Apple 1Q 2008 Results: Record $1.58 Billion Profit [Archive]

MacRumors

Jan 22, 2008, 04:40 PM

http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

Apple posted (http://www.apple.com/pr/library/2008/01/22results.html) revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share during the 1Q 2008 (ending December 29th). These results compare to revenue of $7.1 billion and net quarterly profit of $1 billion, or $1.14 per diluted share, in the year-ago quarter (http://www.macrumors.com/2007/01/17/apple-posts-1-billion-in-profit-1q-2007-and-financial-call-notes/). Gross margin was 34.7 percent, up from 31.2 percent in the year-ago quarter. International sales accounted for 45 percent of the quarter’s revenue.

Other notes:
- 2,319,000 Macs shipped (44% unit growth and 47% revenue growth)
- 22,121,000 iPods shipped (5% unit growth and 17% revenue growth)
- 2,315,000 iPhone sales

"We're thrilled to report our best quarter ever, with the highest revenue and earnings in Apple's history," said Steve Jobs, Apple's CEO. "We have an incredibly strong new product pipeline for 2008, starting with MacBook Air, Mac Pro and iTunes Movie Rentals in the first two weeks."

"Apple's revenue grew 35 percent year-over-year to $9.6 billion, an increase of almost $2.5 billion over the previous December quarter’s record-breaking results," said Peter Oppenheimer, Apple's CFO. "Our strong results produced cash flow from operations of over $2.7 billion during the quarter, yielding an ending cash balance of over $18.4 billion. Looking ahead to the second quarter of fiscal 2008, we expect revenue of about $6.8 billion and earnings per diluted share of about $.94."

We will be highlighting notes of interest from the pending conference call here.

Article Link (http://www.macrumors.com/2008/01/22/apple-1q-2008-results-record-1-58-billion-profit/)

namX

Jan 22, 2008, 04:41 PM

Macs still the big market...

gkarris

Jan 22, 2008, 04:43 PM

Apple stock rebound!!!

QCassidy352

Jan 22, 2008, 04:44 PM

this should give the stock price a shot in the arm...

yayaba

Jan 22, 2008, 04:44 PM

Getting burned after hours. Damn this economy and all its pessimism.

Queso

Jan 22, 2008, 04:45 PM

2.319 million eh? How does that compare with the Gartner/IDC estimates?

John01021988

Jan 22, 2008, 04:45 PM

Whenever I have the money, I would invest on Apple, just like Forrest Gump did

stagi

Jan 22, 2008, 04:45 PM

Apple stock rebound!!! Rebound? Shares are down 13% in after hours :(

FreeState

Jan 22, 2008, 04:46 PM

Rebound? Shares are down 13% in after hours :(

This is normal - given the US recession its bound to be worse IMO.

Martin C

Jan 22, 2008, 04:46 PM

Apple stock rebound!!!
Yup, let's see how the markets go tomorrow. AAPL stock has been on a steady downfall after MacWorld.

zeppiecr

Jan 22, 2008, 04:48 PM

The guidance was so low...

Crawn2003

Jan 22, 2008, 04:49 PM

Apple stock rebound!!!

Dude, as of 4:46 P.M. EST Apple (AAPL) was trading at $140.55 a share, the lowest it hit after hours was 134.81!

Rebound isn't starting now.

Apple shares sink 13% (http://www.marketwatch.com/news/story/apple-reports-58-profit-increase/story.aspx?guid=%7B1FA68088%2DD36D%2D4413%2D876A%2DFBACA379084D%7D)

~Crawn

gkarris

Jan 22, 2008, 04:49 PM

Rebound? Shares are down 13% in after hours :(

That's because of the overall market. It will probably start going back up to where it belongs, especially since Apple has proven that it can survive tough times through its innovations.

me_94501

Jan 22, 2008, 04:50 PM

$9.6 billion in revenue?? Just to think only a few years ago Apple couldn't pull in that much in a year! :eek:

Unspeaked

Jan 22, 2008, 04:52 PM

That's because of the overall market. It will probably start going back up to where it belongs, especially since Apple has proven that it can survive tough times through its innovations.

No, the $5 it was down during the regular session is because of the overall market.

The $15 it's down after-hours is directly tied to this earnings report.

Queso

Jan 22, 2008, 04:52 PM

That's because of the overall market. It will probably start going back up to where it belongs, especially since Apple has proven that it can survive tough times through its innovations.
However, the valuation of AAPL is based on future income continuing to increase, evidenced by the high P/E ratio. If the markets think revenues and income are levelling off, the stock is going to tank.

HenMaster6000

Jan 22, 2008, 04:53 PM

ipods not so hot...
i see a deluge of "death of ipod" articles coming.

Yankees 4 Life

Jan 22, 2008, 04:53 PM

why is all my money going down the drain?? my stock has plunged 64 dollars in 2 weeks!

errol

Jan 22, 2008, 04:53 PM

Stock is down 16% in after hours!!! WTF!

NewSc2

Jan 22, 2008, 04:55 PM

That's because of the overall market. It will probably start going back up to where it belongs, especially since Apple has proven that it can survive tough times through its innovations.

Surviving isn't the only thing it has to do. Apple's P/E ratio is really high, and with the economy going down, people would be more apt to purchase lower-priced alternatives (mp3 players, phones, laptops, etc.). This could more be viewed as a stock correction than a collapse.

Frisco

Jan 22, 2008, 04:55 PM

ipods not so hot...
i see a deluge of "death of ipod" articles coming.

Yeah the iPod is starting to get some serious competition.

shawnce

Jan 22, 2008, 04:55 PM

Stock is down 16% in after hours!!! WTF!

Analyst projected above what Apple stated for iPods, etc. (need to go dig up Apple's guidance for Q1 to see if Apple missed its own estimates but I doubt they did)

TheBonk

Jan 22, 2008, 04:55 PM

Whenever I have the money, I would invest on Apple, just like Forrest Gump did

Yep, this is some kinda fruit company, huh? :p

MarkMS

Jan 22, 2008, 04:55 PM

I knew I should have sold my few shares at $200.

Glad to hear that this is Apple's highest revenue and earnings report.

Chiggs

Jan 22, 2008, 04:56 PM

You have to love a quarter when they sold 2 million+ Macs. It seems like only a couple of years ago that Steve Jobs was making a big deal out of selling 1 Million Macs in a quarter.

The stock will continue to bounce around in my mind - especially given the US Economy and the uncertainty around how the MacBook Air will sell. For a long term buyers though, $135-$140 seems like a great price given it was selling north of $200 just a few weeks ago. It's getting Apple at 30% off !!!

eastcoastsurfer

Jan 22, 2008, 04:56 PM

However, the valuation of AAPL is based on future income continuing to increase, evidenced by the high P/E ratio. If the markets think revenues and income are levelling off, the stock is going to tank.

Bingo! Current numbers do not matter as much as future numbers when it comes to stock price. The iPod growth numbers are really low. Investors are seeing the iPod cash cow potentially coming to an end. Apple also is giving a lower guidance...

shawnce

Jan 22, 2008, 04:56 PM

Yeah the iPod is starting to get some serious competition. Still 5% unit growth in a market that Apple (and others) have saturated.

gkarris

Jan 22, 2008, 04:56 PM

However, the valuation of AAPL is based on future income continuing to increase, evidenced by the high P/E ratio. If the markets think revenues and income are levelling off, the stock is going to tank.

Thanks. Just read more reports. I guess the iPod sales were short, and the outlook for Q2 not so hot.

Looks like the computers will continue to do well, but consumers won't be buying very many iPods the rest of the year - need money for essentials instead...

MacTheSpoon

Jan 22, 2008, 04:57 PM

It looks like Apple's usual overly conservative guidance is giving people palpitations even more than usual because of the overall market climate. Sigh.

Muzzway

Jan 22, 2008, 04:58 PM

Too bad that doesn't include the $20 iPod apps, eh? :p

aswitcher

Jan 22, 2008, 04:59 PM

Looking good. Glad to see the market share is growing all over the lines.

imwoblin

Jan 22, 2008, 04:59 PM

Apple's stock is tanking because the company put its second quarter outlook at 94 cents a share on sales of $6.8 billion, which is far below forecasts of $1.09 a share profit and $6.99 billion in revenue.

Project

Jan 22, 2008, 05:00 PM

Yeah the iPod is starting to get some serious competition.

Its more a case of the market being saturated. Zune is what, #2? With sales of less than 3m in 18 months. Here we have 22m iPods in a quarter.

gkarris

Jan 22, 2008, 05:01 PM

Too bad that doesn't include the $20 iPod apps, eh? :p

:eek:

You need to be slapped.... :p

nippyjun

Jan 22, 2008, 05:02 PM

Time to buy?

rayward

Jan 22, 2008, 05:02 PM

It looks like Apple's usual overly conservative guidance is giving people palpitations even more than usual because of the overall market climate. Sigh.

They do this every quarter, and every subsequent quarter they slaughter their own guidance as well as market expectations. I'm sticking with projections from a couple of weeks ago of a near-$250 stock price target.

Plus, I was in the (Houston) Apple store yesterday, and it was jammed with customers. They were actually buying, not just playing, and there were about 5 one-to-one training sessions going on. It's anecdotal to be sure, but I don't think this train is slowing any time soon.

Rocketman

Jan 22, 2008, 05:03 PM

Let's see.

Revenue growth.
Margin growth.
Cash profit growth.
CPU sales way up.

That sounds like good news to me.

Rocketman

billystlyes

Jan 22, 2008, 05:04 PM

csimmons

Jan 22, 2008, 05:05 PM

Yeah the iPod is starting to get some serious competition.

From who?:eek::rolleyes:

SheriffParker

Jan 22, 2008, 05:07 PM

Almost as many iPhones as Macs. Awesome. :) Way to go Apple!

Small White Car

Jan 22, 2008, 05:08 PM

From who?:eek::rolleyes:

Well, he's kind of right.

You know how Vista's biggest competition is XP?

Well the iPods biggest competition is LAST year's iPod! Lots of people have them now, and since last year's iPod is just as good as this year's Zune, many people are fine holding onto the iPod and buying nothing.

I'm case #1. I'm still using an iPod mini and am perfectly happy! I replaced the battery last year and it's going strong. I'll probably replace it in 2009 with whatever's new then.

THAT's why iPod growth is slowing...people are pretty happy with the iPods they've got!

TheBonk

Jan 22, 2008, 05:09 PM

2.3 million iPhones sold. Do we add that to the 4 million from the keynote, or is it part of the 4 million?

BRLawyer

Jan 22, 2008, 05:09 PM

$9.6 billion in revenue?? Just to think only a few years ago Apple couldn't pull in that much in a year! :eek:

People should start asking WHEN Apple is GONNA take over Microsoft...MS is DEAD.

Project

Jan 22, 2008, 05:10 PM

Do we add that to the 4 million from the keynote, or is it part of the 4 million?

Part of the 4m

shawnce

Jan 22, 2008, 05:10 PM

2.3 million iPhones sold. Do we add that to the 4 million from the keynote, or is it part of the 4 million?

The 4 million includes Q1 numbers.

me_94501

Jan 22, 2008, 05:11 PM

According to the conference call, iPod market share last quarter was "consistent" with the year ago quarter, according to NPD's data.

In other words, it sounds like the market is pretty saturated right now, and it's impractical to think that the market will grow at a 30% clip indefinitely.

