AAPL - Apple Inc.

[DCG]

This quote from that article really ties into another post that ValueInv posted earlier today.

 

"Samsung is out-innovating Apple, according to some in the tech press.". That article also links to this one: http://www.cnn.com/2013/02/18/tech/gaming-gadgets/samsung-apple-innovation/index.html

 

There's a perception that Adding More Features = Innovation, which is not always the case. Removing features and simplifying products IS innovation.

[gokou3]

Removing features and simplifying products IS innovation.

 

StarTAC anyone?

[tengen]

I've taken a look at a couple of smart watches (Sony, Pebble) and they just don't look all that appealing to me. If Apple really does come out with an iWatch, it will have to be a lot better if Apple expects to sell a huge number with a huge profit margin. I hope Apple pulls it off because, even if I don't wind up buying an iWatch, I'd expect competitors to get their acts in gear and come up with good products of their own.

[gokou3]

I've taken a look at a couple of smart watches (Sony, Pebble) and they just don't look all that appealing to me. If Apple really does come out with an iWatch, it will have to be a lot better if Apple expects to sell a huge number with a huge profit margin. I hope Apple pulls it off because, even if I don't wind up buying an iWatch, I'd expect competitors to get their acts in gear and come up with good products of their own.

 

You may have to wait a long time:

http://www.forbes.com/sites/greatspeculations/2013/02/19/apple-iwatch-leaks-drip-with-desperation/

 

The fact that more details than usual have appeared in American media indicates the likelihood that Apple is planting the story about iWatch.  The question is, “Why is Apple departing from its past practice?”

 

One theory is that Apple is acting out of desperation.  Tim Cook has been talking about innovation but not many seem to believe him.  At Goldman’s conference, Tim Cook said that innovation culture at Apple has never been stronger. Perhaps Apple leaked details of iWatch to put some meat on the statement by Cook.

[Palantir]

Don't care about iWatch. I want to see Apple TV. That could potentiallly be really nice.

[LC]

I just don't see an iWatch being commercially successful...I see it as crossing the line and having customers say to themselves, "Okay, this is too much".

[bargainman]

I just don't see an iWatch being commercially successful...I see it as crossing the line and having customers say to themselves, "Okay, this is too much".

 

If you looked at the recent CES there is a big movement towards wearable computing and basically the integration of computers and humans.  Apple has to play in this, and a watch might be the first step.

[Guest valueInv]

I've taken a look at a couple of smart watches (Sony, Pebble) and they just don't look all that appealing to me. If Apple really does come out with an iWatch, it will have to be a lot better if Apple expects to sell a huge number with a huge profit margin. I hope Apple pulls it off because, even if I don't wind up buying an iWatch, I'd expect competitors to get their acts in gear and come up with good products of their own.

 

You may have to wait a long time:

http://www.forbes.com/sites/greatspeculations/2013/02/19/apple-iwatch-leaks-drip-with-desperation/

 

The fact that more details than usual have appeared in American media indicates the likelihood that Apple is planting the story about iWatch.  The question is, “Why is Apple departing from its past practice?”

 

One theory is that Apple is acting out of desperation.  Tim Cook has been talking about innovation but not many seem to believe him.  At Goldman’s conference, Tim Cook said that innovation culture at Apple has never been stronger. Perhaps Apple leaked details of iWatch to put some meat on the statement by Cook.

 

Apple has always planted/leaked stories, its a big part of their marketing. It creates tension, mystery and anticipation for a product launch. Steve Jobs probably learnt from magicians how to create drama. Take a look at how he unveils products on stage.

 

This is nothing new. I'm glad to see Apple continuing with what has worked.

[Guest valueInv]

 

You may have to wait a long time:

http://www.forbes.com/sites/greatspeculations/2013/02/19/apple-iwatch-leaks-drip-with-desperation/

 

The fact that more details than usual have appeared in American media indicates the likelihood that Apple is planting the story about iWatch.  The question is, “Why is Apple departing from its past practice?”

 

One theory is that Apple is acting out of desperation.  Tim Cook has been talking about innovation but not many seem to believe him.  At Goldman’s conference, Tim Cook said that innovation culture at Apple has never been stronger. Perhaps Apple leaked details of iWatch to put some meat on the statement by Cook.

 

Apple has always planted/leaked stories, its a big part of their marketing. It creates tension, mystery and anticipation for a product launch. Steve Jobs probably learnt from magicians how to create drama. Take a look at how he unveils products on stage.

