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Good gesture, roni, and best wished to you as well!
Apple analysts' frenzied Q4 round-up
Posted by Philip Elmer-DeWitt
October 16, 2010 7:58 AM
The Street scrambles to get its spreadsheets ready for Monday's earnings call
Bernstein's Toni Sacconaghi added 2.3 million units to his iPhone estimate on Friday. Piper Jaffray's Gene Munster doubled his iPad number. Hudson Square's Daniel Ernst raised his price target, from $300 per share to $500.
With Apple's (AAPL) products flying off the shelves and its shares setting new record highs every trading day in October (the stock closed Friday at $314.74, up $12.43 for the day), analysts who had let their spreadsheets get dusty over the quarter had a lot of catching up to do.
According to Thomson Financial, the Street's Q4 revenue consensus jumped $100 million in the space of a week, from $18.76 billion to $18.86 billion.
We've been doing our own, somewhat more detailed polling, comparing the estimates of a select group of Wall Street professionals with those of a small community of blogger-analysts who follow Apple for their own fun and profit and whose numbers, frankly, tend to be closer to the mark.
The estimates we've gathered are pasted below the fold.
Curiously, the two groups, which in recent quarters had been growing closer, at least in terms of their average estimates, seem to have drifted apart again.
Both are expecting Apple to report strong year-over-year revenue growth -- anywhere from 55.2% to 66.9%, with the bloggers 7.5% more bullish than the pros.
But they can't agree on iPad unit sales, or on the bottom line.
The bloggers, on average, are looking for Apple to report Q4 sales of 5.52 million iPads, compared with the pros' 4.73 million, a 16.8% difference.
And that's reflected in their average estimates for Q4 earnings per share. The bloggers are calling for an EPS of $4.73, the pros for $4.11. (Thomson's EPS consensus is even lower: $4.06.)
We'll find out whose numbers were closest Monday, Oct. 18 after the closing bell. We'll post our quarterly Earnings Smackdown -- along with a list of the best and worst analysts -- early Tuesday.
Revenue in billions, units in millions.
http://tech.fortune.cnn.com/2010/10/16/apple-analysts-frenzied-q4-round-up/
On Apple and Its (Enviable) Problems
By YUKARI IWATANI KANE
Oh, to have Apple Inc.'s kind of problem. While consumer confidence remains weak, the strength of Apple's quarterly results Monday will depend largely on how fast it has been able to meet demand for products such as iPhones and iPads.
Despite complaints about the iPhone 4's antenna, consumer demand for the smartphone has been insatiable since its late-June launch. The iPad not only has kept up strong sales, but it also has helped whet users' appetite for Macintosh computers. IPod sales have been on the decline, but the debut of new versions of the mobile players last month likely gave them a boost.
Getty Images
Analysts on average expect earnings for Apple's fiscal fourth quarter to rise 46.2%, compared with earnings a year ago adjusted for an accounting change, to $4.05 a share, according to Thomson Reuters. Revenue is expected to jump 54% to $18.8 billion. "It's going to be a blowout," says Shaw Wu, a Kaufman Brothers analyst.
This isn't to say investors are without concerns. Wall Street expects Apple to have sold about 11 million iPhones and 4.7 million iPads during the quarter. Apple has been building production capacity to fix supply constraints; whether it can continue to meet demand is an open question as distribution expands to more retailers world-wide.
Success also comes at a price. Apple's gross margin, at 39.1% in the June quarter, was one of the industry's highest. Yet in a July conference call, Apple said iPhone 4 and iPad sales would be negative for the margin because of their high cost structure. That is especially true for the iPad. And the company has new challengers: The Google Inc.-backed Android smartphone operating system has gained more market share than Apple has.
There is also Apple's cash hoard—it had $45.8 billion in cash and securities in June. Given current super-low rates, Apple can't make much sitting in cash. That has some investors hankering for a dividend.
Plus, the surge in Apple's share price past $300 last week sets a high expectations bar.
For now, though, such matters are small worries. Even if the company sticks to its usual conservatism in forecasting the current quarter, investors are likely to remain as enthusiastic as Apple's own customers.
http://online.wsj.com/article/SB10001424052748704049904575554522490491154.html
Not a bad day at the office. AAPL up $12.73 to $314.74 and AMZN up $9.
If only I owned some GOOG I coulda had a Trifecta.
Why The New IPad Retail Plans Matter
Oct. 14 2010 - 2:45 pm | 2,338 views
By ELIZABETH WOYKE
Apple’s Thursday announcement that its iPad tablet computer will be available at AT&T and Verizon Wireless stores starting Oct. 28 is a clear win for consumers. The ability to pick up an iPad at 4,200 more stores than before is an obvious convenience for shoppers.
What makes the news so interesting, however, are the clues it contains about other developments, including the existence of a Verizon iPhone, data pricing trends and the way tablets will be sold in the future. Here are some not-so-obvious reasons why today’s iPad news matters:
Holiday sales will blunt the competition
Analysts were already predicting the iPad would be a huge holiday hit. Expanding distribution so significantly further ensures the iPad will sell briskly over the next few months. (In addition to AT&T and Verizon, Target began selling the iPad on Oct. 3, Wal-Mart plans to offer the tablet from Oct. 15 and Sam’s Club will stock at it at some point before the holidays.) Ticonderoga Securities analyst Brian White recently estimated iPad sales would top 7 million units in the fourth quarter.
Holiday sales will affect Apple’s competitors as much as Apple. A number of companies including Research In Motion, LG, Acer and Lenovo have developed their own tablets, but won’t begin selling them until next year. Since there is little evidence that people intend to buy multiple tablets, each new iPad owner represents a lost customer for these firms.
Samsung in particular may see an impact. In September, the Korean electronics giant said its Galaxy Tab tablet would be available at the four largest U.S. carriers before the end of the year. None of the operators have started selling the device, however, and AT&T and Verizon may have lost some enthusiasm for it now that they have access to the iPad.