Glad to see the Mac growth continue. Woot!

djellison

Jan 22, 2008, 05:12 PM

>$1.5B 3 month profit
>$18B in the bank

But they had to pull developers off Leopard to finish the iPhone

:confused:

Frisco

Jan 22, 2008, 05:13 PM

Good news. Maybe I should buy Apple stock again.

shawnce

Jan 22, 2008, 05:15 PM

>$1.5B 3 month profit
>$18B in the bank

But they had to pull developers off Leopard to finish the iPhone

:confused: Key developers, ones with knowledge of something are hard to clone... you just can't bring folks on board and get instant returns. Looking at the iPhone it looks like the developers involved related to Cocoa (UIKit on the phone looks like a next generation version of AppKit).

SheriffParker

Jan 22, 2008, 05:15 PM

THAT's why iPod growth is slowing...people are pretty happy with the iPods they've got!

Actually the new pink nano is going to change all that. I'm already thinking about getting one. ;)

Phil A.

Jan 22, 2008, 05:16 PM

Good news. Maybe I should buy Apple stock again.

I think it's still got a way to drop with the current economic climate. Personally I expect the price to bottom out around $115 - 120

neutrino23

Jan 22, 2008, 05:17 PM

If I knew for sure why the market went up or down I'd be making millions on investments and not posting here.

Given that caveat, it seems to me that some investors are very sensitive to short term news. The news is mostly about blockbuster products like the introduction of the iPhone. They ignore incremental growth like we saw at MWSF this year. However, that incremental growth is what builds the base from which new blockbusters like the iPhone are launched.

If the overall economy and market were doing well and only AAPL was tanking that would be a concern. However, most of the world is tanking and AAPL is not a mainstream business so no surprise it is suffering, regardless of performance. The lower guidance for this quarter didn't help.

Speaking of MWSF, I thought there was a lot of good news. The addition of the MBA is nice because it expands the MacBook line. We can quibble about specs but this will be incremental business as it brings in new customers and sells as a second unit to existing customers. Apple continues to open new stores and the stores are working fantastically well. New firmware was released for the iPhone which added some new features, increasing the value and attractiveness of the iPhone without raising the selling price. It wasn't announced at the show but it seems that a huge update for Leopard will be released soon. Leopard itself has been selling well and has gotten good reviews. So, going forward I expect Apple to continue to grow. How the stock reacts is anyone's guess.

MacsAttack

Jan 22, 2008, 05:18 PM

You know how Vista's biggest competition is XP?

And now MicroSoft's roadmap is for Windows7 to b out next year - its Hastal la Vista!

Brianstorm91

Jan 22, 2008, 05:19 PM

New MBP's would do wonders for stock...
Please?

imwoblin

Jan 22, 2008, 05:20 PM

Might be the time to pick up more Apple shares. According to the propeller heads on CNBC, Apple stock is trading at $135 in after market trading.

iLeoMarc

Jan 22, 2008, 05:20 PM

2.3 million iPhones sold. Do we add that to the 4 million from the keynote, or is it part of the 4 million?

Well the market share, needs to be adjusted to include this 2.3 million iPhones. But the 4million estimate for the number of iPhones sold is as of the 200th day or the day of Macworld accounts for the 4th Quarter numbers and some of Q1 2008.

MarlboroLite

Jan 22, 2008, 05:21 PM

Looks like the stock is going to tank some more tomorrow...I'd say the day after is probably a good time to buy....or maybe the stock will hit a sub $100 bottom and then shoot up again...

I feel sorry for the people who bought at $200! :(

jlbrown23

Jan 22, 2008, 05:22 PM

The stock in tanking in after hours. They sort of deserve it for not addressing some of the holes in their product line. Apple my friends has become a "niche" computer maker again. The MacBook Air is proof.

And you get that from these numbers how?:

- 2,319,000 Macs shipped (44% unit growth and 47% revenue growth)

44% unit growth - pretty impressive for a company falling back in to being a niche player.

I am amazed by all you Air whiners - you act like they have discontinued the MacBooks & the MacBook Pros(the 6 models ranging from $1100 to $2800 not enough choice for you?) and will only sell you the Air. I guess you want a 3 lb machine with a 750GB drive, 8GB of memory, dual Blu Ray Burners and 5 Fire Wire ports? I suggest time travel(or a cart to wheel around your 15 lbs laptop).

gkarris

Jan 22, 2008, 05:22 PM

And now MicroSoft's roadmap is for Windows7 to b out next year - its Hastal la Vista!

Link?

Clive At Five

Jan 22, 2008, 05:22 PM

- Enthusiastic about announcements at Macworld. Very confident in our product line outlook for 2008.

Translation: No xMac. No Tablet.

-Clive

tny

Jan 22, 2008, 05:24 PM

Jack M.'s last update on "As the Apple Turns" back in October of 2005:

"Apple has its best quarter and year in the history of the company-- so of course its stock tanks."

milo

Jan 22, 2008, 05:25 PM

ntrigue

Jan 22, 2008, 05:26 PM

Am I putting too much faith in the subscription services? ATV and iPhone are initial hardware purchases associated with small daily returns on rentals, SDK apps, and AT&T profit sharing.

I'd expect all of these earnings to be a great catalyst for new products and technology.

sconnor99

Jan 22, 2008, 05:28 PM

Well it sounds like it's all over for Apple now, Macbook Air has destroyed the company, if only they'd bought out new MacBook Pros that would have saved them.

IJ Reilly

Jan 22, 2008, 05:28 PM

Looks like the stock is going to tank some more tomorrow...I'd say the day after is probably a good time to buy....or maybe the stock will hit a sub $100 bottom and then shoot up again...(

Just as an historical note, the last time AAPL sunk this far this quickly was in September, 2000, and it stayed sunk for years thereafter.

Doctor Q

Jan 22, 2008, 05:29 PM

2,319,000 Macs shipped
2,315,000 iPhone sales
These are practically identical numbers, differing by only 0.17%. Fascinating!

I wonder how much the customers overlap. I'm sure only a small percentage of Mac owners bought an iPhone, but how many new Mac purchasers this last quarter have an iPhone? And what percentage of iPhone users own a Mac?

Well it sounds like it's all over for Apple now, Macbook Air has destroyed the company, if only they'd bought out new MacBook Pros that would have saved them.Just as an historical note, the last time AAPL sunk this far this quickly was in September, 2000, and it stayed sunk for years thereafter.So if the new MacBook Pro came out January 15, stockholders would be happy for years, but if the same models come out tomorrow morning then Apple will have doomed their stock for years to come?

gnasher729

Jan 22, 2008, 05:31 PM

Jack M.'s last update on "As the Apple Turns" back in October of 2005:

"Apple has its best quarter and year in the history of the company-- so of course its stock tanks."

It's mostly due to the fact that Apple has given lower revenue guidance. If you listen in to the conference call, the analysts are prodding Apple continuously why their predictions for the current quarter are so low. Apple has done this before, coming up with an excellent product, guiding low, and the stock price drops.

I always have the impression that Apple really, really wants to beat its prediction in every quarter, but has no interest at all in the stock price.

MacsAttack

Jan 22, 2008, 05:32 PM

Link?

http://apcmag.com/7874/windows_7_to_be_released_next_year

darthvedder81

Jan 22, 2008, 05:35 PM

The "weak" iPod sales has more do with the fact that everybody already has an iPod! Yes, the market is saturated with MP3 players but I've tried them all and other than the iPod they are all still terrible. With Apple adding all the apps to the Touch effectively turning that into the Apple PDA we should see iPod sales start to pick back up again.

Oh, and as someone who spends A LOT of time (not telling why!) in an Apple store I wouldn't be surprised to see Mac market share shoot up to 15%-20% by next year. People are finally dumping Windows and buying Macs in droves. It's going to be a fun year!

freeny

Jan 22, 2008, 05:35 PM

Good time to buy :)
Ill wait and see in the morning if its still dropping....

gnasher729

Jan 22, 2008, 05:35 PM

Well it sounds like it's all over for Apple now, Macbook Air has destroyed the company, if only they'd bought out new MacBook Pros that would have saved them.

Well, absolutely, 2.3 million Macs sold, $9.6bn revenue and $1.58bn profit, we'll be lucky if Apple still exists by the end of the year :rolleyes:

For a bit of reality check: Which product made more profits in 2007: (a) XBox 360. (b) PS3. (c) Apple TV.

LizKat

Jan 22, 2008, 05:36 PM

Clive At Five

Jan 22, 2008, 05:36 PM

Well it sounds like it's all over for Apple now, Macbook Air has destroyed the company, if only they'd bought out new MacBook Pros that would have saved them.

*chuckles*

Do you think really think Apple is going to neglect the MBP for much longer? I've heard rumors saying MBP updates as early as next month. Who knows, maybe sooner. Surely this 3-week-late update will destroy the company! How could Apple have made that mistake?!

Oh, and RE: MBA, there are just enough idiots out there to make the MBA a popular device. It's Apple. It's RDF. It's inevitable.

Just as an historical note, the last time AAPL sunk this far this quickly was in September, 2000, and it stayed sunk for years thereafter.

*sings*

...so put on a happy face!....

:rolleyes:

-Clive

lkrupp

Jan 22, 2008, 05:37 PM

sconnor99

Jan 22, 2008, 05:37 PM

Well, absolutely, 2.3 million Macs sold, $9.6bn revenue and $1.58bn profit, we'll be lucky if Apple still exists by the end of the year :rolleyes:

For a bit of reality check: Which product made more profits in 2007: (a) XBox 360. (b) PS3. (c) Apple TV.

I'm guessing c

happydude

Jan 22, 2008, 05:42 PM

ipods not so hot...
i see a deluge of "death of ipod" articles coming.

how could 22 million ipods shipping not be good news?

Clive At Five

Jan 22, 2008, 05:43 PM

http://apcmag.com/7874/windows_7_to_be_released_next_year

You know, I'm actually excited about Windows 7. I think Microsoft is so determined to amend its Vista blunder that they will point every gun they have at Windows 7. If this is the case, I await it eagerly. Competition is good and keeps Apple on its toes.

-Clive

ventro

Jan 22, 2008, 05:43 PM

The stock is tanking because they posted piss poor outlooks for the next quarter.

MacsAttack

Jan 22, 2008, 05:43 PM

The "weak" iPod sales has more do with the fact that everybody already has an iPod!

That is why Apple have started to diversify into things like phones... Still having significant growth in the computer side of things helps a lot too.

Of course the world economy has flopped into killer inverted-tail-spin-death spiral thanks to the mess in the US - a situation not aided by all the psycho-headless-chicken-panic that has sent stock markets into free-fall... When the government tells people not to panic the first reaction appears to be - there's something they ain't telling us! panic!

angelodmhl

Jan 22, 2008, 05:43 PM

For a bit of reality check: Which product made more profits in 2007: (a) XBox 360. (b) PS3. (c) Apple TV.

(d) Wii

nippyjun

Jan 22, 2008, 05:44 PM

Just as an historical note, the last time AAPL sunk this far this quickly was in September, 2000, and it stayed sunk for years thereafter.

But how was the company doing at that time compared to now?

milo

Jan 22, 2008, 05:45 PM

Translation: No xMac. No Tablet.

They say that every year...and yet we saw the iPhone and the air.

Apple just doesn't tip their hand. I bet we'll see the xMac at some point, it's just a question of when. And until it is announced, apple will insist that their product line is perfect and nothing new is needed.

