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selling AAPL
Apparently lots of folks are bailing on the recent rise -- AAPL leads "outflows" for selling on strength:
http://online.wsj.com/article/SB120948700335953157.html?mod=yahoo_hs&ru=yahoo
The more sidelined, money, the more fools available to rush back in when the talking heads declare a new price target.
Take care,
--Tex.
re stock's buoyancy
I think the reports on Apple's strong Mac sales, and the apparent threat Apple poses RIMM in the enterprise as Apple rolls out updated software and sells into a broader geographical customer base, are likely to give a stronger framing to any positive surprises Apple unveils in at WWDC or the in next-gen phone hardware launch.
Apple's been reporting something like 50% switchers, or 50% switchers among Apple's retail customers, for a while now. This can't be sustained more than a few years ... can it?
Does Apple have a significant mechanism for delivering iPods to China at present?
Take care,
--Tex.
re record setting
Congrats on the Mac sales!
Between the news pieces trumpeting Macs in business and the impending assault of iPhone on traditional Blackberry turf amidst Apple's global phone rollout, I'm unsurprised though pleased to see Apple's stock creeping up. However, I didn't expect to see this news before autumn. It is nice to see, as it'll re-frame the WWDC and back-to-school seasons, creating hype that will help my leaps around the time they become a long term gain. If Macs continue exploding, Apple may be unable to keep down its quarterly number even though delaying iPhone revenue recognition several months.
Anyone else think this revenue recognition delay is mostly to confuse onlookers trying to back sales numbers and wholesale prices out of Apple earnings numbers? I'm kinda perplexed myself. Apple's been pretty bad at making use of cash, so I don't see the value frankly of delaying tax payments a couple of months.
Take care,
--Tex.
re slower iMac
My G5 iMac is in the care of an Apple Store for its (annual?) motherboard replacement. I'm hoping it'll work long enough for me to get one of the towers I expect in time for MWSF'09 (and options expiry Jan'09, though I doubt the tower upgrades are material to expiry). The downside? While parts are on order, I'm without my machine.
In other news, I need to get a bigger external drive to backup my iMac. This is yet another reason to want a tower: internal drives which can more quietly and quickly perform the copy and backup operations which presently require spin-up of external drives.
Take care,
--Tex.
word on what?
I don't have access to anything you don't. Post if you see something interesting.
I'm still miffed that volume has collapsed. There's no possibility of exiting even when prices are good, with volume only a few thousand shares a day.
Take care,
--Tex.
re call team
I like the fact his interests section leads with presidential fitness awards. Didn't they give those out in the '80s to anyone who could do 30 sit-ups before the sand ran out of the timer? The fact he was "vive president" and had a sales award from a financial institution is pretty funny. I knew a broker who was a "vice president" who confided that every broker at his firm was a "vice president" so everyone thought they were dealing with a top man. Giving out awards to everyone in sales is also good for ensuring the marks -- er, customers -- think they're dealing with a "top man".
I can't hear the term "top man" without thinking of the ending scene of Raiders of the Lost Ark. It always means, to me, a worthless imbecile with a title. Of course in BSDM it means something else, but I am thinking this guy wouldn't know where to find good rope, much less use it ....
At any rate, I'm sure this guy is a legend in his own mind. Hurray for the home team!
Thanks for the link and the laugh. Nitwits like this are god encouragement that there's still money that's not in Apple, but could be if the wind changed. By year end it'll be interesting to see what the fools are writing. With Apple off its ATH, it's certainly "smart looking" to criticize.
But back to the topic: anyone got ideas what Apple's expansion efforts will look like in China? I'm sure the one store in Beijing will be good business for a store, but I can't see it being material to the bottom line. Anyone have a feel for how strategy might roll out for the market in China?
Take care,
--Tex.
re the bold and the imbecilic
Their vapid analysis had me chortling. Not gonna get bookmarked, even as humor.
Faux analysis grows on trees, apparently.
Take care,
--Tex.
re secure, American CPUs
I think the concern here may be the one raised by the Lenovo acquisition of IBM's desktop and notebook businesses, which had some in congress asking during hearings whether it'd left US government buyers with Thinkpads vulnerable to Chinese sabotage via low-level hidden nefarious things secreted on the Chinese-made machines. The "designed by Apple in California" label apparently means something to some folks, regardless that fabbing is universally subcontracted to Taiwan, or Singapore, or the like.
The question whether a non-x86 CPU might have some security benefit isn't a complete lark, by the way. Features like W^X work best on chips with hardware support for page-level granularity of memory permissions, for example. Since FreeBSD targets x86, W^X hasn't been a big deal on FreeBSD as it has on OpenBSD, but Apple could certainly do things like contribute code to the tree for support of other platforms. Does Apple really care enough about security to build stuff like this on a preventative basis? From my interactions via email with Apple's Jordan Hubbard, I kinda doubt it. I don't think he gets it.
