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I like this green trend much better than that red trend thang.
Options Maximum Pain Update: Apple
On Monday, I published a Seeking Alpha article about the impact the theory of maximum pain can have on stock prices. You can reference that article by clicking here. I intend to publish a lengthier update to that article on Monday, as May's options expiration week commences. Price action in Apple (AAPL), however, leads me to jump the gun and provide an update today.
While academic work and other analyses of the theory of max pain render inconclusive results, investors should keep a close eye on stocks that often pin to the strike price that would cause the most "pain" to option contract holders.
On Monday, shares of Apple traded between $346.53 and $349.20, closing the day at $347.60. A look at Apple's recent price history reveals two interesting points: (1) After touching $350 on Wednesday, AAPL appears to be setting up for a holding pattern that could assert itself around $340; and (2) AAPL often runs right after an options expiration day and begins to fall heading into the next one. Price action, courtesy of Yahoo! Finance, since April options expiration shows this trend.
I have yet to determine what the max pain strike price was for AAPL in April. It would not surprise me if it was $330. Considering the fact that AAPL came down from highs of around $350 in late March to close April's options expiration day at $327.46, lots of people who bought calls on the run to $350 would have been hurt. Call writers stood to benefit.
It's important to note that the theory of maximum pain does not suggest illegal market manipulation. Rather, it's a statistically-based hypothesis. Backers argue that stock prices tend to pin to the options strike price that would cause the most 'pain' for option contract holders.
Interestingly, AAPL's max pain price for May remains unchanged from last week at $340. Here's the most up-to-date chart, courtesy of OptionPain.com.
Early in Thursday's session, AAPL's chart indicated a breakdown that makes $340 or less appear realistic. AAPL rebounded considerably, finishing the day down $0.66 at $346.57. This type of intraday swing is nothing for AAPL. In fact, it's quite common, particularly on the heels of a meaningful up or downtrend.
It will be interesting to follow the action into next week, particularly on days when tech is up. The last day to trade May options is Friday, May 20th. Of course, things can change in an instant, but, at this point, the movement merits at least one eye. I think it has a better than zero chance of playing out to form with respect to max pain theory.
(Chart courtesy of Schwab's StreetSmart Edge)
When I wrote about exiting my long position in AAPL, I noted I would swing trade it. it's this type of price action that fueled a penchant for that strategy. It's difficult to call anything "predictable" in this racket, but the way AAPL moves month-to-month comes pretty close to qualifying. If you are an AAPL long, with a close study of its historical price action and chart, you could make up for the dividend the company does not pay and its tendancy to stay range-bound by banking profits on short-term trades that take advantage of the action I outline in this article.
On Monday, I will provide a complete update on maximum pain as it relates to AAPL and other stocks as we head toward options expiration on May 20th. In that article, I will also take a closer look at AAPL's month-to-month price history.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: Author may initiate a long or short position in AAPL at any time.
http://seekingalpha.com/article/269685-options-maximum-pain-update-apple
Comments are interesting as well.
Yadda, yadda, yadda.
You did see where it's Part 1 of a two-part article, didn't you?
I thought not.
How the market in Apple 'weeklys' is rigged
By Philip Elmer-DeWitt May 15, 2011: 9:32 AM ET
If you're looking for evidence of manipulation, Friday's close was picture-perfect
Volume rose sharply and Apple's share price collapsed in the last half hour
"The easiest way to think of options," wrote The Market Skeptics's Eric deCarbonnel in a prescient 2009 post, "is as a type of insurance. Investors pay a premium to protect themselves against sharp swings in the market. If these sharp swings don't happen, those selling options (option market makers) keep the premiums as profit."
"In a legitimate free market," he continues, "every single option market maker would have already gone bankrupt, especially with the volatility over the last two years. Luckily for option market makers, U.S. markets are neither legitimate nor free."
If he were looking for a case to make his point, deCarbonnel couldn't do much better than the trade that started last summer in Apple "weeklys" -- puts and calls that expire every Friday. As we saw in Thursday's post, Apple's (AAPL) share price tends to gravitate with uncanny accuracy toward the closing price that causes "max pain" to option buyers and maximum profit to option sellers -- often in a burst of last-minute trading.
In that respect, Friday's close was picture-perfect.
On Friday morning, when Apple opened at $345.79, there were about 70,000 weekly option contracts set to expire that afternoon, roughly split between puts and calls (see definition at right). The most important were the $350 calls, with about 11,000 contracts outstanding, and the $340 and $345 puts, with about 16,000 contracts between them. The best scenario, from the contract writers' point of view, would be for Apple to close above $340 and below $350.
At 3:14 p.m, Apple was trading at $343. The $350 and $345 calls were safely out of the money, but there were still a few thousand open $340 call contracts worth $300 each.
So what happened? At 3:16, in a pattern that has become as predicable as rush hour traffic, sell orders started pouring in. In the space of less than 45 minutes, about 500,000 shares changed hands. As volume soared and share price dropped, the value of the $340 calls shrank -- from $300 to $50 at the closing bell, when Apple finished the day at $340.50.
Meanwhile, tens of thousands of calls with higher strike prices -- the $345s that were heavily traded on Thursday, the $350s that were most widely held, the $355s, $360s, etc. -- all expired worthless. The options writers pocketed the premiums as profit, just as deCarbonnel said they would.
If you're like me and are having trouble following the plot, you might find the first video posted below useful. It was put together by reader Travis Lewis, who dabbles in monthly options and has been watching this narrative repeat itself nearly every Friday since trading in Apple weeklys began last summer. In the video he shows how, using a snapshot of Thursday's outstanding puts and calls, he can predict to within a few dollars where the stock is going close the next day -- barring big news that even the option writers can't control.
Speaking of news, rumors and press reports can play a role in this game, either by helping drive the share price or -- depending on how cynical your point of view -- providing a fig leaf for the traders who are controlling the action behind the scenes.
As it happens, The Street.com's Scott Moritz posted a report at 3:52 Friday afternoon that hit four of Apple's hottest sell buttons: The iPhone 5 delay, the stock's depressingly sideways trading pattern, the rise of Google's (GOOG) Android and concerns about Steve Jobs' health.
Because The Street comes up a lot in stories about Apple manipulation, I've posted two more videos below. They're from The Street's famous interview with Mad Money's Jim Cramer, in which Cramer talks about how Apple's share price can be manipulated by fomenting bogus iPhone rumors. The clips, which The Street pulls off YouTube whenever they pop up -- come courtesy of Jon Stewart's Daily Show. I don't know how many times I've watched Cramer get sliced up in these clips, but every time I do I find Stewart's outrage cathartic.
It's worth noting that buying or selling securities for the purpose of "pegging, fixing or stabilizing" the price of those securities is illegal. Defenders of weekly derivatives will tell you that natural market mechanisms are what cause options to close at max pain. But every academic paper on the subject I've seen -- including Jerry Wenjiu Liu's 2009 study of Google options -- reject that hypothesis. Retail investors might close out a few thousand in-the-money calls just before expiration to avoid taking possession of the stock, but they don't control enough shares to turn a ship as big as Apple around.
This is the second in a series of posts about the alleged manipulation of Apple's share price. You can read the first one here. In our next piece, we'll see if we can figure out who is pulling the strings.
Let's go to those videos:
[Videos at link]
http://tech.fortune.cnn.com/2011/05/15/how-the-market-in-apple-weeklys-is-rigged/
Hey, KC, welcome back!
Back to school specials may be announced as early as the end of the May, according to another AAPL board.
There also seem to be some current deals on the Ebay Macmall store.
I don't have a link, but as with most things these days I assume you could Google it.
