you can’t even say the market got anything "directionally right." It was simply always "directionally wrong."
Instead of accusing me of "throwing opinions around without evidence" you should be apologizing.
You keep using phrases that have never been used in the way you are inventing. Saying the various ways to play the stock market are overlapping games is not in any imaginable way a "conspiracy theory." Consult a dictionary. But your other facts are all wrong too.
Apple’s margins are far higher than Samsung, 2x or more. The idea that Apple had shifting margins (certainly not plunging) as it introduced new products and earned "only" $37B in FY 2013 compared to $41.6B in FY 2012 does not support a nearly halving of its market capitalization.
"Might have been over-reaction" might be a huge understatement. Look at 2008 and tell us if the market "got Apple's fundamentals directionally right," given they they were all over the place, and had absolutely nothing to do with Apple’s fundamentals.
Additionally, Apple’s big drop since Sept 2012 didn’t occur after lower results came in, but occured BEFORE (-31% over the blockbuster winter Q1 13 quarter) Apple released HIGHER Q1 results and continued trending downward after it released the highest Q1 results ever. The stock has since recovered as Apple released LOWER Q2/Q3/Q4 earnings.
So you can’t even say the market got anything "directionally right." It was simply always "directionally wrong."
Instead of accusing me of "throwing opinions around without evidence" you should be apologizing.
If I knew what I had to apologize for, I'd gladly do so. As it stands, your post above is a stream-of-consciousness rant that I am unable to deconstruct. I have no clue what you're saying here, in other words.
Maybe you can take a deep breath, gather your thoughts better, and post when you feel you are actually likely to make sense. I can help, if you're interested:
1) You brought up the notion that the market is a 'game', I didn't. Why don't you tell us, based on your having looked up a dictionary, what the word means?
2) Who said anything about -- or cares about -- Samsung's margins!? What does that have to do with Apple's lower margins, which is what I was addressing? Btw, was that the only factor affecting Apple's stock price that I referred to, or were there a couple of others?
3) The price today (~$520) is exactly directionally right vis-a-vis where AAPL was a year ago. If you can't see that, I don't know what to say.
4) Your reference to Apple's various quarters leads me to conclude that perhaps you're not exactly on top of how markets value assets. They give a hoot about happened on the past quarter or year. They focus on expectations relating to margins, risks, and growth from today to forever.
PS: While you're at it, you may also need to learn a bit about deferred revenues versus accrued expenses, and the notion that it is not the levels of those that matter, but the changes from one period to the next.
Yes, they're sitting on deferred revenue and Apple's share price will be the first to drop. Apple needs to cut out these twisted accounting methods and run their finances like every other company. Wall Street already has problems with understanding Apple's value. Why does Apple have to make it worse. Every financial trick Apple attempts backfires on them and shareholders always end up taking the brunt of share price decreases. Meanwhile, companies like Google and Amazon just play it straight and investors pour money into those companies. Apple's devious revenue tricks don't interest big investors at all. In fact, it probably scares them away because they think Apple is trying to pull a fast one on them to cover up some other losses. Big investors obviously have no interest in GAAP or Apple.
Keep changing your argument and I'll eventually tire of responding. Particularly when you evade everything I respond to and shift to a new thrust lubricated with abstract insults.
Yes, they're sitting on deferred revenue and Apple's share price will be the first to drop. Apple needs to cut out these twisted accounting methods and run their finances like every other company. Wall Street already has problems with understanding Apple's value. Why does Apple have to make it worse. Every financial trick Apple attempts backfires on them and shareholders always end up taking the brunt of share price decreases. Meanwhile, companies like Google and Amazon just play it straight and investors pour money into those companies. Apple's devious revenue tricks don't interest big investors at all. In fact, it probably scares them away because they think Apple is trying to pull a fast one on them to cover up some other losses. Big investors obviously have no interest in GAAP or Apple.
Depends on whether you believe companies exist for customers or shareholders.
Steve Jobs felt that Apple's success came from serving the former, even at the expense of the latter.
As a customer and not a practitioner of the religion of shareholder worship, I agree.