I happen to think the Return of the PPC sounds silly (at least for desktop and laptops), but I'm willing to conduct a little thought experiment. x86 helps MacOS X adoption at present because it lower the barrier to switchers, and switchers are reportedly still half of Apple's buyers (or at least half of Apple's Apple Store buyers, I'd have to check the conf call to make sure which they meant). Fast forward five years in your imagination. If Apple's sales continue to be half to switchers for several more years, the need to offer a migration path will have dwindled terribly, as the non-MSFT share of the market would be likely half or more. PPC in the short-term is silly. PPC in the long term might be a very valuable alternative to keep alive -- especially if there's a family of buyers for the tech already. But let's face it: a few tens of thousands of units over several years isn't the size of market Apple would need to make this buy a good payoff, so I doubt existing defense contracts are a plausible reason to buy in. And Apple has seemingly telegraphed lack of interest in the current products or the existing roadmap.
Apple has, however, already bought an embedded graphics chip design firm, seemingly to acquire its IP and personnel. Apple may have something interesting in the works, in particular for products that aren't part of the traditional "PC" market. An Apple-designed portable platform could easily be built by some stranger in Singapore or Taiwan (and its processors at TI or at IBM or even Intel, under contract), and it's not crazy to imagine Apple might have the unit volume to support this at a competitive price. The future's interesting-looking.
Take care,
--Tex.
cash
I suspect Jobs' experience running cash-burning companies leaves him preferring to have cash in quantity against bad times. Still, getting such poor return for the cash as Apple has been getting is kinda disappointing. One would think Apple might want to at least hire someone to manage short-term investments productively.
MSFT has been creating cash for so long that it's unlikely they see much value in a big cash inventory. I mean, it's going to rain cash tomorrow, so why hoard today, right? One can argue that MSFT's prospects have changed a lot in the last 20 years, but it's the attitude of management that governs the resource allocation choices, dividend policy, and so on.
Personally I think dividends are a terrible way to handle profits, as they create multiple taxation, unless one is involved in something like a BDC or trust or partnership that gets tax pass-through treatment. So I don't begrudge Apple's keeping funds on principle. What bothers me is failing to deploy it productively. Also, in theory, there are some tax issues that one might apply to a cash hoard like Apple's, but if MSFT dodged it then Apple is probably safe.
Take care,
--Tex.
re MSFT and 30
I recall MSFT pre-split at about 125, thinking it was at high altitude, but I was already leveraged up on AAPL and unwilling to bet folks would smarten up before I could go broke. Since the crash in '01, MSFT just hasn't recovered well, despite its continued amassing of cash:
http://finance.yahoo.com/q/bc?t=5y&s=MSFT&l=on&z=m&q=l&c=aapl
Apple, as the chart shows, has recovered from the 50% haircut it got in one day, and then some. Where do folks see the growth in MSFT to be? OEM licenses? Upgrade revenue into a growing installed base?
MSFT's efforts to thwart ODF are well-neigh Herculean, and have been paying off. MSFT has been gunning with all barrels at efforts at the state level to ensure ODF is used in publicly-created documents in order to ensure access to them when MSFT EOLs currently installed versions of its document-creating products. Outside the US, I wonder. I understand MSFT has basically bought the contracts for a few municipalities that were thinking to go with a non-MSFT platform and to begin standardizing on open standards. Must be rough, besieged on all sides.
I'm interested in how AAPL can improve margins, though I see why it would prefer for tax-deferral reasons to appear not to make money it can appear to earn later. The problem is that AAPL's track record of making money from cash and is so poor that I'd rather see Apple focus on that than spend good money trying to delay taxes. That only helps if, you know, you make money on the cash in the meantime, no?
Take care,
--Tex.
bull/bear on AAPL
This link had an interesting point:
http://blogs.wsj.com/marketbeat/2008/04/24/four-at-four-its-all-good/?mod=WSJBlog?mod=yahoo_hs
... Apple's accounting games and revenue deferral make a joke out of margins, as some high-margin products' revenues are being deferred, while low-margin music store sales aren't; the reported margins are an illusion unrelated to Apple's actual margins, which have done nothing but expand for years.
If one adds non-iPod music-related revenues to Apple's totals, one gets Apple with nearly half its revenues from music-related business. Apple's dependence on low-margin or slow-growing music-related business may be aided significantly by Apple's wild Mac growth, which probably won't be hurt by MSFT's Vista-only future.
Though Apple should consider more strategic software acquisitions to bolster and entrench Apple share in important and growing business segments, like medicine. What on Earth are they thinking to do with the cash?
Take care,
--Tex.
In other news ..
Ballmer says MSFT isn't going to keep selling XP because, you know, folks really like Vista:
http://www.electronista.com/articles/08/04/24/ms.on.keeping.xp/
MOT, of "iPhone is too hard for Apple to pull off" fame, loses money on cell phones:
http://www.electronista.com/articles/08/04/24/moto.q1.2008.loss/
Off to work!
Take care,
--Tex.
where's our post-earnings selloff?
We had some folks flee in the runup, but where's our flight post news?
And where's ace, isn't he supposed to tell us the end is near? Or is the fact we're back up the $8 he was talking about kinda taking the wind out of his sails? Surely not -- surely he really believes he will be vindicated in the end, when the worthless house of cards collapses and it becomes clear Apple can't really make or sell anything and is a ponzi scheme.
Oh, well.
