AAPL - Apple Inc.

[boilermaker75]

I am intrigued by the iWatch. I remember as a kid looking at the comics when the Sunday Chicago Tribune would come with Dick Tracy on the front  with his communication watch.

 

I don't invision wearing an iWatch, but who knows. I do wear a watch to tell time. It is the all-silver TAG aquaracer. I don't wear it as a fashion statement, but because it was a gift from my wife and daughter. Before that I was wearing a cheap timex digital.

 

I used to have a Microma watch, which was made by INTC in the seventies. I worked at INTC from 1976-1978 and as an employee could purchase them cheaply. I wore the Microma till it stopped working.

 

Edit: Here is a link on the history of the digital watch,

 

http://www.computerhistory.org/semiconductor/timeline/1974-digital-watch-is-first-system-on-chip-integrated-circuit-52.html

 

Peter Stoll worked at INTC. When I joined INTC Peter was in the same division, the Microcomputer Design Division, which was really small back then.

[jeffmori7]

I haven't worn a watch in about 25 years, and can't really imagine wearing any type of smartwatch.

 

I haven't worn a watch for about 10 years also..but ironically, my last watch was an Apple watch!! Unfortunately I lost it...

 

Lately, I thought it was probably a rare and precious object..but actually, you can find it on eBay, and it is not worth that much!

 

http://www.ebay.com/itm/NEW-APPLE-COMPUTER-MAC-OS-WRIST-WATCH-NEW-BATTERY-RARE-VINTAGE-RUBBER-BAND-/181108930173?pt=Wristwatches&hash=item2a2aeef67d

[boilermaker75]

I haven't worn a watch in about 25 years, and can't really imagine wearing any type of smartwatch.

 

I haven't worn a watch for about 10 years also..but ironically, my last watch was an Apple watch!! Unfortunately I lost it...

 

Lately, I thought it was probably a rare and precious object..but actually, you can find it on eBay, and it is not worth that much!

 

http://www.ebay.com/itm/NEW-APPLE-COMPUTER-MAC-OS-WRIST-WATCH-NEW-BATTERY-RARE-VINTAGE-RUBBER-BAND-/181108930173?pt=Wristwatches&hash=item2a2aeef67d

 

I never knew AAPL had watches.

 

Here are images of the INTC Microma watches,

 

http://www.google.com/search?q=microma+intel+watch&hl=en&tbm=isch&tbo=u&source=univ&sa=X&ei=BuFQUdquK4-byAGW1oDgDw&sqi=2&ved=0CD4QsAQ&biw=1146&bih=586

[Parsad]

I haven't worn a watch in about 25 years, and can't really imagine wearing any type of smartwatch.

 

I haven't worn a watch for about 10 years also..but ironically, my last watch was an Apple watch!! Unfortunately I lost it...

 

Lately, I thought it was probably a rare and precious object..but actually, you can find it on eBay, and it is not worth that much!

 

http://www.ebay.com/itm/NEW-APPLE-COMPUTER-MAC-OS-WRIST-WATCH-NEW-BATTERY-RARE-VINTAGE-RUBBER-BAND-/181108930173?pt=Wristwatches&hash=item2a2aeef67d

 

I used to wear a watch every day, until my phone started telling the time and doing alot of things.  Now if an iWatch could do alot of things my phone could do, I would go back to wearing a watch. 

 

I used to collect watches actually...I even have a Berkshire Hathaway Seiko watch...it's very nice...never worn except the day I bought it!  Sitting in my safety deposit box, alongside the really nice Gucci watch my parents bought me for my 21st birthday just before my Dad died.  Those are the only two watches I have left...as I sold the rest because I don't wear them anymore.  Cheers!

[Guest valueInv]

Apple gets moving in India:

 

http://gigaom.com/2013/03/26/apple-may-expand-retail-presence-in-india-but-plan-still-doesnt-include-apple-stores/

[Guest valueInv]

Like I've said many times before:

 

http://gigaom.com/2013/03/26/why-apple-doesnt-need-a-cheap-iphone-if-t-mobile-does-it-for-them/

[Guest valueInv]

On the Apple-can't-innovate-now-that-Jobs-is-gone theory:

 

1, People give Jobs too much credit:

http://www.businessinsider.com/apple-insanity-2012-12

 

2, If it's not innovating, its probably has a lot to do with Jobs:

http://appleinsider.com/articles/13/04/01/apple-govt-rep-says-next-two-iphones-were-designed-under-steve-jobs

 

Yeah, I know I may have been wrong on the second one.

