Rayz2016

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Rayz2016
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  • Review: Apple Pencil 2 is a huge step forward but still not perfect

    pnaddaff said:
    So your issues with the pencil are that it is expensive and falls off the iPad too easily?

    “Far from perfect”??

    Almost as funny as saying buying crap jeans is a problem with the Pencil.

    StrangeDaysMisterKitmacpluspluselijahgwatto_cobra
  • Microsoft surpasses Apple, retakes crown of world's most valuable company

    avon b7 said:
    Rayz2016 said:

    zoetmb said:
    lkrupp said:
    pjs_socal said:
    Microsoft has a P/E ratio of 45 and Apple has a P/E ratio of 15.

    Apple and Microsoft have similar margins and Apple had better growth in 2018. Apple makes 2.5x more revenue and 3x more profits. So, why are Microsoft shares valued at 3x Apple’s? Because investors are morons.

    In reality Microsoft is worth ⅓ the value of Apple.
    Because Microsoft is diversified with recurring revenue streams which Wall Street loves. With Apple if iPhone sneezes the entire company gets a cold.
    So when did the iPhone sneeze? I must have missed that. The only thing I’ve heard are the predictions of analysts based on supply chain reports which Tim Cook has consistently advised against using to provide meaningful data about Apple. So remind me, when did the iPhone sneeze and give the entire company a cold? In your wet dreams?
    Reality doesn't matter.  It's about perception.   The iPhone is approximately 66% of Apple's gross revenue.  And Apple announcing that they're no longer going to break out iPhone units sales is sending the message, correct or not, that they expect declines in unit sales.  Wall Street doesn't like a lack of transparency and in that regard, I don't blame them.   Combine that with the insanity of believing supplier chain complaints and that's a recipe for killing the stock and that's if the stock is not being manipulated.   

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?   

    On the Mac side, Apple's price hikes combined with the inability to replace the battery, memory and storage as well as the fact that so many people don't really need a computer anymore is going to continue to affect sales, but the Mac is only about 10% of Apple now anyway.   Apple probably thought they could replace Mac sales with iPad sales, but that's only about 8% of Apple.    While I realize that Apple has never wanted to be the low-end, low-margin provider, I think the high salaries paid to Apple managers and executives has completely warped their perception of what most people are willing and able to spend, especially for a machine that can't be upgraded after purchase.    A 15" MBP now starts at $2400 and tops out at $6700.   That's ludicrous.   The MBA starts at $1000 at tops out at $2600.   The Mini tops out at $4300.   $5K for the 27" 5K Retina iMac (topping out at $13,200)?   IMO, this is either desperation to keep revenue high or unbelievable arrogance.     



    There is of course, the third option: you have the details wrong.

    Let's begin with the most obvious stumble (the real drop off the cliff is that Apple actually sells phones at a range of prices, but that's so obvious it doesn't really need covering):

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop? 

    Er, no. Apple doesn't expect that because no one has ever done that.  What happens is that on each new release, Apple gets picks up customers from other platforms, but also gets a massive boost from people with folk with much iPhones much older than two years. I have just replaced my iPhone 6s, which means I missed out on the 7 and the X. The assumption that Apple thinks folk update their phone every two years is laughable. Which brings me to your other point:

    Yes, the price. And here again, the problem is narrow thinking. Saying that no one would buy a $1000 phone is a bit like saying no one would buy a house for $300,000 or a $30,000 car. Clearly they will, because I've seen houses and cars that cost several times that amount. So how do they do it?
    Well, I'm going to clue you in, but you have to keep it under your hat because I'm thinking of taking out a patent on the whole idea.

    Ready?

    This is going to amaze you, but people don't hand over the whole amount for houses and cars all at once. They pay it off in chunks. Buying a $1000 iPhone (which, by the way, is not the most expensive smart phone on the market) is best done on the Apple payment scheme: they throw in AppleCare and you can change the phone after a year if you want. Oh, and it's interest free, so if you're paying the whole cost up front then you're doing it wrong. 

    But that's kind of an aside. The point is that folk have been saying Apple gear is insanely expensive for as long as I can remember, and for as long as I can remember, they've been shifting it. So that leads me to believe that Apple understands basic economic theory better than anyone here who comments on it. All this braying about  Apple pricing always misses one vital piece of information: Apple's demand curve.

