AAPL - Apple Inc.

[Guest wellmont]

i think part of what you are seeing here is something I would call institutional arrogance. a lot of it was developed under prior management. they fostered an environment where management was taught that it was Their capital, and not the shareholders. Jobs developed a fantastic business but a highly concentrated one. That's great when you are in the sweet spot of the cycle. But technology markets are fickle.

 

Apple concentrated on mobile devices, really 2 products when you think about it. Some would argue 1---Iphone. And even their mobile phone business is not segmented much. So, no contingency plan. No plan to diversify and spread out risks. I would argue that msft goog and orcl took the opposite approach and started to spread out technology risk over more products and segments. We are seeing a confluence of 2 events. the product concentration strategy, and the capital hoarding strategy are coming home to roost.

[txlaw]

 

That's why the future -- if there is any future at all -- is in Blackberry's software and service offerings, where they will make money with partners (device manufacturers, developers, carriers, enterprises using their MDM, content providers, etc.), not in making money on devices.  That's if BBRY can turn it around.  Otherwise, we can only count on run-off value. 

 

So, yeah, I have applied the commoditization/de-commoditization model to BBRY.

Back on the "M2M/Cloud" train, huh? Good, good.

 

No, it's more than that. 

 

The bottom line point is that there has to be a shift to monetizing the OS via software and services.  I gather you disagree with that?  What's your stance?

[Guest wellmont]

actually bbry software revenue is going down. their subscription revenue is going down. so how is that monetizing? they've been trying to license os10 for months now. no takers. why would someone pay for a closed proprietary stack when you can license android, tizen, or firefox for free, and modify it to your heart's content?

[txlaw]

actually bbry software revenue is going down. their subscription revenue is going down. so how is that monetizing? they've been trying to license os10 for months now. no takers. why would pay for closed proprietary stack when you can use android, tizen, or firefox for free, and modify it to your hear's content?

 

I suppose I could respond to this post, but I don't really want to turn this into a BBRY-related discussion.

 

What are your thoughts on the possible commoditization of the OS and the effect on AAPL and its current business model? 

[Guest wellmont]

actually bbry software revenue is going down. their subscription revenue is going down. so how is that monetizing? they've been trying to license os10 for months now. no takers. why would pay for closed proprietary stack when you can use android, tizen, or firefox for free, and modify it to your hear's content?

 

I suppose I could respond to this post, but I don't really want to turn this into a BBRY-related discussion.

 

What are your thoughts on the possible commoditization of the OS and the effect on AAPL and its current business model?

 

I think it's trouble. I always thought android would win. Nobody expected Samsung to be as formidable a competitor as they are at the high end. they came out of nowhere. And these new X phones from Moto are something to watch carefully. Sony and LG are getting their act togther. I see windows phone getting stronger. I see HTC being taken out by Nok or msft and maybe shift emphasis to Windows. or htc could merge with one of the big 3 Chinese device makers.

 

Apple needs a third act. Whether it comes from more product innovation or from acquisition. investors are telling them they require more action on product front and capital management front. I saw a recent interview with Michael Price saying he won't even look at apple unless it gets to $350.

[Guest valueInv]

i think part of what you are seeing here is something I would call institutional arrogance. a lot of it was developed under prior management. they fostered an environment where management was taught that it was Their capital, and not the shareholders. Jobs developed a fantastic business but a highly concentrated one. That's great when you are in the sweet spot of the cycle. But technology markets are fickle.

 

Apple concentrated on mobile devices, really 2 products when you think about it. Some would argue 1---Iphone. And even their mobile phone business is not segmented much. So, no contingency plan. No plan to diversify and spread out risks. I would argue that msft goog and orcl took the opposite approach and started to spread out technology risk over more products and segments. We are seeing a confluence of 2 events. the product concentration strategy, and the capital hoarding strategy are coming home to roost.

 

 

Ummmm, yeah , it's called focus.

[Palantir]

ValueInv - what is your estimate of Apple's intrinsic value?

 

 

Please don't say "insanely great".

[DCG]

I think it's trouble.

 

You also said if you were the CEO of Apple, you'd run the company around whatever David Einhorn says to do, which ruined your credibility in this thread, IMO.

[Parsad]

I think it's trouble.

 

You also said if you were the CEO of Apple, you'd run the company around whatever David Einhorn says to do, which ruined your credibility in this thread, IMO.