More evidence of a Verizon iPhone
Rumors of an iPhone compatible with Verizon’s network have gained credence in recent weeks with multiple press reports pointing to an early 2011 launch. The fact that Apple included Verizon in its iPad retail plans instead of limiting sales to AT&T, which provides the device’s cellular service, is further evidence that the two companies have begun viewing each other as partners.
Insight into pricing strategies
While AT&T and Verizon will offer the iPad for the same basic prices — $629 for 16 gigabytes of memory, $729 for 32GB and $829 for 64GB — the two companies are setting different rates for their data plans. AT&T will charge $15 per month for 250 megabytes of data and $25 for 2 gigabytes. Verizon will charge $20 for 1 gigabyte. Credit Suisse analyst Jonathan Chaplin notes that Verizon’s higher rate hints at its stance toward data plan pricing in general. “Some investors have been concerned that Verizon would play to their capacity advantage by pricing data more cheaply than AT&T,” Chaplin wrote in an Oct. 14 research note. “This seems less likely now.”
AT&T instituted a tiered data plan in early June, but Verizon’s iPad plan is its first attempt at capped data pricing. The carrier has said it will start charging subscribers based on the amount of data they use later this year.
Strengthens carrier model for tablets
The iPad’s two different flavors — Wi-Fi only and 3G-equipped — mean it could be stocked in consumer electronics stores like Best Buy or in carrier shops. Today’s announcement shows that Apple is pursuing both avenues. If the iPad sells well through carrier channels, it could encourage operators to stock more tablets.
Another testing ground for mobile hotspots
The iPad, in its current form, will not run on Verizon’s network, so the carrier has created a work-around: bundling the Wi-Fi version of the device with standalone “MiFi” mobile hotspots. Verizon isn’t the first to try this approach; Sprint has been marketing its 3G/4G mobile hotspot, Overdrive, as an iPad accessory for months. Hotspot functionality is also increasingly getting built directly into smartphones.
Though it is not a completely new idea, Verizon’s iPad promotion is likely to shape the mobile hotspot market by further popularizing the concept. Up to now, carriers pushing hotspots as iPad add-ons were not able to stock the actual iPad in their stores.
http://blogs.forbes.com/elizabethwoyke/2010/10/14/why-the-new-ipad-retail-plans-matter/
Apple Just Became the Number One U.S. PC Vendor, Kinda
BY KIT EATONToday
Apple's just been confirmed as the top PC vendor in the U.S.--if you look at things in a certain way. What's the trick? You have to include iPad sales in the figures.
IDC has just done its math and worked out that for the first time in its modern era, Apple has won over 10% of the PC market in the U.S. As we noted earlier, this is a notional milestone...but still an important one, which many other industry figures will be paying attention to (given the news about Outlook and a Vuze portal on Macs, Microsoft itself is reacting to the trends already).
But if you blend in sales data from Gartner to the mix, you get a different and altogether astonishing picture: Apple may have become the number one PC vendor in the U.S. Forget Dell, forget Acer and Asus with their netbooks, forget Sony's sleek Vaios--it's all about Apple. You know--that PC maker that people still think overcharges for its computers, and which only "creative types" use.
The one wrinkle in this thinking is that this math only works if you count iPads as mobile computers.
I know, I know. Some of you will have thrown your hands in the air at this, declaiming your displeasure at any such thought, and despairing at a future where kids get used to "closed" ecosystems and PC programming creativity is a distant memory. But bear with us on this. We were recently careful to note that claims iPads were depressing sales of notebooks weren't necessarily straightforward.
But then this week, during the press call concerning Intel's finances, CEO Paul Otellini conceded a little, measurable, notable nibble was probably being taken out of PC sales by Apple's iPad. From a big industry name like this--one whose future hinges, in many respects, on future tablet PCs utilizing his company's products--this is a huge admission. And it definitely lends credence to the notion that you should count iPads as mobile computers. There's also some compelling common-sense thinking about the matter (notably that the iPad can do many things a "normal" computer can do, plus many extra things, and it's finding increasing use cases in industry and enterprise).
With Apple's push to expand availability of the iPad in the U.S., a continuing international roll-out (whose speed has already been limited by the available production line capacity in China) more and more iPads are going to be sold. Particularly if Apple does surprise us all with a cheaper 7-inch version. We're also expecting to see refreshed Macs in the event next week, and possibly that smaller, lighter MacBook Air everyone's waiting for. The timing for a reveal of Apple's new Mac operating system couldn't be any better. In other words, even with a tide of competing tablet devices expected any moment, Apple's position at the top of the computer game is only going to get more comfortable.
WSJ: Verizon vs. AT&T on the iPad
By Jennifer Valentino-DeVries
The iPad is boldly going where no Apple device has gone before — to a Verizon store.
ZUMApress.com
The tablet will be available at Verizon Wireless outlets starting Oct. 28, the companies said Thursday — the same day Apple and AT&T announced that the iPad would be sold by that carrier as well. But there are a few differences between the stores’ offerings.
For starters, AT&T will be selling 3G iPads, while Verizon will be selling bundles that include a Wi-Fi iPad and Verizon MiFi mobile hotspot, which takes signal from Verizon’s cellular network and converts it to Wi-Fi. Apple devices don’t yet work on the technology that Verizon’s network uses, called CDMA. The Journal reported that a CDMA iPhone is expected early next year, though, and the iPad sales could indicate a deepening relationship between Verizon and Apple.
Users who buy at Verizon will need to carry around an extra device to get 3G connection, but it’s a small one. The MiFi is a little more than 2 oz and about the size of “eight stacked credit cards,” Verizon says.
The Verizon MiFi bundles cost $629 to $829 depending on the iPad’s memory–that’s essentially the same price for the 3G iPads that AT&T is selling. Wi-Fi-only iPads cost $499 to $699; Verizon will be selling those as well, but AT&T won’t.
The MiFi ordinarily costs about $270 on its own without a contract, so the iPad bundle offers a discount for those who don’t want to sign up for a long-term plan. On Verizon’s website, the MiFi is free with an online discount and a two-year contract.
