AAPL - Apple Inc.

[Liberty]

Let's agree to disagree. I think Apple is cheap, you don't. We'll see who's right over time.

[Guest valueInv]

Let's agree to disagree. I think Apple is cheap, you don't. We'll see who's right over time.

 

And this is why I don't engage with him intellectually. It is a waste of time.

 

 

[frommi]

I value AAPL currently at around 700$, that is around 35% upside from here. When i look at cashflow growth YoY (7,5%) it seems as the big growth years for Apple are over. I am long in aapl with 5.5% of my portfolio and some call options, but i will sell around 600$ because i think that the smartphone market will get the same problems the pc market had. Users use their phones longer and longer, because they don`t need the latest gadget any more. The IPhone-Hardware is nowerdays nearly as powerful as my desktop pc. With the IPad its the same. They sold 25% more phones this year, but made only 7,5% more money with it. I really don`t want to imagine what happens when the smartphone market growth slows down to 10%. And with software being free, there is no further revenue growth in sight.

 

So i think aapl is cheap, but its longterm prospects are not really good.

[Palantir]

Note what I said about the 4s. The people who buy is don't care that it is not competitive to the Nexus 5. They're grandma who likes Apple products because they are simple and intuitive or some guy in China who views Apple as an aspirational brand but can't afford the 5s.

 

This is hogwash. $450 is a very popular (and profitable) price point in which many people buy phones. Especially in emerging markets where carriers don't subsidize the product.

 

Do answer this question - If you were going to spend $450 on a smartphone, you would choose the 4S over the Nexus?

 

 

In many markets most people don't pay $450 - the phones are subsidized. Even in emerging markets, there are financing plans. Not to mention, Apple is getting more aggressive with the pricing, as they talked about in the last earnings call.

 

And in many markets, people DO pay $450. That's how people buy smartphones in many countries - pay the full price and then sign on to the contract. Even with a financing plan, which are far less common. This market is very different from the subsidized market you're familiar with. (Btw, the 5C costs above 550 in EMs)

 

BTW, they realized that demand for the iPad mini retina is going to be robust and that they could get away with raising the price. This is further helped by having the old iPad at $299 to compete against cheaper devices. They see and analyze a lot more sales data than we have access to. There is a reason for these prices.

 

It is also a better long term strategy - as you are seeing with the profits in the PC markets.

 

When you engage in sustained aggressive price competition, you have to start cutting corners to eke out margins. You can get away with no margins in the short term, not in the long term. So you start cutting corners and the quality drops (even though you tout the same features as the high end). Over time, the gap in quality between the low end and the high end widens and people start noticing it - allowing the high end brands to cement themselves in their price segment. You are seeing it in the PC market today. Where are emachines and Gateway today?

 

The iPad Mini is a very different market from the iPhone, and it is a lower margin market. Do I need to rehash this over and over again?

 

As for your argument about margins. This is a total straw man, I've never said that Apple should get away with "no margins". But the $450 price point is not a "low end" "throwaway" pricepoint by any means as you seem to think. Especially in EMs. Your utter disdain for this group is kind of ridiculous.

 

Apple is not a high end, niche, smartphone vendor for the prestigious as you and others have been touting on this forum, nor has it ever sold itself this way. Apple has a broad customer base that's very diverse and they've sold it as the most desirable smartphone, and they have been able to do that due to subsidies. In the US or a developed nation, I think Apple will do great. In an unsubsidized market, the whole dynamic changes.

[Guest valueInv]

Note what I said about the 4s. The people who buy is don't care that it is not competitive to the Nexus 5. They're grandma who likes Apple products because they are simple and intuitive or some guy in China who views Apple as an aspirational brand but can't afford the 5s.

 

This is hogwash. $450 is a very popular (and profitable) price point in which many people buy phones. Especially in emerging markets where carriers don't subsidize the product.

 

Do answer this question - If you were going to spend $450 on a smartphone, you would choose the 4S over the Nexus?

 

 

In many markets most people don't pay $450 - the phones are subsidized. Even in emerging markets, there are financing plans. Not to mention, Apple is getting more aggressive with the pricing, as they talked about in the last earnings call.

 

And in many markets, people DO pay $450. That's how people buy smartphones in many countries - pay the full price and then sign on to the contract. Even with a financing plan, which are far less common. This market is very different from the subsidized market you're familiar with. (Btw, the 5C costs above 550 in EMs)

 

BTW, they realized that demand for the iPad mini retina is going to be robust and that they could get away with raising the price. This is further helped by having the old iPad at $299 to compete against cheaper devices. They see and analyze a lot more sales data than we have access to. There is a reason for these prices.

 

It is also a better long term strategy - as you are seeing with the profits in the PC markets.