 

That would be the dumbest thing to do...cater to Einhorn!  Look, a few months ago people were clamouring for Apple to blow through their wad...figuratively!  ;D  Well they didn't.  And now the stock is in a place where they could retire 20% of it with half the cash hoard, while still doubling the dividend with operating cash flow.  Listening to Einhorn would have cost Apple more money.  They have an opportunity now to do something significant with excess cash, and if the stock goes down further, it will only increase shareholder value by deploying it now, rather than earlier.  Investors have a very impatient mind when it comes to excess capital...do something now is their mantra...that's not always optimal!  Cheers!

[CorpRaider]

refresh ipad and mini, slightly larger and smaller size variations for iphone (just like we saw with ipod) and keep selling the crap out of stable (relatively) secure OS songs and movies and apps etc. and lets put a 15 multiple on ttm earnings and at $660 with a smartdisplay coming down the pike. 

[compoundinglife]

refresh ipad and mini, slightly larger and smaller size variations for iphone (just like we saw with ipod) and keep selling the crap out of stable (relatively) secure OS songs and movies and apps etc. and lets put a 15 multiple on ttm earnings and at $660 with a smartdisplay coming down the pike.

 

Combine that with Prasad's 72B buyback and you have a TTM of 54 * 15 = 810. Now we are talking!

[CorpRaider]

refresh ipad and mini, slightly larger and smaller size variations for iphone (just like we saw with ipod) and keep selling the crap out of stable (relatively) secure OS songs and movies and apps etc. and lets put a 15 multiple on ttm earnings and at $660 with a smartdisplay coming down the pike.

 

Combine that with Prasad's 72B buyback and you have a TTM of 54 * 15 = 810. Now we are talking!

 

That works.  Also perish the thought of paying a premium multiple for probably the strongest brand name in the world.  I'm hoping for a blah quarterly with silence on dividend and buybacks and silence on products (to be expected) and a really great buying opportunity.  I guess I can't count on them to sandbag the guidance since it seems like the cook regime doesn't do that.  Probably going to end up being too greedy.

[Guest wellmont]

I think it's trouble.

 

You also said if you were the CEO of Apple, you'd run the company around whatever David Einhorn says to do, which ruined your credibility in this thread, IMO.

 

well you've been a perma bull on AAPL from the get go and that hasn't been very Credible lately now has it?

[Palantir]

They were going to return cash before David showed up, and had already started. Tim had noted the possibility of returning cash since 2011.

[Guest wellmont]

well let's see if they buy back stock. so far they seem to lack a fundamental understanding of the value of that move. btw, Einhorn's plan would not have cost them a dime out of their existing Cash HOARD. lots of cash to buy back stock with. That is if they ever decide to pull the trigger in any more than a nominal way.

[Parsad]

well let's see if they buy back stock. so far they seem to lack a fundamental understanding of the value of that move. btw, Einhorn's plan would not have cost them a dime out of their existing Cash HOARD. lots of cash to buy back stock with. That is if they ever decide to pull the trigger in any more than a nominal way.

 

Einhorn wanted the cash.  That's it.  No long-term involvement as a shareholder.  He's a parasite who wanted part of the cash hoard.  Once that is paid out, he would be gone.  Cheers!

[Guest wellmont]

well let's see if they buy back stock. so far they seem to lack a fundamental understanding of the value of that move. btw, Einhorn's plan would not have cost them a dime out of their existing Cash HOARD. lots of cash to buy back stock with. That is if they ever decide to pull the trigger in any more than a nominal way.

 

Einhorn wanted the cash.  That's it.  No long-term involvement as a shareholder.  He's a parasite who wanted part of the cash hoard.  Once that is paid out, he would be gone.  Cheers!

 

he's already held the stock a long time. He would have sold the pref and kept the common. But since they are not going to follow his plan, I would not blame him for selling. After all he had to sue them to keep them from doing harmful things to their shareholders. Cheers!

[Guest valueInv]

I think it's trouble.

 

You also said if you were the CEO of Apple, you'd run the company around whatever David Einhorn says to do, which ruined your credibility in this thread, IMO.

 

well you've been a perma bull on AAPL from the get go and that hasn't been very Credible lately now has it?

T

Yeah, and you've been a perma bear on RIM and how credible is that these days?

[DCG]

well you've been a perma bull on AAPL from the get go and that hasn't been very Credible lately now has it?

 

I don't think I've really been a perma bull on Apple. I sold a bit more than half my position between $680-$690, and started buying more in the low $400's. Most of my comments in this thread have been around Apple as a company, and not the stock price though.

 

I fully admit that the stock has sold off more than I expected though, and that the sentiment on the brand has decreased a bit (and I previously mentioned that Samsung's add campaign was pretty brilliant - and it's been real effective).

[Guest wellmont]

I think it's trouble.