There also are differences in iPad data plans. Both carriers are offering plans without long-term contracts, but neither offers unlimited monthly data. Verizon is offering higher monthly data limits but charging higher monthly prices than AT&T.
Verizon is charging $20 a month for 1 gigabyte of data, $35 a month for 3 GB, $50 for 5 GB and $80 for 10 GB, the company said. AT&T charges $15 for 250 MB per month and $25 for 2GB. Both plans offer access to Wi-Fi hotspots at no extra cost.
Readers, what do you think? Would you rather get the iPad at Verizon or AT&T?
http://blogs.wsj.com/digits/2010/10/14/verizon-vs-att-on-the-ipad/?mod=yahoo_hs
Verizon to sell iPads beginning October 28. em
And you got the name of Stockexpertpro how?
Apple 'Back to the Mac' media event on October 20
by Dave Caolo (RSS feed) on Oct 13th 2010 at 11:30AM
The word is out: Apple is hosting a media event on Wednesday, October 20th. The invitation features a a big cat -- looks like a lion to us, which means if you had "Mac OS X 10.7 Lion" in the betting pool, congratulations -- peeking out from behind a metallic Apple logo and the phrase, "Back to the Mac." We're going to don our Carnac outfit and predict that Apple will be talking about the next iteration of Mac OS X.
Of course, we'll have full coverage. See you then.
http://www.tuaw.com/2010/10/13/apple-media-event-on-october-20/
We have $300. eom
Or is it?
sinclap, why don't you post that on the GOOG board where it properly belongs?
Apple's iPhone shipments much stronger than expected, says Sterne Agee.
Sterne Agee's checks indicate the iPhone 4 saw a big jump in September shipments late in the quarter due to strong demand. The analyst now believes September quarter iPhone shipments will be closer to 12M - 15M units vs. previous expectations of 9M - 10M units. The firm notes that key suppliers to the iPhone 4 are Skyworks (SWKS), Diodes (DIOD), and CEVA, Inc. (CEVA). Shares of Apple are BUY rated with a $320 price target.
Barclays (Reitzes) raises target to $385
http://www.marketwatch.com/story/apple-affirmed-overweight-at-barcap-target-385-2010-10-12?siteid=yhoof2
TEL AVIV (MarketWatch) -- Barclays Capital affirmed an overweight rating on shares of Apple Inc., (AAPL 295.36, +1.29, +0.44%) the Cupertino, Calif., tech giant. BarCap analyst Ben A. Reitzes raised his target price 13% to $385 a share from $340. That's as much as 31% upside from Apple's closing price on Monday of $294.07. "Even at this market cap" -- almost $270 billion -- Apple "is the best growth play in the IT-hardware segment, with prospects for significant double-digit organic revenue growth for several more years," the analyst wrote in a note dated Tuesday. The analyst said that in the long term he is "excited" about the growth potential in Apple's FaceTime videoconferencing application, "which we expect to be enabled on all Apple devices over time." And short term, we believe the calendar third quarter was very strong for Apple, with momentum building into the holidays," the analyst wrote.
What We'll Do After Apple Announces Blowout Quarter
October 10, 2010
Jason Schwarz
We have been awaiting a glimmer of evidence to convince us that this market truly can break through its trading range. This past week the market has tried to use the 'currency war' as a reason to sell off and we felt it was important to see Friday's action following the employment report before making any more buys, considering we're already substantially invested. Obviously, the action is positive and we are confident to make our final Apple (AAPL) purchase before its earnings report on October 18th. We are buying a 5% allocation of AAPL November and January option calls. This brings total cash to 28.5% of the portfolio (after Thursday's purchase of GLD puts) This is the optimal amount considering the economic timing barometer is in the green and considering we have a full allocation of LEAPS.
Yair Reiner with Oppenheimer said in a note to investors on Friday that although AAPL stock is up 37 percent in 2010, it has still lagged behind the company's fundamentals: "The prime factor behind the underperformance of the stock relative to the fundamentals seem to be investor concern about Apple's size," he wrote. But a blowout September quarter would spur an "overdue" catch-up with investors".
I agree that Apple stock is overdue to catch up to the fundamentals. We maintain our $330 price target for the aftermath of the earnings report at which time we will seriously consider taking profits and moving most of the Apple allocation into 2012 LEAPS. This earnings report is a rare opportunity to own short term options because the risk/reward is in our favor. Not only do we expect Apple to announce that they have sold every iPhone and iPad that they could produce, but we also anticipate the market will begin to price in the Verizon/China Mobile iPhone that is rumored to arrive in Q1 2011.
We believe the rumors to be true for a variety of reasons:
Apple wants to take some strain off of the AT&T (T) network
Apple wants to compete more directly with Google's (GOOG) Android
Apple needs to spread out the manufacturing burden.
Most are speculating that a move to Verizon (VZ) means the end of Apple's exclusivity deal with AT&T but we hear that Apple might give AT&T exclusive rights to the new versions of iPhone while the Verizon release date lags 6 months or even one year behind. It will all depend on how quickly the new manufacturing partners can ramp production. It's really not that big of a deal because any margin squeeze that results from a loss of AT&T exclusivity will be made up in volume from Verizon. Steve Jobs has stuck with AT&T for so long that I expect his loyalty will remain with them even as iPhone expands to other carriers in the U.S.
Apple and its many catalysts will be the primary stock engine to drive the rest of the market through its stubborn trading range. It's nice to see Apple regain its leadership position this week as it indicates a breakout above Dow 11,000 will happen sooner rather than later.
Disclosure: long AAPL
Why Apple Isn't as Great as Many Say
Reality check for investors bumping up valuations and making bold iPad sales predictions.
By Sean Udall Oct 08, 2010 2:15 pm
I've gotten a seemingly large number of questions of late regarding Apple (AAPL) and if it's still a buy, why I've cooled on the name when it seems everything is better than ever, and why I haven't "bumped" my valuation higher even though everyone else seems to be doing so daily.
I'll start with the latter. First, I was calling for low- to mid-$400s on Apple when the high analyst targets were in the mid-$200s. Also, my longer-term view (and valuation target) is just that and it hasn't been reached. Therefore, until it's close or I see something radically different fundamentally than I've previously forecast, I don't see a huge reason to change it.
