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MacRumors
Jan 17, 2007, 03:37 PM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

Apple announced their financial results for the 1st fiscal quarter of 2007 ending on December 30, 2006.

Apple posted record revenue of $7.1 billion and record net quarterly profit of $1.0 billion, or $1.14 per diluted share. These results compare to revenue of $5.7 billion and net quarterly profit of $565 million, or $.65 per diluted share, in the year-ago quarter. Gross margin was 31.2 percent, up from 27.2 percent in the year-ago quarter. International sales accounted for 42 percent of the quarter’s revenue.

Apple shipped 1,606,000 Macintosh computers and 21,066,000 iPods during the quarter, representing 28 percent growth in Macs and 50 percent growth in iPods over the year-ago quarter.

“We are incredibly pleased to report record quarterly revenue of over $7 billion and record earnings of $1 billion,” said Steve Jobs, Apple’s CEO. “We’ve just kicked off what is going to be a very strong new product year for Apple by launching Apple TV and the revolutionary iPhone.”

“We generated over $1.75 billion in cash during the quarter to end with $11.9 billion,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2007, we expect revenue of $4.8 to $4.9 billion and earnings per diluted share of $.54 to $.56.”

A live streaming conference call of the Q1 2007 Financial Results will take place at 2:00 p.m. PST on Wednesday, January 17, 2007 at http://www.apple.com/quicktime/qtv/earningsq107 (http://www.apple.com/quicktime/qtv/earningsq107).

Full notes available here (http://www.macrumors.com/pages/2007/01/20070117163713.shtml)



psychofreak
Jan 17, 2007, 03:38 PM
Whazam!

A few more weeks of poket money and I can buy them out!

Earendil
Jan 17, 2007, 03:39 PM
I love you, Apple.

Teh Don Ditty
Jan 17, 2007, 03:41 PM
Those numbers are staggering for Apple. Congrats!

combatcolin
Jan 17, 2007, 03:42 PM
Now make even more money by releasing a consumer upgradable Mac.

I wish. :(

Peace
Jan 17, 2007, 03:45 PM
Good numbers but I noticed they are projecting MUCH lower earnings for the next quarter.

$7.1 Billion for Q1 2007
$4 Bilion for the next quarter.

Christmas rush?

Daveway
Jan 17, 2007, 03:46 PM
21 million iPods?!?

That's way higher than any analyst predicted. They were saying 16.5m which was way too low considering last year's 14m.

Waahooo for stock holders.

Allotriophagy
Jan 17, 2007, 03:46 PM
With that profit, Apple might just be able to afford an iPhone and the two year contract charges.

Stella
Jan 17, 2007, 03:47 PM
Congrats.

BTW: when was the last article regarding Apple's imminement ( spelling ) demise?!

macshark
Jan 17, 2007, 03:48 PM
Now make even more money by releasing a consumer upgradable Mac.

I wish. :(

Not a bad idea. If there is anything negative in what is probably the best earnings release in the history of Apple, the CPU sales numbers did not increase over the previous quarter. We need cheaper iMacs and a headless single processor Core 2 Duo model.

Squonk
Jan 17, 2007, 03:49 PM
Good numbers but I noticed they are projecting MUCH lower earnings for the next quarter.

$7.1 Billion for Q1 2007
$4 Bilion for the next quarter.

Christmas rush?

Why yes it was the holiday rush! :D

Edit: And lot's of people holding onto their $$$ for the iPhone later this year.

herbalizer
Jan 17, 2007, 03:49 PM
I hope their stock doesn't go down. :mad:

LagunaSol
Jan 17, 2007, 03:50 PM
Oh crap, stellar financial news from Apple. That means my stock will take a dive now, thanks to the bizarre mentality of those who buy and sell Apple shares.

With AAPL and investors:

Bad news = bad
Good news = bad
Fantastic news = really bad

Ah well, things will rebound, then head for infinity and beyond.

Daveway
Jan 17, 2007, 03:50 PM
I do find next quarter's profits quite scarilly low. Last years Q2 was 4.3m. Yes, that means lower profits than last year. Esh.

Also, I'm not too excited about Mac growth. Although they are growing, they went from 1.2m to 1.6m macs. I thought it would have been better...thats all.

Webcast in 10mins.

freeny
Jan 17, 2007, 03:51 PM
I hope their stock doesn't go down. :mad:

Of course it will. It always does.;)

Teh Don Ditty
Jan 17, 2007, 03:53 PM
AAPL is up around $2.00 in after hours trading

Daveway
Jan 17, 2007, 03:53 PM
I hope their stock doesn't go down. :mad:

Even with the amazing numbers, the stock could very well go down. Which I wouldn't mind so I could buy even more shares.
Wallstreet looks forward and forward (4m profit) isn't exactly a rosy future.:o

Rocketman
Jan 17, 2007, 03:53 PM
Mac sales were UP something like 27% over the prior year quarter which is how comparisons are made "fair".

Margin growth! That means Apple has pricing power.

BIG unit sales growth, BIG revenue growth, BIG, make that huge, PROFIT growth.

Wall street is a whore for growth.

Consumers are whores for features and immediate gratification.

Apple seems to be delivering.

Rocketman

VanMac
Jan 17, 2007, 03:54 PM
Very Nice.

Go AAPL!

macshark
Jan 17, 2007, 03:54 PM
Good numbers but I noticed they are projecting MUCH lower earnings for the next quarter.

$7.1 Billion for Q1 2007
$4 Bilion for the next quarter.

Christmas rush?

The expected revenue is 4.8-4.9B for the next quarter, and the expected profit is .54-.56 per share.

In comparison, the revenue for the Jan-Mar quarter in 2006 was 4.36B and the profit was .47 per share.

Even assuming that Apple is not low-balling as usual, they are expecting more than 10% revenue growth and more than 17% earnings growth next quarter compared to the corresponding quarter in 2006.

mwswami
Jan 17, 2007, 03:54 PM
21 million iPods?!?

That's way higher than any analyst predicted. They were saying 16.5m which was way too low considering last year's 14m.

Waahooo for stock holders.

I am no analyst but I predicted 18-20M (http://forums.appleinsider.com/showpost.php?p=1007753&postcount=8) ipods mid November on AppleInsider forum. :D

Doctor Q
Jan 17, 2007, 03:55 PM
Do we ever learn about Apple's income from the iTunes Store?

arn
Jan 17, 2007, 03:55 PM
Do we ever learn about Apple's income from the iTunes Store?

I don't think they ever break it out.

arn

Daveway
Jan 17, 2007, 03:56 PM
Do we ever learn about Apple's income from the iTunes Store?