 

You also said if you were the CEO of Apple, you'd run the company around whatever David Einhorn says to do, which ruined your credibility in this thread, IMO.

 

well you've been a perma bull on AAPL from the get go and that hasn't been very Credible lately now has it?

T

Yeah, and you've been a perma bear on RIM and how credible is that these days?

 

I really wish these kinds of sophomoric attacks for having a contrary opinion, that precipitated my post, didn't happen at all on stock message boards. but such is life ehh?

[jeffmori7]

Anecdotal remark on Apple, and precisely about the iPad : Here in Montreal, the main newspaper just a launch a brand new electronic version, which is only available on iPad. It is entirely free, offers all the content available in the paper version, and even more interactive display, videos, and new ad formats for announcers. They choose to make it available through the most recent iPad (iOs 6) only, using the newsstand application as they believe it is the best available tablet, and the most widely used. And there is no announcement for a futur Android version so far.

 

So it tells me that the iPad is still perceived as the dominant player in the tablet area, and that is probably worth something. I like it when other companies help Apple selling more iPad by offering exclusive contents!

 

For those interested, it is in French : http://www.lapresse.ca/actualites/201304/17/01-4642042-la-presse-est-lancee.php

[beerbaron]

Anecdotal remark on Apple, and precisely about the iPad : Here in Montreal, the main newspaper just a launch a brand new electronic version, which is only available on iPad. It is entirely free, offers all the content available in the paper version, and even more interactive display, videos, and new ad formats for announcers. They choose to make it available through the most recent iPad (iOs 6) only, using the newsstand application as they believe it is the best available tablet, and the most widely used. And there is no announcement for a futur Android version so far.

 

So it tells me that the iPad is still perceived as the dominant player in the tablet area, and that is probably worth something. I like it when other companies help Apple selling more iPad by offering exclusive contents!

 

For those interested, it is in French : http://www.lapresse.ca/actualites/201304/17/01-4642042-la-presse-est-lancee.php

 

They took 3 years to develop the software, 3 years ago the only descent tablet was iPad. This is the kind of project where the team would focus on the first platform and then go to the next one (get the thing started, start getting revenues ASAP, and make increase client base with Android later)

 

BeerBaron

[Guest valueInv]

I think it's trouble.

 

You also said if you were the CEO of Apple, you'd run the company around whatever David Einhorn says to do, which ruined your credibility in this thread, IMO.

 

well you've been a perma bull on AAPL from the get go and that hasn't been very Credible lately now has it?

T

Yeah, and you've been a perma bear on RIM and how credible is that these days?

 

I really wish these kinds of sophomoric attacks for having a contrary opinion, that precipitated my post, didn't happen at all on stock message boards. but such is life ehh?

 

Don't make them then

[jeffmori7]

Anecdotal remark on Apple, and precisely about the iPad : Here in Montreal, the main newspaper just a launch a brand new electronic version, which is only available on iPad. It is entirely free, offers all the content available in the paper version, and even more interactive display, videos, and new ad formats for announcers. They choose to make it available through the most recent iPad (iOs 6) only, using the newsstand application as they believe it is the best available tablet, and the most widely used. And there is no announcement for a futur Android version so far.

 

So it tells me that the iPad is still perceived as the dominant player in the tablet area, and that is probably worth something. I like it when other companies help Apple selling more iPad by offering exclusive contents!

 

For those interested, it is in French : http://www.lapresse.ca/actualites/201304/17/01-4642042-la-presse-est-lancee.php

 

They took 3 years to develop the software, 3 years ago the only descent tablet was iPad. This is the kind of project where the team would focus on the first platform and then go to the next one (get the thing started, start getting revenues ASAP, and make increase client base with Android later)

 

BeerBaron

 

Good observation. But still an advantage in the short term for Apple as a first mover in this area.

[Guest valueInv]

 

That's why the future -- if there is any future at all -- is in Blackberry's software and service offerings, where they will make money with partners (device manufacturers, developers, carriers, enterprises using their MDM, content providers, etc.), not in making money on devices.  That's if BBRY can turn it around.  Otherwise, we can only count on run-off value. 

 

So, yeah, I have applied the commoditization/de-commoditization model to BBRY.

Back on the "M2M/Cloud" train, huh? Good, good.

 

No, it's more than that. 

 

The bottom line point is that there has to be a shift to monetizing the OS via software and services.  I gather you disagree with that?  What's your stance?

With regards to Apple, they will continue to make more money than anyone else. Their hardware margins % may decline as they add mid market segments but their margin dollars will increase.

 

Their overall margins will at least stay stagnant over the long term as they ramp up other services on top. The big one being payments.