With regard to me "cooling" on the name. It's simple, when things change, I change. I actually think Apple is at more risk of not achieving my former number now than it was two years ago. Simply put, there wasn't this massive share take of Android happening. And Android is the real deal and a real threat to Apple's long-term valuation. Second, I've stated that I don't like Apple's exclusive usage of the A4 chip as well as exclusionary chip R&D. This cuts out a lot of very talented silicon development and is highly proprietary and exclusionary. In all my years of studying the technology landscape, this is usually detrimental (sometimes severely). Just look at Apple circa 1990s to see what can happen. Lastly, with valuation in a growth stock it's about what can be exceeded. When folks were thinking 10mm in iPad sales was ridiculous, it was much easier to produce upside. Now I'm seeing numbers like 45mm and higher in iPads for the next calendar year. These sorts of numbers get harder to beat and that compresses valuation, especially in a no-uptick world. See Equinix (EQIX) as an example of what a small miss can do to a stock.
Is Apple still a buy? For me the simple answer is yes, but risks are higher and, in my view, the upside is a lot lower now (versus Apple of $220s, $175, or $144 -- the most recent area where I was uber bullish on the shares). That said, I'm still confident that we see the mid-$300s and I haven't given up on my long-term $400s as of yet. Specifically, I still view Apple as a buy and a core holding but I'm not holding it as a large overweight anymore, as I did for years.
P.S. So could anything get me uber bullish again? Sure, a weird post-EPS reaction that takes $50 off the stock for no good reason other than profit-taking would help but I don't expect that. The main thing I'd like to see Apple do in the near term is not pursue the proprietary semiconductor development. I think partnering with the best of the semiconductor world spurs innovation and cooperation. Second, it could develop its own chips but use them as a competing option. In other words, put the A4 and others up against the silicon of Broadcom(BRCM), Intel (INTC), Qualcomm (QCOM), Nvidia (NVDA), etc. -- and let the best chip win.
About this 7-inch Apple iPad
By Jim Dalrymple
OCTOBER 7, 2010, 11:57 AM PT
Analyst are predicting that Apple will begin work on its 7-inch iPad very soon. They are wrong.
The fact is, Apple already has a 7-inch iPad. They have had one of the smaller devices since they started making the 9.7-inch iPad that we have now.
To be clearer, the two devices were developed at the same time. They have pretty much the same specs, except, of course, the 9.7-inch model has a higher density screen than its smaller counterpart.
Why did Apple choose to go with the larger model instead? Only Steve Jobs knows that for sure.
Perhaps Apple didn’t want comparisons to the iPhone or iPod touch. Even though those comparisons were made with the larger iPad, they would have been even more prevalent with a 7-inch model.
With other companies releasing their 7-inch tablets, you may wonder why Apple doesn’t push its device out the door. I think the answer to that is quite simple — they don’t have to release it.
The iPad is the one of the best selling devices in history. Why would Apple need to release a smaller version to compete in a market it owns. It doesn’t.
When Apple decides it is going to release a 7-inch iPad, rest assured it has been in the works for a long time.
The next time someone says they believe Apple is beginning work on a 7-inch iPad, you will know they are wrong because it’s already done.
http://www.loopinsight.com/2010/10/07/about-this-7-inch-apple-ipad/
Google TV's Dark Side
By: Lance Ulanoff
10.07.2010
The Logitech Revue with Google TV's Web browser offers you no more protection or control than a run-of-the-mill desktop version.
Google TV becomes less mysterious every day. We now have Logitech's pricey Revue box and peripherals to fawn over. Everything looks so sleek and black. The color is fitting; it matches the darkness at the heart of this otherwise innovative product.
Yes, we need a device that brings together our online, desktop, and television-viewing worlds. I want a platform that can break down barriers, with a search engine that traverses all digital mediums and brings back a single, cohesive results page. This is bliss. So why do I think it could turn into a horror show?
A core component of Google TV—and the Logitech Revue—is the Google Chrome Web browser. This makes perfect sense. Google has built one of the best Web browsers on the market. It's so good it's captured over 10 percent of the market in just two years.
According to one Google exec I spoke to at the Logitech Revue launch event, the browser inside the device is actually Chrome 5. It will even get slipstream updates just like the Chrome browser on your desktop or laptop. In case you didn't know, Google is quietly updating Chrome for you, whether you like it or not.
Surely, I thought, the browser inside the Logitech Revue with Google TV couldn't be exactly the same as a run-of-the-mill Web browser. I was right. A Google executive explained that this browser was entirely devoid of Chrome, meaning the thin interface Google wraps around the desktop version is gone. Another Google rep did tell me that Google made the UI slightly different to optimize for the TV "form factor."
I wondered what other tweaks Google might have made to try and optimize the browser for Revue with Google TV.
Virtually none.
Wait a minute, I said to the Google exec. What if someone is operating his Revue with Google TV And he stumbles on a pop-up chain (accidentally hitting an adult site comes to mind). Does the Google TV Chrome browser do anything to suppress the pop-ups or at lease shield the user from this kind of activity? This isn't, after all, a PC.
Nope, the browser doesn't do anything, because it's simply Chrome. It will protect you only in the ways Chrome on the desktop can protect you.
And there's the fatal flaw. It gets worse. Remember, this Chrome browser has no interface or controls. So how do you shut it down and stop those out-of-control pop ups? How do you even change the browser settings? To be clear, it's really just a browser. Throughout the Logitech Revue with Google TV press conference, both companies repeated that mantra. When asked about commerce integration, execs said that "the whole Web is accessible" through the browser, which means, shopping sites, content sites, and everything else. If that's the case, don't you need some sort of protection from "the whole Web?"
You can't install security software on Google TV, so how do you automatically block the bad stuff?
To me this is more than an issue. It's a big, dark problem that literally lies at the core of Google TV. I don't understand how Google can put a browser on a device without the traditional controls of a computer and not make any kind of software adjustments.
