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iPhone availability
much better this morning http://www.apple.com/retail/iphone/availability.html
Wonder how it is at AT&T stores and internationally.
4 weeks until the roll-out in 20 plus more countries.
4 weeks until college students start rolling onto campuses
And then, sometime, the product transitions that are going to lower Apple margins. Opie said this in the conference call about those products and their predicted (and perhaps sandbagged) effect on margins:
Peter Oppenheimer
We have some investments in front of us that I can’t discuss with you today where we are going to be delivering state-of-the-art new products that our competitors just aren’t going to be able to match and as a result, I would see gross margins being about 30%, and that’s all I can tell you at this point.
Should be an interesting second half of 2008
Quack Quack Quack
What does it want?
Here is link for quote for August $140 puts. It includes info on the day's range
http://finance.yahoo.com/q?s=APVTH.X
I sold mine at $3.10 (bought at $2.00 yesterday) and bought Jan 2010 $180 calls for $27 shortly thereafter. Would have been better off to have acted on my thought of selling all our Apple stake near the close yesterday :), but will turn out all right in any event.
Lango: The more I reflect on how Apple chose to refer to the mysterious margin hit in the CC, the more I'm convinced that was NOT a reference to the forthcoming Macbook Pro CPU upgrade, or, as roni suggested, some sort of general price cutting to go after market share generally.
I think for that size hit to the GM, it is likely more than one thing, and I seem to recall language reflecting that in the earnings report and CC.
I think the plural of the word product was used, but ya'll could look it up.
JimosJim, part of it
I think Apple may choose to reduce margins on current products (Macintoshes) to juice up market share. That has certainly been advocated here in the past.
If that is the case, Apple goes over 10% market share in US sometime next year, I predict.
Apple (NASDAQ:AAPL): Colour on quarter
Several firms are out with comments on Apple (NASDAQ:AAPL) following results out last night:
- Piper Jaffray maintains their Outperform and $250 tgt saying that while the focus today will be anxiety over gross margin, they expect by the end of the September quarter, the Street will likely look past margin guidance and focus on product transitions, along with the positive impact these products will have on revenue growth.
What is new is Apple guided to a 30% gross margin target for FY09, compared to PJ's previous estimate of 32.3%. Firm believes there are two reasons for this guidance. 1. Apple will slightly lower its pricing on existing products 2. Apple typically guides GM 270 basis points below the previous quarter's actual GM.
They believe Apple is readying new iPods and new portables that will apply downward margin pressure in the Sept. quarter and into FY09. We believe there is an 80% chance Apple will introduce redesigned MacBooks and possibly new MacBook Pros at lower price points. Specifically, Apple may re-enter the $999 price point (currently $1099)with the MacBook, or test the $1,799 price point with the MacBook Pro (currently $1999). In addition, PJ expects slightly redesigned iPods in the Sept. quarter, with lower-cost touch-based iPods for the holiday season. They believe Apple is getting slightly more aggressive with its pricing; but overall the company is not diverting from its strategy of premium pricing.
- Deutsche Bank notes AAPL beat expectations with revs of $7.5B & EPS of $1.19 (vs. DB at $7.4B & $1.06, Street at $7.4B & $1.08). However, concerns surrounding Steve Jobs' health and weak guidance (GMs of 31.5% in Sep Q and ~30% in FY09) overshadowed results and could likely pressure the stock in the NT. They expect AAPL to oscillate around current levels while investors digest current guidance and await improved visibility into new product refreshes (iPods and Macs) in C3Q. As a result, they lower their estimates and PT to $200 (from $235); maintain Buy.
Regarding Steve's health, mgmt said 'he has no plans to leave Apple and his health is a private matter'. While the topic is delicate, they believe the absence of a straightforward denial of health issues will increase speculation of a worst case scenario. Further, weak guidance (GM's of 31.5% for Sept Q) suggests softening end market demand with lower pricing required to drive share gains (iPods/Macs).
