KGI: iPhone sales forecast at 54M in Q3, Apple Watch demand 'tepid' at 4M shipped units

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  • Reply 61 of 115
    tmaytmay Posts: 3,844member
    Quote:

    Originally Posted by Gatorguy View Post





    They report both GAAP and non-GAAP don't they?



    https://investor.google.com/earnings/2015/Q1_google_earnings.html



    ...well yes they do.



    As far as it being frustrating to play in the stock market it would be for me. Apparently you play along with the gaming and understand it so what's so frustrating about it for you? There's lots of investment opportunities paying better than Apple at the moment if you understand how to play, right? Surely you aren't tying your fortunes to Apple stock. If not what does it matter if Apple doesn't skyrocket at every earnings release. You profit if Google skyrockets or Microsoft skyrockets if I understood one of your posts from Friday.



    As the professional investor as you claim to be Google's stock performance should have made you pretty darn happy instead of frustrated. It didn't hurt your Apple holding in any way did it? Now you've got the Apple announcement to look forward to. It's a good month right?

    If Apple is "cheap" that would be a buying opportunity. If Google or MS  "skyrockets", then Apple is even a better buy.

     

    As for the Watch, Apple is a player, and looks to see a decent revenue from it.

     

    The only "cloud" I see on the horizon is the anti-trust investigation by the FTC of Apple's 30% take on streaming subscriptions of competitors. The FTC will have to portray Apple as wielding the leverage in its market of a monopoly, even though it does not in any way actually enjoy near the market share of a monopoly, and has a minority ecosystem.

     

    I would ask whether Apple should be penalized for its strong brand, and its many years of effort negotiating with media rights holders to create the framework that is standard for all the competitors. I think the FTC would like to penalize Apple for actively supporting the elimination of advertising supported music, even though this is in fact what the media rights holders would like to happen anyway.

     

    Just waiting for the "collusion" words to come out of the FTC wrt streaming music.

  • Reply 62 of 115
    tmaytmay Posts: 3,844member
    Quote:
    Originally Posted by Dick Applebaum View Post





    I don't mean to single you out, but there is great potential for health and wellness monitoring/prevention with the Apple Watch -- and the Watch Sensors are now open to developers.



    Consider that 30% of the US population has high blood pressure -- ~100 million people.



    Consider that 10% of the US population has diabetes -- ~30 million people.



    These are potential [non-geek, non-fashion] users of the Apple Watch.



    There are already 3rd-party testing/monitoring devices that interface the iPhone & soon will interface the Apple Watch.



    I suspect that the next Apple Watch and/or 3rd-party devices will greatly extend the health and wellness monitoring/prevention capability.





    Then, there's the whole dietary intake potential. What if you could tell your Apple Watch that you are treating yourself to In-N-Out: Fries, Vanilla Shake, Burger -- Animal Style. And the Watch (via the iPhone) could retrieve the dietary breakdown (Calories, Fat, Sodium, etc.) of the meal and save it along with your fitness information -- and suggest activities to compensate for your treat.



    I have high blood pressure and take 6 different meds for that, plus a special diet. I recently had the 2nd of 2 eye cataract surgeries ... I take two different eyedrops 4 times per day (first week). After that, 1 drop three times a day for a week ... two times a day for a week ... once per day for a week ...



    Its easy to get confused with diet, meds, eyedrops -- not to mention doctor/hospital visits, etc. (I depend on my daughter for transportation). We use a shared calendar on our Macs/iPads and Apple Watches.to coordinate all this ... It's kinda' kludgey, but it works! Now that I can see again, I think I'll take a stab at writing a couple of specific Watch/iPhone apps to make this easier.





    My whole point here is that I believe the Apple Watch has much, much more potential than the iPad and iPhone that preceded it.

    While I'm writing this, the Haas machining centers in my shop are cranking out parts. Wouldn't it be nice it my watch could track my production and alert me when my parts are ready to change? How about an Industrial kit Apple?