If something bad starts to happen on Logitech's Revue with Google TV, what's a user supposed to do? Shut off the TV? No, the activity will still be live and right there when you turn on your set. There are, in fact, Ctrl Alt and Delete buttons on the Revue Remote Control keyboard, so I guess you could use that to reset the box. That seems very un-TV-ish. How, though, do you clear your history and cache?
Look, I'm glad Google, Logitech, and other partners are diving into this, but if they let this problem slip by, what other crucial product mistakes have they missed?
http://www.pcmag.com/article2/0,2817,2370379,00.asp
Apple tgt raised to $345 at Oppenheimer; firm would be a buyer ahead of its 4Q10 earnings report on Monday, 10/18
Oppenheimer is raising their tgt to $345 from $330; they'd be buyers of Apple ahead of its 4Q10 earnings report on Monday, 10/18. AAPL's stock has performed admirably this year (up 37% YTD), but it has significantly lagged the improvement in the co's fundamentals, which have driven FY10 consensus EPS ests up by 75% since Jan. The prime factor behind the underperformance of the stock relative to the fundamentals seems to be investor concern about Apple's size. They think the last 6 months have prepared investors to get over this psychological hump and they think a blowout Septr quarter will provide the catalytic push in the rump for an overdue catch-up trade
Apple Wins First Round Of TV War With Google
Dan Frommer, On Thursday October 7, 2010, 10:27 am
Apple and Google just kicked off the first round of their battle for the living room. Based on what we've seen so far, Apple is in the lead.
It's still early, and this could change, but it looks like Apple is making an all-around smarter bet than Google.
To recap what the two companies are doing:
Google is introducing a product called "Google TV," which is initially available as part of a $300 set-top box from Logitech, or as part of a high-end line of TV sets from Sony. It's trying to become the default way you look for TV shows to watch, hooking up between your cable box and your TV. It'll let you search the TV listings, web video sites, and will eventually have an App Store.
Apple just released the second version of its "Apple TV" gadget, which costs $100, or two-thirds less than the first Google TV set-top box. It's basically a DVD player for the 21st Century, including movie and TV rentals from iTunes, playback for other iTunes videos, and Netflix movie streaming. And, starting next month, you'll be able to wirelessly beam video and audio to it from an iPad, iPhone, or iPod touch. Apple hasn't announced plans for an App Store on the Apple TV yet, but we assume it'll have one in the next year or so. (Plus, Apple TV hackers may create an unofficial App Store much sooner.)
Analyst Michael Gartenberg has a nice way of summing up the difference between these two products:
Google is going after "input one" on your TV -- the first input where your cable box is plugged in, which is a really big, really risky bet. Most people don't mess with input one. How often do you switch cable or satellite providers? Or set-top boxes? Rarely, if ever.
Apple, meanwhile, is going after "input two," where your DVD player or videogame machine is probably plugged in. In most households, that's likely to be an easier entry point -- mentally easier to unplug, easier to experiment with.
That, combined with the significantly lower initial cost for Apple TV versus the Google TV gadgets, is why we think that Apple will have higher adoption this holiday season than Google TV.
No one really needs either of these systems yet. And most people have no idea that they'd even want the web on their TV sets -- especially to the extent Google is building it in.
Because of the simpler message and lower price tag -- $99 is within impulse-purchase range, while $300 is not -- Apple should at least have an easier time convincing people to give Apple TV a try than Google will for Google TV. And that's how Apple has won this early first round.
Here's where Google could do well, though, over several years: If it can spray its software everywhere through wide distribution, the way it has done with Android in the mobile industry.
If Google can get every TV manufacturer, some set-top box makers, cable companies, etc. to use Google TV as the basis for their devices, then people will get Google TV in their homes without even realizing it. Apple is unlikely to license the Apple TV software to other companies, and may or may not ever come out with its own TV sets. But if Google can get its software built-in everywhere, it could gobble up market share more quickly.
Here's the tricky part. For now, the first batch of Sony TVs with Google TV built-in are supposedly going to be expensive, so this will be a slow process. We assume this is because the Intel chip required to run Google TV is more expensive than the guts that go into a budget-grade TV. Eventually, this cost may go down, so even budget TVs could come with Google TV pre-installed.
But for now, it looks like people are going to have to consciously choose Google TV -- and pay hundreds of dollars extra for it -- to get it. And that's going to constrain adoption. That tips this round in Apple's favor. But we're eagerly awaiting the next one.
http://finance.yahoo.com/news/Apple-Wins-First-Round-Of-TV-siliconalley-1824840963.html?x=0&.v=2
Hey, it's free!
http://instagr.am/index/
The symmetry of share shifts in mobile phones
Horace Dediu
Thanks to a reader’s suggestion, I took another look at the profit and market share data from the mobile phone market overview posted last quarter. This time to compare the vendors on two dimensions at the same time.
I plotted the vendors on share of market and share of profit axes in two different points in time: Q2 2007 and Q2 2010. I further broke the chart into four quadrants as shown:
I chose to label the quadrants to indicate the possible categorization of the companies.
Dominant: large market share and large profit share
Star: low market share with large profit share
Fading: high market share with low profit
Marginal: low market share and low profit
It’s interesting to note the shift over the time period of the eight vendors. Whereas Nokia moved from Dominant to Fading, only Apple rose from Marginal to Star. The Marginal players dispersed their placement with Samsung moving laterally toward Nokia while RIM followed in the Apple trajectory and increased profit share while maintaining relatively low share.
Thinking about motion around these two dimensions could be reduced to a vector model. If each vendor is represented by an arrow showing direction and distance moved, we can compare each vendor vs. a symmetric competitor which might account for the loss or gain of share.
The vectors can be paired as follows:
Although the data does not contain all market participants, the shifts in share are quite closely conserved with the vector magnitude (arrow length) and angle (direction) paired. Note how Nokia and Apple swapped Profit without too much impact in Units volume. Similarly, RIM and Sony Ericsson traded profits and volumes quite symmetrically. Samsung also took volume while Motorola lost it. HTC and LG did not change positions dramatically.
