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Apple's 2012 Annual Report: More Employees, More Office Space, More Sales
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Not to mention it's crippled by the usual 13" issues: dual core, integrated GPU, miniscule storage, and a pathetic RAM limit. Why Apple won't allow you to spec it up to match a 15" is beyond me.
If you actually read the 10-K report Mac sales increased by 7% this year over last. This is in the backdrop of 6-7 % decrease in sales by Dell and HP over same period. I think the Retina books will be a big seller this Q. They just need some time to penetrate the market. Most people can't buy an iPhone 5, an iPad Mini, and a Retina book all at once but they probably have their eye on their next target.
Careful there, it sounds like you're implying that overseas manufacturing isn't putting food on the table for people. To me, that says 1) You think overseas manufacturing uses robots instead of people, or 2) Chinese, Brazilians etc aren't people. Which is it?
I'm sorry but I'm sick of self-centred nationalistic patriotism. I recently found out that the average Australian gives less than 1% of their average income to charity, it sickens me.
A low P/E ratio of 13.48 and a current market price of 595.32 is not a bubble. If you want a bubble, look at AMZN with a P/E ratio of 3,112.71 and a current stock price of 232.89 as of market close on 10/31. I attribute the recent selloff to three factors, 1) profit taking, 2) overall market conditions, 3) market panic and fear.
I agree with the super-high expectations not being met. However, those expectations were from the street and not in-line with reality and Apple's own guidance. The only people who know Apple is well, Apple.
The execs getting fired is far more minuscule compared to Jobs stepping down over a year ago. The day Jobs stepped down as CEO, AAPL was down $50 in the after market and recovered in days.
So glad I saw two of these things coming and sold at $700
Good for you but as the saying goes, hindsight is always 20/20. If you want to get lucky again, now is a good buying opportunity.
Not necessary a good buying opportunity here. The two question every Apple investor has to ask is the margin going forward and volume of Iphone and Ipad going forward. Apple margin go down from 43+% in F3Q (2Q12) to 40% in F4Q and management project a margin of 36+% in F1Q13. Question is what will the gross margin be in F2Q13, F3Q13 and F4Q13. Every product that Apple put out now has low gross margin than the product before (that include Iphone 5). And Ipad mini has the lowest margin of them all. Google is hell bent to try to lower Android tablet and smartphone cost. Apple decide to lower tablet price to respond to Nexus 7 and Amzon fire HD and ignore Nexus smartphone.
The second question is volume. We are going to have a very front load Dec and Mar Q. But what is the sales going to be in 2Q13 and 3Q13 when all the product line are 6 months or older. Apple does not get high PE because there is a lot of question about how Apple will do as they replace their product line over time with more and more expensive device. It will hit the gross margin with no mercy...
Let's suppose Apple was a company that was not growing, but simply maintaining current market. At a PE of 13 and a dividend of 1.8%, it would be considered a solid buy. But Apple is not stagnating. They are continuing to grow. Though they are not doubling year-over-year like they were before, they're still growing earnings about 30% YOY. To not consider the stock a buy, you'd have to believe that earnings would shrink in the coming year or two. Not just grow more slowly, but actually shrink. Considering that earnings have exploded in the past few years during a craptastic economy, and despite the continuing economic crisis in Europe, what do you think is going to happen when the economy actually turns around?
None of the hardware company work that way. They go with the boom and bust product cycle. Why is that a problem to believe Apple earning CAN (not will but can) shrink in the future? Apple already project yoy earning drop in F1Q13 (4Q12). Gross margin is the key. And Apple saw raising gross margin in the last few year on top of exceptional unit growth. If margin go from average of 41-42% from fiscal 12 to average of 31-32% in fiscal 13, Apple need to sell 25% more unit to just stay even in earning. They project the gross margin for F1Q at 36% as compare to 40% in 4Q12. Just look at how Apple priced Ipad mini and you can see the issue. Ipad mini, at best, has high teen, low twenty kind of gross margin. They have some discussion in the earning conference call and the discussion is not encouraging. The question is what will happen to Iphone, would they need to price it lower in the future in respond to competition in 13?? If your answer is no and you think volume will grow also, then the stock will be a buy. But if you think the gross margin will shrink, then the stock may be a short...