I'm guessing we will drift newslessly downward for a bit as we approach WWDC and the real news, which will include disappointing timeline info on hardware and software releases that will be billed as 'delays' even though they happen in late June as advertised, since they aren't actually at WWDC like folks had hoped.
Then, we get Q3. That'll be interesting, for sure.
Take care,
--Tex.
on PA Semi
I think the answer is in this pair of paragraphs:
The lack of any obvious application of PWRficient in Apple’s products has already spooked PA Semi’s existing clients. EETimes reported that just two days prior to the announcement of its purchase by Apple, “PA Semi informed its customers it was being acquired and it could no longer guarantee supplies of its chips. The startup did not identify the acquiring company but said that company may be willing to supply the chip on an end-of-life basis, if it could successfully transfer a third-party license to the technology.”
The report then flatly reiterated that “PA Semi customers were told the acquiring company was not interested in the startup’s products or road map, but is buying the company for its intellectual property and engineering talent.”
After saying Apple won't be supporting PA's customers as Apple customers, the article suggests Apple would use PA chips as accelerators to provide performance advantages. Honestly, I wonder at that. The trend in speed seems to be to reduce silicon: putting the RAM controllers on the CPU silicon to reduce latency and throughput, adding instructions to the CPU instead of depending on separate coprocessors, etc. GPUs' apparent ability now to handle flexible programming seem to be a counter to this, but GPUs have been a special case for a long time: folks depend on very sophisticated and specialized processing for graphics, and hardware acceleration of this type of calculation is a shining example of a very broadly-demanded high-yield place to add silicon for good return. Years ago I used to read a lot about audio processors, sound cards, and so on, but I sense most of this has ended up back on the CPU, with only conversion to analog likely depending on special hardware now (though I am happy to stand corrected -- or to hear that serious gamers or professional audio folks still use separate hardware I don't see advertised heavily to the masses any more).
Would Apple really want to invest in coprocessor development when the development of the CPU is likely to be more likely to solve the "problems" a coprocessor would address? By the time the coprocessor got out of testing, would the bottleneck not have moved? What is really stopping performance now? And isn't the PPC another general-purpose processor? Would Apple seriously ship both PPC and Intel in one case? What about the margins advantage Apple now gets by using the same chips as its competitors?
Because Apple now sells millions of Macs per quarter, adding highly efficient hardware acceleration chips across the board would add only minimal cost while delivering a significant and tangible advantage that would be expensive and complicated for other PC vendors to match.
This is where I would need to see the math. I suspect that folks can easily buy more computer than their needs require, with the possible exception of the notebooks, so perhaps adding some energy-efficient coprocessor hardware in pro notebooks might be worthwhile. The Cocoa apps might really benefit from multiway machines with different processor types with different strengths. The non-Cocoa apps would never code for this stuff, in my view. And Lord knows what a compiler would do with a request to compile for a platform with discordant processor architectures -- would it be possible to custom-tweak an app that didn't have runtime decisions on what libraries to link? Would Apple's fork of the gcc have to go really crazy to support this?
Apple certainly is the only major vendor that could get away with something like coprocessors, but a serious coprocessor is a cost item. Would performance really shine enough to make folks see the value? Apple is selling to the masses -- not to an elite of hardware geeks. What, exactly, is Apple's incentive to complicate its products and add to costs?
I'd imagine there'd be a lot more return buying vendors of software for medical practices, real estate offices, and law firms. These guys shell out, buy support, and give repeat business and upgrade revenue.
Coprocessors? For real?
Cocoa makes this plausible -- Apple can add hardware-specific code to already-shipped software because of Cocoa, so the whole "re-coding to take advantage of the new [dual processor | GPU | sound card | I/O interface]" isn't a problem for existing apps, and benefit is immediate unlike the "benefit" people got when Intel launched MMX Pentiums -- but will the hardware really offer the zip Apple promises? On costly pro rigs, there may be a serious differentiator there, or on lightweight low-power systems without a dedicated graphics card, but ... I would need to see the math.
It's certainly an interesting road to take, and one nobody else will be able to follow. If it works, it'd be very interesting.
On the competition front, I am better persuaded by this kind of reasoning in the mobile sector:
Kaelin pointed out, “On the inside, the Zune is remarkably similar to the iPod Nano. Many of the parts are exactly the same. The difference is that the interface chips and software in an iPod are made by Apple. I know some die-hard fans will protest, but the insides don’t lie. The Microsoft Zune is a few Apple chips from being an iPod.”
By developing more its own integrated components, Apple could potentially save money, support new proprietary features, and throw copycats off its trail and force them to develop their own devices from scratch. As Apple blazes into uncharted territories by accelerating its iPod line into a new series of WiFi mobile devices, cost savings, differentiated features, and difficult to copy designs will all become increasingly important. PA Semi’s hardware expertise can help in that regard.
Driving up development costs for competitors is a lot more plausible in the commodity music player market, and in the market for handhelds in which slight price differences really add up. The idea wouldn't be to have coprocessors, but to replace the whole enchilada with hard-to-replicate tech, forcing competitors to build from the ground up, blind, using parts full of IP they don't own and for which they would pay a premium.
Take care,
--Tex.