Finally, moving all vectors to the same origin leads to this view of share gain/loss over three years in two dimensions:
It becomes quite easy to see who the winners and losers are and by how much.
This model is only an observation of the shifts in market power and is not conclusive about where share was gained or lost, however there is compelling symmetry which also matches the intuition of observers.
Interesting comments at the link:
http://www.asymco.com/2010/10/05/the-symmetry-of-share-shifts-in-mobile-phones/
Mercedes-Benz extends iPad plans to all US dealerships
updated 03:25 pm EDT, Tue October 5, 2010
VP cites 'positive' response
Auto maker Mercedes-Benz has announced that all of its 355 US dealerships should soon be equipped with 3G iPads. The company launched a pilot program in June, initially distributing iPads to just 40 outfits. The stated intent was to keep dealers and customers out by the cars, rather than forcing people to retreat back to an office to hash out details.
The company uses a custom system, MB Advantage on iPad, to speed up tasks like credit applications, checking on marketing campaigns or performing inspections of lease turn-ins. Based on extremely positive feedback, the company says it is not only pushing iPads out to all US dealers, but upgrading MB Advantage to allow for some documents to be signed on-screen. The feature should be ready by the end of October
Read more: http://www.electronista.com/articles/10/10/05/vp.cites.positive.response/#ixzz11WsYoWPX
Versus no tablet at all as of yet.
LG, Not Satisfied With Froyo’s Stability, Delays Tablet Until Android Improves
by Matt Burns on October 4, 2010
It’s funny. Every time a new version of Android rolls out, I get all excited and giddy, dreaming of double rainbows and a stable platform. Then I install it and slowly discover my dreams were not realized and the latest tasty Android treat isn’t what I hoped for. It happened with Donut, Eclair, and Froyo.
Apparently LG agrees with my feeling about 2.2 because, well, the South Korean company delayed its tablet simply because the release wasn’t stable enough. They’re going to wait until something better comes along. Seriously.
LG official to Reuters,
"We plan to introduce a tablet that runs on the most reliable Android version … We are in talks with Google to decide on the most suitable version for our tablet and that is not Froyo 2.2."
The Android tablet has seen some major setbacks as of late. Google themselves said that 2.2 isn’t meant for tablets. HP officially scrapped its Android tablet plans. Android tablet’s future doesn’t look peachy when the aforementioned reports are combined with the fact that the vast majority of Android tablets are simply underdeveloped iPad clones, developed just to make a quick buck.
The Internet seems to think that the next Android release will be the good one and even developed with tablets in mind. But just as in the past, the next version of Android always seems to promise the world and then just deliver incremental updates.
10 Ways People Are Using The iPad To Create Content, Not Just Consume It
Dan Frommer | Oct. 1, 2010, 12:22 PM
One of the first, lame criticisms of Apple's iPad was that it would only be useful for consuming content, not creating it.
Wrong!
Sure, the iPad is great for reading web pages and watching videos. But it has also become a very potent, very cool device for being creative.
Its creative use cases range from a DJ kit -- that's iPad DJ Rana Sobhany pictured -- to a tool for making amazing illustrations and music.
And app developers and artists are creating new uses all the time. Let us know if we've missed something cool.
Read more: http://www.businessinsider.com/ipad-creative-2010-10?slop=1#ixzz119FMY8Il
How Apple took the high ground in the battle for the global digital living room
Posted by Philip Elmer-DeWitt
October 1, 2010 5:42 AM
Google and Microsoft are gaining, says an analyst. Sony, Amazon, Samsung are dark horses
Source: UBS Investment Research
Apple's (AAPL) tightly integrated software and content ecosystem is the template by which a UBS team led by Maynard Um judged the key players in the battle they see "brewing among the mega caps to own the consumer" in what they call the global digital living room.
"We believe the 'holy grail' for these vendors," they write in a 48-page report issued Friday, "is to provide users with seamless access (eventually through the Internet or so-called 'cloud') to all types of content across all types of devices (anything with a screen) anywhere and at all times. It is what we dub the Global Digital Living Room. Unlike in past years, technology and ecosystems are now enabling this to be a reality. While the race is still in the early stages, we believe Apple, Google, and Microsoft are the early leaders in the group -- each with strengths and weaknesses in different areas -- and a number of 'dark horses' including Sony, Amazon, and Samsung. However, the early leaders are the ones that have 'glued' or are in the process of 'gluing' the content together with the hardware through end to end ecosystems.
"We believe the barriers to entry for standalone new entrants are rising and see a number of more vertically focused companies that make their own operating systems such as Research In Motion, Nokia, and Hewlett Packard (via the Palm acquisition) as currently more challenged to compete either given their lack of media-generated content, limited strategy across multiple devices, or, perhaps most importantly, the need to invest heavily to 'keep up with the Joneses' - namely Apple, Google, and Microsoft."
The report goes on to analyze each of the players' current position using the diagram above as its starting point. Only Apple's is mostly green (for "strong"). Google's (GOOG) and Microsoft's (MSFT) have large areas of yellow (needs improvement). Amazon's (AMZN) is mostly red (no solution).
Below: The report's summary of how Apple took the high ground.
With content, in our view, currently being the key pillar, we believe Apple has generated an early ecosystem lead, having pioneered the a la carte music purchase model via iTunes. Apple has leveraged that content to create its ecosystem (i.e., iTunes as a central content repository) that allowed seamless transfer of music to multiple devices -- first iPod and then to iPhone. The introduction of the App Store then built upon the early successes and installed base, which we believe has also been a key driver to the iPad's success.
With more than 160 million iTunes accounts, Apple has built a strong user base that we believe, in part, is captive because of the investments users have put into the ecosystems from a time and dollar perspective as well as familiarity and ease of use. We believe Apple is the benchmark by which others will be judged. Although we believe much of the music within iTunes libraries are likely "ripped" by users, we believe there have been increasing music purchases, some of which may be DRM'd. These purchases that are not transferrable to other media devices could make switching costs higher. The same principle applies to applications. Apple has gained a head start with the rapid success of its App store. While many of the apps users download are free or relatively inexpensive, they still represent an investment into the Apple ecosystem as these applications only work on iOS devices and searching for and downloading the same apps on other platforms could be time consuming.