http://www.morningstar.com/earnings/earnings-call-transcript.aspx?t=AAPL&pindex=5
The iPhone 5, iPad Mini, iMac, MacBook Pro 13-inch, iPod Touch and iPod Nano have completely new form factors with great new features and we've never before introduced so many new form factors at once. All of these products have higher cost than their predecessors and therefore lower gross margins as they are at the height of the cost curve. This has been the case with new products in the past, so nothing new. The difference this time is the sheer number of new products we are introducing in a very short period of time. Additionally, we lowered the price of the iPhone 4S and iPhone 4 delivering incredible value to our customers. We head into this holiday quarter with the strongest iPhone lineup that we have ever had with the iPhone 4 starting at free in the subsidized markets. We also added the iPad Mini to our iPad line up. The iPad Mini has the full iPad experience and we priced it aggressively at $329, delivering incredible value to our customers. Its gross margin is significantly below the corporate average.
I was surprised at that! It seems strangely honest for a corp like Apple to advertise vulnerabilities And
potential weakness like that!
I've had a 1994/95 Powerbook (can't remember what model), a 1999 Wall Street Powerbook that gave me 6+ useful years, and a 1996 MacBook Pro that lasted over 5 years (early 1996-2011 and still runs as a secondary machine) before I got a newer 2011 model. Of the three, the only issue I ever had was the hard drive in the old powerbook needed replacement once under warrantee. Otherwise, each has given me my money's worth for sure.
BTW... almost all computers (and parts) come from China, Twain, and other countries in that region. It's not just Apple but more of an issue with the US and why we can't seem to make it attractive to keep these types of manufacturing jobs here.
All publicly-traded companies are required by law in the 10K filing to state, in a broad fashion, the particular challenges that could materially affect business success/profitability. It's a document geared toward hardcore and institutional investors, the kind that may decide to pour tens if not hundreds of millions of dollars into an individual stock.
The document is governed even down to its physical appearance. It's meant to be a baseline from which you can compare companies, even across industries, and get a clear picture of its health and operations at a point in time.
I don't know if you have taken any economic class in high school or college. You can price a mechandize at any price, the key is to find out the demand at that price. As a business you try to maximize the profit by running different pricing scenario. At higher price,they will sell less units but each unit will have more profit. At lower price, they will sell more but each unit will carry less profit. All the Android maker, including Samsung, would love to price their product at the saem level as Apple. The only trouble is that if they do, the sales volume will drop off to an unacceptable level. Asus indicated that Nexus 7 is selling around 1m unit a month rate at 199 starting price. Can you imagine how many unit will they sell if the same Nexus is priced at $329 like Apple???
Apple price their mechandize high because they have enough customers that are willing to pay for them. Either Apple customers are all suckers or they do see enough value in Apple stuff that make them willing to pay more for them.
There was a small bubble. I'm not trying to compare Apple to other companies, and I'm not one of those "Apple is gonna die!" people, but there was a small bubble I think around the $700 mark. That is, too many people were buying Apple stock purely because of speculation that other people will buy. This can be caused by a stock reaching a new hundreds' digit ($699.99 vs $700).
Also, the P/E ratio is not exactly how you look for bubbles. P/E can be high simply because investors think that the company will do well later, as opposed to investors thinking that other investors will buy. This has got to be the case for Amazon; their earnings dropped dramatically very recently, so this bumps the P/E. They were at about 200 P/E before, right?
I do plan to buy soon. I'm waiting for a little European scare first. I have to trade almost purely using triggers, by the way, which is annoying and requires me to be very sure about what I'm doing, so I have to keep the risk low.
Apple customers are suckers to a certain extent but then it's not exactly a moral issue that Apple have to adress. They're perfectly within their rights to say 'if you can't afford it. Tough.' I'd love a Mac but their ridiculously expensive compared to Windows PC's. I blame Microsoft. If they hadn't flooded the market with cheap Windows computers then there'd be more choice and Apple wouldn't so easily be able to exploit people who don't want a Windows PC.
Thanks for the unneeded economics class. You might want to focus on reading comprehension. I never said it wasn't financially the right price for Apple. I just said the laptop is NOT worth even close to $1699. All you need is google and a web browser to figure that out online. Similar laptops with super hi-res screens are in the $1000-$1200 range with twice the SSD Space or more.
That is the whole reason to bring the economic 101 on supply and demand. You are taking a position that it is way over price. But there are obviously a lot of people who think differently than you. If it is financially the right choice for Apple. All you are saying is that you are not in their target audience group (me neither, I have a 800 Toshiba window laptop that I use once every 3 months while I am on a trip. I won't buy any Apple laptop neither). It is a thread to discuss Apple quarterly report. Our individual choice have very little to do with Apple earning. Consumer as a group do.