Nope. It's included under their "music business" results.

liven2
Jan 17, 2007, 03:57 PM
I hope I am wrong but every year after they announce there Q1 results about 2 to 3 weeks later if not days later the Apple stock will plummet. It will most likely do the same again this year as it has for the last three years in a row. The Market seems to think that Apple did really well so therefore there is no way than can keep up the continuous growth. So they go innto this doom and gloom mode Last year the stock took a dive so it will probably do it again.. It always comes back up but it takes like until late spring/summer before we start to see it rise again... SLowly!! Sigh :o I hope I am wrong!

Peace
Jan 17, 2007, 03:58 PM
Do we ever learn about Apple's income from the iTunes Store?


They always say something like "we don't give out those numbers" or "iTunes sales are above the break-even point.

Daveway
Jan 17, 2007, 03:59 PM
Trading for AAPL was halted at 4:30est? What's up with that?

macidiot
Jan 17, 2007, 03:59 PM
Analysts missed by .36/share? By almost 50%???

Estimate was for .78

Actual was 1.14

Seriously, I want their jobs. I'd love to get paid for getting things wrong over and over again.

BTW, AAPL is now at 99 in after hours trading.

Teh Don Ditty
Jan 17, 2007, 04:00 PM
trading was halted for the release of the financial results

Peace
Jan 17, 2007, 04:00 PM
Trading for AAPL was halted at 4:30est? What's up with that?

Isn't that when the market closes?

Teh Don Ditty
Jan 17, 2007, 04:01 PM
markets close at 4pm EST

macidiot
Jan 17, 2007, 04:01 PM
Trading for AAPL was halted at 4:30est? What's up with that?

They often halt trading in stocks after a significant news announcement. The idea is to give a little breathing room. Kind of a pause to reduce volatility.

bignumbers
Jan 17, 2007, 04:04 PM
Holy crap that's a lot of money.

28% growth in Macs - that's very nice indeed.

re: lower forecasting, I wonder if they're predicting high-end iPod buyers holding off until the iPhone is released. I'm not 100% sold on the iPhone but will hold off my iPod upgrade until I see it for real.

gugy
Jan 17, 2007, 04:06 PM
Congrats Apple!

bommai
Jan 17, 2007, 04:06 PM
Webcast started.

Ummm where do yall see prices up to 99 on after hours. I'm seeing down actually.

After market prices are highly volatile due to reduced volume. Kinda like desert temperatures. So, one instance to another there can be a big difference.

macidiot
Jan 17, 2007, 04:07 PM
Webcast started.

Ummm where do yall see prices up to 99 on after hours. I'm seeing down actually.

99 when I posted. looks like 96 now. lol, welcome to real time trading...

iPegboy
Jan 17, 2007, 04:07 PM
um, good for the them. but am i the only one who sees that they profitted $1 billion and think i've been screwed a little bit?

i mean, they need to make money, but they could easily set prices a little lower and still be VERY healthy.

iPhone for $399 and $499. i don't think that would cut into the BILLION dollar profit too much. :D

ph0rce
Jan 17, 2007, 04:08 PM
Good to see my money has gone to a good cause!

slffl
Jan 17, 2007, 04:14 PM
Boooo! I don't want Apple to turn into Windows and I don't want the Mac community to turn into the Windows community. Switchers make me :(

50548
Jan 17, 2007, 04:22 PM
Boooo! I don't want Apple to turn into Windows and I don't want the Mac community to turn into the Windows community. Switchers make me :(

Yep, it's simply awesome...Apple is moving quickly to become the BIGGEST computer/electronics company in the world. It's market share has more than doubled on a quarterly basis, compared to other crappy PC makers, and the iPod is the undisputed king of music...no competition, no comparison.

Apple can't stop blowing away analysts' forecasts...MS, move over and file your Chapter 11 papers...MS fanboys will follow.

GO APPLE! BANZAI!

Rocketman
Jan 17, 2007, 04:25 PM
Apple can't stop blowing away analysts' forecasts...MS, move over and file your Chapter 11 papers...MS fanboys will follow.

GO APPLE! BANZAI!

Microsoft has high gross margins and high sales and high market shares. No BK.

Their stock might be pretty flat for the year.

Rocketman

manu chao
Jan 17, 2007, 04:31 PM
Microsoft has high gross margins

Just curious, what is the definition of gross margins for software companies?
(For hardware it's, very simplied, revenue minus production and distribution cost over revenue. But software has very small production and distribution costs.)

Peace
Jan 17, 2007, 04:33 PM
Looks like international sales really helped boost sales this quarter.

and Tim Cook just said Apple plans on shipping Leopard in the spring.

bradallen
Jan 17, 2007, 04:35 PM
they just said that they do plan on shipping lepord in spring! i hope they give us some info on it soon.

Daveway
Jan 17, 2007, 04:36 PM
Stock split. Maybe

bradallen
Jan 17, 2007, 04:43 PM
google will never split their stock. they know they're the god of the internet, and they want to brag about it.

Teh Don Ditty
Jan 17, 2007, 04:46 PM
I don't think the words "God of the Internet" do them justice.

cynerjist
Jan 17, 2007, 04:47 PM
This is an interesting conference call. I like this better than the MacWorld keynote. There is interesting, informative real-world data here.

hooch
Jan 17, 2007, 04:48 PM
So um, how did Dell do? :D

QCassidy352
Jan 17, 2007, 04:48 PM
21 million iPods?!?

That's way higher than any analyst predicted. They were saying 16.5m which was way too low considering last year's 14m.

Waahooo for stock holders.

and yet shares are down $2 on the day... go figure.

Teh Don Ditty
Jan 17, 2007, 04:48 PM
(In reference to GOOG) It's kinda like this, "Conglomo - We Own You" (Rocco's Modern Life)

bradallen
Jan 17, 2007, 04:53 PM
I don't think the words "God of the Internet" do them justice.
:D there is no word that gives them justice

psingh01
Jan 17, 2007, 04:56 PM
When asked if iLife will be refreshed in January the answer was "stay tuned".....

Daveway
Jan 17, 2007, 04:56 PM
I see a Special Event coming. Tim hinted to it in response to iLife's no show at Macworld.

Anyone notice the fishy numbers in relation to Mac numbers that has many of the analysts kinda confused?

Rocketman
Jan 17, 2007, 04:59 PM
This is an interesting conference call. I like this better than the MacWorld keynote. There is interesting, informative real-world data here.

Agreed.

On the split, they just said no comment. I bet it splits soon.

On the 2004 discussion they commented there was a G5 processor shortage! I wonder if they ever said that before?

Gee, I wonder why they went Intel.

They also punted on iPhone battery replacement discussion. Does it have 1 or 2 batteries?

They said music (iTunes) was up someting like 30%, but the margins on that block are really narrow.

40,000 product outlets, greater than 50% outside of the United States.