Yeah this article needs a healthy addendum. By GAAP principles, you can't recognize revenue until the product or service is delivered. It's not an option and it's not at the discretion of Apple, Microsoft or anyone else. Now, the accountants can certainly push the envelope of how they interpret the accounting rules, but it's not an infinite envelope.
A lot of Apple's deferred revenue comes from things like... service contracts, iTunes gift cards, or any variety of other things you pay for in advance and receive later. Johnny's aunt buys him a $50 iTunes gift card for Christmas... but that ain't revenue for the December quarter. It's deferred revenue. When Johnny downloads a $1.99 app then Apple gets to deduct $1.99 from deferred revenue and add $1.99 to current revenue along with the associated cost.
Which comes to point #2. Revenue and earnings are quite different things. I don't get the comparison between Apple's revenue and Google's earnings.
Comments
It's incorrect to say that the deferred revenue is pure profit. The deferred revenue has to offset the development costs which are amortized over the life of the products.
If you assume Apple's software margins are 50%, then only 50% of the deferred OS X revenue, for example, will become profit. The most of the rest will go to capitalized costs, mainly programmer's salaries.
You generally cannot capitalize salaries. You can capitalize freelancers and outside contractors.
No I read the article and my point still stands. The deferral is largely irrelevant as previous revenue has been deferred to this quarter. In any case the market is looking for future growth.
Also. Don't get so defensive DED, and at least post as yourself.
It´s the money that´s Apples biggest problem. Apples Business is worth much more than a PE of 13. But the PE is calculated against the whole of Apple, which means $150 of that is dead cash. And dead cash is punished in terms of PE. Had Apple done followed Icahn example, not only would AAPL increase its share price to 750 - that is just based on EPS model. But Apples business would also be priced at a much higher PE as well.
Make no mistake about it, excess cash is penalised by Wall Street. The current $150b is barely making 1% appreciation currently, that gives you a *terrible* PE sole based on the cash.
I´m sure Tim Cook and Apples board knows this, and will make adjustments come january 2014. They love sitting on cash, but they hate the fact that it´s starting to drag the PE/Business valuation down so much more. Time to take action.
I fully understand that company is "sick". It was a simplified thought experiment. Were that company trading at $140 with a billion stock outstanding you could buy $150B for $140B. If that's too out there imagine a company making no profit and zero margins - the market cares about profit more than revenue. There are other factors (brand etc) but in this, also simplified analysis, the $150B is priced in. Again, if it weren't, you could buy a loss making company for pennies even if it had $150B in cash. ( or securities etc).
And this price should not vary. It can't be based on sentiment - like brand or goodwill. Or estimations of future growth. It has to be always priced in. This isn't about DEDs article but the commentators encouraging a buy back. That's a loss of "firepower" to buy acquisitions, join patent consortiums and all for money which will effectively "disappear" into a stock price which won't even increase, only to appear as cash again if Apple issues new stock, which is a stupid way to acquire company's etc.
Keep the money.
Thanks. That's the first explanation which explains why cash may be worth less than stock. Cash doesn't earn that much cash and has negligible p/e.
So I have now changed my opinion. Apple should buy back with half it's reserves keeping the rest for firepower.
Not so fast. Most of Apple's cash is abroad, and it would incur a massive (up to 35%) tax bill if brought back. That would be silly to do.
People are misrepresenting or misunderstanding the p/e argument. First, in any valuation, Step 0 is, you set the cash aside, and value only the operating asset; the cash, which is assumed to be worth no more than cash, is simply added back at the end to get the aggregate market cap. Any half-way decent analyst would take a that into account in his/her valuation.
Second, Apple's ex-cash p/e actually looks worse that the p/e including cash; i.e., the market is undervaluing Apple's operating assets even MORE than we think. Here's a simple example. Suppose a company has no debt (i.e., it's all equity financed), and it has a market cap of $150 that includes $50 in cash. In other words, its operating assets are valued by the market at $100. Assume the company has $10 in earnings, all of it from the operating assets (i.e., cash produces zero returns).
What is the company's p/e including cash? 150/10 = 15x.
What is its p/e if we exclude the cash? (150 - 50)/10 = 10x.