Again, good to see you again!
Katy Huberty visits Apple
Posted by Philip Elmer-DeWitt
May 5, 2011 5:48 AM
Leaves meeting with three top execs with "increasing confidence" in a $540 price target
Huberty. Photo: Bloomberg
Katheryn ("Katy") Huberty, Morgan Stanley's chief Apple analyst, met recently with three of Steve Jobs' top lieutenants: Peter Oppenheimer, the money man; Ron Johnson, the former Target exec who built the Apple Stores; and Eddy Cue, the senior vice president in charge of Internet services.
Apparently no company secrets were revealed. The Apple execs would not confirm that the next iPhone launch has been pushed back to September, and they seem to have talked in only the broadest terms about expanding iPhone penetration (from 90 countries and 185 carriers today), building more and larger stores (up to 50 per year) and following a product cycle that's driven more by software than hardware (major iOS feature update in June?).
Still, Huberty came away more bullish on Apple (AAPL) than ever, judging from the note to clients she issued Thursday, with "increasing confidence" in a bull case scenario in which iPhone sales grow 55% per year over the next two years, iPad sales grow 74%, Macs grow 17% and the stock hits $540, up 54% from Wednesday's close of $349.57.
Her base-case target, $428 per share (up $18 from March), assumes that Apple sells 72 million iPhones in 2011 and 30 million iPads, with Mac unit sales growing three times as fast as the PC market. She's also got a $270/share "bear case," in which unit sales barely meet Wall Street's expectations (65 million iPhones, 25 million iPads) and traders remain obsessed with Steve Jobs' medical leave.
But she's not buying it: "We believe AAPL shares discount a significant deceleration in top-line growth that is unjustified in light of several long-term growth drivers."
These include, according to Huberty:
LTE iPhone upgrade cycle and lower priced 3G iPhone in 2012
Larger tablet market and continued Apple market dominance longer-term
Expanding distribution in China
Potential for Apple to enter the Smart TV market in 2012-13.
Huberty's three cases:
Source: Morgan Stanley
Why is there a continued screen size gap between the two?
I think Apple does it just so you'll have something else to gripe about.
I think the sweet pot size is a 23/24 inch screen for optimal vision viewing.
Put the doobie down. I suspect Apple knows what they're doing. Make a 24" model the low end and you're no longer able to offer the same entry point price wise. Make it a third, middle model and you've complicated things and reduced margins.
Besides, once you've used a 27" monitor, there's no going back to a smaller size.
The new iMacs are serious desktop machines, period.
Comparing the old iMacs with today's new models
by Dave Caolo (RSS feed) on May 3rd 2011 at 2:15PM
Earlier today, Apple updated the iMac line with Thunderbolt, quad-core processors across the line and a HD camera for FaceTime. Prices start at US$1,199 for the 21.5", 2.5 GHz model and climb to $1,999 for the big daddy. How do the specs compare to the previous models? Here are some of the highlights.
Processor
There are still two basic models, 21.5" and 27". Each stars with two configurations, beginning with the processor. As of January 2010, the 21.5" model sold with a 3.06 GHz Intel Core i3 or a 3.2 GHz Intel Core i3, while the 27" model featured either a 3.2 GHz Intel Core i3 or a 2.8 GHz Intel Core i5.
Today, the 21.5" machine offers either a 2.5GHz Quad-Core Intel Core i5 or a 2.7GHz Quad-Core Intel Core i5, while the 27" iMac features a 2.7GHz Quad-Core Intel Core i5 or a 3.1GHz Quad-Core Intel Core i5. That's the first time quad-core has been available across the entire iMac line. (The previous 27" model had an i7 build-to-order option, but that processor wasn't the current Sandy Bridge variety.)
Additionally, the previous models featured a 3MB shared L2 cache, with a build-to-order 8MB shared L3 cache option for the 27" iMac. Current models feature a 6MB on-chip shared L3 cache across the board.
Display
The display resolution is the same as it's been. The current options are 1920 x 1080 pixel resolution for the 21.5" model and 2650 x 1440 pixel resolution for the 27" iMac.
Apple notes that the current iMac displays feature "in-plane switching," or IPS. Originally designed by Hitachi in 1996, IPS improves color and contrast at sharp viewing angles.
RAM
Current models all start with 4 GB of RAM, just as previous models did. The current 21.5" models are upgradable to 8 GB of 1333MHz DDR3 SDRAM from Apple, while the 27" models can house up to 16 GB of the same.
Graphics
Previous models featured either a NVIDIA GeForce 9400M or a ATI Radeon HD 4670 with 256 MB on the 21.5" model, while the 27" model offered the ATI Radeon HD 4670 or a ATI Radeon HD 4850 with 512 MB.
The new iMacs are clearly improved. The base 21.5" model sports either a AMD Radeon HD 6750M with 512 MB or a AMD Radeon HD 6770M with 512 MB, while the 27" starts with either that same Radeon 6770M or a AMD Radeon HD 6970M with 1 GB.
http://www.tuaw.com/2011/05/03/comparing-old-imacs-with-new/
I'm suffering some serious new iMac envy here.
OT: Osama Bin Laden is dead. em
Killer Deals: new MacBook Airs for $879, new 64GB 3G iPads for $569
Saturday, April 30, 2011
By AppleInsider Staff
Published: 12:00 PM EST
Once again, MacMall has teamed up with eBay and AppleInsider to offer readers the lowest price around on Apple's new 11.6-inch MacBook Airs with shipping guaranteed for Mother's Day. Separately, the Apple reseller is also blowing out brand new, 1st-gen 64GB 3G iPad bundles for $300 below MSRP.
MacBook Airs
MacMall on Saturday extended a limited-time offer on Apple's new 11.6-inch MacBook Airs, which the Apple Authorized Reseller is selling through eBay for $879. Thats $120 below Apple's $999 suggested retail price and the lowest price available from all Apple resellers by $35. It's also currently the lowest entry price we've seen for any current Mac notebook (Mac Price Guide).
These are brand new, unopened MacBook Airs feature a 1.4GHz Intel Core 2 Duo, 2GB DDR3 SDRAM, 64GB Flash Storage, NVIDIA GeForce 320M, 11.6" LED-backlit glossy widescreen display, AirPort Extreme Wi-Fi 802.11n, Bluetooth 2.1, FaceTime camera, built-in battery, and precision aluminum unibody. There's a strict limit of one per customer while supplies last.
As an added bonus, MacMall on Saturday tacked on free 2-day shipping to the offer so that readers purchasing the notebook as a Mother's Day gift can rest assured that their order will arrive before next Sunday.
First-gen iPads
Meanwhile, MacMall has also taken stock of a large cache of brand new, unopened 64GB first-generation 3G iPads (the high-end model), which the reseller is blowing out at $569. Each order includes a free Apple iPad case, which originally retailed for $39, bringing the combined savings on the bundle to $299.
Again, that's the lowest price we've seen by far, besting Amazon's $701 offer by $132 and Apple's similar $659 offer on Refurbished units (not new units) by $90. These first-generation models are worthy alternatives for those unwilling to wait for iPad 2 shipments or who don't mind forgoing the new model's slightly-slimmer design for the $299 in savings.
Unlike the reseller's MacBook Air deal, however, the iPads are available only by telephone order and cannot be placed online.
Microsoft Net Falls Below Apple’s as IPad Eats Into Sales
Microsoft Corp. (MSFT)’s Windows sales slumped last quarter as the iPad crimped demand for consumer laptops, marking the first time in 20 years that the software maker reported a smaller quarterly profit than Apple Inc. (AAPL)
Revenue in Microsoft’s Windows division fell 4.4 percent to $4.45 billion, the Redmond, Washington-based company said yesterday in a statement. That missed the $4.6 billion average prediction of analysts surveyed by Bloomberg. Net income was $5.23 billion, eclipsed by the $5.99 billion reported by Apple last quarter.