Mac market share up something like a couple of points or more to the point, plan to buy is up from 18-28% and sales increases over 25% as compared to industry 2-3%.

NOT MANY NEW STORES ADDED IN THE QUARTER.

6600 employees in retail, 21500 Apple overall.

Will add 35 stores in F07.

More . . .

Rocketman

Daveway
Jan 17, 2007, 05:01 PM
Will add 35 stores in F07.

More . . .

Rocketman

I'm more interested in how many of those stores will be in new markets as opposed to 8 or ten more in New York and SF (rooting for the south).

Call is over btw.

sabbath999
Jan 17, 2007, 05:07 PM
Good numbers but I noticed they are projecting MUCH lower earnings for the next quarter.

$7.1 Billion for Q1 2007
$4 Bilion for the next quarter.

Christmas rush?

That is an across the board tech norm... the fourth quarter is always the biggest, which is why it is critical that a company not blow it... and why the missed Vista release tanked a lot of the big MS vendors like Dell.

Embed
Jan 17, 2007, 05:07 PM
I'm more interested in how many of those stores will be in new markets
there will be an apple store in Edinburgh very soon.
apple have bought an amazing location on Princess Street.
cant wait

aafuss1
Jan 17, 2007, 05:07 PM
they just said that they do plan on shipping lepord in spring! i hope they give us some info on it soon.
That's good news-at least it'll ship before July.

And we might hear about iLife/iWork '07 soon.

IJ Reilly
Jan 17, 2007, 05:10 PM
and yet shares are down $2 on the day... go figure.

Now down another dollar in after-hours trading. Sadly typical.

Bitman
Jan 17, 2007, 05:11 PM
With just one week of sales under its belt, Apple Inc.'s new Apple TV set-top streaming media hub has claimed the top slot on the company's list of best selling items.

According to a ranking of best selling products on the Apple online store (right sidebar), Apple TV over the past week outsold all versions of the company's popular iPod digital music players, including the ubiquitous iPod nano.

Rocketman
Jan 17, 2007, 05:18 PM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

- Q: You decided not to support 3G in the first prototype iPhone model? Your thinking? A: At this point we are very much sold on the EDGE network with Cingular because it is much more widely deployed in the U.S. We don't comment on our roadmaps, but obviously, we would be where the technology is over time.

- Q: Comment on the Cisco lawsuit? A: We think the Cisco lawsuit is silly. Several companies use the term iPhone already. First company to use it for a cell phone. Confident we'll prevail.

- Q: Will there be additional software download opportunities on the iPhone? A: We'll talk more about the iPhone closer to the launch

[/url].

I posted in another thread I felt EDGE was used precisely for the reasons they state here :)

The Cisco suit is not material and even if they changed the name it would become the Apple Phone.

I also said in the iPhone thread that the APPS on the ATN (iPhone) would be augmented by others shortly after launch. I say now, to increase revenue opportunities.

Rocketman

Queso
Jan 17, 2007, 05:21 PM
Some things that struck me. Despite the rumoured delay Leopard is coming in the Spring, and these results were massively up despite the equivalent quarter last year being a week longer.

They also mentioned that CS3 is still expected for next quarter and that Mac sales in Europe are up 28%. I bet most of that last one is in the UK and down to us having Apple stores. Roll out to Italy, France, Germany and Switzerland and watch those number jump.

So, when do we get the Gartner figures about market share?

Rocketman
Jan 17, 2007, 05:39 PM
Just curious, what is the definition of gross margins for software companies?



Profit before taxes and extraordinary items.

Rocketman

StuPidQPid
Jan 17, 2007, 05:48 PM
Gross margin was 31.2 percent, up from 27.2 percent in the year-ago quarter.

31.2 percent margins!
Wow good for Apple and perhaps the shareholders, but doesn't seem so good for Joe Consumer...
But hey I guess that's Capitalism :rolleyes:

Also for those complaining about the APPL stock price going down. It's all about future predicted growth. My guess is that people are selling as they can't see the growth of iPod sales keep going up at the rate they have been, especially in Q1. And the products that could make up for a slow-down in iPod sales such as the iPhone aren't going to be around for a while. Personally I would classify the stock as hold at the moment. Mind you I don't even have enough money to own any stock :(

tmornini
Jan 17, 2007, 05:57 PM
31.2 percent margins!
Wow good for Apple and perhaps the shareholders, but doesn't seem so good for Joe Consumer...

You do realize that many retail establishments use what's known as keystone to set margins, right?

Keystone means 100% *gross* margins.

31.2 percent gross margins are not excessive. If you think so, try buying something for 1 (currency of choice) and selling it for 1.3 (same currency) sometime.

Rocketman
Jan 17, 2007, 05:58 PM
31.2 percent margins!
(

31% margin 31% of which is tax ($310,000,000 this quarter)

About 22% of gross after tax. Not much considering the risks and capital costs.

The thanks the FEDGOV gives Steve is a stock options investigation :(

Rocketman

IJ Reilly
Jan 17, 2007, 06:06 PM
A slowdown in iPod sales growth has been solemnly predicted for at least two years now, quickly following on the heals of the predictions that it would never really sell well in the first place.

AAPL often drops on the best of news. I've been browbeaten many times for in the past for making this statement, but it's true. I've given up trying to figure out why.

jettredmont
Jan 17, 2007, 06:11 PM
- Q: Do you see the iPod and iPhone converging? A: We'll see. The iPod has a broad range of products. We'll talk more as the iPhone gets closer to shipping.


Hmmmm ... seems like more confirmation than we had before that a iPhone-like iPod will be released before or near after the iPhone launch ...

Otherwise, I can't see why we'd "talk more" when the iPhone launches.

AidenShaw
Jan 17, 2007, 06:47 PM
I posted in another thread I felt EDGE was used precisely for the reasons they state here :)
My Verizon EVDO phones and PC-cards fall back to the older, slower technology if no EVDO coverage is available.

It seems crazy to say "we'll go with slow, since there's wider coverage".

macidiot
Jan 17, 2007, 06:47 PM
A slowdown in iPod sales growth has been solemnly predicted for at least two years now, quickly following on the heals of the predictions that it would never really sell well in the first place.

AAPL often drops on the best of news. I've been browbeaten many times for in the past for making this statement, but it's true. I've given up trying to figure out why.

I agree, this looks like typical buy the rumor, sell the news. Then again, it could be that Wall St. is taking the guidance as the word of god. Given that Apple ALWAYS guides lower, you'd think analysts would figure it out. Especially considering how badly they (analysts) missed, um, today.

Oh, and going forward, it looks like Apple could easily do $4/share earnings for FY2007. Based on that Apple at 100 is merely a 25 p/e. And further out, assuming an extremely conservative 25% growth rate, earnings for FY2008 would be $5/share. 100/share on a foward basis is cheap.