- Oppenheimer notes Apple reported respectable F3Q08 results--as if that mattered. The real news last night was Apple's forecast of a 350bps drop in gross margin in FY09.
Apple attributed the knee-capping to an upcoming product transition, the details of which remain shrouded in the typical cone of silence. So the obvious question is: what magnitude of product innovation (and revenue upside) would propel Apple to sacrifice so much profit?
Opco's guess: something big. While product details and the appropriate growth adjustments will emerge over time, we note that innovation has always been the key to Apple's growth and premium valuation. As such, they'd see a near-term pull back as an opportunity to re-enter Apple on a new ground floor. Reiterates Outperform rating.
- Morgan Stanley notes that while they believe last night’s move in AAPL shares presents an attractive valuation entry point (~$146 = 20x FY10 P/E, ex-cash, and just 0.7x earnings growth), they believe AAPL will remain in this range (and potentially trend lower) until we approach new product introductions in September.
http://notablecalls.blogspot.com/2008/07/apple-nasdaqaapl-colour-on-quarter.html
transcript of conference call
http://seekingalpha.com/article/86056-apple-f3q08-qtr-end-6-28-08-earnings-call-transcript
Bloomberg app on iPhone shows the PE at at ~ 33 EOM
Stock down 10+% in AH and only one post...?
I was at a meeting until 4:30 Pacific time.
Here is something I wrote on another board at 6:45 this morning, Pacific time:
Bought to open some August $140 puts.
Now I am ready for the earnings report and reactions to it :).
I paid $2 for them. I wonder where they will open tomorrow.
Looked at a quote during a break in the meeting. Was real glad I bought them.
<Figure a range of $135 to $225 for a while?>
I'd be delighted and significantly wealthier if we got to within 10% of that high sometime in the next year or so.
So what's left in the cupboard to get this stock moving again?
The passage of time.
Problems with iPhone OS 2.0 ?
Head of O2's Convergence Services seems satisfied with it
Dominic Hulewicz, O2's Head of Convergence Services, explained the mass appeal of the Apple mobile: "We have people who were early adopters of the iPhone; now we also have demand from the corporate market." Hulewicz also notes cheaper, subsidized iPhone prices to have bought in more price conscious shoppers, while the fact that it's possible to program for the device has also attracted a hardcore of mobile technology hobbyists.
Hulewicz also revealed a little anecdotal evidence to support the proposition that the iPhone will boost Mac sales. "I had never used an Apple product and I've been in the mobile and IT industry since 1994, but I very quickly took to the iPhone."
He explained that O2 has iPhone debugging tools which work on Macs. As such, the executive had a MacBook to run those tools. He took the Mac home one night, his wife loved it, and they ended up buying their own Mac. 'Now it seems like I do everything in Apple."
Another switch is also pretty significant: "I'm a long-time BlackBerry user. That is now consigned to the draw. I've been using my iPhone for everything since we got iPhone Software 2.0," he said.
http://www.thestandard.com/news/2008/07/14/global-sales-figures-predictions-iphone
Apple sells 1 million 3G iPhones, 10 millions apps from App store
It is good to be fully invested this morning :)
Up over 7 bucks in pre-market trading
re: Geez - there are already six "bible" apps in the store
Good.
I want bible apps, Koran apps, Buddha apps, Pagan apps, Hindu apps, porn apps, learning apps, designy apps, game apps...
All kinds of apps that encourage many parts of the market to buy the iPhone.
Amen and Halleluia
Nope, going to the Oregon Country Fair
http://www.oregoncountryfair.org/
http://web.mac.com/roni_smith/iWeb/Site/OCF.html
I have not bought any, and will not until the iPhone 2.0 is installed on my phone.
We're packing to go camping and will spend much of the weekend away from computers - but will have some iPhone access from one place we will be.
The APP Store - Wow
Update to v 7.7 of iTunes and go here
http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewRoom?fcId=285119007&id=25204&mt=8
re MobileMe
I'd be very glad to hear your reports
To be honest, I do not use it much - but I do use iWeb and .Mac for my personal web presence, and I like that all right.