For a bit of reality check: Which product made more profits in 2007: (a) XBox 360. (b) PS3. (c) Apple TV.

Does anyone even know the answer to that question?

Clive At Five

Jan 22, 2008, 05:46 PM

(d) Wii

Hahahahaha touche!!

Wii is teh best thing evar!

No, seriously, though, I love mine. For costing about the same as :apple:TV, the Wii is a MUCH better value, especially for families, and non-gamers.

-Clive

IJ Reilly

Jan 22, 2008, 05:46 PM

So if the new MacBook Pro came out January 15, stockholders would be happy for years, but if the same models come out tomorrow morning then Apple will have doomed their stock for years to come?

This analysis makes about as much sense as any other I have heard!

MacsAttack

Jan 22, 2008, 05:46 PM

You know, I'm actually excited about Windows 7. I think Microsoft is so determined to amend its Vista blunder that they will point every gun they have at Windows 7. If this is the case, I await it eagerly. Competition is good and keeps Apple on its toes.

-Clive

Nahh... I was excited about Vista! Watching the train-wreck that was the Longhorn development process was the imputes to try out a Mac (if I was going to have to buy new hardware and upgrade my apps anyway...). Then the Mini came along - and now I've switched completely and am much happier for it. :D

SheriffParker

Jan 22, 2008, 05:48 PM

Does anyone even know the answer to that question?

Its pretty common knowledge that Microsoft and Sony sell their main game systems for a loss, hoping to make it up with software sales or marketshare.

Paix247

Jan 22, 2008, 05:49 PM

Hahahahaha touche!!

Wii is teh best thing evar!

No, seriously, though, I love mine. For costing about the same as :apple:TV, the Wii is a MUCH better value, especially for families, and non-gamers.

-Clive

can you compare the two? I have a Wii, but I really want to get an :apple:TV

Clive At Five

Jan 22, 2008, 05:49 PM

Does anyone even know the answer to that question?

PS3 and Xbox 360 both sold at a loss. That doesn't mean Sony and Microsoft didn't make a ton money on software and other related contracts, though...

-Clive

Much Ado

Jan 22, 2008, 05:51 PM

Someone, anyone, please help cheer me up.

Record breaking quarter, and I'm getting burned. Long-term investment, long-term investment, long-term investment...

Project

Jan 22, 2008, 05:51 PM

Getting anything out of Tim and Peter is like getting blood out of a stone lol

IJ Reilly

Jan 22, 2008, 05:53 PM

But how was the company doing at that time compared to now?

Not at all good, and that's the point. They certainly weren't reporting record profits. This is turning into a battering of historic proportions, which I can only compare numerically to a time when Apple was not in anything like its current condition financially.

Clive At Five

Jan 22, 2008, 05:54 PM

can you compare the two? I have a Wii, but I really want to get an :apple:TV

With DotTunes (http://www.dottunes.com) you can access your iTunes music through your Wii... and I wouldn't doubt that video playback is right around the corner as well.

With a Wii, you have a two-for. ;) Plus, if you hack it, you can give it a DVD player.

-Clive

angelodmhl

Jan 22, 2008, 05:55 PM

Hahahahaha touche!!

Wii is teh best thing evar!

No, seriously, though, I love mine. For costing about the same as :apple:TV, the Wii is a MUCH better value, especially for families, and non-gamers.

I just love it! Cheap, tons of great games, and thanks to Wii Sports i lost 10 pounds! What's not to love?

And now, :apple:TV = my next purchase

iDAG

Jan 22, 2008, 05:57 PM

Someone, anyone, please help cheer me up.

Record breaking quarter, and I'm getting burned. Long-term investment, long-term investment, long-term investment...

Remember when Apple cost a very expensive $50 about two years ago? :)

MarlboroLite

Jan 22, 2008, 05:57 PM

You know, I'm actually excited about Windows 7. I think Microsoft is so determined to amend its Vista blunder that they will point every gun they have at Windows 7. If this is the case, I await it eagerly. Competition is good and keeps Apple on its toes.

-Clive

Wow if that really is a screen shot of Windows 7, then it can be declared once and for all and for the end of time that Microsoft is not in the business of selling software but copying Apple. If I'm not mistaken that looks like dock clone/wannabe. And a fugly attempt at that.

tveric

Jan 22, 2008, 05:59 PM

twoodcc

Jan 22, 2008, 06:01 PM

great news! gotta keep it going though

GroundLoop

Jan 22, 2008, 06:04 PM

From who?:eek::rolleyes:

From itself. Not everyone buys every new iPod that comes out. I have a 5.5G that is more than enough for me for the next few years.

Hickman

flir67

Jan 22, 2008, 06:05 PM

I think apple stock still has a way to go before bottoming out. the way the us economy is, I expect a few apple less profitable apple stores to close, and that business moved to bigbox stores.

apple should offer apple stock purchase on their website to push it back up. just a click to own it.
:D

the us is so broke is not real.

Clive At Five

Jan 22, 2008, 06:06 PM

Wow if that really is a screen shot of Windows 7, then it can be declared once and for all and for the end of time that Microsoft is not in the business of selling software but copying Apple. If I'm not mistaken that looks like dock clone/wannabe. And a fugly attempt at that.

It does certainly resemble a launch bar of some sort, but other than that, it's hard to make heads or tails of it. Like, what the hell is Control Panels doing floating above it for no apparent reason? ...and then the Office Suite just above that?

It makes no sense, and I'm calling "fake." We'll wait to see what's in the pipe.

-Clive

elppa

Jan 22, 2008, 06:06 PM

Which product made more profits in 2007: (a) XBox 360. (b) PS3. (c) Apple TV.

And for the wider perspective: Who made more profit from consumer electronics?

(a) Microsoft (b) Apple

roland.g

Jan 22, 2008, 06:06 PM

Then why did the stock tank?

Much Ado

Jan 22, 2008, 06:07 PM

Then why did the stock tank?

Guidance. Panic. Wall Street.

ChrisA

Jan 22, 2008, 06:09 PM

..Apple my friends has become a "niche" computer maker again....

Apple always has been. They "cherry pick" and sell only the parts of the line that bring in the most money. Apple sells premium products at a premium price. By definition a "premium product" can never be mainstream. This is not to say that Apple can't make a lot of money this way. Look at the car industry. BMW, Mercedes and so on sell only in a "niche" too.

If they wanted volume and market share they'd offer a $299 "Econo Mac" that would compete with E-machine.

gnasher729

Jan 22, 2008, 06:10 PM

Does anyone even know the answer to that question?

Well, Apple makes more profit than Microsoft loses on the XBox 360, but not _that_ much more :p PS3 is in the red as well. Apple TV is not the big money spinner, but it isn't doing too bad if you compare it to products that are roughly in the same market, like the TiVo.

And one poster got it right, of course; the Wii is actually making serious money.

NewSc2

Jan 22, 2008, 06:11 PM

So far this is the dumbest comment made in this thread. It'll take a lot to beat the stupidity of this analysis.

Psh, if only the Macbook Air had an ethernet port, it wouldn't doom Apple this way. Because, you know, we all buy 3lb. laptops to leave them tethered to a desk.

gnasher729

Jan 22, 2008, 06:17 PM

And for the wider perspective: Who made more profit from consumer electronics?

(a) Microsoft (b) Apple

Now that is a good question. First we'd need to decide what you count as "consumer electronics". XBox, iPod, Zune, iPhone obviously. Do you count computers and mice/keyboards if they are sold to home users? Software sold to home users?

seedster2

Jan 22, 2008, 06:23 PM

I would love to see the iPhone sales breakdown.

I would bet that there wasnt much penetration in the international market.

Successful negotiations in the Asia region will really make the biggest impact. There is a lot of new wealth there, but I doubt the Telcos will bend over as easy considering the speculation regarding sales performance in Europe.

Glad to see sales of other products are coming along nicely. But it looks like they are forecasting a slow down which is never a good sign.

IJ Reilly

Jan 22, 2008, 06:29 PM

I'd like to request a moratorium on posts about stock prices from people that know ******** about stocks, P/E ratios, analyst expectations, and everything else that's related to what you call the "financial condition" of a company. Stick to squealing about pink ipods, I beg you.

Did I mention P/E ratios?

AAPL investor since 1997. And you?

Guidance. Panic. Wall Street.

Because Venus is in the second house. And you needed to ask?

IOW, good luck finding any logic in the stock market, especially on any given day.

Pandaboots

Jan 22, 2008, 06:31 PM

All it boils down to is people are idiots. Everyone is panicking and selling and hurting themselves and everyone around them. Apple just posted another all-time record Qtr. Investors respond with a mass sell-off because Apple projects profits and growth for next qtr to be less than analysts expectations. However, Apple is still projecting growth.

Now you know as well as I do that Apple will continue to launch products that will surprise everyone and give us that "I need/want one" reaction. That coupled with movie rentals, which should make everyone with the older model iPods upgrade to the newer video versions to utilize this. Also, :apple:TV will have a great year in 2008 as the movie/tv show fiasco settles down and iTunes matures a little more on this front. In addition every mac will be seeing upgrades/potential refreshes this year too and market share will continue to grow in the computer division. Then we also have a new iPhone due out, which in my opinion will blow away the original's sales numbers, because a lot of people (myself included) are holding out for version 2. Leopard will become more stable (and even more attractive for switchers), iLife/iWork will be updated, and on and on.

So, in these bad economic times with companies posting record losses, or first-time losses, companies going bankrupt/being bought out, Apple is posting record numbers and still projecting growth in possibly one of the worst economies of all-time. It only makes sense that investors would be looking to find a shining star like Apple. I say let the idiots bail and let us smart ones hold on and keep gobbling up shares at a bargain. I mean, where the hell is everyone putting their money when they sell Apple? Under their mattress?

These times are amazing. In the first 3 weeks of 2008, Apple has announced a record qtr for growth, sales, margins and profits, produced an amazing line-up of products and services, and added 3 billion dollars to their already fat wallet and investors see this as negative and bail....I hope they all go to Microsoft....This will be Apple's finest year...I guarantee you that Apple will be buying up their competition with their 18 billion in cash as all their competitors' stock prices dwindle. Man, what a world we live in.

Hattig

Jan 22, 2008, 06:34 PM

I guess the iPod is good enough as it is, people aren't upgrading as often now.

Seems the MP3 player market is around 25m a quarter, max. Indeed in many places it will go down as people use their phones instead for this function. Maybe this will be counterbalanced by increasing sales in poorer markets.

So Apple's investment in mobile phone technology and platform is extremely useful for them to continue the long term growth of this area of their business (mobile communications and personal entertainment). The 3G phone will be a hit around the world as well, and as a product should be extremely desirable, but it will still take a year or two for Apple's phone sales to even approach their iPod sales. But cumulatively they could still increase overall, allowing Apple to mask possible falling sales of iPods. Apple do have other markets to attack with the iPod though, it's all very interesting. A 32GB Touch later this year will round out the offerings, and it's possible the nano will relegate itself to a $149 8GB device, with a $199 8GB Touch and a $249 16GB Touch. The Classic will stay alive into 2009 because flash memory isn't quite competitive yet in terms of capacity.

In the short term consumer uncertainty means people will be putting off non-essential purchases. High price items will be eschewed in favour of cheaper alternative if they have to be bought. Apple needs the Mac Mini more than ever this year as their low-price product. They will want to keep the YoY sales increasing, so quantity is required. MacBook could do with a cheaper option as well.