[Ross812]

Apple hands down. Someone else put it the best - "When you buy Apple you are buying options on new products they are developing". This is in addition to their moat, cash flows, etc. I am willing to bet Apple will be more successful in developing new innovative products than anyone else in the industry.

 

There is also an additional factor to consider in their moat. Apple is not standing still, they are constantly evolving their products and putting distance between themselves and their competitors. They are also entering new business like mobile advertising. There are a lot of reasons why I see a huge upside for the stock. But I also don't see a margin of safety (as with most tech companies). The company is very dependent on Steve Jobs.

[Guest valueInv]

Apple hands down. Someone else put it the best - "When you buy Apple you are buying options on new products they are developing". This is in addition to their moat, cash flows, etc. I am willing to bet Apple will be more successful in developing new innovative products than anyone else in the industry.

 

There is also an additional factor to consider in their moat. Apple is not standing still, they are constantly evolving their products and putting distance between themselves and their competitors. They are also entering new business like mobile advertising. There are a lot of reasons why I see a huge upside for the stock. But I also don't see a margin of safety (as with most tech companies). The company is very dependent on Steve Jobs.

 

There was a time when I used to be nervous about Apple. Reading the board cured me of that. Live and learn.

[Guest wellmont]

the cheap iphone is for emerging and developing markets. the iphone problem is not a USA problem. it's a ROW problem. the tmo iphone is slightly less expensive when you run the numbers. and not enough of a discount to matter much. And they've already done informal surveys on this anyway. it's going to take much more than transparency to get people to switch to tmo. and the point is moot. the cheaper iphone is on it's way. late. but on it's way. Most people in the USA who want an iphone have one. the growth in smartphones is coming in sub $250 category.

[Guest valueInv]

Another classic:

 

http://www.asymco.com/2010/03/09/music-sweet-music/

[Shawn]

From an investor's standpoint could one of you politely and OBJECTIVELY explain why or why NOT - Apple would be a good investment.

 

I honestly think that at 3.1x book value and 10x earnings, it is a FAIR price. But I'm curious to read a criticism for and AGAINST investing in Apple.

 

 

Thanks,

SCC

 

(man I should probably change my name on here :( )

[boilermaker75]

From an investor's standpoint could one of you politely and OBJECTIVELY explain why or why NOT - Apple would be a good investment.

 

I honestly think that at 3.1x book value and 10x earnings, it is a FAIR price. But I'm curious to read a criticism for and AGAINST investing in Apple.

 

 

Thanks,

SCC

 

(man I should probably change my name on here :( )

 

If you purchased the whole company, assuming no growth you would still be able to pull out 12% cash per year,

 

(market cap of 405.66B - cash 10.746B - short-term investments of 18.383 B)/(TTM FCF 46.3 B) = 8.1.

 

Why I am interested at these prices.

 

Edit: Something didn’t seem right and then I saw Palantir’s recent post and realized I left off the marketable long term securities. So, this is what I should have posted

 

(market cap of 405.66B - cash 10.746B - short-term investments of 18.383 B – long-term marketable securities 92B)/(TTM FCF 46.3 B) = 6.1

 

Again not discounting for the overseas portion

 

[Palantir]

I think you should have some declines, so I wouldn't use the given FCF, but maybe give it a haircut of like 30%, furthermore, the cash should get a haircut of 35% for the implicit tax.

[boilermaker75]

I think you should have some declines, so I wouldn't use the given FCF, but maybe give it a haircut of like 30%, furthermore, the cash should get a haircut of 35% for the implicit tax.

 

yes I wasn't discounting the overseas cash.

 

Could someone borrow money overseas, take a company private, and then pay off the overseas loans with the overseas cash and escape the US tax consequences?

[Palantir]

My stab = we have 137 B (8)) in cash and securities, and we give a theoretical tax haircut of 35%, yielding 89B.  48 Billion in taxes!

 

Given MCap of 400B-89B= 311B.

 

Assume that Apple slowly loses market share, and give it a decline of 30%, so 31B.

 

We get a FCF yield of about 10% just at my hurdle rate, which is the bearish case. IMO fairly valued is a 9% yield, so that would make Apple's IV to be (bear case) = 433B = $461.

 

 

So many assumptions!

[Viking]

Apple earns (by far) most of its profit with iphone; the US market is (by far) the most important market for iphone. How is Apple doing with iphone in the US? Very well. Apple grew their #1 share by 3.9% to almost 38.9%; #2 Samsung grew 1% to 21.3% (3 month average measured to the end of Feb). Nice to see.