And these are numbers that completely exclude the iPhone and tv device.

In other words, Apple should be at at least 120 in 12 months. And it could easily be at 140-150. If not in 12 months, then 2 years... Of course, if the iPhone turns out to be a huge hit, all bets are off... Apple could be at 225 in 2 years...

EagerDragon
Jan 17, 2007, 06:53 PM
I do find next quarter's profits quite scarilly low. Last years Q2 was 4.3m. Yes, that means lower profits than last year. Esh.

Also, I'm not too excited about Mac growth. Although they are growing, they went from 1.2m to 1.6m macs. I thought it would have been better...thats all.

Webcast in 10mins.

That means that we are probably not going to see much new products soon, and if we do: they will be announcements for something that will ship latter or too late to affect the bottom line much. Comments?

rfrankl
Jan 17, 2007, 06:53 PM
I do find next quarter's profits quite scarilly low. Last years Q2 was 4.3m. Yes, that means lower profits than last year. Esh.

Also, I'm not too excited about Mac growth. Although they are growing, they went from 1.2m to 1.6m macs. I thought it would have been better...thats all.

Webcast in 10mins.

.4 over 1.2 is still 33% growth for the Macs. Not too shabby. I think more and more will change with Leopard.

rfrankl
Jan 17, 2007, 06:55 PM
google will never split their stock. they know they're the god of the internet, and they want to brag about it.

Google will never split their stock. They are big fans of Warren Buffet.

Rocketman
Jan 17, 2007, 07:19 PM
My Verizon EVDO phones and PC-cards fall back to the older, slower technology if no EVDO coverage is available.

It seems crazy to say "we'll go with slow, since there's wider coverage".

I have a view on AAPL, supported by repeated experiences, notably recent earnings estimates.

UPOD

Rocketman

EagerDragon
Jan 17, 2007, 07:20 PM
um, good for the them. but am i the only one who sees that they profitted $1 billion and think i've been screwed a little bit?

i mean, they need to make money, but they could easily set prices a little lower and still be VERY healthy.

iPhone for $399 and $499. i don't think that would cut into the BILLION dollar profit too much. :D

At 399 they would probably not be able to make them fast enough. But yes I would agree that 399 and 499 would be a fairer price and one that would tempt me to switch (overcomes some of the cost of breaking contract).

Music_Producer
Jan 17, 2007, 07:37 PM
A slowdown in iPod sales growth has been solemnly predicted for at least two years now, quickly following on the heals of the predictions that it would never really sell well in the first place.

AAPL often drops on the best of news. I've been browbeaten many times for in the past for making this statement, but it's true. I've given up trying to figure out why.

Lot of reasons why a stock goes down when a company comes out with good news - it's all about how the company will do in the future, not the sales that they have achieved in the previous quarter. Soon as someone says 'Sales will decline due to.. ' the stock drops. This is true with every company.

Hence, I trade currencies :D

Fiveos22
Jan 17, 2007, 07:39 PM
I'm digging the new article format here. Very nice.

StuPidQPid
Jan 17, 2007, 07:41 PM
You do realize that many retail establishments use what's known as keystone to set margins, right?

Keystone means 100% *gross* margins.

31.2 percent gross margins are not excessive. If you think so, try buying something for 1 (currency of choice) and selling it for 1.3 (same currency) sometime.

Is that right?
I thought retailers aim for 100% markup, which is 50% gross margin.
i.e. I have something that costs $3 to make or buy and sell it for $6 (a 100% markup). But my profit (margin) is half what I sold it for or 50% ($3/$6). A 100% margin is thus impossible, unless your costs are zero. Mmm, maybe I should start bottling my tap water and selling it. Oh hang on, isn't that called Dasani :)

Obviously Apple are going to sell their stuff for a much as we are willing to pay. I just don't want them to rip us off. As long as most of that money is going into great R&D then I'm not too worried.

IJ Reilly
Jan 17, 2007, 07:42 PM
Lot of reasons why a stock goes down when a company comes out with good news - it's all about how the company will do in the future, not the sales that they have achieved in the previous quarter. Soon as someone says 'Sales will decline due to.. ' the stock drops. This is true with every company.

Unless I missed something, forward guidance looked fine. Typically cautious, but not unusually so. I didn't hear anything that sounded like a warning.

twoodcc
Jan 17, 2007, 07:53 PM
Those numbers are staggering for Apple. Congrats!

yep ;) Go Apple!!!:D

Teh Don Ditty
Jan 17, 2007, 07:57 PM
I try to keep it short and to the point. That phrase happened to have worked lol. We'll see what happens in Q2 and Q3 (mostly Q3) as the iPhone is released.

MSM Hobbes
Jan 17, 2007, 08:02 PM
Positive news! :)

Now, for the future:
keep strong investment in hardware & software R&D
stay on the cutting edge [like the front of my MB :( :p] of technology
open new [even smaller versions] stores in hungry areas {NE IN ;)}
slight raise for the grunts, the good positive ones, in the stores
create means to run Classic apps/games on Intel-based machines
give all who purchased two or more Macs this past year 10 shares of stock :D

Analog Kid
Jan 17, 2007, 08:43 PM
Just curious, what is the definition of gross margins for software companies?
(For hardware it's, very simplied, revenue minus production and distribution cost over revenue. But software has very small production and distribution costs.)
Thus very high gross margins...

dejo
Jan 17, 2007, 08:49 PM
Thus very high gross margins...
Not necessarily. One must also include the cost of design, development, testing, etc. in the production cost. Therefore no guarantee of high gross margins. Just ask the average software company.

bousozoku
Jan 17, 2007, 08:57 PM
Lot of reasons why a stock goes down when a company comes out with good news - it's all about how the company will do in the future, not the sales that they have achieved in the previous quarter. Soon as someone says 'Sales will decline due to.. ' the stock drops. This is true with every company.

Hence, I trade currencies :D

Profit-taking is always a good reason. There still seem to be a lot of day traders. They build things before the call and rip the heart out of the stock afterwards. They must celebrate their winnings after that.

Of course, when the crude oil was dropping in price yesterday, most stocks were up and Apple's was down. They rarely go with the crowd on anything.

Glad they're healthy, though.

failsafe1
Jan 17, 2007, 09:34 PM
Wow wish I had invested back when I thought I should. This can only get better when the jaw dropping device shows up? This is really good news. I am going to add a bit to the bottom line by picking up a refurbed iPod soon.

Analog Kid
Jan 17, 2007, 10:03 PM
My Verizon EVDO phones and PC-cards fall back to the older, slower technology if no EVDO coverage is available.

It seems crazy to say "we'll go with slow, since there's wider coverage".
If you've got one device out of the gate, aim it at the sweet spot... The Nokia's of the world can target each niche, but with one phone in one country you don't want the majority of your potential market saying "It's 3G and my city doesn't support 3G".