     

    It isn't hard to imagine that a smartwatch could make industrial production much more efficient, but it would also go along way towards monitoring workers in hazardous environments. When I was much younger, I worked summers fighting wildfire. Now its common not only to have repeaters on fires for two way radios, but cell towers placed strategically for larger fires to reduce and maintain the two way radio traffic strictly for critical operations. A watch would go one step further and allow monitoring an individual's life signs for physical stress, and also provide alerts to hazards, especially weather/wind changes that are notable for fireline fatalities. Time is always critical in these situations.

     

    I agree with you; I don't think the the first generation Watch has come anywhere close to tapping its future potential.

  • Reply 63 of 115
    gatorguy wrote: »
    They report both GAAP and non-GAAP don't they?

    https://investor.google.com/earnings/2015/Q2_google_earnings.html

    ...well yes they do.

    Not implying anything about non-GAAP measures -- they're fine as long as they're clearly explained and defined, and appropriate comparisons made to prior years using similar definitions -- but it's interesting to note that Apple reports no non-GAAP measures afaik.

    If I am right about this, that takes a lot of discipline, and suggests the company just plays by the book, no more no less.
  • Reply 64 of 115
    gatorguygatorguy Posts: 20,918member
    Not implying anything about non-GAAP measures -- they're fine as long as they're clearly explained and defined, and appropriate comparisons made to prior years using similar definitions -- but it's interesting to note that Apple reports no non-GAAP measures afaik.
    At one point they did, 2008-2010.. That changed in 2010 because they were required to AFAIK, tho I could certainly be misunderstanding. I'm no seasoned investor. .

    EDIT: There's an article here that includes discussion of it.
    http://betanews.com/2010/01/26/once-you-dig-deeper-apple-s-record-quarter-is-not-so-impressive/#comments

    "In September (2009?), the Financial Accounting Standards Board revised GAAP to Apple's benefit. Under older rules, Apple had to defer most iPhone, iPod touch and Apple TV revenue for 24 months. Subscription accounting rules mandated that Apple had to recognize most of the revenue over time rather than in the quarter realized from sales. According to Piper Jaffray analyst Gene Munster, Apple reported $78 per iPhone each quarter, deferring $595 per device per quarter. Under the new rules, which must be adopted before 2011, Apple could realize most of the revenue during the quarter of sale. Apple plans to defer $25 per iPhone and $10 per Apple TV per quarter.

    Apple is following the new GAAP rules as it is required to."
  • Reply 65 of 115
    The watch is gonna be tremendously well positioned for Christmas. But I think the real surprise will be Christmas 2016. Watch for it!
  • Reply 66 of 115
    rogifanrogifan Posts: 10,669member
    The watch is gonna be tremendously well positioned for Christmas. But I think the real surprise will be Christmas 2016. Watch for it!

    it's amazing how Wall Street has no problem playing the long game with companies like Amazon but with Apple it's always what have you done for me lately and when Apple does deliver it then gets penalized because analysts don't think they can do it again. Weaker iPhone sales are D&G but then record iPhone sales are too because of "tougher comps". It's basically heads I win tails you lose.
  • Reply 67 of 115
    tmaytmay Posts: 3,844member
    Quote:
    Originally Posted by Gatorguy View Post





    At one point they did, 2008-2010.. That changed in 2010 because they were required to AFAIK, tho I could certainly be misunderstanding. I'm no seasoned investor. .



    EDIT: There's an article here that includes discussion of it.

    "In September (2009?), the Financial Accounting Standards Board revised GAAP to Apple's benefit. Under older rules, Apple had to defer most iPhone, iPod touch and Apple TV revenue for 24 months. Subscription accounting rules mandated that Apple had to recognize most of the revenue over time rather than in the quarter realized from sales. According to Piper Jaffray analyst Gene Munster, Apple reported $78 per iPhone each quarter, deferring $595 per device per quarter. Under the new rules, which must be adopted before 2011, Apple could realize most of the revenue during the quarter of sale. Apple plans to defer $25 per iPhone and $10 per Apple TV per quarter.