$2m apiece
I think Apple must be expecting either to be acquiring lots of valuable IP or to be ensuring some competitor does not. I'm hoping there's an actual product to be created from this, though, and therein I find my curiosity about what the head count will be set toward accomplishing. The statement that the company's current customers will be taken care of sounds like there's some plan to keep the company productive doing similar work, which makes me wonder whether there's not something to the rumors that Apple wants to use -- or at least be ready to threaten to use -- the company's products for the interior of some future Apple mobile device.
I can't see Apple using it for PCs because Apple's PC business really benefits from the ability of users to access VMs, dual-boot, and other migration-friendly tech. Might Apple use it in a server? Who knows. 64-bit-only PPC sounds cool as a specialized product, but I imagine Apple would need to be shipping something new to use it.
Hmm. Whole new product?
One thing is for sure: Apple's ability to deploy on multiple architectures is a definite asset.
Take care,
--Tex.
PS I think it's clear these guys include some gurus -- the question is how Apple can deploy them to get the best value out of them. If Apple isn't actually going to have someone make it CPUs, it's hard to see what Apple will get though. And imagining Apple back in the building-its-own-CPUs business is kinda a shocker. On the other hand, if Apple is going to be deploying many millions of set-top boxes, iPods, iPhones, and other small devices every quarter, then perhaps there's some benefit to having this all under one roof.
The other thing is, if Apple gives some neat solutions to Intel based on IP owned by Apple, Apple might be able to arrange favorable pricing as its licensing cost -- in effect, having every other customer of the chips pay the licensing fee to Intel on Apple's behalf -- that would give Apple a pricing advantage going forward. Could Apple plausibly do something like that? Might Apple be able to deliver solutions that Intel isn't working out internally? The mind reels.
On the quarter
I think this link does a good job of pointing out some of the major trends:
http://www.macnn.com/articles/08/04/23/education.and.macs.grow/
+ 1/3 of Fortune 500 companies are already in the iPhone/Enterprise beta program
+ Apple's CPU growth is 3.5x that of the industry
+ Apple's higher ed growth rate is the best it's been in 8 years
+ hundreds of thousands of developers downloading the SDK isn't a bad harbinger for diversity and quantity of applications likely to be available on the iPhone, and though it's not clear how many of these developers have been given certificates for signing AppStore applications, it's likely that when the App Store does launch, it'll do so with a quantity and diversity of retail applications that pretty much dwarfs that available on some other major mobile platforms, which will probably itself cause positive press, migration, good reviews and word of mouth, and a virtuous cycle of adoption and use and satisfaction and referral.
+ The first 25% of the year got Apple 17% of the way to its calendar 2008 goal of 10m iPhones, and considering that Apple's sales are likely to increase as stores continue to roll out and more foreign countries begin to be accessed with officially sanctioned distribution schemes, and as Apple's future summer-scheduled software enables businesses to support adoption of the phone, this sales is likely to increase, so the sales number is likely to get better and better. It's not a no-brainer, but it's likely.
+ Air is being adopted by folks outside the rarified mobile professional elite some of us thought were its major market, and it's a high-margin item, so that's cool.
My current impression is that WWDC won't see any actual releases, just demos and testimonials, and that neither hardware nor software will get updates until the anniversary of the iPhone. Given that the quarter will get hit with a bunch of iPhone 2.0-related revenue deferral, and that some folks will be shunning old models due to the Osborne effect, I think we should expect to see poor iPhone revenue this quarter. If Apple turns in a decent quarter, it'll be the work of Macs (or music? is that possible?).
Next quarter will be full of newsworthy events (related to the WWDC, the iPhone software platform and its adoption, and the details of the iPhone hardware upgrades folks expect) that may drive future expectation, but I'm not expecting the quarter itself to be outlandishly great. I expect the back-to-school-cum-iPhone-update quarter that follows to be a great quarter, though, for sure.
Take care,
--Tex.
Take care,
--Tex.
re IP buys
The folks Apple got with the last processor design company -- the mobile graphics company -- undoubtedly brought interesting tech, know-how, processor-specific optimization tech, etc. to Apple's various efforts. There's no doubt this will happen here, too.
The thing that makes me think this is different is that the guys on this team seem to be a blue-ribbon group of processor designers, the kind of group one might want if one really wanted processor designers. These guys aren't compiler writers (at least, not mostly), and aren't going to be in a position to make Apple's software better (mostly), they are hardware designers.
I like the IP licensing angle, but Intel will want to sell what it can as fast as it can build it, so Apple's "exclusivity" is likely to last only as long as Intel has such supply constraint that Apple can consume its whole output. The alternative is the parts costing everyone more, and that's in nobody's interest, isn't it?
Apple building up an IP portfolio it can use to leverage itself favorable CPU and GPU pricing ... that is worthwhile. The question then becomes: what does Apple do with this new headcount of CPU engineers?
Take care,
--Tex.
on PA Semi
Do they make anything that would be good in the non-Tough iPods?
Does anyone think the future iPods, other than the Shuffles, will not support the apps Apple wants to make available on the iPhone?
If I think of the iPod family as part of the same hardware market, I start seeing self-designed chips as a less-crazy alternative, and as possibly a place Apple could introduce some hardware distinctiveness -- battery life, graphics performance, and other features that would make them more attractive in the marketplace.