It's not like this year will see Apple take a battering - with nearly $20b in the bank they'll be good for years, and that will probably be at $25b in 12 to 18 months regardless.

takao

Jan 22, 2008, 06:34 PM

BMW, Mercedes and so on sell only in a "niche" too.

yeah mercedes is only selling in niches...

not counting tractors, cabriolets, financial business and electronics/design business:
A -class
B -class
C -class
E- class
S -class
G
GL
R
V
Vito/Viano
Vario
Sprinter
Actros
Atego
Econic
Axor
CapaCity
Citaro
Conecto
Unimog UGN
Unimog UHN

in fact you couldn't have choosen a worse example... in fact mercedes is one with the widest possible line ups out there

milo

Jan 22, 2008, 06:38 PM

No, seriously, though, I love mine. For costing about the same as :apple:TV, the Wii is a MUCH better value, especially for families, and non-gamers.

But does it play movies? (much less HD ones or 5.1 surround...it doesn't even have HD output, does it?)

Its pretty common knowledge that Microsoft and Sony sell their main game systems for a loss, hoping to make it up with software sales or marketshare.

Sure, but the real question is whether xbox or PS3 is profitable once you include software sales. In the case of 360, it's entirely possible that it's more profitable than aTV at this point.

MacGeek7

Jan 22, 2008, 06:40 PM

Yeah the iPod is starting to get some serious competition.

that's not necessarily a bad thing - it just means that  will have to push that much harder to give us better products.

All it boils down to is people are idiots. Then we also have a new iPhone due out, which in my opinion will blow away the original's sales numbers, because a lot of people (myself included) are holding out for version 2.

ditto

tutubibi

Jan 22, 2008, 06:57 PM

If that $20 iTouch fee does not go away soon, that was probably the last quarter Apple could count on my contribution to the bottom line...

jayducharme

Jan 22, 2008, 07:01 PM

http://apcmag.com/7874/windows_7_to_be_released_next_year

perhaps a shorter product cycle from here on in will get users and businesses thinking ahead much quicker, not to mention the hardware vendors who were the major contributors to Vista’s shaky start

Ahhh! So it wasn't Microsoft that was to blame for Vista not being accepted. It was those darned hardware vendors! :rolleyes:

numediaman

Jan 22, 2008, 07:05 PM

Then why did the stock tank?

It didn't tank. It was a kernel panic.

Just reboot tomorrow.

gvegastiger

Jan 22, 2008, 07:09 PM

Guiding down in any market will hurt you. In this market it will kill your share price. Just look at what happened to Cisco when it guided down last quarter.

Apple has to continue to show sustainable growth and it doesnt look it has done that with the iPods. I'm sure they will pick it it up somewhere in the future, but investors don't want to hear a company guiding down.

megfilmworks

Jan 22, 2008, 07:16 PM

in fact you couldn't have choosen a worse example... in fact mercedes is one with the widest possible line ups out there
Not to mention contributing the block for Thielert's Turbo Diesel aviation engines. Used on the Austrian Diamond TwinStar.

trukurt

Jan 22, 2008, 07:52 PM

Like many people, I wish I had sold my Apple stock at $200, and I keep waiting for this crazy slide to abate, and yet I refuse to join the panic and sell. Why? Because I see where Apple is heading. Think about it. Steve gets all of the major movie production companies to make their movies available through iTunes, fattening that cash cow. I've already rented two movies and bought three. They've added a GPS-like feature to iPhone and just now put out their SDK. We'll see this platform mature into an even greater "must have", plus the device is making strong inroads into corporate America. It's #2 behind Blackberry, they'll hit their 10 million sold in a year, and Apple aims at a global market, much larger than RIM. Watch for Apple to lead the "smart phone" innovation by enabling video iChat on the device. That's already feasible over wifi, and will be possible as faster phone networks evolve. Apple's demograpic appeal is broad spectrum. Who doesn't like music and/or videos of some kind. Consumers want convenience, selection, and value. Apple TV sales will take off once the video library is up to 1,000+ videos, which is by the end of February. The number of video offerings will grow exponentially, as happened with music on iTunes. Apple TV, like the ipods, will work cross platform, and will become another conduit for video on demand that will beat NetFlix or any cable service because the issues will be easily transferred across Apple's many devices (video iPods, iPhones, laptops, etc.). Apple is positioning itself in the center of the entertainment universe. At the same time, it makes the best computers and software on the planet. The have a record quarter and are spanked mainly because consumer demand is expected worsen over a recessionary period that will likely last no longer than 18 months. During this time, Apple will continue to grow market share, introduce new products, improve how existing products and software perform, and further enhance it's global panache. When the markets open tomorrow, I'm buying all the stock I can afford. Apple stock will rebound as one of the surest bets and will split before it hits $250.

Clive At Five

Jan 22, 2008, 07:54 PM

But does it play movies? (much less HD ones or 5.1 surround...it doesn't even have HD output, does it?)

No, but you could shoot for a PS3 which is a media center, has a BluRay optical drive, has the best graphics on the market, and has motion-sensing controls (albeit nothing like the Wii's). It even has media-sharing with iTunes with the proper configuration.

So for $170 more than the cost of an :apple:TV, you can get a device that has 80% of the functionality of an :apple:TV (no iTS), can play BluRay media, and has the best graphics of any gaming console on the market. I also just read that this year Sony is announcing technology to make the PS3 a DVR as well!

So if you're asking what I'd rather buy...

.......PS3.

-Clive

dante@sisna.com

Jan 22, 2008, 07:59 PM

Getting burned after hours. Damn this economy and all its pessimism.

There is PLENTY of good reason for the Pessimism.

dante@sisna.com

Jan 22, 2008, 08:01 PM

rfrankl

Jan 22, 2008, 08:12 PM

The stock is down because of next quarters guidance, but they do that every quarter than smash the numbers. Last quarter was the first quarter they guided up to $1.42 or so, which was ahead of analysts numbers, but by the time they came out today, most analysts had raised their number to about $1.60 during the quarter. They all want to be heroes and the one that is right. They still handily even beat those raised numbers.

Apple's p/e based on last 12 months of earnings at $4.55 is 30. It has been at roughly 40 all year. It's growing much faster still than 30%. Even Graham & Dodd followers WOULD buy at these levels. It's tech and volatile, but the future looks bright to me.

wildmannz

Jan 22, 2008, 08:14 PM

shawnce

Jan 22, 2008, 08:27 PM

It's interesting that they have released the MacBook Air with a smaller Merom processor. Ideally this should have a Penryn chip in it - for heat and processing power. Intel is preparing the small form factor Penryn for 2H08 so this one off (using Merom and early spin of the packaging) for Apple is special and likely shouldn't be used to make predictions from.

"standard" size Penryns are ready now for the mobile space with more coming in May.

ArmyKnight12

Jan 22, 2008, 08:32 PM

Awesome news. Yeah for Apple!

sd452

Jan 22, 2008, 08:33 PM

Actually the trailing PE was 24.24 at todays close. The after market drop close the stock dropped about 14 percent. Tomorrow's open should see the trailing PE under 20. That is one heck of a value for 30% + growth. I bought most of AAPL at $12.50 back when Gil bought NEXT. I'll be buying more tomorrow.
:D

shawnce

Jan 22, 2008, 09:03 PM

Actually the trailing PE was 24.24 at todays close. I think you meant forward PE.

JGowan

Jan 22, 2008, 09:09 PM

"The Company sold 22,121,000 iPods during the quarter, representing five percent unit growth and 17 percent revenue growth over the year-ago quarter. Quarterly iPhone™ sales were 2,315,000."

Maybe I'm just stupid, but 22.1M iPods sold in 3 months sounds like a ridiculous amount, YET people here act like the market's saturated. Why?

Personally, I bought 6 iPods last year (Two 2Gen Shuffles, 80GB 5.5Gen, 160GB 6Gen, a new Nano and an iPod Touch [the last 3 during the Holiday 4th quarter]) I also, plan on getting 2 iPhones next month. I know I'm not alone. Also, I know many people who keep upgrading ever couple of years. Now that Shuffles are so small, cheap and nice, they're owning more than one iPod and using them depending on their need.

Plus, one must consider that 2.3M people DID in fact, get awesome "iPods" when they bought the iPhone. Does the iPhone cannibalize iPod sales? Absolutely.

HelloKitty

Jan 22, 2008, 09:33 PM

Guidance. Panic. Wall Street.

Exactly. I think Intel suffered the same thing just a while ago when they announced their quarterly report.

But what can I say? They're the one that have big money and are capable of determining stock price. If they say the stock price should be 100, then 100 it is...

RRutter

Jan 22, 2008, 09:33 PM

Macs still the big market...

Yup

:apple:

Butthead

Jan 22, 2008, 10:01 PM

First of all - I'm not taking Stock-buying advice from any of you.
I'd be very poor if I did.

In 6 months time, I don't think Apple will be at $140 or lower - and here's why.

It's interesting that they have released the MacBook Air with a smaller Merom processor. Ideally this should have a Penryn chip in it - for heat and processing power. They haven't - so this suggests to me that they haven't got their laptop platforms nailed down for Penryn yet - and aren't ready to release. If they had to wait 10 weeks for the MBA platform to be ready for Penryn - would they have waited?

So - I'm going to take a guess and say that Apple HAS got a revision ready for the MacBook Pro - and that it won't be released this quarter.
That helps explain their conservative guidance.
Watch them release the MBP in the next quarter and watch the share-price jump up again.

Everything is humming along quite nicely - the iPhone getting ready for release into Asia Macs selling well - and now a share-price drop.
Can you say BUY opportunity? Catch a falling knife... it can be done.

Agreed, buy op, but everything else in the post is wrong :p If I were a Google CEO and didn't already have some options to get it for less, I'd be buying up hundreds of millions in Apple stock, rather than the over priced Google stock, lol.

Intel is preparing the small form factor Penryn for 2H08 so this one off (using Merom and early spin of the packaging) for Apple is special and likely shouldn't be used to make predictions from.

"standard" size Penryns are ready now for the mobile space with more coming in May.

If you believe digitimes, the 22mm Penryns are due out at the same time in May, as the 35mm Penryns. Now which series of CPU's, in what die size, will be used in what model; you can speculate on that :D

cache is gone for the DT article, but you get pretty much all of it in engadgets story:

http://www.engadget.com/2008/01/15/intel-releasing-15-montevina-cpus-in-may/

Rumor sites have the MBP being nearly ready for MWSF, but supposedly due to resources being put towards MBA, it (MBP Penryn's ) were a no show, but that they should be out any day, as PC vendors have already announced. Apple would be foolish to wait until the next quarter to update the MBP line.

In May, with the release of Monteviña we can expect yet another MBP revisions to follow, perhaps around WWDC?

Apple's stock won't hinge on the success of the MBA anymore than it did on the MacMini.

spork183

Jan 22, 2008, 10:04 PM

1.58 Billion? I knew it! Apple is an oil company...

jicon

Jan 22, 2008, 10:16 PM

"The Company sold 22,121,000 iPods during the quarter, representing five percent unit growth and 17 percent revenue growth over the year-ago quarter. Quarterly iPhone™ sales were 2,315,000."

Maybe I'm just stupid, but 22.1M iPods sold in 3 months sounds like a ridiculous amount, YET people here act like the market's saturated. Why?