 

http://www.engadget.com/2013/04/04/comscore-february-2013/

 

http://www.asymco.com/2013/04/05/reasons-for-ios-outperformance-in-the-us/

[Guest valueInv]

Parsad, got your trigger finger ready? Buying opportunity may be coming up:

 

http://www.slashgear.com/foxconn-sales-fell-19-this-quarter-blame-is-placed-on-apples-iphone-10277314/

[Guest wellmont]

Apple earns (by far) most of its profit with iphone; the US market is (by far) the most important market for iphone. How is Apple doing with iphone in the US? Very well. Apple grew their #1 share by 3.9% to almost 38.9%; #2 Samsung grew 1% to 21.3% (3 month average measured to the end of Feb). Nice to see.

 

http://www.engadget.com/2013/04/04/comscore-february-2013/

 

http://www.asymco.com/2013/04/05/reasons-for-ios-outperformance-in-the-us/

 

unfortunately growth in the US high end has slowed to a crawl. and appl is poorly positioned in emerging markets where growth is strongest. hence the radically low p/e ratio and poor stock market performance.

[Guest valueInv]

Apple earns (by far) most of its profit with iphone; the US market is (by far) the most important market for iphone. How is Apple doing with iphone in the US? Very well. Apple grew their #1 share by 3.9% to almost 38.9%; #2 Samsung grew 1% to 21.3% (3 month average measured to the end of Feb). Nice to see.

 

http://www.engadget.com/2013/04/04/comscore-february-2013/

 

http://www.asymco.com/2013/04/05/reasons-for-ios-outperformance-in-the-us/

 

unfortunately growth in the US high end has slowed to a crawl. and appl is poorly positioned in emerging markets where growth is strongest. hence the radically low p/e ratio and poor stock market performance.

 

Really? According to you a month back, the poor stock performance was due to holding too much cash.

[Guest wellmont]

Really? According to you a month back, the poor stock performance was due to holding too much cash.

 

that too. :)

[Viking]

As has been noted on the MSFT thread, PC sales continue to weaken (and faster than anticipated) as buyers continue to shift from PC's to tablets and smartphones. Yes, Apple will see some softness due to slow Mac sales. However, I would expect Mac to out perform the industry (as it has the past few years). More importantly, Apple now earns the vast majority of its profits from the tablet and smartphone segments (mostly smartphone). Apple is positioned perfectly to take advantage of continued growth in tablets and smart phone segments.

 

Here is an updated post. IDC estimates US sales of Mac are down 7.5% and Gartner estimates MAC sales are actually up 7.4%. Bottom line is PC sales are very weak and Apple continues to gain market share. 

 

http://www.macrumors.com/2013/04/10/apples-u-s-mac-shipments-fall-7-5-as-overall-pc-market-plunges-14-year-over-year/

[Palantir]

So MSFT is obviously going to the crapper. But Apple is also losing its innovation edge. Google can't make money off mobile.

 

Which large cap consumer tech stock is worth buying?

[Guest valueInv]

So MSFT is obviously going to the crapper. But Apple is also losing its innovation edge. Google can't make money off mobile.

 

Which large cap consumer tech stock is worth buying?

Who said Apple is losing its innovation edge?

[Viking]

Palantir, I believe your comment accurately summarizes current consensus opinion on Apple.

 

I see nothing that leads me to think that Apple has lost its innovation edge. If you look at history, it appears they launch 'breakthrough' innovation about every three to four years. My guess is we will see their next big thing sometime in the next 12 months (as the ipad just turned three). Maybe it will be 4 or even 5 years this time. Does this mean they have lost their mojo? I don't think so.

 

I think the ipad mini launch last year is under appreciated. The tablet market is growing like crazy and Apple launched a brand new size that has greatly exceeded (already high) expectations. They absolutely nailed the ipad mini (screen size, components, price etc). This product launch is an example of a company that has lost the ability to do great things?

 

Apple continues to be a leader in pretty much every product category they compete in. The smartphone and tablet markets are growing well and Apple will benefit in the coming years.

 

It is also clear that things are changing at Apple. I do expect gross margins to come down. Some years profit may simply go sideways (perhaps this is one of those years) as current product categories mature and the company consolotates its leading position. And it may be a while until we get that next new product. I look forward to seeing what they have planned in the coming years. I believe their most profitable years are still ahead of them. Time will tell.