 

When you engage in sustained aggressive price competition, you have to start cutting corners to eke out margins. You can get away with no margins in the short term, not in the long term. So you start cutting corners and the quality drops (even though you tout the same features as the high end). Over time, the gap in quality between the low end and the high end widens and people start noticing it - allowing the high end brands to cement themselves in their price segment. You are seeing it in the PC market today. Where are emachines and Gateway today?

 

The iPad Mini is a very different market from the iPhone, and it is a lower margin market. Do I need to rehash this over and over again?

 

As for your argument about margins. This is a total straw man, I've never said that Apple should get away with "no margins". But the $450 price point is not a "low end" "throwaway" pricepoint by any means as you seem to think. Especially in EMs. Your utter disdain for this group is kind of ridiculous.

 

Apple is not a high end, niche, smartphone vendor for the prestigious as you and others have been touting on this forum, nor has it ever sold itself this way. Apple has a broad customer base that's very diverse and they've sold it as the most desirable smartphone, and they have been able to do that due to subsidies. In the US or a developed nation, I think Apple will do great. In an unsubsidized market, the whole dynamic changes.

 

Ok, show me the data. What % of users are paying what price point?

[Palantir]

I don't know. But since whenever you're pressed you're back to your usual snide remarks, I rest my case.

[Guest valueInv]

I don't know. But since whenever you're pressed you're back to trolling and snide remarks, I rest my case.

 

Actually, you're the one who is trolling. I have stuck to the facts. It seems that your default go to when you in a hole is to accuse the other of trolling.

 

What you have presented is a conclusion. I just asked you to support your conclusion with data. If you think that is a snide remark,

I would recommend a dictionary.

 

(BTW, that is a snide remark)

[Palantir]

Yes, "facts" and "data" like "4S is for grandmas" or the "450 price point is cheap, low end". Sure, keep going.

 

 

[Guest valueInv]

Yes, "facts" and "data" like "4S is for grandmas" or the "450 price point is cheap, low end". Sure, keep going.

 

I dunno, just a hunch  ;):

http://qz.com/145704/slides-mobile-is-eating-the-world/

[VAL9000]

Yes, "facts" and "data" like "4S is for grandmas" or the "450 price point is cheap, low end". Sure, keep going.

 

I dunno, just a hunch  ;):

http://qz.com/145704/slides-mobile-is-eating-the-world/

 

Great article.  So if its all about the apps where does Apples sustainable competitive advantage come from?  Hardware? IOS? iWork?

 

The apps are virtually identical between iOS and Android, so I'm unclear as to how the Apple ecosystem can perpetually stay ahead.

[Guest valueInv]

More interesting data:

 

http://9to5mac.com/2013/11/11/google-maps-left-out-in-the-cold-as-most-iphone-users-stick-with-apple-maps/

[wachtwoord]

I've learned that the fact that the discussion is so heated shows that the participants aren't so sure. If people are sure of their opinions they tend to care less when others disagree.

 

This also applies to my own (limited) participation in the discussion :)

[Guest valueInv]

Some history:

 

http://www.businessinsider.com/steve-jobs-on-android-founder-andy-rubin-big-arrogant-f-2013-11

[Liberty]

Sapphire screens at some point?

 

http://feedly.com/k/18p1sh3

 

Any manufacturing technique that requires a particle accelerator will leave some competitors behind...

[Guest valueInv]

Sapphire screens at some point?

 

http://feedly.com/k/18p1sh3

 

Any manufacturing technique that requires a particle accelerator will leave some competitors behind...

 

They doing a lot more than that:

 

http://www.bloomberg.com/news/2013-11-13/apple-s-10-5b-on-robots-to-lasers-shores-up-supply-chain.html

 

But that won't stop people claiming that Tim Cook is resting on his laurels, Samsung has an advantage because they are vertically integrated, Apple is not innovating, yada, yada, yada.

[Guest valueInv]

You can't make stuff like this up:

 

http://techcrunch.com/2013/11/13/g-is-for-google/

 

I can't count how many times I've heard that the Android user experience has caught up with Apple.

Maybe Google is irrationally biased?  ::)

[Liberty]

You can't make stuff like this up:

 

http://techcrunch.com/2013/11/13/g-is-for-google/

 

I can't count how many times I've heard that the Android user experience has caught up with Apple.

Maybe Google is irrationally biased?  ::)

 

https://twitter.com/aaronissocial/status/400669713807978496

[Guest valueInv]

You can't make stuff like this up:

 

http://techcrunch.com/2013/11/13/g-is-for-google/

 

I can't count how many times I've heard that the Android user experience has caught up with Apple.

Maybe Google is irrationally biased?  ::)

 

https://twitter.com/aaronissocial/status/400669713807978496

 

Brilliant!!

[tengen]

Reminds me of Linux users who claim that Gnome or KDE are "better" because they offer so many options.

[rkbabang]

Reminds me of Linux users who claim that Gnome or KDE are "better" because they offer so many options.