    This little bit of paper sitting on Tim Cook's desk will show you is that the demand for Apple kit is comparatively inelastic: movements in price have fairly negligible effects on demand.  If they increase the price, the sales will not drop significantly.

    But far more importantly, dropping the price will not actually produce a significant increase in sales, and this increase may not be enough to cover the price drop.

    So why is Apple's demand inelastic? Simply because the combination of hardware and software is perceived as unique in a very crowded market. 



    The details aren't wrong. You are interpreting things wrong.

    There are pricing ceilings on everything. Financing (including interest free) also has ceilings, or do you think someone will be willing to take on financing to pay for a phone over 5 years when it will be upgraded before it is paid off?

    The increasing cost of iPhones (and every other phone in the same price band) is taking users one step further up to their individual ceilings.

    You are taking his 1,000 dollar point completely out of context. He is speaking in general terms. We already know people buy 1,000 dollar phones every year. The point is those people aren't most people and three or four years of flat sales is telling in itself.

    The higher the price the harder the sale in high numbers, even with financing and upgrade options but that ceiling becomes ever nearer or you are hitting it. And if the cheaper options mean sacfricing features or getting an older iPhone, then the sale is equally hard.

    People argued that users were on longer upgrade cycles (provoked in part by pricing itself) and that is probably another reason while sales flattened, but how many people do you think are still using iPhone 6?

    But that argument doesn't take into account the vast potential pool of Android users that are there for the taking, right? 80% of the market. 1,000 dollar Android phones sell in the millions even while they are a fraction of the 80%. Why isn't Apple able to take a slice of that premium Android Pie (sic)? Why aren't people switching from Android in enough numbers to move the Apple needle off 'flat'? It's clearly not price for those users. It's value (among other things). The longer upgrade cycle really isn't doing much except allowing Apple tread water.

    Apple is on an 's' cycle - through its own choice - which only makes the sale look worse when compared to rival flagships that are pushing the pedal to the metal. So while Apple takes a breather on innovation and brings the A12 and little else to the table while still including a 5W charger in the box, others are innovating on everything and showing no signs of slowing down. That means 'new' tech is flowing down the lines into the middle ground at an incredible pace and upping the value proposition of those phones.

    How can you say that movements in price have a 'fairly negligible effect on demand? Apple doesn't break down unit sales on price.

    Price is the number one factor for most people when it comes to buying a Phone. The iPhone X hit new price highs for Apple. It was the 'most popular' 2018 iPhone for Q1, 2 and 3. But Q4? Estimates said demand for the 'most popular' iPhone dropped off sharply in Q4. Far more quickly than any other Apple flagship from previous years in the same quarter. But 'most popular' isn't truly quantifiable is it? 

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.



    Price elasticity doesn't state that there isn't a ceiling on price. All it says is that some products are relatively unaffected by price changes when compared to others, and nothing you've said actually disproves that.  This is why Apple can increase the price of the phone and knows that the amount of sales that they will lose will more than make up for the increase in revenue.

    Secondly, as I pointed out in my post, the whole argument falls flat because Apple sells phones at various price points.

    You are taking his 1,000 dollar point completely out of context. 

    He said folk will not upgrade a $1000 every two years. There's no context.

    That inelastic demand you are referring too is new found. From 2015, and really means FLAT but that inelasticity is shorn up at the other end of the spectrum. The middle and the low end. If Apple hadn't widened its spread in 2017, do you think things would have remained flat or that demand would have dropped? There was no such inelasticity in demand up to 2015.

    Price inelasticity is new found? Nope. Apple products have always been considered irreplaceable by the most valuable and price insensitive areas of the population, and Apple tends to leave everyone else to the Android manufacturers. Can't say that's right or wrong, but they seem to make a lot more money than everyone else. So in general, Apple products, across the whole range enjoy greater price elasticity than the competition, which is why the competition fights like dogs at the lower end of the market, and Apple would rather not.

    But let's go back to the real point here. The problem you have is the one I have highlighted again and again. Apple sells a range of phones at a range of prices. But oddly enough, everyone always homes in on the most expensive flagship phone as if this is the only one available. Even Gruber has stated that the XR is better deal because it's almost as good and way cheaper. Apple has even said that the XR is it's best selling phone. 
    So the problem isn't that Apple's phones are too expensive. The problem is that folk want the top of the range phone, but want to tell Apple how much they want to pay for it.