The big difference is going to be the cloud computing thing. That strikes me as a pretty handy way to sync devices - I'm sure there are other, probably less expensive ways to do the same thing, but for personal stuff I do not care.
I am the odd person who enjoys paying my taxes to the government and to Apple :), but maybe being a dedicated, career public servant has something to do with that.
Now if only they would spend more of it on our infrastructure....
iPhone to Capture China
http://seekingalpha.com/article/84287-apple-s-iphone-to-capture-chinese-internet-market
In a revealing interview with Kai-Fu Lee, President of Google (GOOG) China, PBS's Margaret Warner extracted some valuable information regarding the Chinese Internet explosion. Lee predicts that a quarter of China's 1.3 billion people will be online by year's end.
and later in the article
he Chinese are craving an inexpensive Internet device to further liberate their access to information, entertainment, and communication. Perhaps an alternative to the western world's use of laptop computers will fuel a revolutionary wave of Chinese gadget obsession.
They love their gadgets. Before the government intervened with the China Mobile monopoly, the company reported 574 million mobile subscribers back in March; the number of mobile subscribers is expected to grow to 738 million by 2010. To put that number in proper perspective consider that the entire US population is just over 300 million. Capturing the Chinese market is the prize of all prizes.
To win the Chinese prize one must cater to the Internet demand of the young Chinese but do so on a culturally accepted platform. Computer ownership is not culturally accepted. Cellphone ownership is. That's where Apple's (AAPL) new 3G iPhone comes in. Back on May 24th Chinese officials announced their intention to issue three licenses for mobile phone 3G technology and they promised to provide 3G services for the Olympic Games in August. Investors must be careful not to throw a pending agreement between Apple and China in with the rest of the international batch.
China is different. The inexpensive iPhone caters to the hundreds of millions of people who will trade in their current cellphones for their first ever opportunity of owning a mini-computer. The iPhone launch in China represents the most significant technological product release of our generation; not only financially for Apple but culturally for China as 7 out of every 8 households goes without a computer. Will Apple bite the bullet and advertise the iPhone as a laptop alternative in China? We'll see.
mobile.me
Thoughts on its potential and when and how it might start producing meaningful and annually recurring revenue. It seems to have value to me, and I will start getting more for the .mac tax I have gladly paid since Apple starting charging for it.
No AAPL position - it's too near midpoint of the range I'm expecting. Patience...
You could be correct. I am long shares and LEAPs. The shares are long term core holdings. The Jan 2010 LEAPs (strike prices of $160 and $180) were purchased to open when the shares were in the $120's and $160's. I have some Jan. 2009 $160's that I bought to open on June 27 that are green as of Thursday at close. Those may be gone before the July earnings report. I did hold some January 2009's through the January downdraft, and sold those a while back at a loss - they had recovered some and I basically rolled them out to Jan. 2010's
I think that in the competing drumrolls of a good G3 launch stories and negative stories about the launch and June quarter earnings - the positive will outweigh the negative. I do not see Mac growth slowing down based on what little we know about the quarter so far. To the extent that the share price reflects future prospects for Apple, I would give the range a higher base than $140 on funnymentals :).
OTOH, I have not been trying to time this exactly. I did a couple of trades in June, selling on weakness and rebuying on further weakness as I seem to do. I know the mantra is sell on strength, but I seem incapable of selling whilst there seems to be any strength:).
I think the iPhone is going to be a major hit. I think Mac growth rates may accelerate into the end of the year. I am nervous about the economy and the cost of energy and food sucking some of that growth out.
Anyway, I think AAPL is higher next year than it is this year.
In other areas, I have been pouring as much as I can afford into a tax deffered retirement plan going mostly into the large cap growth category, and will continue to do that. If this ain't the "buy low" part of the cycle - well, I'll still be doing that when the "buy low" part of the cycle gets here.