Personally, I bought 6 iPods last year (Two 2Gen Shuffles, 80GB 5.5Gen, 160GB 6Gen, a new Nano and an iPod Touch [the last 3 during the Holiday 4th quarter]) I also, plan on getting 2 iPhones next month. I know I'm not alone. Also, I know many people who keep upgrading ever couple of years. Now that Shuffles are so small, cheap and nice, they're owning more than one iPod and using them depending on their need.

Well, the question must be asked. How many do you plan to buy this year? Surely you should be buying more than two iPhones, as revenue generated from the phones counts for over the length of the two year contract I believe... Otherwise, I'd speculate your iPod consumption is oversaturated.

elgruga

Jan 22, 2008, 10:29 PM

Yeah the iPod is starting to get some serious competition.

THIS is exactly the kind of stupid comment that irritates so many, including me.

1 - The iPod has the same market share it has had for some time - north of 70%
2 - The iPhone is also an iPod - consider the two together and you have more like 80% of the music player market, and of course, 20% of the smartphone market in its FIRST 6 months.
3 - the iPod is up on profits, and despite a downturn in retail, sales are still UP 5%.

Competition? From where - the planet friggin' Zargon?

The stock market does NOT reflect huge gains in Macs, 2.5 TIMES the rest of the PC market - the stock market is a shell game so that rich folks can fleece poor folks. There is no logic, just greed.

Wake up!
Apple 1Q 2008 Results: Record $1.58 Billion Profit.

hagjohn

Jan 22, 2008, 10:31 PM

Time to buy?

If you buy now, your nuts... the market is going to drop more and so will Apple.

hagjohn

Jan 22, 2008, 10:39 PM

Wake up!
Apple 1Q 2008 Results: Record $1.58 Billion Profit.

Yes and they expect less profits in the 2nd quarter, which is where the drop in price comes in.

hulugu

Jan 22, 2008, 10:41 PM

Not at all good, and that's the point. They certainly weren't reporting record profits. This is turning into a battering of historic proportions, which I can only compare numerically to a time when Apple was not in anything like its current condition financially.

... Catch a falling knife... it can be done.

I'm sticking to my guns here. It's a time to buy a bunch of discounted Apple stock. I can't help but think this is an opportunity for someone to make a lot of money betting on a company weathered the last slow-down with aplomb by committing money to R&D rather than withdrawing into itself. Maybe it's the RDF, or maybe it's because I'm sitting in a coffee shop frequented by law students, professors, and other university types and half of the laptops are running OS X.

JGowan

Jan 22, 2008, 10:42 PM

Well, the question must be asked. How many do you plan to buy this year? Surely you should be buying more than two iPhones, as revenue generated from the phones counts for over the length of the two year contract I believe... Otherwise, I'd speculate your iPod consumption is oversaturated.Well, I'm sure, come the holidays, at least 2 or 3 more people will find iPods in their stockings. :D I really believe that many here are thinking that iPods/iPhones are only bought by those using them, when clearly many people are getting them as gifts. As they get cheaper and better, people will continue to consider buying them for the techie in their life. Perhaps at $399, they wouldn't consider it, but at $79 and $149, suddenly it opens the door for an awesome gift to replace someone's iPod who normally would've tried to eek out another year of their current model.

Factor in several other gift-giving holidays (Valentines, Mother's Day, Father's Day and BIRTHDAYS [everyone's favorite holiday]) and there will always be a reason to buy more iPods. Oh yeah... and Apple will continue to make them better and better, enticing those of us who already own multiple iPods to buy "just one more".

wildmannz

Jan 22, 2008, 10:53 PM

If you buy now, your nuts... the market is going to drop more and so will Apple.

The market already HAS dropped.
And so has Apple.
The market will show proof on Weds - either way.

Wild-Bill

Jan 22, 2008, 10:55 PM

Apple should take that 1.58 billion and sink it into quality control. Immediately.

starflyer

Jan 22, 2008, 11:48 PM

Apple should take that 1.58 billion and sink it into quality control. Immediately.

Yeah, because customer satisfaction for Apple products are at an all-time low. :rolleyes:

hulugu

Jan 23, 2008, 12:06 AM

You know, I'm actually excited about Windows 7. I think Microsoft is so determined to amend its Vista blunder that they will point every gun they have at Windows 7. If this is the case, I await it eagerly. Competition is good and keeps Apple on its toes.

-Clive

I think Microsoft hasn't figured out that they're sailing the wrong damned direction, yet. So, this having all hands aboard set the main and load the guns won't make much difference.

I'd like to think that Microsoft has woken up and will be attempting a renaissance for Windows, but I think they're still sleepwalking based on Silverlight, the Zune 2, and IE 7. And, Vista...oh the tragedy is almost Olympian.

neilspartacus

Jan 23, 2008, 12:33 AM

hulugu

Jan 23, 2008, 12:38 AM

With such great results someone should have visited the market share of Mac and PC. The last i knew was mac were just 5 or 6.1%! I think its time to revisit those figures if they weren't!
Do someone have credible figures on this?

According to AppleInsider (http://www.appleinsider.com/articles/07/10/17/apples_u_s_mac_market_share_rises_to_8_1_percent_in_q3.html), Gartner is reporting that Apple's share for the 3rd Quarter (2007) was 8.1.

Now, remember that this is just for the quarter of sales and thus has no impact on overall sales nor installed-base, which is always the problem of relying on these numbers. However, with this in mind, Apple increased from 6.2 to 8.1 over the same period.
Of note, similar studies place Apple with 17% of notebook purchases.

Confidemus

Jan 23, 2008, 01:03 AM

Time to buy?

The markets are very volatile due to a some large investors playing around and making a lot of money. I suppose that there are some guys sitting together on their "boat" and smile...

AAPL will rise as expectated up to 600 the next years. Take your stock widget and tick the "2y" button. And then make a projection into the next two years. What do we see?

Time to buy.
Best,
Confidemus

Scottgfx

Jan 23, 2008, 01:30 AM

The stock in tanking in after hours. They sort of deserve it for not addressing some of the holes in their product line. Apple my friends has become a "niche" computer maker again. The MacBook Air is proof.

So... Apple sees a market to break into, and just because it doesn't fit your personal needs, you slam it? Is Apple just supposed to make just one "People's Computer" that addresses all computing needs? You slam the MBA as a niche computer at the same time you say that Apple isn't diversifying their product line! You can't have it both ways!

Next time, make a point.

The markets are very volatile due to a some large investors playing around and making a lot of money. I suppose that there are some guys sitting together on their "boat" and smile...

AAPL will rise as expectated up to 600 the next years. Take your stock widget and tick the "2y" button. And then make a projection into the next two years. What do we see?

Time to buy.
Best,
Confidemus

I doubt that just looking at a 2-year graph is enough information to make a stock purchase decision. I did that kind of stuff with SBUX and I've taken a beating. *ouch*

But I am all set up to buy more AAPL in the morning. Wish me luck. :)

Pandaboots

Jan 23, 2008, 01:45 AM

Ah, No, clearly you do not understand the fundamental underpinnings of an economy and where they currently stand in ours.

I don't care what textbooks say about an economy. People really are idiots. The market right now makes no sense at all. But please enlighten us all to the fundamental underpinnings and where these underpinnings are right now in our economy. In other words, elaborate more on your response.

I wonder how many people are actually selling off at a loss right now due to panic? Now if Apple had its hand in the subprime game and was writing down billions for the quarter, I could understand a mass hysteria to get out. Apple has become a very big company in the last fews years. Very few companies have the market cap that Apple has and fewer more have the growth that Apple continues to have coupled with the hottest products and services and diversity.

No one is even talking about the retail side of Apple. Surely people can now see that Apple is serious business and not just a trendy niche company anymore. Steve Jobs is everywhere now---Computers/Software/Apple Retail Stores/iTunes store/Hollywood/Music/Phones/Starbucks/Disney. You can't escape Apple no matter where you go. On top of all that, they are making profits hand over fist, increasing and more importantly maintaining any market share they gain in any division, and are sitting on tons of cash. Furthermore, they are well positioned and well armed to gain the top spot in market share for their phone and movie divisions. And all the while, their computer and software division keep steadily growing.

Where the hell else would any investor want to put his money right now? Are companies like Apple a dime a dozen? You see my point now?...People are idiots.

As a sidenote, I did sell my shares at $200. I had owned Apple since 2000. I've seen more than my fair share of massive paper losses in that time, as well as some really good roller coaster rides. In the end, my investment made 720%. I re-invested half of that back into Apple in the low 180s recently and diversified the rest. I can't imagine another 720% gain, but I anticipated Apple growing a little more through 2008 before reaching the saturation point and becoming a blue chip. Point of the story is, yes Apple's growth will slow and eventually flatten, but it doesn't mean they are doomed. They are just maturing into a mega company that if ran well will maintain its dominance and market share. Think Wal-Mart, Xerox, Fed Ex, Starbucks, McDonalds...and from time to time they will have a sudden spike in stock price, but will not continue to double every year like we have become accustomed to recently. Go long on Apple, and you'll enjoy some hefty profits and might even see a dividend sometime too.

Scottgfx

Jan 23, 2008, 01:48 AM

...Go long on Apple, and you'll enjoy some hefty profits and might even see a dividend sometime too.

Huzza! Huzza!

Clive At Five

Jan 23, 2008, 01:59 AM

I think Microsoft hasn't figured out that they're sailing the wrong damned direction, yet. So, this having all hands aboard set the main and load the guns won't make much difference.

I'd like to think that Microsoft has woken up and will be attempting a renaissance for Windows, but I think they're still sleepwalking based on Silverlight, the Zune 2, and IE 7. And, Vista...oh the tragedy is almost Olympian.

Fair enough, and maybe I see MS as being in more dire straits than they do, but I think Microsoft is going to be in some VERY deep s*** if they do not release a winner of a OS this time around. If they pull another "Vista," you can say goodbye to the Windows division of MS. A failure to produce in this iteration is going to signal the beginning of the end of Windows.

-Clive

Pandaboots

Jan 23, 2008, 02:10 AM

The stock in tanking in after hours. They sort of deserve it for not addressing some of the holes in their product line. Apple my friends has become a "niche" computer maker again. The MacBook Air is proof.

I'm not even sure what is even meant by this comment. What holes are missing in Apple's line-up first of all? Every product Apple makes is a niche product. It's their diversified selection that allows them to cover all the niches and post record sales and growth.

Please at least answer this: How is the Macbook Air anymore a niche product than say a Mac Pro/iMac/Mac Mini/Macbook/Macbook Pro/iPod nano/iPod Classic/iPod Touch/iPod Shuffle/iPhone?

I chose an iMac 2 years ago over a notebook, mac mini, and mac pro because I wanted a large screen, large hard drive, a nice graphics card to at least play wow and a fast intel processor, with the simplicity of an all-in-one for less than $2,000. I appreciate Apple making the 20" iMac that met all my needs and it still does to this day.

The same thing is happening with the Macbook Air, it's meeting the needs of the customers that need a computer like that. And remember, there is a "coolness factor" that is a part of us humans that Apple taps in to. (i still admire my white imac for its design and coolness inasmuch as I do for its reliability and ease of use) If I were on the go a lot and needed to have a computer with me a lot, I'd sure buy a MBA to supplement my iMac.

