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'Nightline' Looks at Apple's Woes as Stock Declines 20% from All-Time High
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huh?? record profit margin???? Did you hear the conference call and read the company guidance for 4Q12? The gross margin is projected to be 36% 40% in 3Q12 and 43ish% in 2Q12). 4Q12 is the first Q for a long time that YOY earning is projected to go down because of the low gross margin and lower volume (Iphone 5 is projected to sell 39M by analysts as compare to 4S+4+3GS sold 37M in 4Q11) You can easily build a case for Apple stock price to be in the $400 or $800 at this point depending on your view on the gross margin and unit volume of Ipad 4, Ipad mini, Iphone 5, Iphone 6 and Ipad 5. Mac, Ipod, Itune sales don't count since they are too small to affect the overall earning. And the one major pending issue for the stock is what will Apple do to low end smartphone. If they can produce a low end smartphone with 30%+ gross margin (Iphone 4s is in the 50-60% gross margin. and Iphone 5 is probably in the low 40% and below now given all the problem in scaff gate warranty cost and shipping cost for flying Iphone 5 from China to US instead of shipping through sea), the stock will be golden for another couple year.
There is no next big thing in Apple horizon. So it is either doing better in Iphone and Ipad earning or the stock will suffer...
http://seekingalpha.com/article/952...f4q12-results-earnings-call-transcript?page=4
As we indicated previously, revenue in that 14th week last year was approximately one 14th of the quarters total revenue. We expect revenues to be about $52 billion compared to $46.3 billion in the December quarter last year. We expect gross margin to be about 36% reflecting approximately $90 million related to stock-based compensation expense.
We expect OpEx to be about $4.05 billion including about $485 million related to stock-based compensation expense. We expect OI&E to be about $380 million, and we expect the tax rate to be about 26%. We are targeting EPS of about $11.75.
We head into this holiday quarter with the strongest iPhone line-up that we have ever had with the iPhone 4 starting at three 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.
So in summary, we expect our gross margin to decline by about 400 basis points sequentially. We expect the benefit from positive leverage on a sequentially higher revenue and a greater mix of iPhone, but we expect these benefits will be more than offset by a number of factors.
http://seekingalpha.com/article/952...arnings-call-transcript?page=5&p=qanda&l=last
First, margins on new products are lower than their predecessors including the iPhone 5 and we have been aggressive with the iPad Mini. Second, weve lowered the price of the iPhone 4S and the iPhone 4. Third, we will experience transitionary cost associated with multiple new product ramp. Fourth, the high anticipated volume of iPhone and other new products will generate significantly greater deferred revenue sequentially.
As you are aware, we defer a portion of our revenue with every device we sell, and amortize it back into revenue over the l
Oh please......
Geez. Apple was always undervalued during Steve Jobs lifetime and he had an adversarial relationship with Wall Street interference in his business. What I hope this means is that "in the recent corporate shake-up", I hope Tim Cook also finally kicked out those jerks from Goldman Sachs that he let in after Steve Jobs died.
Geez. Apple was always undervalued during Steve Jobs lifetime and he had an adversarial relationship with Wall Street interference in his business. What I hope this means is that "in the recent corporate shake-up", I hope Tim Cook also finally kicked out those jerks from Goldman Sachs that he let in after Steve Jobs died.
Who has more risk of "missing the mark"? A product company who could run out of innovation? Or a mega reseller who sells just about everything anyone wants.
Stock prices factor in risk. Amazon is low risk. Technology companies are high risk.
When they announce the new iTV in June that's all investors will want to know.
Also the new redesigned Mac Pros.
China is tough when you can get one of these from the home team.
Even here stateside I see something like the Nexus lineup for $349 without a contract and wonder the of the appeal of other phones on contract.
Me too, apart from the disappointing 13" retina MBP. The new iPhone 5 is great and I'm glad they didn't make it any bigger, who wants a mini-tablet in their jeans pocket?!?
Nice surprises were the unexpectedly recently revamped new iPad and just how good the mid-2012 MBA upgrades were (especially USB 3.0 and the 8Gb RAM option, and the HD 4000 graphics are a major improvement), which kind of makes the 13" MBP and rMBP redundant right now. The new thin iMacs are sweet too.