Consumer PC shipments dropped 8 percent in the quarter, Microsoft Chief Financial Officer Peter Klein said. Netbooks -- the cheap laptops that became popular during the recession -- plunged 40 percent, partially because of defections to tablet computers, he said. The decline overshadowed a better-than- anticipated performance from Microsoft’s Office unit and increased PC demand from corporations.
“You have to live underneath a rock not to know that the iPad has taken share from the netbook,” said Pat Becker Jr., principal of Portland, Oregon-based Becker Capital Management Inc., which holds Microsoft shares as part of its $2.5 billion in assets. “It’s a problem on the consumer side, and that’s a market where Microsoft continues to give up territory to Apple.”
Microsoft fell 1.6 percent to the equivalent of $26.37 at 11:29 a.m. in German trading. The stock declined as much as 74 cents in late U.S. trading yesterday after the report. The shares, down 4.3 percent this year, had closed at $26.71 on the Nasdaq Stock Market.
Less Than Apple
Net income rose to 61 cents a share, from $4.01 billion, or 45 cents, Microsoft said yesterday. Excluding a 5-cent per-share tax benefit, earnings matched the 56-cent average of estimates compiled by Bloomberg.
The results underscore the ascendance of Apple, which surpassed Microsoft as the world’s most valuable technology company last May. The last time Apple’s profit was bigger than Microsoft’s was 1991.
While PC shipments to corporate customers rose 9 percent, tablet competition accounted for some of the sluggishness in consumer sales, Klein said in an interview.
“It’s fair to say tablet is some of that,” he said.
Total PC sales declined 2 percent last quarter, Microsoft said. That the Windows business performed even worse adds to the concern over Microsoft’s performance, said Brendan Barnicle, an analyst at Pacific Crest Securities in Portland.
Office Sales
“That’s suggesting some market share loss, some real deterioration,” said Barnicle, who rates Microsoft’s stock “sector perform.”
Microsoft’s overall sales rose to $16.4 billion, compared with the $16.2 billion average projection. That reflected demand for such products as Office business-productivity software and programs for servers -- the computers that run networks.
“We are seeing businesses invest in technology,” Klein said. “They are buying hardware and they are buying Microsoft software.” Microsoft expects corporate PC shipments to outpace consumer sales for the rest of the year.
Sales in the business division, which sells Office software and is the company’s biggest unit, rose 21 percent to $5.25 billion, compared with the $4.9 billion average estimate of analysts. Revenue at the Server and Tools unit was $4.1 billion, compared with the $4 billion analysts projected.
“There is a tale of two cities going on here,” said Brent Thill, an analyst at UBS AG in San Francisco, who recommends buying Microsoft shares. “You have consumers who say an iPad is good enough for consuming data, but for the enterprise side, those enterprises are continuing with Microsoft. The thing that has hurt Microsoft is that tablets are no question the must-have item for consumers.”
Not I.
Four Android myths lazy analysts love
by Chris Rawson (RSS feed) on Apr 27th 2011 at 10:00AM
The more I read about the tech sector, the more it becomes clear that "analyst" is synonymous with "stand-up philosopher," which Mel Brooks fans will know is the same thing as an artist who works in a decidedly unsavory medium. This is never more clear than when an outlet like Nielsen releases numbers on the US smartphone market, because immediately afterward legions of "analysts" will leap to the dumbest conclusion possible: Android is ascendant, and Apple is doomed! Dead in the water! DOOOOOMED!
In support of that entirely boneheaded thesis, I've noticed a pattern: these "analysts" keep using the same four myopic arguments. All four of these myths dance around a central point, that the smartphone market will only have one "winner," and it sure won't be Apple.
The worst part of these analysts' outlandish claims isn't that the arguments are so easily dismantled, it's that so many otherwise intelligent people completely fall for them. Ever since the HTC Dream came out I've seen people jumping up and down and saying, "That's it for Apple, they're done! Android is going to eat your lunch, sorry fanboys!"
The fact that it's two and a half years later and that still hasn't happened is no deterrent to the Android faithful, or the lazy analysts who egg them on in the first place. It's honestly getting kind of painful to watch this happen every month, especially since the analysts keep saying the exact same things every time.
Read on for the four Android myths that contribute to these analysts' narrow views.
The Four Myths of Android's Ascendancy
Myth 1: Market share is the most important metric possible
As my colleague Erica Sadun points out, market share doesn't matter. But don't try telling that to the analysts, because they keep hammering away at market share like it's the only thing that matters. Android's market share numbers keep climbing more than Apple's, which obviously means that Android is going to beat Apple black and blue and steal its lunch money.
With all due respect, I don't think Erica's gone far enough in her counterargument. She's acknowledged that market share doesn't matter as much as the pundits claim it does, but I'll go a step farther: market share doesn't matter at all. It is the least important metric possible when analyzing Apple's future success or failure in the smartphone market.
Let's look at some numbers that actually matter in terms of a corporation's bottom line. The original iPhone was released on June 29, 2007. On that day, Apple's stock was worth US$122.04 per share, and its market cap at the beginning of the month was about $105.56 billion. Today, Apple's stock is worth $353.01 per share (289 percent more), and the company's market cap has risen to $324.05 billion; Exxon-Mobil is now the only US company whose market cap exceeds Apple's.
What effect has Android's "ascendancy" had on Google so far? The first mass-market Android phone, the HTC Dream, was released on October 22, 2008. On that day, Google's stock was $355.67 per share, and its market cap at the beginning of September 2008 was $125.94 billion. Today, Google's stock is $525.10 per share, 148 percent more than before the first Android handset hit the market. That's a respectable increase, but nowhere near the massive rise in Apple's stock. Google's market cap now stands at $171.31 billion; Apple's market cap has grown by over $200 billion since it introduced the iPhone, but Google's has only grown by $45 billion since the first Android phone hit the market. Again, $45 billion is nothing to sneeze at, but it's sure not $200 billion... and since Google's only pulling in $1 billion in revenue per year from Android, it doesn't look like it's had much positive impact on Google's stock at all.
"Now, hold on," you might be thinking. "If there are more Android phones sold than iPhones, that obviously means that Android's making more money than Apple, right?" Not necessarily, and the stock performances of Apple and Google certainly don't reflect that line of thinking. But since the analysts are so fond of comparing the smartphone market to the global PC market (more on that dross later), let's go ahead and look at it from that angle. Apple's market share in the PC market has held pretty steady over the past decade. Depending on which fiscal quarter we're talking about, Apple's either gained or lost a percentage point here or there, but overall Mac OS X has hovered at about 10 percent of the US market and approximately 5 percent of the world market. That leaves the rest to Microsoft Windows, which still holds an overwhelming lead in worldwide OS market share. [That's leaving out the rounding error that is Linux on the desktop, and not including the infrastructure/server market where Linux does indeed challenge the Microsoft hegemony. –Ed.]
Since market share is supposedly all that matters, that should mean Apple is at best carving out a niche amount of the available profits in the PC market, right? Sure, except that's not what's happened at all. Not even close. For 20 or more fiscal quarters in a row, Apple has been the only PC maker to show consistent growth; everyone else is either stagnating or losing market share. As for Microsoft itself, despite shipping a remarkable 350 million licenses of Windows 7, the company frankly isn't the "too big to fail" monolith that it was in the 90s. In fact, going by the market cap, Apple is now worth more money than Microsoft, and Apple passed Google's market cap almost three years ago.