    Apple is following the new GAAP rules as it is required to.

    http://betanews.com/2010/01/26/once-you-dig-deeper-apple-s-record-quarter-is-not-so-impressive/#comments

    It's humorous that the link you posted seems to be very negative towards Apple in how it handled the changes and the posters (generally) had to push Mr. Wilcox to clarify his writing to support the facts and acknowledge specifically that Apple had not "surprised" anyone with the accounting change during that quarter.

     

    Mr. Wilcox doesn't appear to have all his journalism ducks in a row as it were.

     

    Edit;.( i accidentally erased part of the following response prior to post; I have corrected that)

     

    I'm certain that you didn't select this singular article to link specific to your opinions.

  • Reply 68 of 115
    gatorguygatorguy Posts: 20,918member
    tmay wrote: »
    It's humorous that the link you posted seems to be very negative towards Apple in how it handled the changes and the posters (generally) had to push Mr. Wilcox to clarify his writing to support the facts and acknowledge specifically that Apple had not "surprised" anyone with the accounting change during that quarter.

    Mr. Wilcox doesn't appear to have all his journalism ducks in a row as it were.

    I'm certain that you didn't select this singular article to link specific
    Its the first one I came across. Feel free to link a different article that explains it in terms you like better. I didn't see one right off.

    EDIT: Here ya go. This one should please you more. It still points out that Apple's accounting change was because of requirements, tho one Apple lobbied for along with a few other companies;
    http://fortune.com/2009/09/24/apples-2009-earnings-up-nearly-44-under-new-accounting-rules-analyst/
    http://fortune.com/2009/09/14/accounting-rule-change-in-apples-favor/
  • Reply 69 of 115
    tmaytmay Posts: 3,844member
    Quote:
    Originally Posted by Gatorguy View Post





    Its the first one I came across. Feel free to link a different article that explains it in terms you like better. I didn't see one right off.

    Nah, it isn't even an issue.

     

    I just thought it was funny how Mr. Wilcox was being chastised as an MS fanboy (by a few posters) for his poor journalism. Even now I come across MS fanboys touting how Windows 10 is the premier ecosystem and how that will change everything. Maybe, but it's unlikely that it will take any share from either Apple or Google in mobile. That ship has sailed. Best that MS bulk up its Office/Azure offering for iOS and Android OS.

  • Reply 70 of 115
    gatorguy wrote: »
    At one point they did, 2008-2010.. That changed in 2010 because they were required to AFAIK, tho I could certainly be misunderstanding. I'm no seasoned investor. .

    EDIT: There's an article here that includes discussion of it.
    http://betanews.com/2010/01/26/once-you-dig-deeper-apple-s-record-quarter-is-not-so-impressive/#comments

    "In September (2009?), the Financial Accounting Standards Board revised GAAP to Apple's benefit. Under older rules, Apple had to defer most iPhone, iPod touch and Apple TV revenue for 24 months. Subscription accounting rules mandated that Apple had to recognize most of the revenue over time rather than in the quarter realized from sales. According to Piper Jaffray analyst Gene Munster, Apple reported $78 per iPhone each quarter, deferring $595 per device per quarter. Under the new rules, which must be adopted before 2011, Apple could realize most of the revenue during the quarter of sale. Apple plans to defer $25 per iPhone and $10 per Apple TV per quarter.

    Apple is following the new GAAP rules as it is required to."

    Yes, you're misinterpreting it. In a major way.

    Apple reported its iPhone sales from 2007-2010 based on what it thought was the appropriate GAAP-based revenue recognition principle then. This was necessitated by the fact that most iPhones were bought on installment plans from ATT. Although ATT paid Apple cash up front for the cost of the iPhone, Apple thought it would be prudent to count only a portion of it as revenue, and recognize the rest as revenue over the next seven quarters. (This is similar to the 'percent completion' revenue recognition rule used in construction contracts).

    As a result, Apple's true revenue and income were understated in a significant way.

    Resulting from a newer interpretation in 2010, Apple decided to recognize much more of the revenue up front. (There is still a portion that is recognized over the next seven quarters, to account for the possibility of default on two-year cell phone contracts).

    Apple was simply being conservative, and entirely within GAAP rules. In other words, there has been, afaik, no non-GAPP reporting on Apple's part.
  • Reply 71 of 115
    gatorguygatorguy Posts: 20,918member
    Yes, you're misinterpreting it. In a major way.