 

This is nothing new. I'm glad to see Apple continuing with what has worked.

 

From 2010:

 

http://www.macobserver.com/tmo/article/how_apple_does_controlled_leaks/

 

It has been past practice. Its just Forbes trying to write click-bait stories and stand out. I've been seeing them do a lot of that lately.

[Guest valueInv]

I thought Samsung was winning?

 

http://finance.yahoo.com/news/apples-old-iphone-iphone-4s-142300162.html

 

this is right on the eve of s4 launch, with iphone 4s having been discounted. so not a fair comparison.

 

samsung has dominated many markets so its still a big threat

 

 

I'm looking at smartphone costs in India and the iPhone 4 is more expensive than the s3, leave alone the 4s. While it is not fair to compare the s3 to the 5, I'd say the 4s comparison is telling.

 

It also tells you that its not the Galaxy S series that is driving Samsung's unit sales numbers, its the cheaper phones.

[Palantir]

David Einhorn needs to go away.

[hardincap]

I thought Samsung was winning?

 

http://finance.yahoo.com/news/apples-old-iphone-iphone-4s-142300162.html

 

this is right on the eve of s4 launch, with iphone 4s having been discounted. so not a fair comparison.

 

samsung has dominated many markets so its still a big threat

 

 

I'm looking at smartphone costs in India and the iPhone 4 is more expensive than the s3, leave alone the 4s. While it is not fair to compare the s3 to the 5, I'd say the 4s comparison is telling.

 

It also tells you that its not the Galaxy S series that is driving Samsung's unit sales numbers, its the cheaper phones.

 

plenty of people would still choose the galaxy s over the iphone if they were the same price. i just got off the plane and i saw many more people with large android screens than the iphone. if you think this is solely because of price you're deluding yourself

[Parsad]

I thought Samsung was winning?

 

http://finance.yahoo.com/news/apples-old-iphone-iphone-4s-142300162.html

 

this is right on the eve of s4 launch, with iphone 4s having been discounted. so not a fair comparison.

 

samsung has dominated many markets so its still a big threat

 

 

I'm looking at smartphone costs in India and the iPhone 4 is more expensive than the s3, leave alone the 4s. While it is not fair to compare the s3 to the 5, I'd say the 4s comparison is telling.

 

It also tells you that its not the Galaxy S series that is driving Samsung's unit sales numbers, its the cheaper phones.

 

plenty of people would still choose the galaxy s over the iphone if they were the same price. i just got off the plane and i saw many more people with large android screens than the iphone. if you think this is solely because of price you're deluding yourself

 

I like the size of the larger screens on the Samsungs, but I prefer the user interface of the iPhone.  Also what the iPhone 5 screen lacks in size, it makes up for with the retina display. 

 

Still a 4.5-5" retina screen on the iPhone 5 would have been greatly appreciated.  Yes, it's very nice that you can use the iPhone with one hand, but I read quite a bit on it and would have preferred a bigger screen.  Cheers!

[hardincap]

I thought Samsung was winning?

 

http://finance.yahoo.com/news/apples-old-iphone-iphone-4s-142300162.html

 

this is right on the eve of s4 launch, with iphone 4s having been discounted. so not a fair comparison.

 

samsung has dominated many markets so its still a big threat

 

 

I'm looking at smartphone costs in India and the iPhone 4 is more expensive than the s3, leave alone the 4s. While it is not fair to compare the s3 to the 5, I'd say the 4s comparison is telling.

 

It also tells you that its not the Galaxy S series that is driving Samsung's unit sales numbers, its the cheaper phones.

 

plenty of people would still choose the galaxy s over the iphone if they were the same price. i just got off the plane and i saw many more people with large android screens than the iphone. if you think this is solely because of price you're deluding yourself

 

I like the size of the larger screens on the Samsungs, but I prefer the user interface of the iPhone.  Also what the iPhone 5 screen lacks in size, it makes up for with the retina display. 

 

Still a 4.5-5" retina screen on the iPhone 5 would have been greatly appreciated.  Yes, it's very nice that you can use the iPhone with one hand, but I read quite a bit on it and would have preferred a bigger screen.  Cheers!

 

the one hand thing is a ridiculous reason not to build a larger iphone. for many people the benefits of a large screen more than make up for the loss of one handed usability. i just dont understand why apple is holding on to that excuse. they need to be very careful not to become too extremist with product design, so they dont repeat past mistakes of great products that the market rejects (next, lisa, some of the early macs)

 

 

[Guest wellmont]

David Einhorn needs to go away.