Still ... I kinda liked Apple getting all the chip work for free from Intel and getting out of the business of competing with folks whose core competence was processor design. It's overhead Apple could just avoid, I'd have thought. I sure hope they did the math on this
Assuming large worldwide sales volumes, getting a few bucks per processor might be a worthwhile advantage -- as might performance and battery advantages Apple might derive as a competitive advantage over other competitors' units. It's not crazy, but from a financial perspective it's worthwhile-ness is'nt obvious either. I'd like to see the math
Take care,
--Tex.
lame iPhone sales?
Apparently T's iPhone customers give twice the ARPUs of other T customers, but the increase in T customers doesn't seem to indicate huge iPhone sales lately:
http://www.techcrunch.com/2008/04/22/apple-shares-slump-as-att-gives-vague-details-on-iphone-growth/
The operative paragraph is:
Investors were hoping for some indication that AT&T blew the doors off its iPhone sales, and some assurance that Apple would hit its goal of selling 10 million iPhones by the end of the year. Anything over one million new iPhone subscribers would have been well received. It doesn’t look like Apple delivered anywhere near that number, since AT&T added 1.3 million net new subscribers across all phones. (It added 5 million gross new subscribers before accounting for churn).
So it looks like T gained 5m, netted 1.3m, and someone hopes to extrapolate that this means it didn't get more than 1m iPhones added to its network. I don't know enough about the churn patterns in carriers, but if one assumes the iPhone customers didn't leave (and the low churn of these customers supports this), then why should one conclude that the 5m incoming weren't more than a fifth iPhone buyers?
Apple had something like 28% (over a fifth) of the smartphone market:
http://www.infoworld.com/article/08/02/06/Apple-beats-Microsoft-Motorola-in-phone-sales_1.html
... but this doesn't help: Apple's share of the whole phone market in the US (the only place T has iPhone subscribers) isn't 28% yet, but on the other hand, all Apple's share in the US is concentrated in T's mobile subscriber rolls, so we don't really know what fraction of all T customers are also Apple customers. Since T specifically declined to break out iPhone numbers, we're left guessing until (maybe) this afternoon.
From my own investigations, folks with unexpired contracts and an interest in third party iPhone apps are still on the sidelines. Particularly if Apple releases a whiz-bang new processor in the 3G phone as it rolls out iPhone 2.0, the combination of upgraders and new consumers and enterprise buyers would be bigger than the original launch quarter.
But the badassed new chips won't be ready this summer, just the software and presumably 3G:
It will likely take at least a year before products incorporating P.A. Semi designs are ready. The company's flagship chip is at the heart of heavy-duty computing systems, such as those sold by NEC's (nasdaq: NIPNY - news - people ) storage division. But the design philosophy--hefty processing power and frugal power use--are in concert with Apple's directions. Although Apple plans to continue supporting P.A. Semi's current customers, insiders suggest that Jobs plans to use future P.A. Semi chips exclusively within Apple products.
At that point, executives believe the company will have created a unique asset--a powerful microprocessor that sips power lightly and so can support just abo
http://www.forbes.com/technology/2008/04/23/apple-buys-pasemi-tech-ebiz-cz_eb_0422apple.html
Why shouldn't Apple sell to NEC's storage division? I kinda like the idea of Apple becoming an enterprise product OEM, but maybe OEM hasn't got the margins Apple likes -- though it can drive up unit production numbers, which drives down unit production price. Ah, well.
This "at least a year" time frame means the designs will already be competing with Intel offerings in the same space:
Led by Intel Chief Executive Paul Otellini, Intel is developing a line of chips that it believes can become as central to handheld computing devices as its "x86" chips have been to the personal computer industry. Intel has said it aims to create somewhat different lines of Atom processors tailored to different classes of applications, such as consumer devices, low-cost notebook computers and set-top boxes. The first of these designs is slated to begin shipping by the middle of this year; another by year's end.
(same link)
So, the question is whether Apple will get enough juice out of a custom chip to justify going out on its own with a custom chip design. And if the design rocks so hard, will Apple push this design in something else, like servers? The guys who designed it were working on UltraSPARC and the like ...maybe they think big iron is cool? Maybe there's an angle in which to have some kind of discussion with IBM?
This stuff just gets crazy, as one thinks about how to imagine an Apple that's back into the chip design business.
Take care,
--Tex.
wonder chip?
If PA Semi already has this running, and it's 64-bit only and PPC, Apple might be capable of shipping a solution before Intel is in a position even to compete with it. My understanding was that the Intel ultra-low-power mobile x86 stuff was in line for next year or so.
Can PA Semi give this stuff to Apple this summer?
If so: wow!
Developers who want to do real applications on a handheld will like Cocoa plus a real 64-bit PPC, which is a serious platform. Wow.
Take care,
--Tex.
re processor designer
This isn't the first one. A mobile graphics botique was bought last year or the year before, I recall. Apple seems to be acquiring some expertise and perhaps some IP in the mobile processor market, though I'm not sure how close this is to simply acquiring folks with deep understanding of how to eek the most out of mobile tools (e.g., power management, hardware-specific programming, etc.). Are these guys compiler gurus, for example?