Of course a counter argument could be made that the early adopters for a phone like this are going to be a little more savvy than that...

seashellz2
Jan 17, 2007, 10:14 PM
21 MILLION iPODS!


Now whats the name of that other also-ran iPod thingy that comes in brown?

macidiot
Jan 17, 2007, 10:59 PM
Profit-taking is always a good reason. There still seem to be a lot of day traders. They build things before the call and rip the heart out of the stock afterwards. They must celebrate their winnings after that.

Of course, when the crude oil was dropping in price yesterday, most stocks were up and Apple's was down. They rarely go with the crowd on anything.

Glad they're healthy, though.

A perfect example of this mentality was seen on CNBC's Fast Money show today. 3 of the 4 panelists recommended immediately selling Apple. It quite possibly could have been all four, but the fourth was not allowed to speak.

Their reasons:

Won't be any more good news for a month or so.
The only news that could possibly come out would be bad, referring to options backdating.
Claimed that iPod inventory increased from 2-4 weeks to 4-6 weeks.
Claimed that Macintosh sales were disappointing. Even though there were 2 fewer weeks this quarter...

A note about the third point. I listened to the conference call which specifically addressed this. The fool panelist apparently either has ADD or poor listening skills. What was explained was that while there was an increase in inventory, this was experienced early in the quarter and with respect to the prior quarter. It was clearly stated that if one were to look at current levels, it would be closer to 1-2 weeks. This is further elaborated (the analyst actually asking the question also could not understand what was being said) by the explanation that Apple pre-loaded inventory in anticipation of heavy Christmas sales. In other words, Apple loaded up early on iPods and worked through the inventory.

It was clearly stated that if one were to look today, inventory levels would be quite low.

I do give the idiots on this panel somewhat of a pass as they are clearly pump and dump kinds of traders. They latch on to whatever sector happens to have momentum and sell when they get their few ticks of profit. Actually this is what the show is all about.

Further illustration: they were banging the table and screaming at the top of their lungs that Apple was a buy buy buy exactly one week ago, after the announcement of the iPhone. They said ignore options backdating, it's a non-issue. They also said that Apple is fair at 97 and all 4 called it a buy.

Amazing how Apple, after reporting blowout numbers, went from a screaming buy to a "get out while you still can" stock.

I'd say this was an example of making a quick buck, but considering the underlying faulty analysis, one has to wonder.

However, it does show that any fool can make money in stocks if you throw enough darts.

It also shows that CNBC's shows are all about entertainment, not providing sound investment advice. I suppose that since they lost the Blodgets of the world, they decided to in-source the spurious analysis. :rolleyes:

gwangung
Jan 17, 2007, 11:07 PM
Thus very high gross margins...

Um, you DO know that most non-manufacturing industries have similar gross margins?

IJ Reilly
Jan 18, 2007, 12:25 AM
Um, you DO know that most non-manufacturing industries have similar gross margins?

Which is why it's unusual for Apple to have them, since they are in manufacturing. Any other company in the PC industry would kill to have Apple's margins.

mazola
Jan 18, 2007, 12:34 AM
Expect Apple to be bought out this calendar year.

You heard it here first, folks.

flir67
Jan 18, 2007, 01:10 AM
does anybody think the apple stores are growing too fast?????


remember what happened to gateway computers?? they started online got big very fast and opened stores across the usa, then all stores went bust.... but they have a nice online system now.

whatca think??????

dontmatter
Jan 18, 2007, 01:28 AM
With just one week of sales under its belt, Apple Inc.'s new Apple TV set-top streaming media hub has claimed the top slot on the company's list of best selling items.

According to a ranking of best selling products on the Apple online store (right sidebar), Apple TV over the past week outsold all versions of the company's popular iPod digital music players, including the ubiquitous iPod nano.

True, but it is apple's website, and the new product they would like to push. Where is it on amazon?

50548
Jan 18, 2007, 02:15 AM
My Verizon EVDO phones and PC-cards fall back to the older, slower technology if no EVDO coverage is available.

It seems crazy to say "we'll go with slow, since there's wider coverage".

It seems pretty obvious from a business standpoint, instead of saying "we'll go with the newest that nobody uses or cares about"...:rolleyes:

21 MILLION iPODS!


Now whats the name of that other also-ran iPod thingy that comes in brown?

You mean the poo that doesn't play for sure..? ;)

Evangelion
Jan 18, 2007, 04:40 AM
Yep, it's simply awesome...Apple is moving quickly to become the BIGGEST computer/electronics company in the world. It's market share has more than doubled on a quarterly basis, compared to other crappy PC makers, and the iPod is the undisputed king of music...no competition, no comparison.

your foaming-at-the-mouth fanboyism is getting.... annoying. Besides, do you think that Apple is doubling their marketshare every quarter? Let's just say that you are mistaken. By a HUGE margin. Let's assume that Apple doubled their marketshare every quarter in 2006. And let's say that in the beginning of 2006 Apple had a market-share of 2% (a low figure, but still)

so, in 1Q 2006, they had market-share of 2%. In 2Q 2006 they had market-share of 4%. In 3Q 2006 they had 8%. And in the end of 2006, they had 16%.

Let's just say that you are off. By a mile. Yes, Their marketshare is going up. No, they are not doubling their marketshare every quarter. Not even close.

Evangelion
Jan 18, 2007, 04:50 AM
I'm more interested in how many of those stores will be in new markets as opposed to 8 or ten more in New York and SF (rooting for the south).

New markets? You mean something like Europe? California alone has a lot more stores than entire Europe does (I believe it's something like 30 for California, vs. 8 for Europe), and all European stores are in the UK. No stores in Nordic countries, no stores in Italy, no stores in Germany, no Stores in France, no stores in BeNeLux.... There are hundreds of millions of paying customers in those countries. And still, zero stores.

Queso
Jan 18, 2007, 05:20 AM
remember what happened to gateway computers?? they started online got big very fast and opened stores across the usa, then all stores went bust.... but they have a nice online system now.

whatca think??????
Not really a direct comparison. Gateway's products were not sufficiently differentiated from Compaq, Dell, or the thousands of small grey-box manufacturers all fighting for customers in the Windows market. So by adding the costs of a large retail operation they were putting themselves at a major disadvantage with regards to their competition. Apple get away with it for two reasons. Firstly within the Mac market the lack of major price differences between their stores and online Mac resellers, and looking at the wider PC market being the only computer maker that has OSX and iLife.

The Apple stores aren't really about sales. They are a showroom, letting people know that computing does not have to equal Windows. They still have to make a profit as Tim Cook always says, but it's more about marketing.