Sure hope it works out all right
It wants more - WmZ
I suspect and reckon it is going to get more :).
I reconfigured my holdings some over the past couple of weeks - both rolling some Jan 2009 $180's out to January 2010 $180's and replacing some Jan 2009 $180's with Jan 2009 $160's. In both cases I avoided some losses between the sells to close and the buys to open. Nota bene: this does not mean I did not lose money in the recent downdraft. I did. Plenty of it, but I could have lost more :).
The only AAPL holdings left untouched were Jan 2010 $160's and shares. I gotta a big long on and I'm thinking it will pay off very handsomely. Can make one a bit nervous from time to time, though. Today was very nice.
The Jan 2009's are traders. The rest, not so much.
What to do with your old iPhone
http://www.ipodobserver.com/story/36265
MLB readies $5 At Bat iPhone app
Let's raise a cold one to dilleet, even though he was dry, we are not.
He would have liked this I think, and probably pointed out its weaknesses as well.
I miss him, damn, I do miss him from time to time.
To bring it back around to Apple and its fortunes
WooHoo_land
Cocoa for Windows? Flash killer?
Some of you smart people read this :)
http://www.roughlydrafted.com/2008/06/14/cocoa-for-windows-flash-killer-sproutcore/
So this morning at 9:28 am abd 10:26 am I
rolled those Jan 09 $180's that I had sold on Wednesday and Thursday out to Jan 2010 180's - roughly the same dollar amount.
impeccable? Thanks a lot, however....
Even a blind pig can find an acorn :).
Often peccable, but I have gotten better over the years.
Yesterday and today I sold
All of the Jan 2009 $180's in my portfolio.
Still holding ITM Jan 2010 LEAPS ($160) and some OTM ($240), bought mostly when AAPL was under $130 a share. Still holding all my shares.
My sells were at $28.5 and $25 (1/2 at each). These are the remaining ones I had in January 2008 that did not get dumped back then.
It feels good to have the cash.
This is getting real useful now - voice search for iPhone.
Nuance Communications (NASDAQ: NUAN), a leading provider of speech solutions, today unveiled a ground-breaking prototype for voice search capabilities shown on the Apple iPhone (NASDAQ: AAPL).
The newly designed application introduces a new, more compelling consumer and search experience. Through Nuance speech recognition servers, mobile consumers - with no training required - can simply speak requests into their phone like "Find the Apple store in Boston, Massachusetts," "Score of the Boston Celtics game," or "Play Hannah Montana Best of Both Worlds" to quickly and accurately search the mobile web or in the future dictate an IM, SMS or e-mail message. The prototype, code-named "OVS" for open voice search, will allow mobile operators to offer simple 'say an ything' search capabilities and is search engine agnostic, able to link to any search engine of an operator's choosing.
A video demonstration of the new application can be found at www.nuance.com/mobilesuite.
From Markoff's NY Times article
“Given the feature set, ecosystem partners, launch countries and the pricing of the iPhone, they are likely to hit the 10 million mark by September-October,” said Chetan Sharma, an independent consultant on the wireless data communications industry.
My prediction is that Apple approaches or exceeds 20 million calendar year 2008 iPhone sales by December 31.
Citi raises AAPL target price to $287 a share
Estimate change
* Quick Call - We remain aggressive buyers of AAPL shares at Y
current levels. Apple's decision to move from a revenue share
model to a traditional subsidy model for the 3G iPhone is a
significant positive because Apple receives iPhone-related
cash flow sooner. As a result, our free cash flow estimate
increases by $2B for FY09 and our price target increases from
$248 to $287.
* 3G iPhone - As expected, Steve Jobs unveiled a 3G version
of iPhone during Monday's Worldwide Developers' Conference
keynote. Hardware specs were generally in line with
expectations while handset pricing was well below
expectations. The biggest surprise was the speed with which
Apple is abandoning the revenue sharing model in favor of a
traditional subsidy model.