Apple so far hasn't built its own mobile GPU, for example. How many units would Apple need to sell to make a custom chip sensible to manufacture? Could it get Intel to fab the chips? Apple for sure doesn't want to be competing in fab tech.
The interesting angle of course is that in a Cocoa-only world, Apple is in a position to make a "click to build for X" checkbox that will mostly work, hand-coded processor-specific optimizations being likely unusual on the majority of portable apps (Wolfram and Adobe don't ship a lot of code on the iPhone, I'm thinking). The processor-independent frameworks to which Apple has migrated the developer base seem ideal for supporting a custom processor -- whether it combines general and graphics processing, or not. The question is whether Apple's internal development will beat what Intel ships, or not.
Assuming Intel's product is an x86 capable of supporting all the legacy x86 stuff, Apple might be able to beat it with a ground-up redesign of its own make. The processor surely isn't the costliest thing in Apple's machines, but it'd be an interesting differentiator for the handhelds, which aren't expected to boot into or be compatible with MS-Windows anyway. The laptops and desktops pretty much have to remain Intel (or compatible) to enjoy the benefits of the low barrier to migration offered by the Intel chips.
Now, if Apple would buy some enterprise software vendors ....
Take care,
--Tex.
re Aperture
Does this look like Apple working to introduce a Cocoa environment in which developers can replace Photoshop with standard plugin kits atop an Apple app for photo collections?
Or is this still really for managing collections?
I'm kinda curious about image manipulation on MacOS X. Photoshop has been the standard forever, but (a) it's not Cocoa and thus isn't going 64-bit soon, (b) Cocoa developers' access to Apple's image-manipulation APIs provides a way to get hardware acceleration that's specific to a whole host of hardware Apple may release in the future without having to re-issue the plug-ins, making the upgrade cycle and the performance potentially advantageous both to developers and to users, and (c) Apple and Adobe seem to be at odds lately (Flash, etc.). So ... I'm expecting someone to provide competition to Photoshop, especially given its price point.
If Aperture offers services which third party apps might tap, then third-party Cocoa apps can use Aperture's versioning and library to access photos for manipulation in the third party apps. This might be a lot closer to the behavior one would expect in a Unix/NeXT environment than a monolithic "this app does everything" environment.
Anyone with more familiarity with image manipulation on the Mac have something to say about where this is likely headed?
Take care,
--Tex.
another 8?
I think it's the same $8 you were gloating about last time. We're back in the 160s where you last appeared to predict doom and gloom. So, what's your prediction? I'm just interested in knowing whether you have an actual bankable opinion or whether you are just here to piss on the lamp post. I have my suspicions, of course.
As for me, I'm on record in January saying my time frame was a year-plus, and already things have moved up. I specifically predict that the post-WWDC environment -- iPhone 2.0, enterprise push, back-to-school, upcoming winter holidays -- will create AAPL share price gains I expect to make me money. The fact we have folks trading out of Apple after a big runup isn't material to this, in my view. The real news will be software and the unit volume after the summer platform upgrade.
If I were a trader, I'd be even happier about the big moves in the price, and trade opposite them, but I'm in AAPL as an investor. The most money I've lost in AAPL has been by being sidelined after selling on the theory the gains were in. Thus, I stand pat.
What's your position on AAPL? None? Just wind? Got any money where your mouth is?
Take care,
--Tex.
PS keep up the good juju cementing a bottom here
tea leafing
Normally the first calendar quarter isn't particularly great for Mac units. The fact that Mac units are reportedly going gangbusters should offer something other than iPhones to focus on, but of course "analysts" may not look anywhere else when people are interested in hearing about the phones. And the phones are due not just for a software upgrade, but a hardware upgrade, and the European price drops have been cited as reason to suspect near-term hardware upgrades.
Honestly, the hardware upgrade I want to see is a processor upgrade so I don't get UI glitches (un-smooth behaviors I occasionally see).
But the interesting thing news-wise will be what Apple shows off in terms of enterprise development under the enterprise beta program. I'm thinking Apple will use WWDC to showcase that not only independent developers vending retail apps, but in-house developers and developers on contract to do works for hire, should see a lot of benefit in the iPhone platform (and Cocoa more broadly). If this succeeds, I see a repeat of last summer: price recovering nicely.
The other news is geographical: how will Apple support multinational enterprises that want one device to work worldwide? Apple needs to show some scheme to make this work. I can think of a few ways it might be offered, but this doesn't mean my first-draft ideas are what Apple would roll out. I'll wait for the news. I just hope the news isn't "well, it'll be a few years before we do India/Taiwan/Korea/Japan" -- there needs to be some solution, in my view. Though really the big news is the showcase of enterprise app success stories.
And yeah -- Lango's ongoing comments on the medical records and billing applications' dependence on Brand X are something Apple should with some alacrity surmount. And I append to that enterprises like real estate, legal office management, etc. There are lots of enterprises that Apple could turn into revenue streams, hardware and apps both.
Take care,
--Tex.
re T's enterprise services
T's interest in enterprise services may be a reason Apple's been pulled as quickly as it has been into support of this market segment. I hope that the beta program puts Apple in a position to have actual, usable support for the expected feature set on launch day of the 2.0 software.