 

if David Einhorn went away this stock would have a 3 handle. he's the only one fighting for shareholders here. he actually had to sue them.

[Palantir]

David Einhorn needs to go away.

 

if David Einhorn went away this stock would have a 3 handle. he's the only one fighting for shareholders here. he actually had to sue them.

 

I think Apple shareholders have done well without Mr Einhorn's input. He's going to annoy Apple management just for an extra 2% dividend. Either he's just looking for notoriety or it's just emblematic of Wall Street arrogance.

[Viking]

What I appreciate with what Einhorn is doing is creating a good discussion around how to think about the net cash position of Apple. I have read little that has helped me understand a useful way to value the cash.

 

On the one hand we could assume that it is worth nothing (the company will do nothing with it, or at best will waste it on a bad aquisition). This appears to be how the market is valuing it currently, which values the company at a 10 PE; significantly below the S&P average.

 

On the other hand we could assume that it is worth 100% of its value (the company will use it wisely). Net of cash, this would give the company a PE of about 7 (about 1/2 of S&P 500).

 

The real answer is somewhere in between. hen you figure it out, let me know.  :)

 

I do expect Apple to increase the dividend (I am hoping for minimum 50% increase); this would be a great first step. I HOPE they also announce an accelerated stock buyback; I would like to see them increase this to $10-20 billion for the next 12 months - subject to stock price (only do it below $500). This would give investors a solid dividend and reduce the shares outstanding. Even with this plan, net cash will still increase year over year. Next year the company can tweak the plan further.   

[Parsad]

What I appreciate with what Einhorn is doing is creating a good discussion around how to think about the net cash position of Apple. I have read little that has helped me understand a useful way to value the cash.

 

On the one hand we could assume that it is worth nothing (the company will do nothing with it, or at best will waste it on a bad aquisition). This appears to be how the market is valuing it currently, which values the company at a 10 PE; significantly below the S&P average.

 

On the other hand we could assume that it is worth 100% of its value (the company will use it wisely). Net of cash, this would give the company a PE of about 7 (about 1/2 of S&P 500).

 

The real answer is somewhere in between. hen you figure it out, let me know.  :)

 

I do expect Apple to increase the dividend (I am hoping for minimum 50% increase); this would be a great first step. I HOPE they also announce an accelerated stock buyback; I would like to see them increase this to $10-20 billion for the next 12 months - subject to stock price (only do it below $500). This would give investors a solid dividend and reduce the shares outstanding. Even with this plan, net cash will still increase year over year. Next year the company can tweak the plan further. 

 

Einhorn is only interested in them releasing the cash, and then he's gone.  I think Apple is trying to distribute the cash over time to long-time shareholders, not issue a special dividend like Microsoft did and then watch the stock flop sideways like a fish out of water.  They are much better off issuing a really fat dividend every quarter and increasing it each year.  Cheers!

[Guest valueInv]

I thought Samsung was winning?

 

http://finance.yahoo.com/news/apples-old-iphone-iphone-4s-142300162.html

 

this is right on the eve of s4 launch, with iphone 4s having been discounted. so not a fair comparison.

 

samsung has dominated many markets so its still a big threat

 

 

I'm looking at smartphone costs in India and the iPhone 4 is more expensive than the s3, leave alone the 4s. While it is not fair to compare the s3 to the 5, I'd say the 4s comparison is telling.

 

It also tells you that its not the Galaxy S series that is driving Samsung's unit sales numbers, its the cheaper phones.

 

plenty of people would still choose the galaxy s over the iphone if they were the same price. i just got off the plane and i saw many more people with large android screens than the iphone. if you think this is solely because of price you're deluding yourself

So why is the 4s outselling the s3?

[Guest valueInv]

What I appreciate with what Einhorn is doing is creating a good discussion around how to think about the net cash position of Apple. I have read little that has helped me understand a useful way to value the cash.

 

On the one hand we could assume that it is worth nothing (the company will do nothing with it, or at best will waste it on a bad aquisition). This appears to be how the market is valuing it currently, which values the company at a 10 PE; significantly below the S&P average.

 

On the other hand we could assume that it is worth 100% of its value (the company will use it wisely). Net of cash, this would give the company a PE of about 7 (about 1/2 of S&P 500).