New markets? You mean something like Europe? California alone has a lot more stores than entire Europe does (I believe it's something like 30 for California, vs. 8 for Europe), and all European stores are in the UK. No stores in Nordic countries, no stores in Italy, no stores in Germany, no Stores in France, no stores in BeNeLux.... There are hundreds of millions of paying customers in those countries. And still, zero stores.
Three of them are for the UK definitely. Glasgow, Edinburgh and Southampton.

neondiet
Jan 18, 2007, 05:48 AM
Not a bad idea. If there is anything negative in what is probably the best earnings release in the history of Apple, the CPU sales numbers did not increase over the previous quarter. We need cheaper iMacs and a headless single processor Core 2 Duo model.

I noticed the drop in Mac sales too, it was 1,610,000 in Q4 2006. And it reverses the trend of the last few years as well. Both Q1 sales in 2005 and 2006 beat their preceding Q4 sales by a healthy margin. Kind of worrying. Maybe it's the Vista effect, in which case Apple may have done well just by standing still.

As for cheaper iMacs, yes it would help if they came down in price if only to offset the cost of buying MS Office. I've recently converted some friends and persuaded them to get iMac's. The cost of MS Office on top of the iMac was almost a deal breaker, I had to work really hard to convince them. If it hadn't been for NeoOffice they would have walked away!

I can't see MS reducing the cost of Office for the Mac platform, so it's vital that iWork07 provides a viable and affordable alternative, and that NeoOffice and the native OpenOffice ports continue at a pace.

iWork07 looks promising with the new Word Processing mode in Pages, and its ability to display pictures in table cells, the lack of which currently breaks every Word Doc I receive from business partners. And if the new spreadsheet App is mostly compatible with Excel too then my sales pitch to prospective iMac owners in future will go a lot easier.

I don't pretend that I can turn around the Mac sales figures all on my own ;) But I do intend to do my bit in 2007.

50548
Jan 18, 2007, 06:23 AM
your foaming-at-the-mouth fanboyism is getting.... annoying. Besides, do you think that Apple is doubling their marketshare every quarter? Let's just say that you are mistaken. By a HUGE margin. Let's assume that Apple doubled their marketshare every quarter in 2006. And let's say that in the beginning of 2006 Apple had a market-share of 2% (a low figure, but still)

so, in 1Q 2006, they had market-share of 2%. In 2Q 2006 they had market-share of 4%. In 3Q 2006 they had 8%. And in the end of 2006, they had 16%.

Let's just say that you are off. By a mile. Yes, Their marketshare is going up. No, they are not doubling their marketshare every quarter. Not even close.

It's annoying, isn't it? But it's good to be a fanboy anyway...worry not.

Of course I am extrapolating when I talk about doubling. But as for market-share on a QUARTERLY basis, I mean that Apple grows MUCH MORE than the rest of the industry, disregarding consolidated figures. As exhaustively said at the conference call, Apple shipments grew something around 30% or 40% (averaging the laptops too), while the overall industry grew something like 8%...the difference is astounding.

And please, those 2% or 3% figures are for the world, perhaps...in the U.S. market Apple has much more than that for a long time already, like 5% percent I would say.

Evangelion
Jan 18, 2007, 06:55 AM
Of course I am extrapolating when I talk about doubling. But as for market-share on a QUARTERLY basis, I mean that Apple grows MUCH MORE than the rest of the industry, disregarding consolidated figures. As exhaustively said at the conference call, Apple shipments grew something around 30% or 40% (averaging the laptops too), while the overall industry grew something like 8%...the difference is astounding.

And still, the fact remains that while Apple is going up in market-share, the growth is not as fast as you imagine. Again: for the sake of the argument:

Let's say that Company A ships 5 million devices. And company B ships 100 million devices. That would give company A 4.7% market-share, while company B had 95.2% (I rounded the figures a bit, so they are not 100% when put together). Those are actually pretty close to real-life market-share of Mac come to think of it. Anyway, let's assume that Company A is increasing unit-sales by 40% every year, whereas Company B is only increasing by 10%. What would market-share figures look like next year?

Company A: 6%
Company B: 94%

Year after that:

Company A: 7.5%
Company B: 92.5%

Yes, market-share would be going up. But it wouldn't be THAT fast. You make it sound like that it's only a matter of time before Apple will utterly dominate the computing-industry. Fact is that it will take quite a while for that to happen. You fanboyism is clouding your judgement on this issue. Even if Apple had 20% market-share, they still wouldn't dominate the industry.

And please, those 2% or 3% figures are for the world, perhaps...in the U.S. market Apple has much more than that for a long time already, like 5% percent I would say.

I'm well aware of that fact. Like I said, I used 2% only for the sake of the argument, no need to get your panties on a bunch because my hypothetical figure was too low for your liking :rolleyes:

gnasher729
Jan 18, 2007, 07:04 AM
Not necessarily. One must also include the cost of design, development, testing, etc. in the production cost. Therefore no guarantee of high gross margins. Just ask the average software company.

That is not what gross margin means. Gross margin for Leopard for example means: How much better off is Apple if you go to a store, look at a Leopard box for five minutes, pick it up, go to the checkout and pay, vs. the case where you go to a store, look at a Leopard box for five minutes, put it back on the shelve and leave. Gross margin is the amount of money you pay, minus all the cost that Apple has because you bought that one box.

What you mean is profit, and profit is much much lower than gross margin. For example, your development cost for some product could be much too high; you still sell it to get at least some of the loss in development back. But if the gross margin is negative, you better stop selling.

bryanc
Jan 18, 2007, 07:22 AM
Even if Apple had 20% market-share, they still wouldn't dominate the industry.

From my perspective Apple manages to dominate many aspects of the industry with <5% market-share. I guess it depends on what you mean by 'dominating the industry'.

Cheers

Dont Hurt Me
Jan 18, 2007, 08:04 AM
Im happy Apple has a Billion in the bank:rolleyes: but walk into any store and look for Apple software and its like finding a needle in a haystack. Cross that, a needle in a haystack is much easier to find then Apple software.

lord patton
Jan 18, 2007, 08:07 AM
Gross margin is the amount of money you pay, minus all the cost that Apple has because you bought that one box.

emphasis added

That sounds like marginal profit.

Gross margin would include development costs, labor, etc (although perhaps not fixed costs like leasing office space).

IMHO

Queso
Jan 18, 2007, 08:11 AM
Im happy Apple has a Billion in the bank:rolleyes: but walk into any store and look for Apple software and its like finding a needle in a haystack. Cross that, a needle in a haystack is much easier to find then Apple software.
Depends where you live. Here in London there's loads of Mac software available in stores. Even HMV does Mac games amongst the Nintendo and XBox stuff.

