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http://finance.yahoo.com/news/apple-ibm-forge-global-partnership-203000199.html

 

IBM will also begin to sell iPhones and iPads to its corporate customers and will devote more than 100,000 people, including consultants and software developers, to the effort.

 

http://recode.net/2014/07/15/apple-and-ibm-team-up-to-push-ios-in-the-enterprise/

 

That's exactly the kind of partnership that Microsoft could do (could've done? probably too late now) with Apple if it didn't insist on losing money on mobile device hardware...

 

http://www.asymco.com/2014/07/15/catharsis/

 

You can't say things don't change:

 

http://i.imgur.com/Ds86pvW.jpg

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At first glance I like the deal. Almost like if Apple had acquired IBM without having to pay for it. They get access to the gigantic salesforce and customer relationships, enterprise brand equity, will get all the software and services developed on iOS first, will have IBM engineers help them on certain projects (Apple has fewer people working on most stuff than most people think -- this will make a difference in keeping enterprise stuff more up to date).

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In the interview Tim Cook talks about this deal accelerating Apple's penetration in enterprise in mobile. They already have a large presence. This deal will drive device sales. Interesting that the deal had not been leaked.

 

At the very end of the video, Cook got a direct question asking about Eddie Cue's recent comment about the fall product pipeline being the best he has seen in 25 years. Cook simple said he agreed with Eddie. Encouraging for what will be announced over the next 5 months.

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I see Costco is now selling the I-Pad.  Is Apple allowing them to discount?

 

Apple can't dictate what Costco charges for the I-Pad. That would be price fixing.

 

I think the real question is what price does Apple sell to Costco?

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https://www.apple.com/pr/library/2014/07/22Apple-Reports-Third-Quarter-Results.html

 

The Company posted quarterly revenue of $37.4 billion and quarterly net profit of $7.7 billion, or $1.28 per diluted share. These results compare to revenue of $35.3 billion and net profit of $6.9 billion, or $1.07 per diluted share, in the year-ago quarter. Gross margin was 39.4 percent compared to 36.9 percent in the year-ago quarter. International sales accounted for 59 percent of the quarter’s revenue.

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Much like last quarter....iPhone and Mac good, iPad shrinking. I wonder how they'll try to reignite sales here.

 

I still think iPad sales got ahead of themselves in the past because of a certain "perfect storm" context (I've written about this previously). People fixate on the short-term decceleration instead of the longer term trend.

 

But if you draw a straight line from launch in 2010 to now, it's still the most successful product launch ever and a great performance, especially if you consider that they cost more out of pocket than subsidized phones, that the update cycle is longer than phones, that they don't have carriers with a lot of marketing muscle pushing them, that they can't be carried everywhere like phones, etc.

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^That it had a great launch does not mean anything when sales are shrinking, and when we value the firm based on future sales, it will also not matter that it was a great product launch, but rather we need to look at it as a shrinking business, unless management can turn sales around.

 

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^That it had a great launch does not mean anything when sales are shrinking, and when we value the firm based on future sales, it will also not matter that it was a great product launch, but rather we need to look at it as a shrinking business, unless management can turn sales around.

 

You didn't understand what I said. I wasn't talking about just the launch, but everything so far. I'm saying that it only looks like it's decelerating because of the huge recent spike in sales, but that's just volatility, and over time it'll grow again (and probably not in a straight line either).

 

If things had happened differently and every quarter had been higher than the previous one in a straight line to the exact total sales of today (in 4 years, in a new category, they sold like 230 million devices), everybody would be saying it's a huge success, but because it spiked up and then dropped back down, everybody seems to extrapolate that recent trend into the future, but I think that's wrong.

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No, I understood what you wrote, it's just not very applicable, it doesn't matter that it is decelerating because it had a great launch because when look forward, we will see a declining business, unless management can show otherwise. As an investor, you are focused on what will happen, not what already has.

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No, I understood what you wrote, it's just not very applicable, it doesn't matter that it is decelerating because it had a great launch because when look forward, we will see a declining business, unless management can show otherwise. As an investor, you are focused on what will happen, not what already has.

 

Not applicable?

 

Let's be more concrete. Do you think iPad sales will be higher or lower than they are now in 3 years?

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No, I understood what you wrote, it's just not very applicable, it doesn't matter that it is decelerating because it had a great launch because when look forward, we will see a declining business, unless management can show otherwise. As an investor, you are focused on what will happen, not what already has.

 

Not applicable?

 

Let's be more concrete. Do you think iPad sales will be higher or lower than they are now in 3 years?