This is Apple's situation currently. Bottom line is, the market is placing a huge discount on Apple's ability to create value from future growth from its operating assets and innovation. In this context, a big cash pile can be a bad thing because it can exacerbate this perception: it can signal to the market that the company has no plans, ambition, or opportunities to invest to create value from future growth. (This latter point is the one important reason to give away the cash. However, I do not believe it applies to Apple.)
What we have here is a simple case of Apple being undervalued relative to its intrinsic value. It happens all the time. If you believe that to be the case, as I do (and as many value investors, such as Bill Miller at Legg Mason, do) just buy and hold, and forget about it for a few years. The rest is noise.
Someone at Apple -- at a minimum, the CFO -- has to communicate grander sense of its vision. Say what you will about Amazon (I happen to think its valuation is nuts), but Bezos is a master at that.
You write a lot of great stuff. But on this one, you're out to lunch, especially when you make sweeping statements like the one I've underlined above.
Please learn the difference between value (what Constable Odo is implicitly referring to), and price (which is what you're referring to). In a market that is efficient, the two should, indeed, be equal.
I said the current stock price is "not a 'true' valuation of the company" in the context of changing stock prices. If AAPL is $500, you can calculate a market cap, but if you started buying up those shares with a $500B war chest, that would dynamically change the valuation of the company. So it’s not a true, fixed value, but rather just an extrapolation of market valuation based on the latest stock price multiplied by outstanding shares. Apple’s market valuation jumped back and forth between ~$380B and $700B over the past year. That’s a pretty shifty "truth." Reality is that value and price are different, and the whole game is trying to outthink others on either a short term of day trading, a medium term of shifting around stock, or as a long term investment, each of which is played very differently. And all the games are going on at once, making things look pretty irrational at any given moment.
I said the current stock price is "not a 'true' valuation of the company" in the context of changing stock prices. If AAPL is $500, you can calculate a market cap, but if you started buying up those shares with a $500B war chest, that would dynamically change the valuation of the company. So it’s not a true, fixed value, but rather just an extrapolation of market valuation based on the latest stock price multiplied by outstanding shares. Apple’s market valuation jumped back and forth between ~$380B and $700B over the past year. That’s a pretty shifty "truth." Reality is that value and price are different, and the whole game is trying to outthink others on either a short term of day trading, a medium term of shifting around stock, or as a long term investment, each of which is played very differently. And all the games are going on at once, making things look pretty irrational at any given moment.
You appear to be conflating 'true' with 'fixed.' Value changes all the time, as new information comes in, new realities emerge.
The fact that Apple's stock price fell was predictable. It is quite consistent with Apple's fundamentals: Apple's earnings fell approximately 10% during 2012-13, along with the market's sense (rightly or wrongly -- rightly, in my view) that increasing competition from Samsung was lowering margins and that (again, rightly or wrongly -- wrongly in my view) Apple had stopped 'innovating.' Put everything together, and add to it the fact that the 'wins' needed to sustain stock price growth at Apple's market cap are dramatically higher (i.e., the fact that a $40B gain in revenue when you're a $80B company is a 100% gain, while a $40B gain when you're $480B company is an 8.3% gain), and we can understand why the stock price fell.
Granted, the $700/share (not 'B') on the upside and $380/share on the downside might both have been over-reactions, but the 'market' got Apple's fundamentals directionally right. That is simply a fact.
Your conspiracy theories about things being a 'game' are just that: conspiracy theories. People bandy that around all the time, with zero evidence. You, of all people, who excoriate others for forming judgments without facts should not throw opinions around without evidence.
As an aside, day trading in Apple's stock amounts to a hill of beans in terms of either price or value. Moreover, Apple is far from the only stock to get day-traded. So that point is not at all relevant.
You appear to be conflating 'true' with 'fixed.' Value changes all the time, as new information comes in, new realities emerge.
The fact that Apple's stock price fell was predictable. It is quite consistent with Apple's fundamentals: Apple's earnings fell approximately 10% during 2012-13, along with the market's sense (rightly or wrongly -- rightly, in my view) that increasing competition from Samsung was lowering margins and that (again, rightly or wrongly -- wrongly in my view) Apple had stopped 'innovating.' Put everything together, and add to it the fact that the 'wins' needed to sustain stock price growth at Apple's market cap are dramatically higher (i.e., the fact that a $40B gain in revenue when you're a $80B company is a 100% gain, while a $40B gain when you're $480B company is an 8.3% gain), and we can understand why the stock price fell.