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I am not sure I understand what you trying to get at.. You almost make it sound like consumer are stupid and didn't know how to spend their money wisely. I bet to differ. Apple target the higher earner and get what the high income folk need in a laptop. And hence they have a bunch of royal follower. I use Window laptop myself and I have no problem on someone who like Mac better and willing to spend more money. Why should you?
Becsause basically I think Apple are being greedy charging nearly 3 times as much for a Macbook compared to some Windows laptops that can do pretty much the same thing. If there was a more diverse range of computers out there so people didn't just have one alternative to Windowsmthen Apple probably would have to sell Macs at a more reasonable price because there'd be a more comptetiitive market. Apple couldnt put so high a premium on Mac's...and I'd go that extra mile to buy one. As it is I'm going to have to go that extra 2 or 3 miles and resent it. Apple are free to target the higher earners and I'm free to be narked about it!
yes, of course you are free to nark about their practice. But charging what the market will bear is the foundation of capitalism. And that is how our economy is builded on.
In 3Q12, Apple sell 156B worth of "stuff" and they net 41.73B of income after all the expense and tax. So about 26.66% of net margin. Microsoft sell 16.0B of "stuff" in 3Q12 and net 4.4B of income after expense and tax for 27.5% of net margin. And I don't see anyone arguing Microsoft charge too much for their "stuff". IBM used to have over 80% net income margin on their system 370 software back in the 70 and 80s. On the other hand, there are plenty of companies who has negative net margin and loss money hand over fist and we won't be sad for them.
http://www.sec.gov/cgi-bin/viewer?a...sion_number=0001193125-12-444068&xbrl_type=v#
http://www.sec.gov/cgi-bin/viewer?a...sion_number=0001193125-12-427209&xbrl_type=v#
Well just for the record. It's just the Mac I find too pricey. What's the profit margin on a Mac? I bet it's well above average. I think the idevices are excellent value for money.
Charging what the market will bear is proving my initial point. The market is small in regards to choice. If it wasn't Apple would probabky have to price the Mac lower. Windows has skewed the market becuase OEM's can get their O/S cheap therefore they don't have to make their own and compete with Apple catering to people's wim's and desires vis-a-vis design appeal. The PC market is basically the Mac on one hand and a race to the bottom on the other. Apple take advantage of that and make people pay through the nose for a computer that had hardware appeal.
???? Have you look at pricing of any luxury goods at all? Channel, LV, designer dress label, Victory Secret "stuff".... All of them cater to a small group of high income individuals and charge "outrageous" price when compare to the manufacturing cost. And we never label them "greedy", so why is Apple Mac line is so special? The really "greedy" product in Apple line up is the smartphone. The gross margin is in the range of 50 to 60% with a net margin in the range of 35+-%. And I thought the competition is pretty stiff in the smartphone area and consumers has tons of choice. The fact is that consumer are pretty smart. Apple product in general are priced higher than competition because a big group of consumer derive higher value of owning their product and hence willing to pay higher price.
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???? Have you look at pricing of any luxury goods at all? Chanel, LV, designer dress label, Victory Secret "stuff".... All of them cater to a small group of high income individuals and charge "outrageous" price when compare to the manufacturing cost. And we never label them "greedy", so why is Apple Mac line is so special? The really "greedy" product in Apple line up is the smartphone. The gross margin is in the range of 50 to 60% with a net margin in the range of 35+-%. And I thought the competition is pretty stiff in the smartphone area and consumers has tons of choice. The fact is that consumer are pretty smart. Apple product in general are priced higher than competition because a big group of consumer derive higher value of owning their product and hence willing to pay higher price.
heh heh, so anyone who make superior product that make a lot of money is greedy in your book? Did you ever ask for a raise? So if you do a good job and ask for raising that is more than your peer, you are greedy too?
I can understand you don't want a Mac because it is higher price. I don't either. I have a PC, a window laptop, an Samsung Infuse, and an Ipad 3. So I buy what is valuable to me. But to label Apple greedy just because they produce a superior product that a segment of consumer want and willing to pay the higher price is hypocritical. We price our own labor the same way. I don't want to work for minimum wage if I can find a better job offering. I charge what the labor market will bare for my service and so is Apple and any other commercial companies in the world.