"It's not a fair comparison," you may now be thinking. "Apple's a hardware company, and Microsoft's a software company. It's apples to oranges." You're right -- although of course Apple makes both hardware and software, the only hardware products with a Microsoft brand are the Xbox 360 and some admittedly nice mice and keyboards. Thanks for pointing that out, though, because it leads me directly into the second of the Android analysts' myths.
Myth 2: Android is a company, not a platform
Every single analyst who's jumped on the "Android rules, Apple drools" bandwagon seems to be treating Android like it's a standalone company instead of a software platform (a combination of open-source and proprietary chunks, along with a brand and a licensing scheme tying it together) that runs on a plurality of handset manufacturers' hardware. Since these analysts all have market share tunnel vision, it's easy to see why they're making this basic and obvious mistake, and they have Microsoft to fall back upon as an example; there's currently no such thing as a Microsoft-branded PC [there was for a while -- looked a bit like a table-sized iPad, actually -- but now the Surface platform is being built by Samsung instead –Ed.], but Windows is the default OS on almost every PC maker's hardware except Apple.
Here's a couple of forehead-slapping "duh" points these guys are overlooking. First, "Android" isn't a company the way Google is a company. Android is a software platform, like Windows is a software platform. That leads into the second point: Google doesn't charge for Android like Microsoft charges for Windows. Google's profits from Android come from ad revenue, carrier licensing for Google-branded proprietary apps (Maps, Gmail, Market, etc.), Android Market fees and other sources -- but not sales of its smartphone OS. The people who really stand to make money off of Android are the smartphone vendors, and they're all competing not just with Apple, but with one another. Not to mention non-Android and non-iOS players like RIM and Windows Phone makers. And all the unsmart phones out there.
Analysts like to treat Android like it's a single entity so that they can make impressive pie charts where Android looks like Pac-Man gobbling up iOS, but once you split that up by manufacturer, the story looks a lot different. It's virtually the same story as the PC market; Apple's share of the PC market looks trifling indeed when you compare it against Windows-running PCs as a whole, but when you break it down by each PC manufacturer, Apple definitely more than holds its own. When you break it down by profitability, the contest isn't even close; Apple owns 90 percent of the "high-end" PC market.
It bears repeating at this point that Google doesn't charge for Android per se, and the bulk of its profitability from the platform comes from ad revenue. Android pulls in about $1 billion in revenue per year for Google. Meanwhile, Apple is the sole manufacturer and seller of devices that run iOS, and the company made $11.9 billion in revenue off the iPhone in one quarter. That doesn't include the $1.4 billion in quarterly profits from the iTunes business, selling music, movies and apps to run on all those phones (and iPod touches, and iPads). "Android's" hardware profits are scattered amongst HTC, Samsung, Motorola and a host of other manufacturers, but Apple is making all the money -- and lots of it -- from iPhone sales. Apple's carrier partners are also making quite a bit of money from iPhone users' service plans.
Myth 3: The smartphone market will be a repeat of the PC market, where Apple "failed"
This one's been repeated often enough to qualify as a meme: "Apple's locking down of iOS will be its downfall. Android's openness and support from multiple handset vendors means the smartphone market will play out exactly the same way the PC market did in the 90s, and the iPhone will be left with only a tiny slice of the overall market."
I wish I was making that up, but that is in fact what outlets like Business Insider are shouting from the mountaintops, almost word-for-word: "As we've said before, Apple is fighting a very similar war to the one it fought -- and lost -- in the 1990s. It is trying to build the best integrated products, hardware and software, and maintain complete control over the ecosystem around them. This end-to-end control makes it easier for Apple to build products that are 'better,' but it makes it much harder for the company to compete against a software platform that is standard across many hardware manufacturers (Windows in the 1990s, Android now)."
Yeah, boy, Apple's paltry $11.9 billion in iPhone revenue per quarter sure pales against Google's $1 billion in Android revenue per year. Stick a fork in Apple, it's done. And hey, remember how the Mac "failed" in the 90s and was never heard from again? You know, except for the roughly 3,760,000 Macs Apple sold last quarter, almost all of them models with hefty profit margins. That's the kind of failure that most companies can only dream of. [Granted, the company did go through a near-death experience in the depths of the Mac 'bad years,' but it made it through. –Ed.]
While we're at it, let's not forget nearly a decade of frothy prognostications of the iPod's imminent demise, when in fact the only products that have managed to put a dent in the 'classic' iPod's sales are Apple's own iPhone and iOS-based iPod touch. And remember how in 2010 virtually every Apple-loathing tech pundit on Earth was utterly convinced the iPad would be a miserable failure? Does anyone remember how that one worked out?
Let's assume for a minute that guys like Business Insider's Henry Blodget are right (even though they're oh so obviously wrong), and Android vs. iOS in this decade (when Apple is on top of its game in every way that counts) will play out the same way Windows vs. Mac OS did in the 1990s (when Apple started out as a niche player, went downhill from there, and was a hair's breadth from dying out completely). Let's assume further that Apple's share of the smartphone market dips down to the same level as its share of the PC market, in the neighborhood of 10 percent of the US and 5 percent of worldwide share. Does such a dip in overall market share mean Apple suddenly starts making less money per iPhone? Nope; Apple's device margins aren't dependent on sales volume in the slightest. Does it mean Apple is "dead in the water" if the coalition of Android handset manufacturers gains a wide majority in the market? Nope; according to recent Asymco analysis of Apple's cash reserves, Apple can afford to make no money whatsoever starting today and still sustain its operations until 2018.
At this point, the only way Apple can fail as hard as it did in the 90s is if someone deliberately mismanages the company into the ground. That leads into the final busted myth...
Myth 4: For Android to succeed, Apple must fail
Why do so many of these pundits have this Old West, "This town ain't big enough for the both of us" mentality when it comes to the smartphone market? Almost since the first Android phone hit the market, it's been all gloom and doom from these guys when it comes to the iPhone. It's the same story with Android users, at least the ones motivated enough to post about their preferences online. One of the Android users I know in real life has gone so far overboard with his anti-Apple rants that I can't even hang around him anymore, because I got tired of the rolled eyes, raspberries and fanatic lectures any time I started using something with an Apple logo in his presence.
There are plenty of examples of markets where multiple vendors succeed simultaneously without the category being dominated by any one player. The one that most closely fits the likely outcome of the smartphone market, at least as far as that "all-important" market share is concerned, isn't the PC industry, but the games console business.
There are three major players in video game hardware right now: Nintendo, Sony and Microsoft. They're all competing for the same space and the same mind share, yet all three companies thrive despite wildly different approaches to the market. None of the three companies holds a lead over the other two that's large enough to call the others a "failure" by comparison. People still get into online shouting matches over which platform is "better," but none of these three companies are in danger of being "dead in the water" because of the efforts of the other two -- although Sony's certainly gone out of its way to shoot itself in the foot as often as possible, most recently with the PSN outage/intrusion debacle.
That's not what pundits want you to hear, though, because "Can't we all just get along" doesn't drive eyes to their sites. "Android number one in US/Earth/Universe, Steve Jobs living in cardboard box by 2013" is the story these guys want you to believe, even if market share is the only metric that even slightly lends credence to that claim. Yet during the same time that Android has gained that precious market share so vital to hysterical analysts, Apple's profits have continued to rise, relentlessly. It really makes it hard to take these guys seriously when Apple keeps turning in record numbers every quarter despite Android's market share (as a platform) outperforming iOS.