Anyway, I hope you at least see the MBA now as a product that is filling a niche market that Apple wasn't addressing. It is part of their total line-up now, not the only thing in their line-up. I hope you can also see that any product that Apple makes is a niche product targeted to a certain end consumer. Apple makes a whole slew of makes and models, all in different colors and sizes and features at different price points, and then are even customizable beyond that.

gnasher729

Jan 23, 2008, 05:42 AM

According to AppleInsider (http://www.appleinsider.com/articles/07/10/17/apples_u_s_mac_market_share_rises_to_8_1_percent_in_q3.html), Gartner is reporting that Apple's share for the 3rd Quarter (2007) was 8.1.

Also important to remember that this market share counts computers sold. A big pile of black plastic with a Dell sticker on it for $299 is one computer sold, same as an eight core Mac Pro with 16GB of RAM. If you count revenues, Apple looks a lot better.

petercooper

Jan 23, 2008, 06:24 AM

Apple posted revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share during the 1Q 2008 (ending December 29th).

So the 1Q 2008 ended in 2007? How does that one work then? We're in the second quarter now, in January?

hagjohn

Jan 23, 2008, 06:25 AM

The market already HAS dropped.
And so has Apple.
The market will show proof on Weds - either way.

And the market will continue to drop. Have you not watched any news. We are on the verge or a recession or possibly in one now. The market will probably drop even more and fluctuate for a while.

I'm not talking about bad about Apple.. It's a good stock to own but at the moment all stocks are going to fall. You don't buy at a high, you buy at lows and with the economic climate at the moment, it would be foolish to buy any stocks... unless you are selling stock to move it into a more safer stock.

CNNmoney.com (http://money.cnn.com/2008/01/23/markets/stockswatch/index.htm?postversion=2008012305)

Wall Street: Still seeing red

Futures point to losses at the open after Apple outlook disappoints; investors can't shake recession fears.
January 23 2008: 5:52 AM EST

LONDON (CNNMoney.com) -- Wall Street looked set to take another beating Wednesday, as investors reacted to a disappointing outlook from Apple and remained haunted by recession fears.

At 5:32 a.m. ET, Nasdaq and S&P futures were lower, suggesting losses at the start of trading.

Apple (APPL) posted record quarterly earnings late Tuesday but issued an outlook that rattled investors. The stock sank more than 12 percent in after-hours trading.

Global stocks have been on a crash course, plunging on worries about a U.S. slowdown. The market rout mostly ended Wednesday as Asian stocks rebounded, although European markets fell in morning trading.

An emergency rate cut the Fed made Tuesday has helped some of the worries hanging over investors worldwide, but there are still concerns that the Fed's dramatic move won't be enough to stave off an economic downturn in the world's largest economy.

U.S. markets finished Tuesday's session lower as the Fed's cut offered little support. With no major economic reports on tap Wednesday, they're likely to face another volatile session.

carlitofox

Jan 23, 2008, 07:13 AM

you know this is a thread about apples stocks and results and yet no one has looked at it logiclly.

if there predicting quiet numbers next QTR then doesn't that tell you that theres no new hard wear coming out ! no MBP etc.

apple qtr's go something like this.

qtr 1 oct - dec - new ipods for the holiday 's poss machine upgrade (imac last year pos this year)

Qtr 2 jan - Mar - macworld launch products normally a machine and somthing new (mac pro and MBA this year) plus a revenue helper like iLife/iWork etc (rentals this year)

Qtr 3 mar - june - wwdc product launch normally a upgrade machine. (MBP this year ?????)

Qtr 4 July- Sept - educ buying time so poss imac/mackbook/ibook/emac etc
(poss alumin/LED macbook this year)

they are a stock led company and thats why things are timed at the start of a Qtr or near the end for the next one.

so there ya go and let the MBP now not later moans/flaming begin.

Evangelion

Jan 23, 2008, 07:25 AM

Evangelion

Jan 23, 2008, 07:26 AM

Yes and they expect less profits in the 2nd quarter, which is where the drop in price comes in.

You can't compare sales/profit on one quarter to the one before it. You need to do it on the same quarter a year ago. that way you eliminate seasonal variables.

Fabio_gsilva

Jan 23, 2008, 07:49 AM

Hahahahaha touche!!

Wii is teh best thing evar!

No, seriously, though, I love mine. For costing about the same as :apple:TV, the Wii is a MUCH better value, especially for families, and non-gamers.

-Clive

Wii is cool, and make a great buddy for a real console, like xbox 360 or PS3... I have an xbox 360 and I'm planning on buying a Wii just to play Mario...

macsack

Jan 23, 2008, 07:52 AM

So the 1Q 2008 ended in 2007? How does that one work then? We're in the second quarter now, in January?

Yes...Apple's fiscal year starts on October 1. If you care to learn more about it, I would go to www.sec.gov.

ImNoSuperMan

Jan 23, 2008, 07:59 AM

“This strong quarter caps an extraordinary year for Apple. Selling more than 39 million iPods and 5.3 million Macs while performing an incredibly complex architecture transition is something we are all very proud of,” said Steve Jobs, Apple’s CEO. “Looking forward, 2007 is likely to be one of the most exciting new product years in Apple’s history.”

link (http://www.macrumors.com/2006/10/18/apple-posts-546-million-profit/)

And we got iPhone, iPod touch, Apple TV, Nano Fatty and Leopard in 2007.

"We're thrilled to report our best quarter ever, with the highest revenue and earnings in Apple's history," said Steve Jobs, Apple's CEO. "We have an incredibly strong new product pipeline for 2008, starting with MacBook Air, Mac Pro and iTunes Movie Rentals in the first two weeks."

Hmmm. Incredibly strong new product pipeline for 2008.... Bring it on Apple.

craig1410

Jan 23, 2008, 08:29 AM

Apple's fortune surely isn't helped when leading IT online newpapers make basic Arithmetical blunders like this one. Can anyone spot the bleeding obvious mistake? It's a shame the author or editor didn't...

I've sent in a comment telling the author to go to the back of the arithmetic class although I doubt it will be published. What's the bet the article will magically disappear...

Source Here (http://www.theinquirer.net/gb/inquirer/news/2008/01/23/iphone-sales-10th-estimates)

Quote from article:
Heading: "Iphone sales are at around a tenth of early estimates"
Subheading "Q4 figures hide bad news"
By Tony Dennis: Wednesday, 23 January 2008, 11:27 AM

"THE INQ has been playing with sales figures for the Iphone and it would appear that they're dropping off real fast. They seem to have fallen to a tenth of what pundits were quoting.
Observers took the total of 4 million units in 200 days quoted by St Jobs of Cupertino and came up with a figure of 200,000 units a day.
The company has just said it sold 2,315,000 units in Q4 2007. That looks good because it sold almost half that number in Q3 - 1,119,000. But if you think about it, Apple increased the number of its markets from one to four in Q4.
So in theory it should have sold 4 million in Q4 alone. Now we get to the interesting bit. The company gave a cumulative total of 1,389,000 to the end of Q3. If you add in Q4's figure, you get 3,704,000.
So we've got a missing 296,000. Let's say there's 14 days between 30th December 2007 and the 200th day.
That's a mere 21,142 units a day. Nothing near the 200,000 units figure which everybody was banding about.
And as the INQ has said before, Q4 is always a brilliant month for phone sales because of the Xmas period.
No wonder Apple's stock is being punished."

OllyW

Jan 23, 2008, 08:36 AM

hagjohn

Jan 23, 2008, 09:08 AM

You can't compare sales/profit on one quarter to the one before it. You need to do it on the same quarter a year ago. that way you eliminate seasonal variables.

That's can be true... Apple's own outlook for the next quarter is down and that's part of the reason the stock has gone down... plus we are entering into economic down turn, which would also indicate a lower sales/profit.

overcast

Jan 23, 2008, 09:28 AM

People should start asking WHEN Apple is GONNA take over Microsoft...MS is DEAD.
You probably shouldn't participate in logical discussions.

Karpfish

Jan 23, 2008, 10:36 AM

The stock is plummeting, wow.

gnasher729

Jan 23, 2008, 10:38 AM

I've sent in a comment telling the author to go to the back of the arithmetic class although I doubt it will be published. What's the bet the article will magically disappear...

FYI: Article and your comment are there :D

Does nobody check these articles?

guzhogi

Jan 23, 2008, 11:15 AM

I'm not even sure what is even meant by this comment. What holes are missing in Apple's line-up first of all? Every product Apple makes is a niche product. It's their diversified selection that allows them to cover all the niches and post record sales and growth.

Please at least answer this: How is the Macbook Air anymore a niche product than say a Mac Pro/iMac/Mac Mini/Macbook/Macbook Pro/iPod nano/iPod Classic/iPod Touch/iPod Shuffle/iPhone?

I chose an iMac 2 years ago over a notebook, mac mini, and mac pro because I wanted a large screen, large hard drive, a nice graphics card to at least play wow and a fast intel processor, with the simplicity of an all-in-one for less than $2,000. I appreciate Apple making the 20" iMac that met all my needs and it still does to this day.

The same thing is happening with the Macbook Air, it's meeting the needs of the customers that need a computer like that. And remember, there is a "coolness factor" that is a part of us humans that Apple taps in to. (i still admire my white imac for its design and coolness inasmuch as I do for its reliability and ease of use) If I were on the go a lot and needed to have a computer with me a lot, I'd sure buy a MBA to supplement my iMac.

Anyway, I hope you at least see the MBA now as a product that is filling a niche market that Apple wasn't addressing. It is part of their total line-up now, not the only thing in their line-up. I hope you can also see that any product that Apple makes is a niche product targeted to a certain end consumer. Apple makes a whole slew of makes and models, all in different colors and sizes and features at different price points, and then are even customizable beyond that.

Very true. One hole that may be missing is a headless Mac somewhere between the Mac Mini & Pro. Just a mini tower case, multiple graphics cards and a single quad core proc. Partially for gamers, partially for people who just prefer towers instead of all in ones like the iMac. Whatever.

Another hole that's absolutely gaping is the sub $1000 computer market. The only computer Apple sells that's under $1000 is the Mac Mini, which is basically the bastard child of Apple's computer lineup. I wouldn't be surprised if Steve Jobs is like "The Mac Mini? What's that? Oh, yeah, that stupid little thing." If Apple really wants to get a bigger piece of the market, they really have to lower prices so more people can actually afford it. I know, the glamor of Apple products costs a bit, but not necessarily as much as it does. Everyone knows Apple charges a large premium for memory. Why can't Apple design computers that look good, perform well and are inexpensive?

l4t13

Jan 23, 2008, 11:19 AM

I havent put in a lot of time with the report yet because i do not trade apple; however, i'd be willing to say we get a decent pop back up if the market turns green. Apple wont turn green but it is oversold slightly. AAPL is victim to a decent report in a horrible market.

slackpacker

Jan 23, 2008, 11:25 AM

Stupid wall street.... its Basically Leagalized Gambling.... not the "Stock Market"

SO APPLE MADE A PROFIT.... WHERE IS MY PROFIT FROM OWNING Stock???:mad:

kaiwai

Jan 23, 2008, 11:30 AM

$9.6 billion in revenue?? Just to think only a few years ago Apple couldn't pull in that much in a year! :eek:

I remember it wasn't too long ago when people were praising Steve Jobs for pulling out a profit of $140million for quarter, after he came back to Apple. This is great news for all; more money, better products, hopefully a bigger software component to Apples profit make up; an Adobe buy out would really hit the spot when it comes to filling a mdd8le waredemand.