They're taking a while to release a new Thunderbolt display (with USB 3.0 etc.), but that's hardly going to be a cash cow for Apple.
Apple are starting to face some stiff competition in the smart phone and tablet markets now, though, from HTC and now particularly from Samsung. Also, will be interesting to see what impact Windows 8 has on the smartphone/tablet market.
OS X 10.8 is okay, evolutionary, not revolutionary, but that's no bad thing as OS X was decent to start with. iOS 6 is let down by the dropping of Google Maps, but I can understand the strategic reasons for this. It's going to take Google a while to catch up with Google Maps, though.
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I'm much less worried about their stock price than their ability to create great products. Stock price is based on what investors think, innovation is based on what their engineers think. I love what Apple is putting out and can't wait for what is coming next. That's what matters to me.
Investors don't care about market share. By that logic they'd be all over android. As long as apple sells more iPhones from year to year, investors will be happy.
Did you catch the part where iPhone (despite being on the edge of a new release) made up 45% of Android-heavy Verizon's 3Q? Or the part where they made up over 75% of AT&T's 3Q? Market-share ebbs and flows with release cycles. World-wide iPhone dips in June, July and August just before the release of a new iPhone, then it surges to make up over 80% of the US market after a release. In the USA the range is between 80% and 45% (depending on carrier), unless we are talking about T-Mobile which only gets customers with unlocked iPhones.
Apple was up 61% in profit for fiscal 2012 versus fiscal 2011. They were up 45% in revenue in fiscal 2012 versus fiscal 2011.
If investors are going to be bothered by seasonal trends and monthly market share reports then they are obviously playing the short-game with their investments and trying to catch the highs and the lows rather than looking at long-term viability.
This ABC report also mistakenly says that Apple has lost tablet share to Samsung. The only non-iPad tablets that are selling in quantity are Nexus 7 and Kindle Fire and that is because they are selling at cost. However, in three months Google has not sold 3M Nexus 7's (according to Asus). But in three days, Apple just sold 3M of their new iPads.
This bearish decline is creating a huge buying opportunity. Microsoft's Surface appears to be DOA given the performance, lack of ecosystem, and price. Google's Nexus 10 is not likely to spark any fires. Apple is poised to have a record quarter and the ONLY thing that is stopping Apple is themselves:
1) They need to be able to make more iPads and iPhones so they can sell more iPads and iPhones.
2) When they are launching a new version of a product the main stream media is reporting rumors of it and therefore slows the sales of their current version of the product by creating anticipation.
It seems to me that the #1 thing driving the stock of Apple down is the fact that they have to compete with their extremely high demand and the incredibly high anticipation for their next version of the product. What company would not want these problems?
Yes. And, as I'm sure you're aware (unlike most here since that's not the purpose of this "highly relevant educational forum") the manipulators have been making huge profits on the weekly and monthly options markets as they've marched it down, only to make a killing when they take it back up. They will take it back up. They have to. This is their biggest money machine, and has been for past half dozen years or so, but it only makes money if they keep it moving in both directions. Aapl has little trouble moving up on its own with solid fundamentals, so all the energy can go into "the sky is falling" FUD machine.
This post is a big crock of you-know-what. It's purely subjective. Period.
But keep living in fantasyland. Or rather - just think that your use case = everyone's.
But keep living in fantasyland. Or rather - just think that your use case = everyone's.
Steve Jobs may not have been everyones idea of a genius. Nonetheless he is so missed. His relentless focus on perfection and limited product offerings with an uncanny ability to go off the reservation in new market segment opportunities.
Apple changed the way the world listens to music and uses a phone. Where is the next big thing? I was assuming we would see an entry into the home TV entertainment segment by now? Yes it is crowded and commoditized. But so were the music and mobile phone market ..
Apple changed the way the world listens to music and uses a phone. Where is the next big thing? I was assuming we would see an entry into the home TV entertainment segment by now? Yes it is crowded and commoditized. But so were the music and mobile phone market ..
Yes they use it so they can be smug about it, but real work is done on a desktop I tell you. Ever saw somebody doing professional photo/video editing on an iPad? Ever saw someone writing a novel on an iPad? Ever...you get my point.
My Nex(us)t phone. Tuesday.
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I simply have no response to this statement.
Its a Reality Distortion Field thing.