In the past week there have been countless stories run about the alleged production cuts of the iPhone 5c. I say “alleged” because that’s all it is right now. Allegation. And at least one of the analysts (who I shall not name) making this allegation has a very spotty track record on all things Apple.
Last week Apple announced the iPhone 5s and iPhone 5c. They'll be shipping both starting tomorrow, and shipped iOS 7 just yesterday. Surrounding this enormous product roll out has been some of the worst Apple coverage I've ever seen. It's been clear for a number of years that many mainstream financial analysts and media outlets simply don't "get" Apple. This week made it painfully clear just how badly they don't get it, and how big of a problem that is.
Yesterday Apple made the iPhone 5s and iPhone 5c official. And Wall Street collectively shrugged at the news. Rather than simply attack Apple's strategy or dismiss investor reaction, let’s talk about Apple the company and the stock. Let’s have a discussion about what these guys are doing (or perhaps failing to do) when it comes to meeting the expectations of the market.
It looks pretty much certain that Apple will unveil a trade-up program across its retail stores soon. 9to5Mac reported on it and iMore heard it was a go as well. TechCrunch claims it's already being tested at some stores, and has even through some numbers around. They’re suggesting an iPhone 4S in good shape might fetch as much as $200.
With Google’s recent release of the updated Nexus 7 tablet at $229, a lot of comparisons have been made between it and other low priced tablets on the market. It sure seems like Google wants to put pressure on vendors to offer solid specs with affordable price tags for consumers. After all, this helps sell more devices, and that increases the potential market for Google services, which is where the search giant makes its profit. This isn't dissimilar to how the race-to-the-bottom in App Store pricing has commoditized software, which benefits Apple's hardware-centric revenue model. But it does prompt the question, will it force down prices, or catalyze a price war, such that nobody really makes any money on hardware? And if so, what will become of Apple's business model?
The results of fiscal Q3 are in, and Apple stock is actually up almost 4% in after hours trading. All this really tells us, of course, is that Wall Street is reasonably happy with the news. The Street expected an overall worse combination of Q3 results and Q4 guidance. So what does it all mean?
Yesterday Bloomberg put out a story discussing a likely deal between Apple and Time Warner. The idea, apparently, is to bring Time Warner cable subscribers the ability to watch content via the Apple TV box in addition to being able to use the traditional cable set top box or iPad and iPhone apps.
Over the last week Apple announced changes to CEO Tim Cook’s compensation. The changes are quite non-standard and there has been much discussion on the topic. Here’s the situation: Cook was granted one million restricted stock units after taking the CEO job. Some people incorrectly call these stock options. They aren’t the same thing but it doesn’t matter for this discussion. So, what's changed and what does it all mean for Apple investors?
Starting first thing in the morning, Apple’s World Wide Developer Conference opens its doors. Tim Cook and other execs will take the stage to share all that is new from Apple. And unless you’ve been living under a rock you know that Apple’s share price has dropped from $700 last September to below $400 in April, and has now recovered slightly to about $440 as I write this.
Last week Techpinions.com posted a really good editorial by John Kirk discussing how much of a joke it is to consider Android the winner in the smartphone space simply because they have the most market share. The very next day, Business Insider tech editor Jay Yarow pubished a post with a headline that read, “Apple Should Be Furious That It Has Such A Tiny Sliver Of The Smartphone Market.” Here's John Gruber’s response at Daring Fireball. And here's my take...
Ahead of the testimony it will be giving before the U.S. Senate tomorrow, Apple (via The Loop) offered up a nicely detailed 17-page PDF document with all sorts of good information inside. The most interesting number is this: Apple pays $1 out of every $40 of income tax collected by the US Treasury. Isn’t it incredible to think that one company is responsible for 2.5% of all US income tax collection?
It’s quite popular for people reporting on Apple’s financial position to quote the absurdly high level of cash the company holds on its balance sheet. At the end of last quarter the $145 billion is more than a rainy day fund, which is why the board of directors approved a massive stock buyback and dividend hike. Of course Apple won’t be using much of its cash to do this. Instead, it raised debt. Why? Because so much of the cash -- about $102 billion -- is not on US soil. Instead this money is held in other countries.
According to research by Cannacord Genuity analyst Michael Walkley, Apple still rakes in a whopping 57% of the profits in the mobile industry, while Samsung grabs the other 43%. Note that I said “mobile industry” not “smartphone industry”. In case you’re wondering why this adds up to 100% despite the presence of other players, it looks like the small profits from guys like BlackBerry and HTC are offset by losses from LG, Motorola, Nokia and others. The report also apparently goes into some detail on how Samsung should overtake Apple to be #1 in profitability. This is a red herring, and here's why...
In the few days that have passed since Apple’s latest quarterly results, people can’t seem to stop writing about the so-called stalled growth and “margin collapse” that hit the company. Ok, the term “collapse” is excessively stupid (you know who you are, stop it). Apple’s revenue is still growing, but profitability is down year over year. The profit decline is due to undeniably lower gross margin. But what does that mean?
On Tuesday Apple reported a pretty solid set of financial results for Q2 fiscal 2013. Revenue was $43.6 billion, which is up 11% year over year. But it’s also fair to point out that earnings were down year over year. In fact Apple posted EPS of $10.09 which is a decline from $12.30 last year.
There are plenty of industry observers and stock market pundits who are pointing out that “Apple is not a growth company anymore”. Factually, I think it’s better to say that Apple did not achieve earnings growth this quarter. They did achieve revenue growth (and quite reasonable growth), but they didn’t grow the bottom line.
Question is - can they get back to delivering growth? I think they can and I think they will. Let’s remember this is a long term game.
Today Apple stock dipped below $400, and is down about 5% as I write this. Yes, the overall market is down today. But Apple is down a lot more than normal. The reason? Cirrus Logic, a supplier of audio chips to Apple, warned today. To “warn” is Wall Street speak for press releasing preliminary results that are crappier than people expected.
Earlier this week, Mal Spooner from Money wrote a piece about the swarming of Apple stock. In the article, he equates street swarming -- when a gang surrounds and often attacks an unsuspecting victim -- to the swarming of a stock by short sellers. The main difference, he suggests, is that in a street swarming there is no real motive. Yet in a short-seller swarming, the motive is to rob investors by driving the stock price down.
In the not-so-distant past, Tim Cook has been quoted as saying he expects China to emerge as the company’s largest source of revenue. Back in January, we discussed this growth in China, along with Asymco.com’s estimate that China would overtake US sales at Apple by 2016.
Earlier today I had a quick chat with iMore’s editor-in-chief, Rene Ritchie about all the crazy rumours and bad journalism that Apple has had to deal with lately. But more to the point, we talked about how this stuff can hurt small time investors if they don’t know how to deal with it. So that’s what we’ll talk about here.