    Apple reported its iPhone sales from 2007-2010 based on what it thought was the appropriate GAAP-based revenue recognition principle then. This was necessitated by the fact that most iPhones were bought on installment plans from ATT. Although ATT paid Apple cash up front for the cost of the iPhone, Apple thought it would be prudent to count only a portion of it as revenue, and recognize the rest as revenue over the next seven quarters. (This is similar to the 'percent completion' revenue recognition rule used in construction contracts).

    As a result, Apple's true revenue and income were understated in a significant way.

    Resulting from a newer into interpretation in 2010, Apple decided to recognize much more of the revenue up front. (There is still a portion that is recognized over the next seven quarters, to account for the possibility of default on two-year cell phone contracts).

    Apple was simply being conservative, and entire within GAAP rules. In other words, there has been, afaik, no non-GAPP reporting on Apple's part.

    Currently? I agree. Previous to 2010? Yes sir they did.

    "In accordance with the subscription accounting treatment required by GAAP, the Company recognizes revenue and cost of goods sold for iPhone™ and Apple TV® over their estimated economic lives. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures* for the quarter are $12.25 billion of “Adjusted Sales” and $2.85 billion of “Adjusted Net Income.”
    https://www.apple.com/pr/library/2009/10/19Apple-Reports-Fourth-Quarter-Results.html
  • Reply 72 of 115
    anantksundaramanantksundaram Posts: 19,302member
    gatorguy wrote: »

    EDIT: Here ya go. This one should please you more. It still points out that Apple's accounting change was because of requirements, tho one Apple lobbied for along with a few other companies;
    http://fortune.com/2009/09/24/apples-2009-earnings-up-nearly-44-under-new-accounting-rules-analyst/
    http://fortune.com/2009/09/14/accounting-rule-change-in-apples-favor/

    Nonsense. No one 'lobbies' for accounting rules. There is a very careful and deliberate process, and it's not the government that decides, but something called the Financial Accounting Standrads Board (FASB), which comprises CPAs, academics, accounting firms, etc.

    Anyone can submit an opinion on what they think is most effective way of communicating to investors. The FASB can reject it or adopt it, depending on whether they believe it makes logical sense from an accounting viewpoint. Period.
  • Reply 73 of 115
    tmaytmay Posts: 3,844member
    Quote:

    Originally Posted by Gatorguy View Post





    At one point they did, 2008-2010.. That changed in 2010 because they were required to AFAIK, tho I could certainly be misunderstanding. I'm no seasoned investor. .



    EDIT: There's an article here that includes discussion of it.

    http://betanews.com/2010/01/26/once-you-dig-deeper-apple-s-record-quarter-is-not-so-impressive/#comments



    "In September (2009?), the Financial Accounting Standards Board revised GAAP to Apple's benefit. Under older rules, Apple had to defer most iPhone, iPod touch and Apple TV revenue for 24 months. Subscription accounting rules mandated that Apple had to recognize most of the revenue over time rather than in the quarter realized from sales. According to Piper Jaffray analyst Gene Munster, Apple reported $78 per iPhone each quarter, deferring $595 per device per quarter. Under the new rules, which must be adopted before 2011, Apple could realize most of the revenue during the quarter of sale. Apple plans to defer $25 per iPhone and $10 per Apple TV per quarter.



    Apple is following the new GAAP rules as it is required to."

     

    Apple may have been "required to AFAIK" but as your second link states, Apple and other companies with software portfolios lobbied to make that happen. That certainly changes the context of your post.

  • Reply 74 of 115
    tmaytmay Posts: 3,844member
    Quote:

    Originally Posted by anantksundaram View Post





    Nonsense. No one 'lobbies' for accounting rules. There is a very careful and deliberate process, and it's not the government that decides, but something called the Financial Accounting Standrads Board (FASB), which comprises CPAs, academics, accounting firms, etc.



    Anyone can submit an opinion on what they think is most effective way of communicating to investors. The FASB can reject it or adopt it, depending on whether they believe it makes logical sense from an accounting viewpoint. Period.