What can we take away from all this? Basically, anyone who pounds away at market share while ignoring every other metric is an "analyst" in name only. There's way more to building a successful product and business than number of units sold. If I sell 1000 lambs at $10 profit each, am I really doing better than the guy down the road who sells 500 lambs and makes $40 on each one? Obviously not, and I'd be doing even worse if I were really only selling the feed that goes into those lambs, at a profit of $1 per lamb. But according to these analysts, if those lambs down the road have an Apple logo on their wool, suddenly the fact that 1000 lambs are eating my feed means those other 500 lambs are destined to drive that farmer out of business... somehow. Look at the monkey! Look at the silly monkey!
[Many internal links in the original article]
http://www.tuaw.com/2011/04/27/four-android-myths-lazy-analysts-love/
Disapprove? Approve?
Those are dislikes and likes.
Did you perchance mean disprove?
Somethings [sic] up on the recent lack of share price gains on quarter after quarter of stellar earnings.
So what's your take on why it's not trading as it "should"? Mayhaps because -- until just recently -- it was vastly over represented in the NASDAQ index and so hedge funds and others wanting to influence the latter could influence the former? And some (many?) fund managers have to divest now, you know?
Also, what's your timeframe? Where was Apple's share price a year ago or two years ago vis a vis some other stock of your choice? I'm not complaining, why are you?
Any number of issues are probably in play now -- Sell in May & go away? -- that may or may not have to do with Apple's fundamentals. Wall Street falls in and out of love with individual stocks for any number of reasons that may or may not appear logical to outsiders. RIMM was a WS darling for awhile, now not so much. A lot of investors wonder why AMZN and GOOG have such valuations as they do, given their forward PEs vs Apple's. Go figure.
With over $12 billion in profits and cash creation in Q2, why is aapl anemeia in share price trading in comparison to the Eur?
The Eur? Never mind. Just explain why you're comparing a corporate entity to an international currency? Why not to the dollar? (And try to make a coherent sentence of it next time, btw.)
Do you think the Euro is up because of any intrinsic value or just a concatenation of current circumstances?
If you've got paper profit in the Euro, btw, I'd book as much of it as you can.
It's not going to last.
Estimates for Apple’s third fiscal quarter (ending June)
APR 25, ’11 11:54 AM
AUTHOR
Horace Dediu
CATEGORIES
Financial
Apple’s CFO guidance statement:
We expect revenue to be about $23 billion compared to $15.7 billion in the June quarter last year. We expect gross margin to be about 38%, reflecting approximately $55 million related to stock-based compensation expense. We expect OpEx to be about $2.5 billion, including about $255 million related to stock-based compensation expense. We expect OI&E to be about $70 million and we expect the tax rate to be about 25%. We are targeting EPS of about $5.03.
Apple Management Discusses Q2 2011 Results – Earnings Call Transcript – Seeking Alpha
Last quarter Apple guided revenue growth at an aggressive 63% with an EPS growth of 47%. They delivered 83% and 93% respectively.
They are now guiding about 47% revenue growth and 43% EPS growth and my current estimates are 65% and 72% respectively based on the following:
iPhone units: 14.7 million (75%)
Macs: 4.3 million (25%)
iPads: 9.8 million (200%)
iPods: 10.1 million (-15%)
Music (incl. app) rev. growth: 25%
Peripherals rev. growth: 25%
Software rev. growth: 25%
Total sales: $25.8 billion (65%)
GM: 38.5%
EPS: $6.02 (72%)
The biggest uncertainty remains iPad growth. This will be the first quarter where we can dial in a y/y growth rate. I’m being bullish with 200% because I believe the ramp for the iPad 2 may get sorted out. There are also more countries being opened up this quarter (13 this week).
Apple’s stock price to earnings ratio has dropped to 16.72. Ex-cash it’s 13.5. On a forward basis (my estimates) it’s 8.3. Apple’s valuation is now a case for business historians to discuss because I don’t think there are modern precedents.
http://www.asymco.com/2011/04/25/estimates-for-apples-third-fiscal-quarter-ending-june/
Apple makes record $11B in purchase commitments, earns its highest margins in Asia
By Sam Oliver
Published: 08:35 AM EST
Apple's 10-Q form filing with the U.S. Securities and Exchange Commission has revealed the largest sequential increase in purchase commitments for a March quarter to $11 billion, as iPad 2 production ramps up.
$11B in purchases planned as iPad 2 ramps up, iPhone 5 rumors heat up
The "10-Q Tidbits" were highlighted this week by analyst Katy Huberty with Morgan Stanley. The financial document shows that Apple's purchase commitments increased 39 percent quarter over quarter by the end of the March quarter.
Apple plans to spend $11 billion on components and other purchases in the March quarter, up from $7.9 billion at the end of 2010. That sequential increase is a record for a March quarter.
"We believe the increase is attributable to procurement ahead of a tight supply environment and expected shipment increases in June (iPad) and September (iPad + iPhone)," Huberty wrote in a note to investors.
Apple's purchase commitments cover requirements in the immediate future. Typically, these expenses cover a period ranging from 30 days to 150 days.
Beyond that, Apple also has long-term supply agreements with component suppliers that extend out as far as the year 2022. The company revealed in its 10-Q that these supply agreements total about $2 billion.
Apple drew attention in the previous quarter when the company revealed it had committed $3.9 billion to secret long-term component contracts. The company declined to reveal what components it had secured supply of, citing competition.
Apple's margins show even more success in Asia
Apple also revealed in its 10-Q that its operating margins in the Asia/Pacific region were 43.1 percent in the March quarter. That represented the highest region in the world for the company, besting the 42.3 percent margins in Europe and 40.3 percent in America.
Huberty said the highest margins in Asia were likely driven by a higher mix of iPhone sales compared to other products.
"We think Apple has the opportunity to replicate its success in China and other emerging markets and the potential introduction of a lower priced iPhone in 2012 should help accelerate growth in emerging markets," she said.
Apple's success in Asia, particularly China, has been a major part of the company's growth story. Last quarter, the company's revenue from the Asia/Pacific region rose 151 percent, representing 25 percent of the company's total revenue growth.
Mac sales were also healthy last quarter in Asia, increasing 76 percent, the company boasted during its quarterly earnings conference call. Apple Chief Operating Officer Tim Cook referred to his company's success in China as a "sea change."
AppleInsider
Report: White iPhone 4 to Launch Wednesday
Best Buy and Apple stores have begun to receive inventory of the devices
Last week we reported that the whiteiPhone 4 was launching in a timeframe of a few weeks. Today, MacRumors is reportingthat the device could see daylight as early as April 27.
First, it looked like an April 27 launch was geared towards Europe, with multiple carriers claiming to be preparing for that date. But 9to5Mac secured screenshots from a Best Buy source that clearly display the device showing up in inventories on April 27, and other sources say they've already begun shipping to stores ahead of the Wednesday launch. Apple stores, too, have begun receiving shipments of white iPhone 4's.
Considering that it's nearly a year late to the party, it's unclear what kind of demand the white iteration of the device will have. Thanks to what Apple called a "manufacturing challenge," the white iPhone4 has been delayed multiple times. Many speculated that Apple was having a problem getting the paint thickness just right, and had trouble color-matching the whites of the various external pieces (particularly the front bezel to the home button).
We'll see what happens when Wednesday rolls around.
stockinvestor, it's out there in a number of places:
Here are a couple of links to start with:
http://mobilized.allthingsd.com/20110418/apple-files-patent-suit-against-samsung-over-galaxy-line-of-phones-and-tablets/?mod=tweet
http://www.businessinsider.com/apple-says-samsung-ripped-off-the-iphone-and-ipad-2011-4
The lawsuit itself is here:
http://cdn0.sbnation.com/podcasts/apple-samsung-lawsuit.pdf
It's a 9.7MB download.