I can imagine it gets a bit scarcer outside of major cities though.

pilotError
Jan 18, 2007, 08:39 AM
remember what happened to gateway computers?? they started online got big very fast and opened stores across the usa, then all stores went bust.... but they have a nice online system now.

Gateway stores sucked BIG TIME. My brother bought a machine from the store. He could have gotten the same thing for $200 less online. Their service sucked (at least at this particular store). They didn't want to fix things. At one point, he brought it back to them for a hard drive problem and they sent it back to Gateway. He waited about 3 weeks to get it back. Not exactly customer service.

I have to say, Apple did a great job picking locations in high traffic upscale shopping areas. It has really paid off for them. Everytime I go into the store, there's always a line at the register and people checking them out.

I think it works, because people always go with what they know. They use a Dell at work and never used a Mac, so they buy a Dell. Now that people can see it first hand, things are starting to build a little momentum. They are still expensive compared to the grey box of the month. Its pretty hard to convince someone that the $1400 iMac is better than the $699 PC with 17" Flat panel. For a very large number of folks, that $699 PC is "Good Enough".

Mike...

whooleytoo
Jan 18, 2007, 09:03 AM
I don't think they ever break it out.

arn

I believe it was alluded to in last quarter's call, someone mentioned revenue from iTMS is now greater than from Apple's desktop sales.

dejo
Jan 18, 2007, 09:16 AM
I believe it was alluded to in last quarter's call, someone mentioned revenue from iTMS is now greater than from Apple's desktop sales.
"No. Totally. Untrue". (http://homepage.mac.com/dejo/.Public/Sounds/no_totally_untrue.mp3)

And the numbers show why:

Q4 2006 (http://images.apple.com/pr/pdf/q406data_sum.pdf) - Desktops Revenue: $869, Other Music Related Products and Services (which includes iTunes Store): $452

More proof:

Q1 2007 (http://images.apple.com/pr/pdf/q107data_sum.pdf) - Desktops Revenue: $955, Other Music Related Products and Services: $634

gwangung
Jan 18, 2007, 09:31 AM
Which is why it's unusual for Apple to have them, since they are in manufacturing. Any other company in the PC industry would kill to have Apple's margins.

Well, yeah, because in any other manufacturing industry, margins are much closer to where Apple is than with other PC manufacturers (you're barely surviving with 20%).

Hm. Of course it may be that a substantial portion of Apple revenues comes from non-desktop sales....

Abu Reno
Jan 18, 2007, 09:31 AM
Profits must mean Apple is making money, right? But the stock takes a $5.00 loss!!!!!!!!!:mad:

Apple Corps
Jan 18, 2007, 10:01 AM
BRLawyer & Evangelion - I think this might be of interest:

http://appleinsider.com/article.php?id=2413

Market share drops - stock price drops.

IJ Reilly
Jan 18, 2007, 10:13 AM
I noticed the drop in Mac sales too, it was 1,610,000 in Q4 2006. And it reverses the trend of the last few years as well. Both Q1 sales in 2005 and 2006 beat their preceding Q4 sales by a healthy margin.

Got a link to those numbers? I don't recall seeing Q1 Mac shipments beating Q4.

Well, yeah, because in any other manufacturing industry, margins are much closer to where Apple is than with other PC manufacturers (you're barely surviving with 20%).

Hm. Of course it may be that a substantial portion of Apple revenues comes from non-desktop sales....

Apple isn't exceptional in earning a substantial proportion of their sales from non-desktop PCs. I believe all of the PC manufacturers are seeing much better growth on the laptop side. Do laptop sales translate into higher margins? I not sure that they do.

Squonk
Jan 18, 2007, 10:14 AM
Profits must mean Apple is making money, right? But the stock takes a $5.00 loss!!!!!!!!!:mad:

Yeah, I don't understand this either. They exceed expectations and now the stock drops... Or is this a correction for the ~+10% surrounding the iPhone hype?

IJ Reilly
Jan 18, 2007, 10:24 AM
Yeah, I don't understand this either. They exceed expectations and now the stock drops... Or is this a correction for the ~+10% surrounding the iPhone hype?

It's just AAPL. Investing in this company can drive you crazy, if you hope for too much logic.

IJ Reilly
Jan 18, 2007, 11:01 AM
Did a little research of my own. Mac shippments from 2004-present, by quarter in millions:

2004-Q1 0.829
2004-Q2 0.749
2004-Q3 0.876
2004-Q4 0.836

2005-Q1 1.046
2005-Q2 1.070
2005-Q3 1.182
2005-Q4 1.236

2006-Q1 1.254
2006-Q2 1.112
2006-Q3 1.327
2006-Q4 1.610

2007-Q1 1.606

Mac sale grew sequentially by 25% Q1-2005 over Q4-2004. However, the following year, sequential sales grew by only 1.5% Q1 over Q4. This year, they were down by 0.25%, coming off a record quarter when sales jumped 21% over the previous quarter.

And this, ladies and gentleman, is what has Wall Street in such a tizzy.

Apple Corps
Jan 18, 2007, 11:35 AM
IJ - stock is now down $4.50 - Apple stock has done great for us but it feels like a lot of the hype was priced in and reality is now setting in regarding the near future. I wish I had held onto it for another day or so, but........:rolleyes:

50548
Jan 18, 2007, 11:44 AM
BRLawyer & Evangelion - I think this might be of interest:

http://appleinsider.com/article.php?id=2413

Market share drops - stock price drops.

Tks Apple Corps...I think Evangelion got my point anyway, my "fanboyism" notwithstanding (which will continue, bien sûr, as this is a MAC rumors site, not Rob Enderle's outfit).

As for the numbers, they either refer to previous periods or the whole world...the article is not that clear at all. Other than that, a growth of 30% against 3% of the rest of industry just blows these conclusions out of the water, which are expressly defined as PRELIMINARY (as much as those "consensus" estimates of 16 million iPods AGAINST REAL 21 million as published by Apple).

Any company growing more than the average in unit sales MUST, by definition, grow its share of the quarterly pie, not to mention the absolute market share, which is much harder to gauge (as Macs remain in use for much longer than crappy PCs).

Or quoting another user from AI, since I am lazy to do my own research after a stressful day at work:

"Apple says they grew at 28%, 3x the industry. That means that they grew marketshare, plain and simple. If they're growing faster than the industry they're gaining marketshare. How can an analyst say something different?

In the US it was much stronger, Apple said they grew 30+% in the US and the US market grew at 3%. That would be a huge market share gain.

I read another report this morning that said Apple market share was up to 4.7%. I don't remember the qualifiers. It was probably in the US market."

SIMPLE AS THAT.

Yeah, I don't understand this either. They exceed expectations and now the stock drops... Or is this a correction for the ~+10% surrounding the iPhone hype?

Actually it's like this: investors wonder about the possibility of FURTHER growth in stock value, based on future predictions of products and innovations.