    Ah, do want to look at one more point:

    You say that if they increase the price, 'sales will not drop significantly'. Given that prices on the new phones have inched up with regards to last year, shouldn't we be holding off on that kind of affirmative conclusion until at least September next year? Or are you happy to take Apple's traditional blowout quarter and use it as a guide for the whole year?  No one can possibly know -today- if what you are claiming will prove true or not.

    Riigggghty-ho then. So what you're basically asking us to wait long enough to give you a better chance of being right. Got it.

    Well, we could do that, but I'm not sure I see the point. Because the thing about Apple is that it will not stick doggedly to its plans in the face of changing conditions. They never have. They won't keep increasing the price of the phone until they are not bringing in enough revenue to make up for the loss in sales units. The fact is they make these adjustments all the time, but because you're so focussed on the phone at the very top of the range, you completely miss that folk are buying the cheaper phones too.


    elijahgmagman1979roundaboutnow
  • Microsoft surpasses Apple, retakes crown of world's most valuable company


    zoetmb said:
    lkrupp said:
    pjs_socal said:
    Microsoft has a P/E ratio of 45 and Apple has a P/E ratio of 15.

    Apple and Microsoft have similar margins and Apple had better growth in 2018. Apple makes 2.5x more revenue and 3x more profits. So, why are Microsoft shares valued at 3x Apple’s? Because investors are morons.

    In reality Microsoft is worth ⅓ the value of Apple.
    Because Microsoft is diversified with recurring revenue streams which Wall Street loves. With Apple if iPhone sneezes the entire company gets a cold.
    So when did the iPhone sneeze? I must have missed that. The only thing I’ve heard are the predictions of analysts based on supply chain reports which Tim Cook has consistently advised against using to provide meaningful data about Apple. So remind me, when did the iPhone sneeze and give the entire company a cold? In your wet dreams?
    Reality doesn't matter.  It's about perception.   The iPhone is approximately 66% of Apple's gross revenue.  And Apple announcing that they're no longer going to break out iPhone units sales is sending the message, correct or not, that they expect declines in unit sales.  Wall Street doesn't like a lack of transparency and in that regard, I don't blame them.   Combine that with the insanity of believing supplier chain complaints and that's a recipe for killing the stock and that's if the stock is not being manipulated.   

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop?   

    On the Mac side, Apple's price hikes combined with the inability to replace the battery, memory and storage as well as the fact that so many people don't really need a computer anymore is going to continue to affect sales, but the Mac is only about 10% of Apple now anyway.   Apple probably thought they could replace Mac sales with iPad sales, but that's only about 8% of Apple.    While I realize that Apple has never wanted to be the low-end, low-margin provider, I think the high salaries paid to Apple managers and executives has completely warped their perception of what most people are willing and able to spend, especially for a machine that can't be upgraded after purchase.    A 15" MBP now starts at $2400 and tops out at $6700.   That's ludicrous.   The MBA starts at $1000 at tops out at $2600.   The Mini tops out at $4300.   $5K for the 27" 5K Retina iMac (topping out at $13,200)?   IMO, this is either desperation to keep revenue high or unbelievable arrogance.     



    There is of course, the third option: you have the details wrong.

    Let's begin with the most obvious stumble (the real drop off the cliff is that Apple actually sells phones at a range of prices, but that's so obvious it doesn't really need covering):

    Declines in iPhone sales wouldn't surprise me one bit.  At least in the U.S., the market is mature, phones are no longer subsidized and Apple keeps raising the prices.   Does Apple really think that their users are going to buy a new phone every two years for $1000 or more per pop? 

    Er, no. Apple doesn't expect that because no one has ever done that.  What happens is that on each new release, Apple gets picks up customers from other platforms, but also gets a massive boost from people with folk with much iPhones much older than two years. I have just replaced my iPhone 6s, which means I missed out on the 7 and the X. The assumption that Apple thinks folk update their phone every two years is laughable. Which brings me to your other point:

    Yes, the price. And here again, the problem is narrow thinking. Saying that no one would buy a $1000 phone is a bit like saying no one would buy a house for $300,000 or a $30,000 car. Clearly they will, because I've seen houses and cars that cost several times that amount. So how do they do it?
    Well, I'm going to clue you in, but you have to keep it under your hat because I'm thinking of taking out a patent on the whole idea.

    Ready?