With iTunes, Apple has created a hub that users use to store, transfer, sync and manage all of their content across multiple devices. The ability for a user to purchase one song and then be able to play that song on their PC's, tablet, smartphone, TV, and music player is a very attractive value proposition for iTunes users. While other competitors (such as Google and Microsoft) are not far behind, in our opinion, no other company currently offers as much content that is as seamlessly integrated on such attractive platforms as Apple does.
THE APPLE INVESTOR: Apple Captures The Digital Living Room, Crushing Google And Microsoft
Heather Leonard | Oct. 1, 2010, 11:17 AM
AAPL Trading Sideways As Q4 Starts
Stocks were on the rise in the morning of the first day of Q4 as signs of strong manufacturing growth in China is driving stocks higher worldwide. Shares of AAPL are currently down over $1, but show signs of recovering. Upcoming catalysts include monthly NPD data (Mac / iPod business); iPhone holiday sales updates and carrier diversification; iPad holiday sales updates and expansion; new content revenue streams such as video, books and social (Ping); and the uptake of the newly refreshed Apple TV. AAPL trades at 16x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).
Apple In A Huge Lead At Capturing The Digital Living Room (Fortune)
Maynard Um at UBS believes that Apple's tightly integrated software and content ecosystem is how the company will capture the global digital living room versus the other mega-cap technology and media companies. He believes content is the key and Apple has generated an early lead with iTunes at more than 160 million accounts. iTunes is a hub where users store, transfer, sync and manage content across multiple devices. While other competitors (such as Google and Microsoft) are not far behind, no other company currently offers as much content that is as seamlessly integrated on such attractive platforms as Apple does.
Another Analyst Increases Estimates On The iPad (Forbes)
Stifel Nicolaus believes that iPad sales and growing popularity will continue to push earnings higher. As a result, the analyst raised EPS estimates as well as increased the price target on shares to $360.
The iPod Is Relevant Because Of iOS: One Million Devices (Macworld)
Apple refreshed the iPod product line last month at its traditional fall unveiling, but why is Apple still building iPods in an iPhone world? Michael Gartenberg at Macworld believes that there are three reasons: 1) The Platform: iOS is what matters most, and the iPod touch is the perfect, low-cost device of the iOS ecosystem; 2) Music: people just want the best experience for portable music. Not games, not mail, not cameras; 3) Diversity: by diversifying its product line, Apple enables users to buy in at any level.
More Reports Out That The iPad Is Killing The Netbook Market (Information Week)
Apple's iPad stole a big chunk of market share from netbooks in the second quarter. DisplaySearch research firm said in its second quarterly report on the laptop market that shipments of the mini-notebooks and other tablet computers combined, without counting in the iPad tablet, would have been down 14% from the first quarter and 13% year over year. With the iPad, overall shipments of netbooks and tablets were down only 4% quarter to quarter, but up 29% year over year. And that's with all the supply constraints.
Apple TV Might Actually Have A Chance (Wired)
In the introduction of the new Apple TV, Steve Jobs didn’t mention that it runs iOS with hidden software that will eventually allow you to share the media with other iOS devices nor that the software may already be jailbroken. These secret ingredients could be the recipe Apple needs to shake up the television industry. Now that Apple TV has been revamped into a streaming rental service with an arsenal of stealth features, maybe Apple has a chance to change the TV business.
Read more: http://www.businessinsider.com/the-apple-investor-oct-1-2010-10#ixzz118xq70u7
I only posted that so I could post a pic of the author:
Typical AAPL shareholder response?
I want Ballmer to be MS CEO forever.
Apple sampling touchscreen panels for iMac Touch?
updated 05:20 am EDT, Fri October 1, 2010
Simtek sending sample displays to Cupertino
A new report has surfaced claiming that Sintek Photronic, a well-known supplier of large touchscreen panels, has sent samples to Cupertino for testing. It is purported that the panels are destined for pre-production versions of a forthcoming touchscreen-based iMac. The latest news adds weight to the rumors circulating in recent months that Apple plans on adding a third iMac model to its current range of 21.5-inch and 27-inch iMac offerings.
According to the DigiTimes story, the sample displays are projected capacitive touch panels. Simtek has the production capability to supply the screens Apple may require. Using a new layering method, perhaps developed by Apple itself, the touch sensors would be integrated into the glass, rather than layered on top. This would make for a thinner, lighter panel that also maintains wide viewing angles. Apple’s current line of iMac use high-quality IPS displays with 178 degree viewing angles, making the preservation of viewing angles a likely priority for any touchscreen iMac.
Just last month, it was revealed that Apple has applied for a patent covering a hybrid iMac interface with a special hinge allowing it to be used in a traditional mouse and keyboard mode, or in touch mode. The proposal also refers to special sensors such as accelerometers that would automatically sense the different screen orientation and would intuitively switch modes. There is even a suggestion that when in touchscreen mode, the iMac may transition from OS X to iOS, in a move likely aimed to leverage the runaway success of Apple's iOS operating system and App store.
Read more: http://www.electronista.com/articles/10/10/01/simtek.sending.sample.displays.to.cupertino/#ixzz116KVnrVO
The plot thickens...
HP Abandons Android
by John Paczkowski
Posted on September 28, 2010 at 1:36 PM PT
Confirming what we first reported here back July, former Palm CEO Jon Rubinstein — who currently heads up Hewlett-Packard’s mobility group, tells the Financial Times that HP has abandoned plans for its Android tablet. Also headed for a dirt nap, the Android smartphone the company was building. Seems HP did indeed reconsider its multi-OS strategy in light of the Palm acquisition and concluded that three operating systems was one too many.
http://digitaldaily.allthingsd.com/20100928/official-hp’s-android-tablet-tabled/
It doesn't ship until next year. em
APPLE; Cook not going to HP
SEPTEMBER 28, 2010, 10:56 AM ET
Apple: Cook Not Going to HP
By Eric Savitz
Just another day in Palo Alto: Apple (AAPL) had a sharp gap down this morning, apparently as rumors circulated that Apple COO Tim Cook was going to be offered the top spot at Hewlett-Packard (HPQ), which continues to seek a replacement for Mark Hurd and which is holding its analyst day today.