    Maybe "lobbied" isn't the correct word, but Apple, et al, might have been involved in discussions with FASB to consider that change. It's not like it has any significant effect on long term revenue, just a more granular approach to accounting.

  • Reply 75 of 115
    anantksundaramanantksundaram Posts: 19,302member
    gatorguy wrote: »
    Yes, you're misinterpreting it. In a major way.

    Apple reported its iPhone sales from 2007-2010 based on what it thought was the appropriate GAAP-based revenue recognition principle then. This was necessitated by the fact that most iPhones were bought on installment plans from ATT. Although ATT paid Apple cash up front for the cost of the iPhone, Apple thought it would be prudent to count only a portion of it as revenue, and recognize the rest as revenue over the next seven quarters. (This is similar to the 'percent completion' revenue recognition rule used in construction contracts).

    As a result, Apple's true revenue and income were understated in a significant way.

    Resulting from a newer into interpretation in 2010, Apple decided to recognize much more of the revenue up front. (There is still a portion that is recognized over the next seven quarters, to account for the possibility of default on two-year cell phone contracts).

    Apple was simply being conservative, and entire within GAAP rules. In other words, there has been, afaik, no non-GAPP reporting on Apple's part.

    Currently? I agree. Previous to 2010? Yes sir they did.

    "In accordance with the subscription accounting treatment required by GAAP, the Company recognizes revenue and cost of goods sold for iPhone™ and Apple TV® over their estimated economic lives. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures* for the quarter are $12.25 billion of “Adjusted Sales” and $2.85 billion of “Adjusted Net Income.”
    https://www.apple.com/pr/library/2009/10/19Apple-Reports-Fourth-Quarter-Results.html

    Fair enough. Good find. (Interesting to see, however, that this non-GAAP measure subsequently became the GAAP measure!).
  • Reply 76 of 115
    anantksundaramanantksundaram Posts: 19,302member
    tmay wrote: »

    Maybe "lobbied" isn't the correct word, but Apple, et al, might have been involved in discussions with FASB to consider that change. It's not like it has any significant effect on long term revenue, just a more granular approach to accounting.

    Most certainly Apple had discussions with them. That would be no different from you and I having a discussion with them. The only thing that would prevail would be, 'who had a better argument.'
  • Reply 77 of 115
    gatorguygatorguy Posts: 20,918member
    Nonsense. No one 'lobbies' for accounting rules..
    You should read more.
    "While Steve Jobs was preparing to introduce the new Apple iPod nano last week, the company’s chief accountant, Betsy Rafael, was sending off a second letter to the Financial Accounting Standards Board related to revenue recognition. At issue: how FASB might rework the rules related to recognizing revenue for software that’s bundled into a product and never sold separately."
    http://ww2.cfo.com/accounting-tax/2009/09/new-revenue-recognition-rules-the-apple-of-apples-eye/

    And here are the presumably "imaginary" letters sent to the FASB lobbying for the change:
    http://www.fasb.org/cs/BlobServer?blobkey=id&blobnocache=true&blobwhere=1175819517064&blobheader=application/pdf&blobheadername2=Content-Length&blobheadername1=Content-Disposition&blobheadervalue2=2548052&blobheadervalue1=filename=0015-_EITF08010903_APPLE_RAFAEL.pdf&blobcol=urldata&blobtable=MungoBlobs

    http://www.fasb.org/cs/BlobServer?blobkey=id&blobnocache=true&blobwhere=1175819517003&blobheader=application/pdf&blobheadername2=Content-Length&blobheadername1=Content-Disposition&blobheadervalue2=915781&blobheadervalue1=filename=0015A-_EITF08010903_APPLE_Rafael.pdf&blobcol=urldata&blobtable=MungoBlobs