 

I've been using Linux for close to 20 years and I've never thought Gnome or KDE where better because they offered so many options.  In fact I've always thought that the bad thing about Linux was that it was behind in the GUI department.  I loved Linux because it was stable and unix based.  I'm an engineer I rather do everything in the terminal than use the GUI anyway.  Also when comparing Linux to others, what are they comparing it against?  Usually Microsoft Windows which was just a god-awful OS, at least until Windows 7 came out.  No one ever compared it against Macintosh because in the 90's no one used a Mac anyway and in this century Mac was unix based (BSD) as well and has an excellent GUI windowing system.  The only reason I've never owned a Mac is that Linux is free.

[Liberty]

Reminds me of Linux users who claim that Gnome or KDE are "better" because they offer so many options.

 

I've been using Linux for close to 20 years and I've never thought Gnome or KDE where better because they offered so many options.  In fact I've always thought that the bad thing about Linux was that it was behind in the GUI department.  I loved Linux because it was stable and unix based.  I'm an engineer I rather do everything in the terminal than use the GUI anyway.  Also when comparing Linux to others, what are they comparing it against?  Usually Microsoft Windows which was just a god-awful OS, at least until Windows 7 came out.  No one ever compared it against Macintosh because in the 90's no one used a Mac anyway and in this century Mac was unix based (BSD) as well and has an excellent GUI windowing system.  The only reason I've never owned a Mac is that Linux is free.

 

I love Linux, for what it is. I ran the Slackware distro on my main box for a few years. Some distros are even getting close to grandma-proof, as long as your grandma doesn't do too many things (Ubuntu). But Linux is still far from being curated enough for the average person, and it'll always be hard to have a strong design voice when you design by committee. It's awesome for computer geeks, though.

 

The best OS for the average person isn't even OS X, its iOS, as we're finding out in the market. Each app an icon, all apps findable in one place, no need to deal with the file system and find where that file has downloaded to, sane default settings, hard to screw things up if you make a mistake, system resources are managed well transparently (can't open a dozen things and then wonder why things slow to a crawl because you're swapping to disk), etc.

[rkbabang]

The best OS for the average person isn't even OS X, its iOS, as we're finding out in the market.

 

This I agree with 100%.  Your average person is never going to want the same things that a computer geek wants.  I think in the near future the Mac OS will be more and more like iOS, that is if Apple doesn't just start using iOS for everything.  I'll still build my own system and install Linux, as will all the computer geeks, but Macs with an easier to use OS will sell like hotcakes.  Maybe they will keep a more full featured OS on their expensive Pro systems.

[Liberty]

The best OS for the average person isn't even OS X, its iOS, as we're finding out in the market.

 

This I agree with 100%.  Your average person is never going to want the same things that a computer geek wants.  I think in the near future the Mac OS will be more and more like iOS, that is if Apple doesn't just start using iOS for everything.  I'll still build my own system and install Linux, as will all the computer geeks, but Macs with an easier to use OS will sell like hotcakes.  Maybe they will keep a more full featured OS on their expensive Pro systems.

 

I think they've already done a lot of that. Bringing the App store (with signed apps, and centralized update mechanism) to the Mac, Launchpad to start apps, and many of Mavericks' optimization bring some of the power-efficiency of iOS to OS X. And they've always had some of the other stuff like drag-and-drop to install, drag-and-drop to uninstall. But I don't subscribe to the view that OS X and iOS will eventually converge and become the same thing.

 

iOS is purpose-built for smaller-screen mobile devices with limited resources. If you ran it on a computer with a much bigger screen, full-size keyboard, mouse-trackpad, and super-powerful hardware, it would be holding you back, not making your life better.. So IMO, they'll keep importing the features that make sense, but also keep what makes OS X a great powerful desktop/laptop OS.

[Liberty]

I thought this slide based on data from Samsung's investor day was interesting:

 

http://ben-evans.com/benedictevans/2013/11/12/a-note-on-the-high-end

 

Samsung had an investor day last week - the first for many years. It was extremely low on information about its mobile device business, but one figure did catch my eye - a target of 100m unit sales of combined Galaxy S and Note devices.

 

Something that people often don't realise, especially in the USA, where even high-end phones are free, is that high-end Android phones are not what are outselling the iPhone. It's the mid and low end that's making up all the volume. That 100m number is a good illustration - it makes up less than a third of the Android phones that Samsung will sell this year. The other two thirds are Android phones other than the S2, 3 & 4, that sell at much cheaper prices.

 

I don't necessarily think that people here are under that impression, but too often in the media there's the perception that "Samsung is outselling Apple by a lot" while if you look at the market segment where Apple is competing, Apple is actually outselling Samsung (and making more per device too).

[racemize]

I just got the new ipad mini retina (from the ipad 3, also retina).  I have to say, it is fantastic.

 

I also got the T-mobile free 200 mb plan, which is awesome.

 

The larger ipad was always a bit too heavy--this thing feels like a futuristic device to me.

 

My wife is also upgrading from the mini to the mini-retina.