WSJ Roundup of Analyst Comments
http://blogs.wsj.com/marketbeat/2011/04/21/apple-earnings-some-smart-takeaways/?mod=yahoo_hs
By Matt Phillips
As we all know, it was another great quarter for Apple. (Although iPad sales seemed below expectations due to supply constraints.) The dozens of analysts — almost all bullish — are out with their glowing notes. Here’s a smattering of what we’re reading.
Rob Cihra, Caris: Macs +28% [year-over-year growth] represented Apple’s 20th straight quarter of PC share gain. Key products included late-Feb’s MacBook Pro refresh, while we expect a new iMac soon enough, with desktops -12% year-over-year vs. portables +53% year-over-year.
Andy Perkins, Societe Generale: Unit sales of the iPhone were 18.6 million versus expectations of 16.3 million and it now accounts for over 5% of the market for all handsets. We believe the iPhone is one of Apple’s highest margin products and as such higher sales helped boost overall margins.
Brian Marshall, Gleacher: Sometimes we have to step back from our AAPL financial model and simply shake our heads in awe…it is amazing how it developed over the years. For example, in CY08, AAPL generated [around] $38.9 billion of revenue with [around] $9.2 billion in operating profits (23.7% operating margin) with the iPhone representing [around] 23% of total sales. Today, we are introducing our [calendar year] estimates of [around] $132.5 billion in revenue and [around] $40.9 billion in operating profits (30.9% operating margin) with the iPhone generating [around] 46% of total sales. To put this into perspective, over this 5-year timeframe, AAPL will have grown its revenue base more than three-fold while simultaneously more than quadrupling its operating profit.
Gene Munster, Piper Jaffray: We continue to believe that Apple will ship the iPhone 5 in the Sept. quarter (likely in the month of Sept.). Apple would not comment on whether the issues in Japan would affect the supply of components in the Sept. quarter, but the situation among Apple’s Japanese suppliers appears to be better than widely expected.
Scott Craig, BofA Merrill Lynch: The main reason for our consistently above consensus EPS has been gross margin. [Fiscal second quarter 2011] was 41.4% (up 290 [basis points quarter-on-quarter], above our 40.2% estimate, and ahead of guidance by 290 [basis points on] mix (iPhone), leverage, and better commodity costs. [Fiscal third quarter 2011] guidance for gross margin down 340 [basis points, or 3.40 percentage points, quarter-on-quarter] (mix shift to iPads, less leverage) seems typically conservative. We model gross margin of 40.4% (-100 [basis points quarter on quarter]) on mix. Apple does not expect component pricing to impact [fiscal third quarter 2011].
Bill Shope, Goldman Sachs: iPad shortfall a supply, not a demand, issue. Apple reported iPad shipments of 4.69 million, versus our forecast of 6.15 million. Apple noted that consumer enthusiasm has been tremendous for the iPad 2, but that it could not ramp its early launch volumes fast enough to meet demand. The company now sees supply ramping very quickly, and the company expects a significant increase in shipments this quarter.
Mark Moskowitz, J.P. Morgan: We believe that the recent pullback in Apple shares was overdone and based on investor fears of weak iPhone and Mac results as well as margin pressures due to Japan and supply chain weakness. Apple overcame theses issues in a big way in the March quarter, and also for the [fiscal third quarter of 2011] guide, which we think stands to put shares of Apple back on an upward track.
Kathryn Huberty, Morgan Stanley: Given Apple’s success in China (revenue +250% [year-over-year] in March), the company looks to replicate its strategy in other emerging markets which is NOT incorporated in our or consensus forecasts. This could indicate a more formal distribution strategy in India over the next year.
Ben Reitzes, Barclays Capital: We believe the App Store remains a key differentiating factor for Apple’s iPhone, iPad and iPod Touch. This software strategy enables a distinctive “stickiness,” which should enhance customer loyalty/retention over the long term as “apps” personalize devices to levels that competitive imitations cannot match. Also, the use and purchase of apps over cellular networks assures that iPhones retain relatively high usage characteristics, leading to the purchase of data plans that drive high subsidies from carriers (=high margins for Apple over time.)
Apple Reports Second Quarter Results
Record March Quarter Drives 83 Percent Revenue Growth, 95 Percent Profit Growth
Record iPhone Sales Grow 113 Percent
CUPERTINO, California—April 20, 2011—Apple® today announced financial results for its fiscal 2011 second quarter ended March 26, 2011. The Company posted record second quarter revenue of $24.67 billion and record second quarter net profit of $5.99 billion, or $6.40 per diluted share.
These results compare to revenue of $13.50 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share, in the year-ago quarter. Gross margin was 41.4 percent compared to 41.7 percent in the year-ago quarter. International sales accounted for 59 percent of the quarter’s revenue.
Apple sold 3.76 million Macs during the quarter, a 28 percent unit increase over the year-ago quarter. The Company sold 18.65 million iPhones in the quarter, representing 113 percent unit growth over the year-ago quarter. Apple sold 9.02 million iPods during the quarter, representing a 17 percent unit decline from the year-ago quarter. The Company also sold 4.69 million iPads during the quarter.
“With quarterly revenue growth of 83 percent and profit growth of 95 percent, we’re firing on all cylinders,” said Steve Jobs, Apple’s CEO. “We will continue to innovate on all fronts throughout the remainder of the year.”
“We are extremely pleased with our record March quarter revenue and earnings and cash flow from operations of over $6.2 billion,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third fiscal quarter of 2011, we expect revenue of about $23 billion and we expect diluted earnings per share of about $5.03.”
Apple will provide live streaming of its Q2 2011 financial results conference call beginning at 2:00 p.m. PDT on April 20, 2011 at www.apple.com/quicktime/qtv/earningsq211. This webcast will also be available for replay for approximately two weeks thereafter.
Boom or Bust tomorrow?
It all depends on how the so-called analysts want to interpret iPad2 sales.
Were they "robust" or "disappointing," "vigorous" or "slack"?
Apple: Court Documents Indicate iPhone and iPad Shipments - ISI Group (334.78 +2.93)
ISI Group notes Apple disclosed approximate shipment information for its iPhones and iPads in its court filing against Samsung. Firm says based on the article, Apple had sold more than 108 mln iPhones as of March 2011. Given the cumulative shipments of about 90 mln through December 2010, the data implies that Apple sold at least 18 mln phones during the quarter, which compares with consensus of 16-17 mln devices. Firm says the filing also indicates that Apple sold over 19 mln iPads by March 2011, which implies F2Q11 units of at least 4.2 mln. Current consensus forecast for iPad shipments is in the 6.0-6.5 mln range. They say the lower than expected iPad units could result in a revenue shortfall of about $1 bln, which will be more than offset by better than expected iPhone units. Given the new information regarding the co's iPhone and iPad units, they believe Apple will beat on gross margin as well as operating margin for the quarter. The company's gross margin could end up around 40% versus consensus of about 39%.
Congrats!
Looking forward to 2015.
Uh, OK, in terms of who, what & when?
Pretty vague statement as is.
So sell your shares and show us the courage of your convictions.
Simple, really.
Gartner’s Tablet Outlook: Rosy Picture For The iPad
The counterpoint to last week’s data from Gartner that spelled out near and long-term victory for Android: in tablets, Apple (NSDQ: AAPL) rules today, tomorrow, and next week.
Although there has been a rush of tablets running Android, iOS is still poised to retain nearly 69 percent of the tablet market in 2011.
See more of our latest Apple coverage
or add an alert for future coverage of Apple.