    FWIW the first letter alludes to conversations Apple had with the FASB prior to the request for comments that Apple submitted a written response to.
  • Reply 78 of 115
    anantksundaramanantksundaram Posts: 19,302member
    gatorguy wrote: »
    You should read more.
    "While Steve Jobs was preparing to introduce the new Apple iPod nano last week, the company’s chief accountant, Betsy Rafael, was sending off a second letter to the Financial Accounting Standards Board related to revenue recognition. At issue: how FASB might rework the rules related to recognizing revenue for software that’s bundled into a product and never sold separately."
    http://ww2.cfo.com/accounting-tax/2009/09/new-revenue-recognition-rules-the-apple-of-apples-eye/

    And here are the presumably "imaginary" letters sent to the FASB lobbying for the change:
    http://www.fasb.org/cs/BlobServer?blobkey=id&blobnocache=true&blobwhere=1175819517064&blobheader=application/pdf&blobheadername2=Content-Length&blobheadername1=Content-Disposition&blobheadervalue2=2548052&blobheadervalue1=filename=0015-_EITF08010903_APPLE_RAFAEL.pdf&blobcol=urldata&blobtable=MungoBlobs

    http://www.fasb.org/cs/BlobServer?blobkey=id&blobnocache=true&blobwhere=1175819517003&blobheader=application/pdf&blobheadername2=Content-Length&blobheadername1=Content-Disposition&blobheadervalue2=915781&blobheadervalue1=filename=0015A-_EITF08010903_APPLE_Rafael.pdf&blobcol=urldata&blobtable=MungoBlobs

    The CFO article is plainly dumb. It says, for instance, "In theory, a successful launch — and its attendant revenue — would drive up Apple’s earnings, and possibly stock price, in the same quarter the product is introduced, according to several news reports that came out earlier this week."

    It assumes that investors can't add or subtract. Give me a break.

    The FASB links are fine. They say nothing about 'lobbying.'

    You can keep proving all the links you want, but there is no 'lobbying' here. Period. See my response to tmay above.
  • Reply 79 of 115
    tmaytmay Posts: 3,844member
    Quote:

    Originally Posted by Gatorguy View Post





    You should read more.

    "While Steve Jobs was preparing to introduce the new Apple iPod nano last week, the company’s chief accountant, Betsy Rafael, was sending off a second letter to the Financial Accounting Standards Board related to revenue recognition. At issue: how FASB might rework the rules related to recognizing revenue for software that’s bundled into a product and never sold separately."

    http://ww2.cfo.com/accounting-tax/2009/09/new-revenue-recognition-rules-the-apple-of-apples-eye/



    And here are the presumably "imaginary" letters sent to the FASB lobbying for the change:

    http://www.fasb.org/cs/BlobServer?blobkey=id&blobnocache=true&blobwhere=1175819517064&blobheader=application/pdf&blobheadername2=Content-Length&blobheadername1=Content-Disposition&blobheadervalue2=2548052&blobheadervalue1=filename=0015-_EITF08010903_APPLE_RAFAEL.pdf&blobcol=urldata&blobtable=MungoBlobs



    http://www.fasb.org/cs/BlobServer?blobkey=id&blobnocache=true&blobwhere=1175819517003&blobheader=application/pdf&blobheadername2=Content-Length&blobheadername1=Content-Disposition&blobheadervalue2=915781&blobheadervalue1=filename=0015A-_EITF08010903_APPLE_Rafael.pdf&blobcol=urldata&blobtable=MungoBlobs



    FWIW the first letter alludes to conversations Apple had with the FASB prior to the request for comments that Apple submitted a written response to.



    Good find.

     

    Thanks.

  • Reply 80 of 115
    gatorguygatorguy Posts: 20,918member
    The CFO article is plainly dumb. It says, for instance, "In theory, a successful launch — and its attendant revenue — would drive up Apple’s earnings, and possibly stock price, in the same quarter the product is introduced, according to several news reports that came out earlier this week."

    It assumes that investors can't add or subtract. Give me a break.

    The FASB links are fine. They say nothing about 'lobbying.'

    You can keep proving all the links you want, but there is no 'lobbying' here. Period. See my response to tmay above.
    Isn't lobbying an effort to make sure your companies/organizations interests are considered and understood with regard to potential rule-making and laws? Yes sir those letters are absolutely examples of lobbying IMHO. How do you define lobbying?
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