Take care,
--Tex.
subsidy comes to UK iPhones
But not at Apple Store:
http://www.macnn.com/articles/08/04/21/uk.iphones.sell.out/
Seems to help sales quite a bit ....
Take care,
--Tex.
getting money's worth on AppleCare
I've gotten good value out of it, and I've had folks I told to buy Apple Care get good value out of it -- including one who got a cracked screen replaced without charge in Canada for reasons that were never made clear to me.
As for why they push it rather than let you learn the hard way you want the warranty -- well, it's surely a high-margin item, and it's an easy metric on which to grade salesfolks.
Take care,
--Tex.
re Friday Night
Yeah, if MSFT isn't paying you to think about Windows bugs, I'd lay off -- it can raise one's blood pressure
Take care,
--Tex.
so nice to see you *grin* em.
re cruel irony
p.p.s. In a particularly cruel irony, the highest level managers in the project with whom I was able to get access, claim that the IE only decision was because no other browser but IE was capable of meeting the high level of security necessary for the transmission of patient data in order to meet federal privacy requirements. Arrggghhh. Needless to say, I had to call b.s. on that.
I have gone through some gymnastics with institutions who use "user-agent sniffing" to determine whether to try to serve content to users, or to give them an error message, and they seem perfectly happy to let outside vendors strand customers on buggy, insecure, proprietary MSFT-owned APIs like the ones exposed by MSIE.
In my view the irony is that if you tell your browser to lie about its identity, many of those sites work just fine with alternative browsers, and don't actually involve MSIE-specific APIs at all. Someone is just dedicated to telling people to use MSIE.
As MSIE's share continues to plummet, I suspect this position will get harder and harder to support. The move to standards has got to be good for both vendors (who, if they are really compliant, need not give users browser advice/support) and browser developers (who will just need to code to the standard, and need not use a bunch of weird hacks to get stuff to "look right" when it's detected that the site is serving broken code targeting a different browser).
I agree dragging small medical or real estate offices into a proprietary hinterland of MS-owned APIs is a nasty business, and that AAPL should do something about it. Whether Apple should buy the apps that are broken, though, is another question. I think that in some fields, it's a no-brainer that growth in the industry and the availability of support contracts and so on mean that a purchase decision would result in a good financial return, but I have no idea what Apple thinks about how to approach the problem.
What I'm afraid is that Apple is satisfied with its performance and thinks it need not address this problem, even thought the alternative is getting crap returns on $18B in cash, or whatever the number is these days.
What's the chance our upturn in share price is an overreaction to news and that we'll get dashed on the announcement? Crazy stuff.
Do you think the "IE-only" insurance portal will work with bogus user-agents, or does it really depend on MSIE-only APIs?
Take care,
--Tex.
re networking issues
It wasn't obvious from the article whether the problem was "networking is borked" or was a special case that was brought into focus by some peculiarity of the NYC networks, but in either case the more people hammer on Apple's software and the more Apple needs to address concerns raised by serious users, mass-installation sites, and busy networks, the better the future will be for Apple's customers.
I wonder if the problem is hard to replicate, or what? One would think if the bug weren't especially obscure, a fix should be easy to come by given a little engineering time.
Hmm.
Take care,
--Tex.
Not-so-easy Mac networking?
Looks like Apple got a little careless somewhere ...
http://www.macnn.com/articles/08/04/16/nyc.schools.freeze.orders/
Take care,
--Tex.
re hijacking
I thought at first it was a cut-and-pasted quote, but it could be something more sinister, like a case of possession ....
Take care,
--Tex.
re migrating to Macs
The experience of an organization like IBM will be helpful in learning what pieces are missing. I noticed that Visio was noted as an absence -- but there's OmniGraffle, which handles Visio documents, and is probably happy to make a deal for a bunch of seats. OmniGraffle's output is really pretty, too.
Does ODF have a way to store this kind of presentation? Or are folks still stuck with format translators?
Given the fact most of the software IBM's users claimed to require but lack is actually IBM software, and IBM builds tools for many other organizations, it seems IBM may be gearing up to make migration much easier for quite a few people as it moves toward platform-independence.
IBM consults with numerous enterprises, and IBM support of Apple products could open the door for quite a few future deployments.
Verrrry interesting.
Take care,
--Tex.
re Comparison Shopping
That article is sure to get a bunch of links. The fact it positions Apple as the bargain and the performance king will be worth seeing quoted.
Mac: In both the laptop and desktop showdowns, Apple’s computers were the winners. Oddly, the big difference didn’t come in our user ratings [....] Leopard OS trounced Vista in all-important tasks such as boot-up, shutdown and program-launch times. We even tested Vista on the Macs using Apple’s platform-switching Boot Camp software—and found that both Apple computers ran Vista faster than our PCs did.
When I first booted MacOS X -- that is, v10.0 -- it was sooo sloooooow that to MacOS X described as a speed champ so many years later is interesting, to say the least.
Or is this just an indictment against Vista?
I think it's interesting, from an ease-of-migration standpoint, to read:
That means for the price of the Gateway you could buy an iMac, boost its hard drive to match the Gateway’s, purchase a copy of Vista to boot—and still save $100.