IJ Reilly

Jan 23, 2008, 11:39 AM

I'm sticking to my guns here. It's a time to buy a bunch of discounted Apple stock. I can't help but think this is an opportunity for someone to make a lot of money betting on a company weathered the last slow-down with aplomb by committing money to R&D rather than withdrawing into itself. Maybe it's the RDF, or maybe it's because I'm sitting in a coffee shop frequented by law students, professors, and other university types and half of the laptops are running OS X.

If I wasn't already sitting on a bunch of AAPL I might consider it. Markets tend to overreact on both the up and downsides. Nothing which has happened to AAPL's fundamentals or even the economy justifies a 35% punishment. Even if Apple's guidance for the 2nd quarter was to come true, it still would not. As I mentioned earlier, the last time AAPL took a hit like this, they were in fundamentally far poorer condition.

I think Apple announcing a stock buy-back would be a great tonic for investors right now. They should be doing something to restore investor confidence or this thing is going to turn into a major donnybrook.

hulugu

Jan 23, 2008, 12:04 PM

If I wasn't already sitting on a bunch of AAPL I might consider it. Markets tend to overreact on both the up and downsides. Nothing which has happened to AAPL's fundamentals or even the economy justifies a 35% punishment. Even if Apple's guidance for the 2nd quarter was to come true, it still would not. As I mentioned earlier, the last time AAPL took a hit like this, they were in fundamentally far poorer condition.

I think Apple announcing a stock buy-back would be a great tonic for investors right now. They should be doing something to restore investor confidence or this thing is going to turn into a major donnybrook.

A stock buy-back does appear necessary, if only to coddle an emotional market.

akadmon

Jan 23, 2008, 12:18 PM

For your viewing pleasure:

http://finance.yahoo.com/q/bc?s=AAPL&t=1d&l=off&z=m&q=l&c=

dante@sisna.com

Jan 23, 2008, 12:26 PM

For your viewing pleasure:

http://finance.yahoo.com/q/bc?s=AAPL&t=1d&l=off&z=m&q=l&c=

That Graph is Great.

It's tanking fast.

Thanks for posting that: was great to see the slide in visual form.

Lord Sam

Jan 23, 2008, 12:32 PM

Oh my god! That's incredible. I can't belive that after that announcement, their stock continues to plummet! I guess it's just the weak market, but you'd think that a company like Apple with all their great announcements, would be able to beat the market, and rise. But no. I wonder why:confused:

digitalbiker

Jan 23, 2008, 01:09 PM

AAPL is victim to a decent report in a horrible market.

That just isn't true! You can't blame this all on the down market. Apple has fallen from above 200 in December to under 125 in January. That drop is enormous. It far exceeds the recent down turn of most stocks.

Investors just believe that Apple has performed as well as they are going to perform and are not a good buy for the future.

They might be right but then again if AAPL over performs next quarter then we will see a reversal. I only wish I would have sold my stock at 200.

macshark

Jan 23, 2008, 01:52 PM

Probably the single most important fact that is being ignored by most investors is that Apple is significantly underreporting their earnings. Reported net profit is $1.56B or $1.76 per diluted share. Positive cash flow from operations is $2.76B or $3.11 per diluted share.

Basically, there seems to be about $1.2B difference between the reported net profit and the actual cash flow. What is the source of this difference? My guess is the deferred iPhone revenues result in about $500 in "deferred profit" for each iPhone sold. This profit will be recognized over the next 8 quarters instead of the current quarter. If Apple can keep selling iPhones at the rate of approximately 2.5 million units per quarter, we will see an incremental 125M profit each quarter for the next 7 quarters. This means there will be close to an additional $1B net profit from previous quarters in two years, assuming that the iPhone unit sales stay flat and Apple's profit margins for iPhone also stays flat. (The more realistic scenario is higher unit sales and lower profit per unit sold, but the overall profit will most likely balance out.)

It doesn't help that the financial analyst community is currently in a very pessimistic mood, and Apple stock just got hammered down to $120 range due to lower iPod unit sales (despite the fact that ASP went up 72%) and the conservative outlook for the next quarter. Still, with $3 per share in actual (as opposed to reported) earnings, Apple is on track to meet earnings of $6-8 per share per year. One would think this might justify a stock price of a lot more than current value in the long term...

surferfromuk

Jan 23, 2008, 02:29 PM

Irrespective of the share price Apple still makes the best products in the market and they will continue to sell in high volumes to people who understand that.

Steve jobs and all the Apple employees will carry on busily creating wonderful things and the 8-9% of the population who buy them will keep doing so.

If anything I'd say the lower end of the PC market is more vulnerable because it's people who buy cheap Dell junk that are going to slow down there buying!

So fear not Apple will be fine - especially since they are debt free with a phenomenal $18billion in cash!

It's actually like a 'big sulk' that Apple haven't released iPhone II if you examine it closely...well, they will soon enough...

bigpics

Jan 23, 2008, 03:03 PM

The stock market ... is a shell game so that rich folks can fleece poor folks. There is no logic, just greed.

Wake up!
Apple 1Q 2008 Results: Record $1.58 Billion Profit.
Let's see... ....compare stock/bond market funded businesses from say a century ago... ....in terms of the a) total shareholder wealth, b) number of people employed in them, c) the average income (adjusted for inflation) of those workers, d) the longevity, health and free time of both shareholders and employees -- which, of course, is based largely on the development and implementation of technologies developed in that free market system.

No wait, do the math. I'll wait.

Now that those who want to return to the economy, work weeks, child labor and union laws, general longevity and other amenities of 1908 have left, I'll continue......

Either that stock market's one damn pretty good greedy shell game or those "poor folks" were hanging on to a lot of fleece: enough to make the (yes, Virginia, still imperfect) world hugely healthier and wealthier on balance than it's ever been. (I knew you couldn't trust that fleece-hoarding lot.)

But I do hope the golden fleecing continues, albeit if interrupted now and again by periods of overexpansion followed by painful corrections.

Investing in homes and stocks is not only NOT a shell game if practiced patiently and prudently -- and in the case of stocks by having a portfolio that's properly (and simply) diversified -- but in fact these two classes of assets have returned more wealth to those who own and hold them than any others over the long term. Period.

This does not apply to the type of investor (small speculator) who finally got excited about AAPL and dumped in the family jewels at somewhere north of $180 and who has just bailed today, but to the person who patiently assembles a small collection of mutual funds divided between thousands of companies of all types and sizes and then keeps adding to it over their working life.

In fact Vanguard, Fidelity and many others have single fund products that do exactly this in one combined investment -- called variously life-cycle funds, target retirement date funds, asset-allocation funds, etc. Just invest, add periodically and otherwise, set and forget until retirement.

Those who aren't pros (and even some pros) who glom on to hot stocks are not being forced by the greedy to invest in this manner, it's their OWN greed (and lack of homework in what to invest in) to "get rich quick" and then their subsequent panic when the run up inevitably corrects.

Shell game, my sweet patootie. The economic ignorance -- and political soft-headedness -- of many of the technologically sophisticated never ceases to amaze me.

IJ Reilly

Jan 23, 2008, 03:05 PM

It doesn't help that the financial analyst community is currently in a very pessimistic mood, and Apple stock just got hammered down to $120 range due to lower iPod unit sales (despite the fact that ASP went up 72%) and the conservative outlook for the next quarter. Still, with $3 per share in actual (as opposed to reported) earnings, Apple is on track to meet earnings of $6-8 per share per year. One would think this might justify a stock price of a lot more than current value in the long term...

Sure. What I'd watch is the analyst targets for one-year share price. If these start being adjusted down sharply, then I would say the fallout could be somewhat justified. If they don't, then what we're seeing is the emotions of the market being played out.

phgreer

Jan 23, 2008, 03:10 PM

l4t13

Jan 23, 2008, 03:32 PM

That just isn't true! You can't blame this all on the down market. Apple has fallen from above 200 in December to under 125 in January. That drop is enormous. It far exceeds the recent down turn of most stocks.

Investors just believe that Apple has performed as well as they are going to perform and are not a good buy for the future.

They might be right but then again if AAPL over performs next quarter then we will see a reversal. I only wish I would have sold my stock at 200.

I know it has dropped more than the market; however, when the market is rising apple outperformed.

I think apple was doomed if they didnt smash estimates. Decent reports aren't cutting it right now.

If you hold long term, I'd continue to hold. I am a short term trader though so from the way apple stands now, I wouldnt trade it. I have never traded it though so I am by no means an expert on aapl.

gwangung

Jan 23, 2008, 05:42 PM

Probably the single most important fact that is being ignored by most investors is that Apple is significantly underreporting their earnings. Reported net profit is $1.56B or $1.76 per diluted share. Positive cash flow from operations is $2.76B or $3.11 per diluted share.

Basically, there seems to be about $1.2B difference between the reported net profit and the actual cash flow. What is the source of this difference? My guess is the deferred iPhone revenues result in about $500 in "deferred profit" for each iPhone sold. This profit will be recognized over the next 8 quarters instead of the current quarter. If Apple can keep selling iPhones at the rate of approximately 2.5 million units per quarter, we will see an incremental 125M profit each quarter for the next 7 quarters. This means there will be close to an additional $1B net profit from previous quarters in two years, assuming that the iPhone unit sales stay flat and Apple's profit margins for iPhone also stays flat. (The more realistic scenario is higher unit sales and lower profit per unit sold, but the overall profit will most likely balance out.)

Nice point (this is in line, isn't it, with that $20 charge they're tacking on to the Touch and all....)

aliquis-

Jan 23, 2008, 07:16 PM

I had to vote negative on this one because Apple should care more about their costumers than their share holders and fix the prices.

luminosity

Jan 23, 2008, 07:22 PM

That just isn't true! You can't blame this all on the down market. Apple has fallen from above 200 in December to under 125 in January. That drop is enormous. It far exceeds the recent down turn of most stocks.

Investors just believe that Apple has performed as well as they are going to perform and are not a good buy for the future.

They might be right but then again if AAPL over performs next quarter then we will see a reversal. I only wish I would have sold my stock at 200.

I learned that a long time ago, and I'm only 26. When you buy something relatively low, and it gets to that kind of extreme price, you should either sell immediately or have already sold well beforehand. Don't ever get greedy (not to say you were, but when it gets that high, there's really no point in holding on to it).

IJ Reilly

Jan 23, 2008, 07:36 PM

I learned that a long time ago, and I'm only 26. When you buy something relatively low, and it gets to that kind of extreme price, you should either sell immediately or have already sold well beforehand. Don't ever get greedy (not to say you were, but when it gets that high, there's really no point in holding on to it).

There's no such thing as an "extreme price" in the stock market.

The decision to sell is the hardest in all of investing. Ultimately, it must be a matter of how you feel about a company's prospects. If you believe they've peaked, or you have another need for the money, or a better place to invest it, sell. Otherwise, you're a damn fool to sell to a stock just because it reaches an arbitrary price. That's not investing at all, it's trading.

luminosity

Jan 23, 2008, 08:23 PM

There's no such thing as an "extreme price" in the stock market.

The decision to sell is the hardest in all of investing. Ultimately, it must be a matter of how you feel about a company's prospects. If you believe they've peaked, or you have another need for the money, or a better place to invest it, sell. Otherwise, you're a damn fool to sell to a stock just because it reaches an arbitrary price. That's not investing at all, it's trading.