That figure is down some 15 percent from Apple’s 2010 share of around 84 percent, but in 2012, Apple’s share will go down only by five points to 63.5 percent, project the analysts. And by 2015, even though other competitors will eat into that share even more, Apple will still be the biggest player in tablets, with a 47 percent share of the “media tablet” market—that is, devices with touchscreen interfaces are mainly designed for media consumption.
Why is Android dominating more in handsets than it is in tablets? One issue that comes up is the recent move by Google (NSDQ: GOOG) to control the tablet-intended Honeycomb OS source code more carefully than it has controlled previous iterations of Android.
That is having a knock-on effect in terms of how many Honeycomb-based tablet models get produced, and that, says Gartner, is keeping both Android tablet volumes and average selling prices in check.
Sounds like a fair-enough conclusion, if you take as your starting point Gartner’s prognosis on smartphones: in mobile handsets Gartner believes the sheer number of Android models, and subsequent cheap prices, will keep Android as the dominating smartphone OS.
But that doesn’t give a good enough explanation for why the Android/Honeycomb devices that are due out this year (and counting the Xoom that is shipping already), which are priced close to the iPad and have comparable and sometimes better specs, aren’t providing more competition against the iPad—especially since Gartner also thinks that people will be interested in getting tablets using the same OS as their handsets, and Android, it believes, will dominate in the latter category.
Apple’s continuing success could be partly due to the content ecosystem around Android devices: Android/Honeycomb-optimised apps in the market have been estimated at anywhere between 50 and 100, compared to iPad’s 65,000 (the number released by Steve Jobs in March). Another major issue, also not covered, is the fact that perhaps Apple is still winning in the user experience stakes.
Ultimately, if this sounds like it’s an exclusively Google and Apple story, that’s because it pretty much is, according to Gartner. The RIM-made Playbook seems to be the only one of the lot of others that even comes within striking distance in terms of market share by 2015, with a 10 percent share of the market. Next biggest is HP’s WebOS with a measly three percent. Those are tough numbers for devices that haven’t even gone on sale yet.
Report available here.
We'll be addressing some of these themes during our next conference, paidContent Mobile, May 18 in New York City. You can find out more about the agenda and register here.
Related Stories
Gartner: Cheap Android Devices Will Mean Google Domination Well Into 2015
http://paidcontent.org/article/419-gartners-tablet-outlook-rosy-picture-for-the-ipad/
Condition ONE app combines iPad and photo journalism
by Michael Grothaus (RSS feed) on Apr 8th 2011 at 5:00AM
Traditional photo journalism has always had a limited point of view. You could only see what was in front of the camera. Video photo journalism added a new dimension to reporting as the camera could pan around an area giving the user views from multiple vantage points. However, with both photo and video journalism, viewers have no control over what they see in the shot. War documentarian Danfung Dennis is on the brink of changing this thanks to a custom camera system and the iPad. The former is a new tool for the photo journalist to record events, and the latter is a tool for the viewer to immerse themselves in that event and control what they see.
Dennis created an app called Condition ONE, which allows viewers to use their iPads as fully interactive windows into photo journalist images. As you can see in the video below (warning, NSFW language), Condition ONE allows you to interact with a current scene in what is probably most easily comparable to a moving photograph from the world of Harry Potter. Users can pan up, down and rotate around to get a complete look at an event in a set moment in time as if they were actually there. Dennis told Time that the point of Condition ONE is to create a new form of storytelling that will "shake viewers out of their numbness to traditional media and provide them a powerful emotional experience."
While there is no hard launch date or price, the Condition ONE app is set to debut in mid-2011 and is sure to change the way many see an event that has occurred halfway around the world. "Once viewers enter a video experience, they can move the tablet in any direction and see the corresponding field of view," says Dennis. "The traditional two-dimensional, rectangular frame is shattered as viewers step inside the frame and experience the stories as the protagonists."
My Freedom Or Death - Condition ONE Beta from Danfung Dennis on Vimeo.
Watch the video at the link below. It's just over a minute long, but contains adult, NSFW language.
http://www.tuaw.com/2011/04/08/condition-one-app-combines-ipad-and-photo-journalism/
Blackberry Bleach Slapped!
And Android doesn't do all that great...
Clorox drops BlackBerry for iPhone, Android at work
updated 02:55 pm EDT, Thu April 7, 2011
Clorox shows shift from BlackBerry to iPhone in IT
Clorox in a speech at the SNW conference revealed that the company has almost entirely dropped the BlackBerry as a company phone for work. The bleach maker scrapped RIM to let users choose between Android, iPhone, or Windows Phone 7 devices. Apple was the winner as about 92 percent of staff chose an iPhone where six percent were Android and two percent were Windows Phone 7.
A handful of iPads were also in testing, although Computerworld noted that there hadn't yet been a staffer who was willing to give up a notebook for Apple's tablet.
CIO Ralph Loura said security wasn't an issue on any of the chosen platforms since the data workers needed was in the cloud. He still had to be aware of risks, but it was important to push the actual end user experience "to the edge" to keep staff happy. As little as a year earlier, when Loura took the position, Clorox still embodied the stereotypically conservative workplace with BlackBerrys for phones and aging Windows 2000 desktops.
"Employee satisfaction with the IT team was not great," he said.
The move is one of a series of deployments that have contributed to RIM's declining market share. It was once the default choice for business smartphones due to the lighter security elsewhere but has seen some of its advantages evaporate as Apple and Google began implementing secure content. Their much wider ranges of apps and better web browsers have usually been enough to overcome outstanding gripes, such as the lack of end-to-end encryption.
Among the projects driving demand for alternate platforms has been a JPMorgan trial along with rapid adoption of iOS devices by Fortune 100 companies. [image via Roadside Pictures]
Read more: http://www.electronista.com/articles/11/04/07/clorox.shows.shift.from.blackberry.to.iphone.in.it/#ixzz1IsPKc000
It's not iOS numbers, it's smartphone numbers.
From your link:
"Gartner expects the iOS smartphone slice to peak with a 19.4 percent share..."
So to date you've posted Frommer's numbers without the iPad included and now you've posted Gartner's numbers with neither the Touch nor the iPad included.
Maybe the third time will be a charm?
Silly Frommer. Why is he including the iPod Touch but not the iPad?
They're all iOS.
For that matter, why is he talking about market share as opposed to, say, oh, I dunno, profits?
How to Trade Apple, When the Surreal Could Be Real
By TIERNAN RAY
If the shares hit $450, its market cap could exceed ExxonMobil's. Why that could happen, and why that scares some investors.
Imagine if shares of Apple, which currently fetch about $345, were to increase by 30%, to $450. Apple's stock-market value would then surpass ExxonMobil's, making it the most valuable company on earth.
I say imagine because it's rather fantastic to think of a consumer electronics company pushing aside a company with oil, and because it's hard to imagine Apple's shares going anywhere these days.
The stock (ticker: AAPL) is up about 7% this year, just even with the Dow Jones Industrial Average—hardly what one would expect for a company that created a new market overnight, the tablet computer craze, with its iPad business expected by some to be worth $17 billion this year.
That's $17 billion in revenue, out of thin air.
Moreover, backing out cash and marketable securities of $60 billion, or $64 per share, Apple shares aren't just cheaper than the S&P, they're bizarrely cheaper. It trades at 11 to 12 times this year's projected earnings per share, versus the S&P's average of 14 times, despite EPS growth projected at 52% this year by analysts.
In fact, there is a plausible path to seeing the shares rise into the ExxonMobil (XOM) neighborhood, but it is the awesome scale of Apple that lately seems to sharpen for some investors all the things that could go wrong.