If this is an experience that's easy to come by, then (a) MSFT's per-seat license revenue will increase because it'll be selling retail rather than OEM to bargain shoppers, and (b) there's little reason to wonder at Apple's share gain rate, as it's based firmly in traditional price comparison. Has Apple finally reached a unit volume at which it can build the OS and invest reasonably in design and still compete viciously on price? Chalk it up to what you will (supply chain management? bulk component contracts? just don't say loss-leaders!), Apple has apparently made itself a price competitor (in some segments, anyway). As Apple's volume grows, the savings it realizes in not shipping MSFT's OS should be a real boon to the bottom line.
Anyone know what a license of Windows Mobile costs? I'm thinking back to my link on MSFT's officer saying MSFT had no fear of competitors because it sold more licenses in some recently-quoted period. I see a link that suggests the deployment runtime might be between $3 (in lots of 1000) and $16, which leaves MSFT needing a ton of units to compete with Apple's profit on iPod Touch, iPhone, etc.
http://www.microsoft.com/windows/embedded/products/windowsce/default.mspx
On the other hand, XP Embedded (apparently suitable for multifunction printers?) is $90 per shipping unit. Vista OEM (according to ArsTechnica) runs from $99 to $199 per seat. Well, maybe small OEMs, anyway.
Given that Apple can sell a machine for a price that lets folks buy Vista while remaining $100 ahead, I think Apple's principle advantage isn't the lack of a MSFT license, though of course that doesn't hurt. I'm curious whether anyone has thoughts on whether, perhaps, the comparison prices were bad? Is Apple really underselling Gateway by more than the cost of a retail Vista license?
Verrrry interesting. In 2000, folks would have sworn the day would never come. Has it?
Take care,
--Tex.
from the 10K
So much for funding the rest of the Chinese acquisitions with revenues from the Chinese operations:
As it is likely that we will seek to raise additional capital during
2008, we are unable at this time to predict any increase or decrease in total
other income (expenses) in 2008 from those reported in 2007.
Bleh.
Anyone else have a take on how, given the fundraising restrictions, CAAH will meet its obligations to make further payments to its Chinese companies' sellers?
Take care,
--Tex.
iIndia
I think Apple's prospects in India are good, notwithstanding the poverty of the poor there. The >1B population leaves quite a few who are not poor, to whom Apple should be happy to sell upscale products for a nice profit.
When, China?
China, India, Australia are a fairly good lineup for this-year launches. I'd like to see Korea, Japan, Singapore, and anything south of the Rio Grande, too. Lots of folks there like gadgets, and have money to boot.
Take care,
--Tex.
NAND collapse
May inform us on the price drops in some NAND-consuming hardware Apple has been selling. The Shuffle, for example, is so cheap Apple has got to be cutting the air off the low-end players. I wonder if there's a waterproofing kit for the Shuffle; I saw one non-Apple music player last weekend and it was on the arm of a swimmer
The fact NAND has plummeted may mean Apple has been able to make pricing deals with foreign channels. Starvation of domestic channels, and maintenance of old pricing, may simply be ways to ensure Apple keeps the margins it intends despite the work of unlockers.
Let's hope this trend continues.
Take care,
--Tex.
market cap
Still under $10m on current share price. I think the stock is so underfollowed that the earnings announcement will take a while to get around. The big question in my view is whether liquidity will continue to suck. If you're not a broker with free trades, who can make money moving shares a few K at a time?
Just creating or exiting a meaningful position has the power to move the price, and at volumes like those just before the annual filing might take a month or several.
On the other hand, the company is executing, and the revenues from the Chinese businesses look like they should support the rest of the payments the company needs to make under the acquisition payment schedule. I think they've crossed the bridge. The remaining mystery is whether they will show solid earnings growth atop the one-shot bonus from acquiring a revenue source. The next few quarters should be interesting to watch.
Take care,
--Tex.
MSFT: No fear for WinCE
MSFT says Apple's phone OS will never catch Win Mobile 6.1
http://www.electronista.com/articles/08/04/01/microsoft.blasts.iphone/
I mean ... never is a hell of a long time, and in this industry things can happen pretty fast ....
So I was thinking, are they in denial, or is it just marketing noise ... then I read:
"We are not at all worried. We think we've got the one mobile platform you'll use for the rest of your life," said [MSFT's] Rockfield. "As for Google and Android we are still waiting for what they are going to do."
Wow. Who's drinking Kool-Aid now?
The fact MSFT has "shifted" (as it terms it) more WinMobile 6.1 licenses than AAPL or RIMM in recent periods may be interesting to MSFT from some kind of numbers-share standpoint, but what does one of these licenses earn MSFT (as opposed to RIMM's or AAPL's)? And just how long will MSFT be able to sell Win Mobile in the face of the existing and developing alternatives?
I suspect that Linux and Qt are likely to be pretty attractive on cheaper handsets, given the commodification of the devices and the fact that OS licensing costs come straight off the bottom line. Does anyone have any thoughts on why users would prefer MSFT's phone OS to some alternative, given a choice? Is there really any value there?
Take care,
--Tex.