Granted, the $700/share (not 'B') on the upside and $380/share on the downside might both have been over-reactions, but the 'market' got Apple's fundamentals directionally right. That is simply a fact.
Your conspiracy theories about things being a 'game' are just that: conspiracy theories. People bandy that around all the time, with zero evidence. You, of all people, who excoriate others for forming judgments without facts should not throw opinions around without evidence.
As an aside, day trading in Apple's stock amounts to a hill of beans in terms of either price or value. Moreover, Apple is far from the only stock to get day-traded. So that point is not at all relevant.
You keep using phrases that have never been used in the way you are inventing. Saying the various ways to play the stock market are overlapping games is not in any imaginable way a "conspiracy theory." Consult a dictionary. But your other facts are all wrong too.
Apple’s margins are far higher than Samsung, 2x or more. The idea that Apple had shifting margins (certainly not plunging) as it introduced new products and earned "only" $37B in FY 2013 compared to $41.6B in FY 2012 does not support a nearly halving of its market capitalization.
"Might have been over-reaction" might be a huge understatement. Look at 2008 and tell us if the market "got Apple's fundamentals directionally right," given they they were all over the place, and had absolutely nothing to do with Apple’s fundamentals.
Additionally, Apple’s big drop since Sept 2012 didn’t occur after lower results came in, but occured BEFORE (-31% over the blockbuster winter Q1 13 quarter) Apple released HIGHER Q1 results and continued trending downward after it released the highest Q1 results ever. The stock has since recovered as Apple released LOWER Q2/Q3/Q4 earnings.
So you can’t even say the market got anything "directionally right." It was simply always "directionally wrong."
Instead of accusing me of "throwing opinions around without evidence" you should be apologizing.
If I knew what I had to apologize for, I'd gladly do so. As it stands, your post above is a stream-of-consciousness rant that I am unable to deconstruct. I have no clue what you're saying here, in other words.
Maybe you can take a deep breath, gather your thoughts better, and post when you feel you are actually likely to make sense. I can help, if you're interested:
1) You brought up the notion that the market is a 'game', I didn't. Why don't you tell us, based on your having looked up a dictionary, what the word means?
2) Who said anything about -- or cares about -- Samsung's margins!? What does that have to do with Apple's lower margins, which is what I was addressing? Btw, was that the only factor affecting Apple's stock price that I referred to, or were there a couple of others?
3) The price today (~$520) is exactly directionally right vis-a-vis where AAPL was a year ago. If you can't see that, I don't know what to say.
4) Your reference to Apple's various quarters leads me to conclude that perhaps you're not exactly on top of how markets value assets. They give a hoot about happened on the past quarter or year. They focus on expectations relating to margins, risks, and growth from today to forever.
PS: While you're at it, you may also need to learn a bit about deferred revenues versus accrued expenses, and the notion that it is not the levels of those that matter, but the changes from one period to the next.
Keep changing your argument and I'll eventually tire of responding. Particularly when you evade everything I respond to and shift to a new thrust lubricated with abstract insults.
Stock predators only consider the last quarter and how they can exploit it.
They would not care at all if making $50 / share ran a company out of business.
They "make" money while apple makes "things". Who contributes more to society?
Depends on whether you believe companies exist for customers or shareholders.
Steve Jobs felt that Apple's success came from serving the former, even at the expense of the latter.
As a customer and not a practitioner of the religion of shareholder worship, I agree.
A lot of Apple's deferred revenue comes from things like... service contracts, iTunes gift cards, or any variety of other things you pay for in advance and receive later. Johnny's aunt buys him a $50 iTunes gift card for Christmas... but that ain't revenue for the December quarter. It's deferred revenue. When Johnny downloads a $1.99 app then Apple gets to deduct $1.99 from deferred revenue and add $1.99 to current revenue along with the associated cost.
Which comes to point #2. Revenue and earnings are quite different things. I don't get the comparison between Apple's revenue and Google's earnings.
apple is still going well without jobs