I think of it as being cautious or conservative. If you bought a stock for $25, and it reaches $150 or $200, there's no point in holding on to it any further. It's likely overvalued at that point, or will probably end up losing value at some point for whatever reason (market decline, company decline, both, etc.). And probably sooner rather than later. Google-esque companies are extremely rare, as we all know, and when something reaches extreme highs, best to sell.

At $200, there's really no point in holding on to Apple stock. Sell it, reap the profit and invest in something else, or just wait until Apple share price declines, and then buy more and do it over again.

I'm not a fool for selling my Apple stock at $150 or 200 if I bought 200 shares for $20 (not that I did that, but some have). I will have made tens of thousands of dollars in profit, for use in other investing or personal use. When the price declines, it's just an abstract, academic problem that doesn't concern me. I'll have already made my profit. There are so few companies able to stay at anything more than $100 for anything more than a short while.

IJ Reilly

Jan 23, 2008, 08:54 PM

I think of it as being cautious or conservative. If you bought a stock for $25, and it reaches $150 or $200, there's no point in holding on to it any further. It's likely overvalued at that point, or will probably end up losing value at some point for whatever reason (market decline, company decline, both, etc.). And probably sooner rather than later. Google-esque companies are extremely rare, as we all know, and when something reaches extreme highs, best to sell.

At $200, there's really no point in holding on to Apple stock. Sell it, reap the profit and invest in something else, or just wait until Apple share price declines, and then buy more and do it over again.

I'm not a fool for selling my Apple stock at $150 or 200 if I bought 200 shares for $20 (not that I did that, but some have). I will have made tens of thousands of dollars in profit, for use in other investing or personal use. When the price declines, it's just an abstract, academic problem that doesn't concern me. I'll have already made my profit. There are so few companies able to stay at anything more than $100 for anything more than a short while.

Again, there's no such thing as an "extreme price." The price of any company is governed, over the long run, by how much money they make. Apple's profits have soared along with the stock price. The reason you don't see many stock prices over $100 is not because they drop, but because the shares are split. This changes the value of the company by $0.

Of course there's a point to holding, no matter what price a stock achieves, if you believe the company's prospects are favorable. This is the only reason to buy a stock in the first place. Sell if you need the money or believe it's better invested elsewhere, but not because it reaches some arbitrary price.

What you suggest is not investing, it is trading, and certainly not conservative. Few know how to trade successfully. They do it full-time, and guess wrong quite often. Amateurs who try it are begging to get burned. Buying what you know and holding it for as long as you believe the stock will perform well over time is the only sensible strategy for investing.

luminosity

Jan 23, 2008, 09:27 PM

IJ Reilly

Jan 23, 2008, 10:53 PM

I simply disagree. When something reaches a share price of $200, ditch it. Take what you've made and go elsewhere. I agree about holding things long term, but that often depends on more normal growth patterns for the average company.

I don't for a minute believing in specifically investing for doing that sort of thing regularly, or even at all. But, it seems to me that if share price goes up high enough, there's little point in hanging on to it. It will eventually go down and your stock will lose value as a result of that. Or maybe I've just seen too many sharp drops in my adult life already.

You seem to have some completely erroneous ideas about share price and what it means. The dollar price of a share is effectively completely arbitrary. There is no such thing as "high enough." A company can elect to split shares on a routine basis (something Apple used to do), or not -- but either way this does not in any way, shape or form have an impact on the value of your investment, let alone whether the shares are at any time "high enough."

I've held onto most of my AAPL shares for nearly 11 years. They've gone up, they've gone down. But overwhelmingly, they've gone up. It would never at any time have been a good decision my part to sell, unless I had some premonition about when it was going to peak and when it was going to bottom out. Good luck with guessing that right. More often than not, you'll get the fuzzy end, timing it all wrong, and you'd have been better of holding. Again, I am describing the difference between investing and trading.

luminosity

Jan 23, 2008, 11:00 PM

I'm afraid my personal experience simply does not hold up to what you're saying. I'm sure you're right in most cases, but my experience has shown me differently.

When you see money disappear in just a few months and never come back, you get the idea that maybe it would have been better to take the gains you had and then move on. No amount of holding on has seen AOL/Time Warner improve its fortunes since 2001, or Sun Microsystems (tiny improvement, but vastly far away from its peak before the tech bubble exploded).

Why buy anything at all if you're not going to eventually sell it for profit? To what end do you hold stock in a company? I just don't see the point in it. I'm not talking about day to day trading, but eventually, there must come a point where you're not going to get much more by holding on and anything more is diminishing returns at best.

coolant113

Jan 23, 2008, 11:03 PM

What an amazing company!!! go apple!!! keep up the good work!!:apple::apple:

digitalbiker

Jan 23, 2008, 11:32 PM

You seem to have some completely erroneous ideas about share price and what it means. The dollar price of a share is effectively completely arbitrary. There is no such thing as "high enough." A company can elect to split shares on a routine basis (something Apple used to do), or not -- but either way this does not in any way, shape or form have an impact on the value of your investment, let alone whether the shares are at any time "high enough."

I've held onto most of my AAPL shares for nearly 11 years. They've gone up, they've gone down. But overwhelmingly, they've gone up. It would never at any time have been a good decision my part to sell, unless I had some premonition about when it was going to peak and when it was going to bottom out. Good luck with guessing that right. More often than not, you'll get the fuzzy end, timing it all wrong, and you'd have been better of holding. Again, I am describing the difference between investing and trading.

I agree with you! AAPL has been a great stock to hold over the past 8 years. Thats about how long I have held mine. I like their products and when OSX was announced I new it was going o be a success, along with the new fleet of products.

Just exactly figuring out when to sell and buy is difficult with Apple stock. If you would have asked me a year ago, I would have said $100.00 was high. However I held on and it climbed over $200.00. Go figure.

Even though AAPL stock has fallen, I still think it is a good hold because AAPL has consistently outperformed the market.

How can luminosity know that $200.00 is too high. In a few months AAPL could outperform it's targets, the recession may not be as deep as thought and AAPL could hit $250.00

luminosity

Jan 23, 2008, 11:41 PM

Hutch98R1

Jan 23, 2008, 11:43 PM

I just placed an order!

After reading all this, ULTIMATELY I decided:
I like Apple and their products
$18B in cash is a lot of money
I think they are on a great path in the future

Yes, $140 may still be a little high, but I don't think it still overrated and would consider it a decent buy. If it drops more...fine. It will rebound. I am in it for the long run.

digitalbiker

Jan 24, 2008, 12:29 AM

How can luminosity know that $200.00 is too high. In a few months AAPL could outperform it's targets, the recession may not be as deep as thought and AAPL could hit $250.00

That would be terrific if it happened. Just one minor thing: What would you really gain if it went that high? Is the opportunity cost really worth it to you? I'd rather sell at $150 and be glad I did well than hoping the company kept going up up up.

I think that's the kind of "more more more" approach that's gotten the economy in such perilous shape. It's what drove the housing market to such insane levels. Your house might be worth $400K after buying it for $300K, but hey, if you wait longer, it might be $500K! It's just not realistic.

It's not about greed or "more more more". It's about investing vs. trading. I invest long term because in 10 or 15 years when I sell I want to beat inflation and/or the long term performance of S & P 500.

Sure I could buy, sell, buy, sell, buy, sell but it takes too much research and time and even then most of the time you end up losing as much as you make. Generally I invest long term in a large diversified portfolio and occasionally I buy some of my favorite stocks to hold because I like the direction a company is headed.

luminosity

Jan 24, 2008, 12:50 AM

It's not about greed or "more more more". It's about investing vs. trading. I invest long term because in 10 or 15 years when I sell I want to beat inflation and/or the long term performance of S & P 500.

Sure I could buy, sell, buy, sell, buy, sell but it takes too much research and time and even then most of the time you end up losing as much as you make. Generally I invest long term in a large diversified portfolio and occasionally I buy some of my favorite stocks to hold because I like the direction a company is headed.

I do understand all that, and it's very sensible.

Having said that, if you wait 10-15 years, do you think selling your Apple stock then would net you more than it would if you sold it at $200?

I think companies like Apple (at least in the past couple years) are exceptions to the sensible and reasonable rules of investing you and others have mentioned, and thus require a somewhat different approach.

IJ Reilly

Jan 24, 2008, 01:09 AM

I do understand all that, and it's very sensible.

Having said that, if you wait 10-15 years, do you think selling your Apple stock then would net you more than it would if you sold it at $200?

I think companies like Apple (at least in the past couple years) are exceptions to the sensible and reasonable rules of investing you and others have mentioned, and thus require a somewhat different approach.

The problem with your argument is that it is predicated on knowing when a stock has peaked. Failing that knowledge, you have to rely on more general knowledge about a company's future propspects. I never said "never sell." In fact I clearly set out criteria for when it makes sense to sell.

luminosity

Jan 24, 2008, 01:19 AM

The problem with your argument is that it is predicated on knowing when a stock has peaked. Failing that knowledge, you have to rely on more general knowledge about a company's future propspects. I never said "never sell." In fact I clearly set out criteria for when it makes sense to sell.

But that itself is predicated on caring on having the stock whenever it does peak. If that doesn't matter to me, I can be happy with a relatively large profit, even if it isn't the absolute most I could have made later on.

To me, one criteria would be to sell when the company's stock price goes well in excess of record prices (or a price not hit in many, many years). Or just goes well above what seems reasonable (subjective, of course) for the time.

sitarro

Jan 24, 2008, 04:11 AM

Too bad that doesn't include the $20 iPod apps, eh? :p

You do know that it's 20 bucks for a copy of Snood, right? 20 dollars won't take you and a friend to see a lousy movie...... when will the whiners get over it?

sitarro

Jan 24, 2008, 04:14 AM

That just isn't true! You can't blame this all on the down market. Apple has fallen from above 200 in December to under 125 in January. That drop is enormous. It far exceeds the recent down turn of most stocks.

Investors just believe that Apple has performed as well as they are going to perform and are not a good buy for the future.

They might be right but then again if AAPL over performs next quarter then we will see a reversal. I only wish I would have sold my stock at 200.

People like you who start crying as soon as a stock drops are the reason it is where it is, same as with the gas futures. Amateurs should stay out of the stock market.

IJ Reilly

Jan 24, 2008, 12:11 PM

But that itself is predicated on caring on having the stock whenever it does peak. If that doesn't matter to me, I can be happy with a relatively large profit, even if it isn't the absolute most I could have made later on.

To me, one criteria would be to sell when the company's stock price goes well in excess of record prices (or a price not hit in many, many years). Or just goes well above what seems reasonable (subjective, of course) for the time.

IOW, guessing. As I've discovered painfully, I'm not especially good at guessing.

More specifically, AAPL's share price has been supported by the company's growth in profits, which have been spectacular. This is why the stock has set so many record highs. AAPL was probably getting a bit ahead of itself when it touched $200 last month, but no so far ahead that its seemed completely unreasonable, given the company's amazing growth rate.

The stock market is a very emotional place. Unless you are a professional trader who knows how to read those emotions, then you are better off buying what you know and holding on for as long as you feel the investment is fundamentally sound, and as best you are able, ignoring the daily, weekly and even monthly market gyrations. In all the years I've been a stock market investor, this is the strategy which has worked the best for me.