The problem is that Apple's stock is already very high, and that's why you will see people selling it for some short-term gains, even with very good results...it's natural in this context.

By the way, do you remember that discussion on Apple x Dell market cap? Apple is just at 80 billion, whereas Dell is at a poor 50 billion...hej Mike, don't ya wanna shut it down and give the money back to shareholders? ;)

IJ Reilly
Jan 18, 2007, 12:11 PM
IJ - stock is now down $4.50 - Apple stock has done great for us but it feels like a lot of the hype was priced in and reality is now setting in regarding the near future. I wish I had held onto it for another day or so, but........:rolleyes:

Thanks -- you made my day. I was actually trying to avoid that particular piece of information. :eek:

Just try to separate the hype from the reality for any given stock, especially AAPL. Either way, I haven't seen any analyst downgrades or reduced 12-month targets, so I think the numbers looked good to them. Personally, I think anyone who dumps a stock on reports of record revenues and earnings needs to have their head examined -- but what do I know?

macidiot
Jan 18, 2007, 12:16 PM
Thanks -- you made my day. I was actually trying to avoid that particular piece of information. :eek:

Just try to separate the hype from the reality for any given stock, especially AAPL. Either way, I haven't seen any analyst downgrades or reduced 12-month targets, so I think the numbers looked good to them. Personally, I think anyone who dumps a stock on reports of record revenues and earnings needs to have their head examined -- but what do I know?

JP Morgan downgraded and reduced it's earnings outlook. Analyst's name is Snope.

Four others upgraded estimates and price targets. Looks like the avg. target price is around 110.

btw, I think Apple is a screaming buy @ 90.

whooleytoo
Jan 18, 2007, 02:01 PM
Mac sale grew sequentially by 25% Q1-2005 over Q4-2004. However, the following year, sequential sales grew by only 1.5% Q1 over Q4. This year, they were down by 0.25%, coming off a record quarter when sales jumped 21% over the previous quarter.

And this, ladies and gentleman, is what has Wall Street in such a tizzy.

Those figures look well odd to me - the Q4 2004 figure looks very low. You'd expect the fourth quarter to be the year's highest but it isn't. And that, perhaps, is why the 1st quarter 2005 looks so good by comparison.

(I assume it was due to some product release during '04, or an anticipated release in early '05, but don't know what offhand).

Cinematographer
Jan 18, 2007, 03:07 PM
You'd expect the fourth quarter to be the year's highest but it isn't.

Apples fiscal year starts in the month of October. So Q1 2005 is the holiday quarter before the 2005 calender year starts.

Apple Inc. has just released Q1 2007 results, which include sales of Oct, Nov and Dec 2006.

Apple Corps
Jan 18, 2007, 04:12 PM
IJ - I missed about $6 on the run up and missed $6 - $7 of run down. I just purchased 500 shares @ $89.55 (average of several orders). So - after all of my sell and rebuy - net of commission - I'm about where I would have been had I just gone off and had a couple of pints :D

The stock option manipulation "issues" are a worry. The product pipeline looks STRONG over the next several months. Perhaps Apple is ready to go on Leopard but holding off to "trump" Vista at launch. iLife, iWork are a small plus. iPhone hype will be up / down / up / down....? CS3 will boost sales in the professional market.

I guess we all will stay tuned... It really is a market emotion roller coaster ride - way too many issues, both +/-, to really know what will prevail.

Forgot another big potential - the Beatles on iTunes Apple Inc & Apple Corps - Ivory and Ebony :-0

IJ Reilly
Jan 18, 2007, 05:50 PM
I guess we all will stay tuned... It really is a market emotion roller coaster ride - way too many issues, both +/-, to really know what will prevail.

The market is breathing fumes most of the time and reacts accordingly. Since we like hanging out on a rumors site, I guess we can't complain too much about that.

Evangelion
Jan 19, 2007, 12:34 AM
BRLawyer & Evangelion - I think this might be of interest:

http://appleinsider.com/article.php?id=2413

Market share drops - stock price drops.

Anyone who does comparisons like that based on the previous quarter, is an idiot. What they should be doing is to do the comparison on the same quarter in the previous year. As that piece of news said, Apple's market-share has gone UP, even though it has gone slightly down when compared to previous year.

It's like when Apple sells zillion iPod in the christmas-quarter, and then sells somewhat less in the next quarter (as is to be expected). Does that mean that sales of iPods are going down? No.

jessep28
Jan 19, 2007, 12:43 AM
Yeah, I don't understand this either. They exceed expectations and now the stock drops... Or is this a correction for the ~+10% surrounding the iPhone hype?

Here's why the stock dropped nearly $6. From the Wall Street Journal Jan 19, 2007 (C6)

Apple lost $5.88, or 6.2%, to 89.07. The consumer-electronics company reported Macintosh computer shipments were flat with the previous quarter and offered a muted second-quarter outlook.

Stock price is naturally based a good deal on future performance. Why would I want to invest in a company that did awesome yesterday?

Evangelion
Jan 19, 2007, 01:03 AM
As for the numbers, they either refer to previous periods or the whole world...the article is not that clear at all. Other than that, a growth of 30% against 3% of the rest of industry just blows these conclusions out of the water

I don't think there's anything wrong with their numbers as such, what they are doing wrong is the methods. They are making headlines by saying that Apple's market-share has gone down when compared to the PREVIOUS QUARTER. But that's totally wrong way to measure these things. What they should be doing is to compare market-share to the same quarter in the previous year. that way they eliminate all kinds of seasonal variations (christmas vs. no christmas, back-to-school vs. middle of school-year etc.).

IJ Reilly
Jan 19, 2007, 10:21 AM
Stock price is naturally based a good deal on future performance. Why would I want to invest in a company that did awesome yesterday?

Because that's the best predictor you will ever have for how they will do tomorrow.

jessep28
Jan 19, 2007, 10:27 AM
I don't think there's anything wrong with their numbers as such, what they are doing wrong is the methods. They are making headlines by saying that Apple's market-share has gone down when compared to the PREVIOUS QUARTER. But that's totally wrong way to measure these things. What they should be doing is to compare market-share to the same quarter in the previous year. that way they eliminate all kinds of seasonal variations (christmas vs. no christmas, back-to-school vs. middle of school-year etc.).

Exactly. Everyone's all yipee that Apple posted $1bn in profit. It doesn't mean squat if you can't compare it to something. I pulled up Apple's 10k for FY ended September 30th and the profit margin was only 10.3% on approx. 19bn in revenue and 1.9bn in net income.

In analyzing a company the user should also use common sized financial statements and financial ratios. This removes the size factor when comparing companies.

With the income statement, you simply take all income statement items divided by revenue (revenue will always = 100%). Balance sheet items should be compared to total assets.