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Old Mar 2, 2013, 11:01 AM   #176
TallManNY
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Originally Posted by lildimsum7 View Post
I think it would be tough for Apple to continue selling a lot. We'll see in Q2 this year. Now that more people own these mobile devices, why would they spend money to buy a new one that does the same thing? With the tech available now, there's really no incentive to upgrade, and the only thing attractive is something different from iOS. Also, more people own smartphones with a 2 year contract, and many are switching to Android. I wouldn't count iOS as a competitive advantage - Apple's profit margin is decreasing, which is a sign of that. I believe Android is the more advanced OS, and that is starting to attract people away from iOS. There's still a market for smartphones, but much less people than in 2009-2011, and much more competitive.
Do you think things have radically changed since last quarter when Apple sold the most iPhones it has ever sold and by a substantial margin? I think there is enough incentive to upgrade from, for example, an iPhone 4. Especially when you can get the iPhone 5 at a subsidized price.

And yes Android is going to attract people away from iOS, but at the same time you have more and more people coming into the Smartphone market. Don't discount the fact that new customers are literally getting "made" each year as little Tommy gets big enough to get his first smartphone. And once you get a smartphone it seems you never go back to a feature phone. And you replace your smartphone at least every three years and probably between breaking and losing it much more often than that on average. So no, I'm quite confident that more smartphones will be sold in 2013 than in 2012, just like more were sold in 2012 than 2011.
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Old Mar 2, 2013, 11:14 AM   #177
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Originally Posted by TallManNY View Post
Do you think things have radically changed since last quarter when Apple sold the most iPhones it has ever sold and by a substantial margin? I think there is enough incentive to upgrade from, for example, an iPhone 4. Especially when you can get the iPhone 5 at a subsidized price.

And yes Android is going to attract people away from iOS, but at the same time you have more and more people coming into the Smartphone market. Don't discount the fact that new customers are literally getting "made" each year as little Tommy gets big enough to get his first smartphone. And once you get a smartphone it seems you never go back to a feature phone. And you replace your smartphone at least every three years and probably between breaking and losing it much more often than that on average. So no, I'm quite confident that more smartphones will be sold in 2013 than in 2012, just like more were sold in 2012 than 2011.
Yes, the way the mobile phone market works is genius in itself. Binding everyone on contracts on things that people integrate into their lives gives almost everyone an incentive to upgrade, simply because there are renewal offers that basically offer you a newer phone with your current plan without much added cost or no cost at all.

When we finally reach a point where all markets are adressed, even then the amounts of phones sold wonīt really go down and thereīs so much digital life that people adjust to through the coming generations that thereīs even more incentive to sell hardware. Apple is in a very good position to capture even more markets, even if they donīt innovate at all. I donīt hope thatīs what Apple does, though, they have more money a company could ever dream of and R&D or buying other companies when it makes sense should be their number one priority.
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Old Mar 2, 2013, 12:11 PM   #178
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Originally Posted by iSunrise View Post
Yes, the way the mobile phone market works is genius in itself. Binding everyone on contracts on things that people integrate into their lives gives almost everyone an incentive to upgrade, simply because there are renewal offers that basically offer you a newer phone with your current plan without much added cost or no cost at all.

When we finally reach a point where all markets are adressed, even then the amounts of phones sold wonīt really go down and thereīs so much digital life that people adjust to through the coming generations that thereīs even more incentive to sell hardware. Apple is in a very good position to capture even more markets, even if they donīt innovate at all. I donīt hope thatīs what Apple does, though, they have more money a company could ever dream of and R&D or buying other companies when it makes sense should be their number one priority.
The way I see it, the smartphone market is simple. It is all humans over the age of 10 or so. And they all need to replace their phones at least every three years. Now that cycle may eventually lengthen, but not by much and not anytime soon. The technology is changing too fast and the phones get too much wear and tear to expect them to last for too many years. So when all markets are addressed, we will be looking at billions of smartphones being sold every year. Now of course with current technology, half of all people in the world are far too poor to afford a smartphone. And that will probably change only slowly. But the market is still gigantic and in no way is it even close to being satiated.
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Old Mar 3, 2013, 03:14 AM   #179
lildimsum7
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Originally Posted by TallManNY View Post
Do you think things have radically changed since last quarter when Apple sold the most iPhones it has ever sold and by a substantial margin? I think there is enough incentive to upgrade from, for example, an iPhone 4. Especially when you can get the iPhone 5 at a subsidized price.

And yes Android is going to attract people away from iOS, but at the same time you have more and more people coming into the Smartphone market. Don't discount the fact that new customers are literally getting "made" each year as little Tommy gets big enough to get his first smartphone. And once you get a smartphone it seems you never go back to a feature phone. And you replace your smartphone at least every three years and probably between breaking and losing it much more often than that on average. So no, I'm quite confident that more smartphones will be sold in 2013 than in 2012, just like more were sold in 2012 than 2011.
Be careful with your optimism, that's the kind of thinking that gets you to buy into value traps. whenever your investment relies on hopes without examining the facts, you've made a bad investment. The fact is that profit margin and ROE have declined due to competition. Increased competition will continue to reduce Apple's margins because people aren't loyal to the brand, and the cost of switching is low. iPhone & iPad offer nothing attractive enough to maintain consumer loyalty. So even if a stream of new smartphone consumers enter the market, it may not be enough to deal with lower margins. Based on the economics, it seems unlikely Apple will continue to earn this well for the next 10 years. If people were more certain about Apple's future the way you are, the stock would be $800+ by now.
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Old Mar 3, 2013, 10:37 AM   #180
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Originally Posted by lildimsum7 View Post
Be careful with your optimism, that's the kind of thinking that gets you to buy into value traps. whenever your investment relies on hopes without examining the facts, you've made a bad investment. The fact is that profit margin and ROE have declined due to competition. Increased competition will continue to reduce Apple's margins because people aren't loyal to the brand, and the cost of switching is low. iPhone & iPad offer nothing attractive enough to maintain consumer loyalty. So even if a stream of new smartphone consumers enter the market, it may not be enough to deal with lower margins. Based on the economics, it seems unlikely Apple will continue to earn this well for the next 10 years. If people were more certain about Apple's future the way you are, the stock would be $800+ by now.
Agreed, I might be being too optimistic. But of course if people knew the future and therefor the market was always right all the time, then it wouldn't be very interesting.

I've actually been an iPhone user since 4 and an iPad user since 1. I recently got the Nexus 7 as I wanted the smaller form factor. It is a great device, but the transition from my Mac/iOS ecosystem is too much a pain. As soon as Apple makes a retina level iPad Mini, I'm probably junking my Nexus 7. I'm barely even bothering to add Apps to my Nexus 7, while a new app or two gets added every week on my iPhone or iPad (and then syncs itself to the other iOS device). Sure Google offers its own ecosystem, but I think Apple got there first and folks that are in the Apple ecosystem aren't going to stay not for loyalty but for convenience. And if you pick and stay with Apple, then you know you have good build quality that isn't going to slip. You may or may not have as much trust that Samsung and Google will do the same.
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