 

Lower. If you agree with this prediction, then please explain to me how lower sales are a positive for Apple's investor.

 

Similarly, I have a question for you - why is it that whenever somebody says something even moderately negative about Apple you immediately run to its defense? Why can you not accept that somebody has a different opinion from yours?

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Lower. If you agree with this prediction, then please explain to me how lower sales are a positive for Apple's investor.

 

I think sales will be higher in 3 years. Likely significantly so.

 

Similarly, I have a question for you - why is it that whenever somebody says something even moderately negative about Apple you immediately run to its defense? Why can you not accept that somebody has a different opinion from yours?

 

When someone says something I disagree with about something that interests me, I want to understand why they think the way they do in case they have a good point and I should change my thinking. When they say something I agree with, that's less interesting.

 

In fact, I find the idea that Apple needs me to defend it pretty funny...

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Here's a question, well two questions and a comment:

 

What will drive further ipad/iphone sales from current users (i.e. current iphone/ipad owners)?

 

Is it important for an investment in Apple today that current users upgrade from their iphone 5/ipad 4 to the newest model, or is there a margin for error in this aspect due to opening up China/enterprise markets?

 

The reason I ask is this: I own the latest iphone and ipad. I think they are great. And I treat them well, as I would guess a good majority of customers do. So as a consumer, I simply don't know what else Apple has to offer that will compel me to upgrade to the iphone 6 or 7. Will the iphone 7 cook me dinner? At what point do they make a device that is so good that it just doesn't need to be upgraded if you take care of it? Barring me crushing it, or the battery dying (perhaps Tim Cook will engage in some planned obsolescence?), I just don't see as long of a runway as I did a few years ago.

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Lower. If you agree with this prediction, then please explain to me how lower sales are a positive for Apple's investor.

 

I think sales will be higher in 3 years. Likely significantly so.

 

 

In the meantime, AAPL is filling the "growth gap" with Mac sales:

 

Apple said it sold 4.41 million Mac computers in the quarter ended June 28, an increase of 17.6% from the same period a year earlier. It also marked the third straight quarter that Mac sales rose on a year-on-year basis, bouncing back after Mac sales fell 10% in the past fiscal year to September.

 

Sales of iPads are going in the other direction, with the number of units sold falling 9.2% after a 16% drop three months earlier.

 

Further highlighting the trend, the gap in revenue between the two products is fast closing. Apple sold $5.44 billion worth of Macs in the quarter, compared with $5.9 billion in iPads. The last time Mac revenue topped iPad’s was in 2011 when the tablet was still in its early days.

 

http://blogs.wsj.com/digits/2014/07/22/apples-new-product-hit-the-mac/

 

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Here's a question, well two questions and a comment:

 

What will drive further ipad/iphone sales from current users (i.e. current iphone/ipad owners)?

 

Is it important for an investment in Apple today that current users upgrade from their iphone 5/ipad 4 to the newest model, or is there a margin for error in this aspect due to opening up China/enterprise markets?

 

The reason I ask is this: I own the latest iphone and ipad. I think they are great. And I treat them well, as I would guess a good majority of customers do. So as a consumer, I simply don't know what else Apple has to offer that will compel me to upgrade to the iphone 6 or 7. Will the iphone 7 cook me dinner? At what point do they make a device that is so good that it just doesn't need to be upgraded if you take care of it? Barring me crushing it, or the battery dying (perhaps Tim Cook will engage in some planned obsolescence?), I just don't see as long of a runway as I did a few years ago.

 

LC,

Planned obsolescence is part of the tech business model. You can be assured that in 3-4 years your iphone 5 would be pretty obsolete even if you took very good care of it. Think of the number of people who are able to use their iPad1, iphone 3gs and earlier models. The hardware doesn't keep up with the software requirements and eventually customers are forced to upgrade.

 

iPhone sales look good because of the subsidy model here which encourages a quicker upgrade. iPads not so much, customers are able to wring out a longer life out of it, primarily because its a higher upfront cost and also because iPads are not as necessary to daily life as an iPhone.

 

For customers like you, Apple's view is, with your purchases of their hardware now, you are buying into their ecosystem. It would make you more likely to upgrade to another Apple device if and when you choose to do so. Also, they hope you would buy hardware in their other categories like an iMac or Macbooks, given the tight integration. Their newest OS release Yosemite is all about that tighter integration and ecosystem lock in.

 

Their runway for current products isn't what it used to be, but it doesn't mean it's not as huge. They can have more market penetration in emerging markets in terms of secondary devices in addition to phones which are a primary device in most of these countries. They can have more market penetration in enterprise space etc. There is quite a decent runway for them.

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