    This is going to amaze you, but people don't hand over the whole amount for houses and cars all at once. They pay it off in chunks. Buying a $1000 iPhone (which, by the way, is not the most expensive smart phone on the market) is best done on the Apple payment scheme: they throw in AppleCare and you can change the phone after a year if you want. Oh, and it's interest free, so if you're paying the whole cost up front then you're doing it wrong. 

    But that's kind of an aside. The point is that folk have been saying Apple gear is insanely expensive for as long as I can remember, and for as long as I can remember, they've been shifting it. So that leads me to believe that Apple understands basic economic theory better than anyone here who comments on it. All this braying about  Apple pricing always misses one vital piece of information: Apple's demand curve.

    This little bit of paper sitting on Tim Cook's desk will show you is that the demand for Apple kit is comparatively inelastic: movements in price have fairly negligible effects on demand.  If they increase the price, the sales will not drop significantly.

    But far more importantly, dropping the price will not actually produce a significant increase in sales, and this increase may not be enough to cover the price drop.

    So why is Apple's demand inelastic? Simply because the combination of hardware and software is perceived as unique in a very crowded market. 



    netmageelijahgpalominemagman1979watto_cobra
  • Tim Cook may get that US privacy legislation he's expecting in 2019

    steven n. said:
    maestro64 said:
    First, Facebook's Cambridge Analytica was not a data breach, Facebook allow Cambridge access to the data via the licensing agreement that was in place. People were just pissed their own information they freely shared with Facebook and Cambridge Analytica was used against them. 

    Of course Apple likes the whole privacy idea since their business model does not rely on this model and Apple's competitors model solely rely on having access to people personal information. This goes into the realm of buyer beware and you do not get anything for free, it is people owe fault their information is not private.

    This is no different than Bezos raising his starting wages to $15/hr for Amazon and turning around and supporting legislation requiring his competitors to also do the same thing. He knows Amazon is doing everything to automate its operations so they need less people making $15/hr verse his competitors who are heavily dependent on a low end labor force.

    This is calling using regulations to keep competition suppressed. In these cases it means less competition controlled by government regulations. You think you have problem now wait to the see the solution the government comes up with.
    What I found interesting in the discussion of the Cambridge/Facebook data sharing thing is something similar happened in the 2008 election where Obama had an app that skimmed very similar data about friends and friends of friends. The difference is, it was lauded by the press as being an astute way to help grow Obama's Grass Roots campaign. Personally, neither one bothered me in the slightest. If you choose to use Facebook, you get treated however they want to treat you. There are reasons I detest the platform and have for many years.
    Read something linked from Daring Fireball a few months ago.

    The real genius of Cambridge Analytica was not the data they accessed, but what they did with it.

    Once they analysed it, they decided that there was no way they could convince enough people to vote for Trump for him to win the election. So instead of attempting the much more difficult task of getting people to vote for Trump, they targeted folk who were likely to vote for Clinton and persuaded them not to vote at all.

    That's what I call thinking outside the box.

    lostkiwijony0
  • Five reasons why Apple is ending unit sales reporting of Mac, iPhone, and iPad

    Were you all writing these editorials when Apple was still providing quarterly unit sales data and putting out weekend launch press releases? 
    No we weren't, because naivety and the misguided belief in the basic intelligence of our fellow man led many of us to think that if, year after year after year, the sales of iPhones/iPads/iWhatever failed to collapse, then perhaps the pundits and bloggers would eventually realise that predictions cannot be made by reading graffiti on the toilet walls of Apple suppliers.

    Cook warned them against this, time and time again. And time and time again, sales continued to exceed all expectations.

    And what are we seeing this year?

    The same again: the same predictions that ignore all guidance and stick doggedly to the failed formula of looking at one supplier and deciding that this is proof enough that unit sales are going to crash.

    All that's happened is that Apple has, rather belatedly, realised that the pundits are not going to learn. They lack the skill, the intelligence, and the morality to analyse unit sales correctly, so the best thing to do is not to report them at all. Will this make the situation worse? How? Look around you? If Apple reports unit sales they make crap up. If they don't report it they make crap up. If they're going to make crap up anyway then don't legitimise their bull by giving them the figures to lie about.

    Secondly, as Apple builds out its services offering then it's much better to give folk just revenue to work with. Working with unit sales from one unit and revenue from another unit is far beyond the ability of your average pundit to interpret correctly.

    baconstangradarthekatelijahgwatto_cobra