Not true, says Gleacher & Co.’s Brian Marshall, who follows Apple. He called me a short while ago to say he’d just run into Tim Cook in Palo Alto, had coffee, and asked him about the rumor.
“Tim Cook will not be going to HP, he loves Apple,” Marshall tells me Cook told him.
(Cook had his iPad on him this morning, Marshall noted; no indication of what app(s) he was running.)
As for Research in Motion’s (RIM) “Playbook” tablet, unveiled last night, Cook thinks the company will mostly have success among its installed base of BlackBerry customers. He projects 50 million tablet computers of various stripes being sold next year, and says that Apple will probably get consumers’ dollars “9 times out of 10.”
Despite a feature list that’s long for the Playbook — front-facing camera, Flash support — “which is the more productive device?” asks Marshall. He thinks the iPad is, as well as being the device consumers actually crave owning. And the next iPad will be coming in Q1 of next year, he argues, likely with a front-facing camera for FaceTime video conferencing.
Marshall thinks the jury’s still out on the 7-inch form factor of the Playbook, and says Apple could do something in that area, but he sees the company continuing to focus on the iPad’s current form factor.
Apple shares this morning have regained some ground, now down $3.83, or 1.3%, at $287.33.
Rumor that Tim Cook is leaving for HP presented a nice buying op.
Apple's new iAd mobile advertising service is poised to take 21 percent of the U.S. mobile advertising market by the end of 2010, giving the company a market share tied with Google and three times larger than Microsoft.
Monday, September 27, 2010
By Sam Oliver
Published: 08:15 AM EST
According to estimates from IDC provided to BusinessWeek, Google, Microsoft and Yahoo have "swiftly lost share" since Apple's iAd debuted in July. By the end of the year, IDC expects Apple and Google to each carry a 21 percent share of the market, which would be a decrease for Google's 27 percent share last year.
Microsoft is expected to see its market share drop as well, from 10 percent last year to 7 percent this year. And Yahoo is projected to drop from 12 percent to 9 percent by the end of 2010, while Nokia will see it share drop from 5 percent to 2 percent.
IDC's figures showing Apple's almost instant success in the mobile advertising market are not, however, as great as the ambitious expectations for iAd shared by CEO Steve Jobs earlier this year. In June, Jobs said iAd would take nearly a 50 percent share of mobile ads in the second half of 2010.
Advertisers who spoke with BusinessWeek reiterated their satisfaction with the performance of iAds. A spokesman for Unilever, which debuted an advertisement for Dove in July, said more than 20 percent of users to view an ad check it out a second time.
A spokesman for Google said the search giant was "experiencing fast growth" this year, though the company declined to give its mobile ad sales for the full year. "If we are losing share, this market is growing faster than any one we've ever seen," said Jason Spero, director of mobile for the Americas at Google.
iAds aim to provide richly interactive ad experiences inside developers' apps, providing them a 60 percent cut of the advertising revenue. The hope is the advertisements -- noted by the iAd logo in the corner -- will be more compelling to users, because they don't have to leave their app and launch a browser to view them.
iAd advertisements act more like full-blown applications, complete with features like videos, interactive games, and the ability to find information such as local stores or product availability.
The iAd platform will expand in November to the iPad, when Apple launches iOS 4.2. Support for iAds was first introduced with iOS 4, released for the iPhone and iPod touch this summer.
Apple plans to use iAd as a program to incentivize App Store development, and does not expect to turn a great profit from its new advertising business, made possible due to the purchase of Quattro Wireless for $275 million.
OK, that was funny!
Lisa, what's not to like here:
http://techcrunch.com/2010/09/24/the-best-advertisement-apple-could-have-for-the-ipad/
Half the time and twice the fun.
The Samsung screen is simply too small for this sort of thing.
That can't hurt. em
Target to carry iPad October 3 in push against Kindle
updated 11:15 am EDT, Fri September 24, 2010Target confirms iPad in stores October 3
Target on Friday confirmed plans to sell the iPad in its stores. The retail chain will carry four models of Apple's tablet as of October 3 at pricing starting from the same $499 as Apple itself. Executive Merchandising VP Kathee Tesija didn't say which models would be cut from the usual six, but both 3G and Wi-Fi versions will be available.
Buyers with a Target credit card will get a five percent discount if they buy the tablet from October 17 onwards.
The move expands the iPad's distribution at a critical point in the holidays but also puts Apple into more direct competition with the Amazon Kindle. Target was the first retail presence for Amazon, which is new to retail and is only just reaching Best Buy at an undefined point in the fall. The new deal gives the rivals closer retail overlap.
Amazon continues to lead in e-book share but has regularly trailed the iPad since it arrived in April. The online retailer never officially publishes Kindle device sales numbers, citing a competitive advantage, but is widely thought to have had its lifetime Kindle sales eclipsed in three months by the iPad. The tablet is much more expensive but has had the advantages both of a wider focus and a much stronger retail presence, as it had both Apple stores, Best Buy and some Apple resellers from the start.
Read more: http://www.electronista.com/articles/10/09/24/target.confirms.ipad.in.stores.october.3/#ixzz10T39Kv9o
Don't get too confident, people. There's still a lot of potential peril out there.
"Scariest Economic Fact I’ve Seen Lately"
http://www.lesjones.com/2010/09/22/scariest-economic-fact-ive-seen-lately/
"The Next Crisis: Public Pension Funds"
http://www.nytimes.com/2010/06/27/magazine/27fob-wwln-t.html?_r=1
Plus, no one knows what the capital gains tax rates are going to look like next year.
Just sayin...
It might be time to consider a prudent, end of year strategy, as opposed to carrying on as if everything is headed straight up.