* AT&T Deal Looks Particularly Favorable - Citi wireless
analyst Michael Rollins believes that AT&T is paying Apple
$220-270 more for the 3G iPhone than the NPV of all payments
related to the original iPhone. AT&T obviously believes that
the higher upfront investment will pay off in higher
subscriber adds, higher ARPU, and lower churn.
* Raising Cash Flow Estimates - We are significantly raising
our FY09 and FY10 free cash flow estimates from $7.4B and
$8.9B to $9.3B and $10.2B, respectively, although there is
little net impact to our above-consensus GAAP EPS estimates
from the change in carrier model. The shift in carrier
payments to the point of sale also boosts FY09 and FY10
revenue by $1.4-3.2B.
Price (09 Jun 08)
US$181.61
Target price
US$287.00
from US$248.00
and more
* The $100 drop in price made possible by the carrier subsidy places the 8GB iPhone below the critical $200 price point where sales volumes typically spike. We believe the drop from $299-399 to $199 will increase Apple's global available unit market by a multiple of 3-4X, with the RAZR's significant jump in volume at $200 as an example of the potential.
* While Apple loses back-end revenue share under the subsidy model, the net present value of iPhone-related cash flows is larger than a subsidy model thanks to the earlier timing of cash receipts from carriers and the increase in iPhone's potential market due to the lower price point.
* Higher unit volumes will attract more third-party software developers to the iPhone platform, further differentiating iPhone from competing handsets. The iPhone application store on iTunes-the exclusive source for all third-party applications-will also provide incremental revenue.
“This changes Apple from an interesting company in the mobile space to potentially dominating the smartphone market,” Van Baker, research vice president at technology research firm Gartner, told Macworld .
When are we going to find time to try out all that software? eon
I feel seasick...
Here is a little song I wrote
You might want to sing it note for note
Don't worry be happy
In every life we have some trouble
When you worry you make it double
Don't worry, be happy......
:)
Keynote chat today? EOM
Apple stores reported down in many countries. EOM
My position?
I wrote that it was my memory.
Here is what Opie said when announcing it. While my memory may have overstated the case, the case is there in Apple's announcement.
We plan to build on this incredible foundation by continuing to develop new software features as well as entirely new applications and incorporate them into the iPhone. Since iPhone customers will likely be our best advocates for the product, we want to get them many of these new features and applications at no additional charge as they become available. Since we will be periodically providing new software features to iPhone customers free of charge, we will use subscription accounting and recognize the revenue and product cost of goods sold associated with iPhone handset sales on a straight line basis over 24 months. So while the cash from iPhone sales will be collected at the time of sale, we will be recording deferred revenue and costs of goods sold on our balance sheet, and amortizing both of them into our earnings on a straight line basis over 24 months. We will continue to expense our iPhone engineering, sales and marketing costs as we incur them. This accounting policy will have no impact on cash flow or the economics of our business.
and, on the AppleTV
Similar to iPhone, we plan to periodically provide new software features and enhancements at no charge to our Apple TV customers. We will also recognize the revenue and product cost of goods sold associated with Apple TV on a straight line basis over 24 months. This will be included in the other music-related products and services in the data summary we provide you each quarter. Additionally, we will provide you with a schedule each quarter in our earnings release that indicates the total deferred revenue, including the combined amounts related to the iPhone and Apple TV.
So it is your position that Apple did not say it was going to subscription accounting for the iPhone and for AppleTV because they would be providing occasional updates to the software for those products.
My memory is that this is exactly the rationale given for the subscription accouting for those two products and that it had nothing to do with the wireless service plans offered by T or with Apple's cut of that revenue - it could not have for the AppleTV, in fact.
Other Platforms
I expect that other software will become available for other platforms. Next up-iChat for iPhone and Windows.
Also, Lango - your answer on the iPhone OS updates for money - I did not see where you dealt at all with the fact that Apple said its move to subscription accounting for iPhone revs and earnings was due to the fact that software updates/upgrades would be provided for no additional charge.
You came back with a statement about AT&T's service plan, as I recall.