TO HIT A $450 PRICE TARGET at its current multiple, Apple would have to produce something on the order of $31 per share in earnings, assuming its cash per share rises to more like $86 in the coming year. That's not impossible.
Projected EPS next year is around $26. What would it take to add an extra $5 per share? The iPad alone is a brand new category, unanticipated a year ago, but that may produce an additional $3.00 or more per share in earnings, based on a net profit margin in the high teens. If that business turns out better than expected, it's possible for 2012 earnings to be at least a couple of dollars higher.
Similarly, the expectation for iPhone sales of perhaps 60 million to 70 million units this year doesn't seem to fully reflect Apple's opportunity. The company has under a fifth of the smartphone market, the most valuable piece of cellular. Even if Google's (GOOG) Android software continues to win converts, the proliferation of smartphones, while also lifting other boats, will likely mostly enrich Apple. For Ticonderoga Securities analyst Brian White, who has the highest price target on the Street, at $550, there is plenty of upside. White notes that Apple's computer market share is still just 4% to 5%, leaving plenty of business to be won.
And then there's the iTV. "I think it's reasonable to assume Apple could introduce their own branded television set in the next 12 to 18 months," says White, something I've written about on this page in recent months. "That's a hundred-billion-dollar-per-year market right there."
FEARS ABOUT CEO STEVE JOBS have not subsided among many since his return from a liver transplant in 2009, and his decision in January to step away from day-to-day duties.
"He's a genius," says Scott Black, head of Delphi Management in Boston, and a Barron's Roundtable member. "How do you replace him? He's the modern-day Thomas Alva Edison." The entire issue for Apple, in Black's view, is, "can they keep creating? Jobs's amazing record doesn't lend itself to McKinsey-style focus group planning." Concern about Jobs is the main reason Black won't own Apple shares now.
Sushil Wagle, a vice president with the technology practice of J&W Seligman, part of Columbia Management, agrees there's deep, deep value in Apple shares. While he won't part with any, he's not buying despite the fact that demand for the company's products "shows no signs of tapering off." Most people Wagle talks to these days, he says, think that "there is a very small chance that Jobs is coming back" to Apple on a day-to-day basis.
But doesn't the stock already discount that? Not at the current market cap, says Wagle. "The stock is so big now, it's so widely owned, that you've got to convince the new buyers who haven't yet gotten into the stock." Those investors, rather than looking past the problems, put their concerns front and center. "You have to think about the fact that there are human beings trading these things, and there is emotion involved, and sentiment," says Wagle.
Barron's Roundtable member Fred Hickey, editor of the High Tech Strategist Newsletter, contends that there is a wall of worry confronting Apple, especially given its market cap, that didn't exist a few months ago.
"At the beginning of the year, when I thought the stock would go to $400, everything was going perfectly for them," says Hickey. "They were putting up huge numbers, the iPad was coming down the pike, the iPhone was on its way to Verizon." The stock looked undervalued then, he says, and maybe it still does, if you think "perfection will continue."
Concerns have cropped up. The disaster in Japan is one of the biggest challenges, of course, and Hickey says the implications for Apple, and indeed for all of tech, are deepening day by day. "I think at first people tried to shrug it off," he says of supply-chain problems stemming from Japan. "We're seeing just in the last 24 hours reports of motherboard prices rising, disk-drive prices going up."
Despite Apple's deep, deep pockets and its long-term supply agreements, Hickey doesn't believe we can say for certain whether Apple's margins will get hit by higher component prices. Nor can we say for certain that the company will get enough components to make enough iPads to meet raging demand.
Add to the mix rumors last week that Apple's iPhone 5 may not ship this summer, as expected, but perhaps in the fall. Is that a result of component scarcity or a deliberate choice by Apple? "I think it's going to take a couple of quarters for all this stuff to work itself out," before Apple shares work again, says Hickey, during which time he would neither short nor buy.
I WOULDN'T BET AGAINST APPLE on supply concerns alone. When one factors in the negative sentiment among some fund managers around Jobs' hiatus, and worries about broader market factors, such as the end of the Federal Reserve's quantitative easing this summer, there's a passel of worries one has to look through.
And yet, if any part of the math I laid out makes sense, if there's a real prospect that Apple can joust with the world's biggest oil company for the top-dog spot, then perhaps it is worth looking through all those concerns. I guess it just depends on how much chutzpah you have.
4% of phones but 51% of profits.
Meanwhile, Horace Dedieu offered this eye-opener on the iPhone's overall smartphone market share:
The iPhone ended the quarter with 17.25% smartphone share and 4.2% phone share. Share of revenues was about 22% and share of earnings was about 51%.
I still hold that 20% smartphone share is possible for the iPhone. As the smartphone market slowly becomes the entire phone market that share will be worth something.
sinclap, did you sell yours?
Thought not.
Guess that makes you a coward of your own convictions.
Which is to assume that you actually have convictions about anything.
Which I seriously doubt.
Jefferies Discusses iPad Checks (AAPL)
By Roger Nachman
Benzinga Staff Writer
April 01, 2011 7:27 AM
Jefferies & Co. is out with a research report on Apple (NASDAQ: AAPL) and channel checks on iPad 2 sales.
In a note to clients, Jefferies writes, "iPad 2 checks show that Best Buy stores are receiving regular shipment (some more than once a week) with the typical suburban store getting 15 to 20 and selling out in 4 hours. There are ~1,300 Best Buy and Best Buy Mobile stores selling the iPad 2. Takeaway: we estimate that 3%-5% of global iPad 2 shipments will go through Best Buy (we assume Apple stores will be the dominant channel), implying 8M to 11M iPads on a quarterly basis vs. our CQ2 estimate of 9.4M.
Apple expanding iPad 2 display supply: according to Economic Daily News, Apple is lining up 30M screens annually from AU Optronics and will pay three to four times the typical price of panels that size. Takeaway: Apple is increasing capacity as the iPad 2 has received stronger demand than expected and is still out of stock globally."
Shares of AAPL are up $1.26 in pre-market trading to $349.77, a gain of 0.36%.
[The AU Optronics story has since been debunked. Not so, in other words.]
Sorry sinclap. But putting iPad in the title is not good enough.
Nice try, though.
And out of sheer curiosity: Do you ever take a break from your anti-Apple activities here and elsewhere?
Just wondering...
Apple's iPad 2 coming to 500 RadioShack locations starting Tuesday
By Neil Hughes
Published: 01:15 PM EST
Starting Tuesday, some of the most heavily trafficked RadioShack stores in the U.S. will begin selling the iPad 2, as Apple continues to expand the retail availability of its hot-selling touchscreen tablet.
AppleInsider has confirmed that the iPad 2 will be available at 500 RadioShack stores Tuesday. A corporate memo scarce on details only reveals that the chosen stores have already been informed they will receive the device for sale.
People familiar with the matter told AppleInsider that the deal to sell the iPad 2 at RadioShack was only finalized within the last few days.
The continued retail expansion comes only a few days after Apple launched the iPad 2 overseas in 25 countries. The second-generation iPad first went on sale in the U.S. earlier this month.
Signs of improving iPad 2 inventory came last week, when estimated shipping times from Apple's online store improved to three to four weeks. Previously, new orders were estimated to wait at least a month before shipment.
The iPad 2 has seen strong demand and regular sellouts at stores since it first became available. Apple's launch strategy has also been significantly more aggressive than with the first-generation iPad, which debuted only at Apple's stores and select Best Buy locations.
RadioShack's partnership with Apple expanded last March, when the company began selling the iPhone. The retailer also made waves late last year when it offered discounts on the iPhone, something rarely seen with Apple's rigidly priced handset.