 

The real answer is somewhere in between. hen you figure it out, let me know.  :)

 

I do expect Apple to increase the dividend (I am hoping for minimum 50% increase); this would be a great first step. I HOPE they also announce an accelerated stock buyback; I would like to see them increase this to $10-20 billion for the next 12 months - subject to stock price (only do it below $500). This would give investors a solid dividend and reduce the shares outstanding. Even with this plan, net cash will still increase year over year. Next year the company can tweak the plan further. 

 

Einhorn is only interested in them releasing the cash, and then he's gone.  I think Apple is trying to distribute the cash over time to long-time shareholders, not issue a special dividend like Microsoft did and then watch the stock flop sideways like a fish out of water.  They are much better off issuing a really fat dividend every quarter and increasing it each year.  Cheers!

Wouldn't a buyback be much better at these prices? Any future growth would lever up the EPS.

[hardincap]

I thought Samsung was winning?

 

http://finance.yahoo.com/news/apples-old-iphone-iphone-4s-142300162.html

 

this is right on the eve of s4 launch, with iphone 4s having been discounted. so not a fair comparison.

 

samsung has dominated many markets so its still a big threat

 

 

I'm looking at smartphone costs in India and the iPhone 4 is more expensive than the s3, leave alone the 4s. While it is not fair to compare the s3 to the 5, I'd say the 4s comparison is telling.

 

It also tells you that its not the Galaxy S series that is driving Samsung's unit sales numbers, its the cheaper phones.

 

plenty of people would still choose the galaxy s over the iphone if they were the same price. i just got off the plane and i saw many more people with large android screens than the iphone. if you think this is solely because of price you're deluding yourself

So why is the 4s outselling the s3?

 

did i say more people would choose galaxy over iphone or did i say plenty?

[Guest valueInv]

did i say more people would choose galaxy over iphone or did i say plenty?

 

Plenty is a very vague number.

 

[Guest wellmont]

Apple suffers defeat in US district court

 

Greenlight Capital Inc. won an order blocking Apple Inc. (AAPL) from moving forward with a shareholder vote on provisions that include a measure limiting the company’s ability to issue preferred stock.

U.S. District Judge Richard Sullivan in Manhattan today granted Greenlight’s request for an injunction blocking the vote on the grounds that Apple had unfairly bundled three proposals, including the preferred shareholder measure it opposes with others it supports, under an item named “Proposal No. 2.”

[Parsad]

What I appreciate with what Einhorn is doing is creating a good discussion around how to think about the net cash position of Apple. I have read little that has helped me understand a useful way to value the cash.

 

On the one hand we could assume that it is worth nothing (the company will do nothing with it, or at best will waste it on a bad aquisition). This appears to be how the market is valuing it currently, which values the company at a 10 PE; significantly below the S&P average.

 

On the other hand we could assume that it is worth 100% of its value (the company will use it wisely). Net of cash, this would give the company a PE of about 7 (about 1/2 of S&P 500).

 

The real answer is somewhere in between. hen you figure it out, let me know.  :)

 

I do expect Apple to increase the dividend (I am hoping for minimum 50% increase); this would be a great first step. I HOPE they also announce an accelerated stock buyback; I would like to see them increase this to $10-20 billion for the next 12 months - subject to stock price (only do it below $500). This would give investors a solid dividend and reduce the shares outstanding. Even with this plan, net cash will still increase year over year. Next year the company can tweak the plan further. 

 

Einhorn is only interested in them releasing the cash, and then he's gone.  I think Apple is trying to distribute the cash over time to long-time shareholders, not issue a special dividend like Microsoft did and then watch the stock flop sideways like a fish out of water.  They are much better off issuing a really fat dividend every quarter and increasing it each year.  Cheers!

Wouldn't a buyback be much better at these prices? Any future growth would lever up the EPS.

 

Yup, I would be happy with any buybacks below $500...and would not complain if they were still buying shares up to $550.  I don't want a special dividend.  The company SHOULD NOT issue a special dividend if they want long-term shareholders. 

 

The preferreds is not a bad idea, but not necessary...just buyback shares below $550, and then issue the equivalent of an increasing dividend annually.  The company has enough cash coming in to foster continued innovation even after paying a very large annual dividend.  They should speed up the buybacks with the cash within the company until it gets to about $550.  Cheers!

[Palantir]

I agree with Mr Prasad. A higher dividend yield/buyback would be great, as long as it is done consistently and spread out over the long term, as a permanent fixture rather than a one time sugar high.

 

The main focus should be on making great things and making sure Apple stays a viable business instead of short term financial gimmicks.