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Lunja said:
EDIT: Come to think of it, a Set Top Box is entirely plausible. It's just the Plasma bit I disagree with.


Yeah, they would need at least 1024x720, preferably 1280x720 (or better like 1366x768) resolution for computers and TV to make it viable. Its a possibility that they could have done a big deal with the likes of Samsung to build a bigger mac mini into a HD plasma and get a decent price point, but it would be as revolutionary for Apple as the iPod was. Its too good to be true...
 
If this drops the price of a 30" I'll be very happy. I wonder how big a screen you would need before you could get a whole Powermac built into one.
 
chicagdan said:
That's actually the big problem with Apple's solution (and everyone else's) -- all the existing equipment and how to integrate it. I have an HDTV with HD digital cable. My cable company provides an HD DVR ... not bad. But how on earth is this going to integrate into an Apple set top box? My HDTV has one HDMI connection (not DVI), so what am I supposed to do, unplug the cable box/DVR any time I want to watch an Apple Box downloaded movie?

And that's just one man's problem ... now imagine all the different cable companies and the different boxes they use and satellite companies and over the air HD and then consider all the non-U.S. versions of HD delivery ... it's mind boggling. Cable companies have ZERO interest in helping a company like Apple take over the box ... THEY want to sell me HD pay-per-view, they don't want Apple getting that money.

So how does all of this work? That's what I want to hear on Tuesday ... and don't tell me to scrap it all and buy an Apple all-in-one solution because I may have drunk my Kool Aid today, but I'm not eager to spend my way into bankruptcy either.

You just stated exactly why something like this won't happen in the immediate future. Maybe a year or so but not at mwsf.
 
As Intel CEO Paul Otellini said at his keynote:

"What consumers tell us they want is online content on that big screen in their living room ... from the couch, from the bed. We need to integrate the TV capabilities, the PC capabilities, and the Internet experience."

I wonder if he has spoken with Steve lately.
 
xnu said:
As Intel CEO Paul Otellini said at his keynote:

"What consumers tell us they want is online content on that big screen in their living room ... from the couch, from the bed. We need to integrate the TV capabilities, the PC capabilities, and the Internet experience."

I wonder if he has spoken with Steve lately.


That's exactly it -- not how to bring TV and computers together, but how to leverage the power of the Internet for TV so that you can download movies and have infinite IPTV channels.
 
So possibly a .Mac through your TV? It could work in the same way as interactive does on Sky/Freeview- "Hit the red button" and you get interactive content from the channel provider. On Sky Sports you can get multiple angles on football (soccer) games through interactive services, so maybe Apple are lining up such a service through which users could connect to a .mac account/environment where all their movies/videos/PVR footage etc are stored...

Do they have such interactive services in the US? Pardon my ignorance- I've only ever used BrightHouse cable in FL :)

EDIT: New prediction then. If Apple are indeed going to release monitors/plasmas, maybe the computer part will boil down to a modem and large harddrive to store content. Or perhaps not given the fact that .Mac will be raised to 1TB shortly... Grrr- I have an essay to write on the relevance of the theory of the carnivalesque in media analysis due in soon, and all I can think about is the relevance of .Mac increases to MWSF lol
 
A peek at SED

For those of you wondering what an SED display is, check out this link, which shows the SED sets previewed at CES. Now that's a nice computer display, perfect, maybe not incredibly expensive, and close to ready for prime time! Of course, if finished sets were announced by Apple, Canon, Toshiba or anyone else, that would be a surprise in itself.

SED at CES
 
chicagdan said:
See, that's where you're wrong. Apple NEEDS to take a big leap.

Read this story. http://business.bostonherald.com/businessNews/view.bg?articleid=120123

The market expectation is well beyond the Mac fan base expectation. We want to hear about Intel notebooks and desktops and maybe some iPod products ... to people who've put hundreds of thousands of the dollars on the line, that's last year's news, it's all been factored into the Apple stock price.

To keep this amazing stock price momentum going, Apple doesn't need an incremental improvement in computing or a slightly better iPod ... they need the next Macintosh, the next iPod, something big and groundbreaking.

So is it going to be full HDTV systems? I have no idea. But Apple has to do something big and Steve Jobs knows this. But forget the rumors of the past week and just connect the dots.

Go back and read three years worth of rumors about Apple set top boxes. Think about Rendezvous and .mac and all the ways Apple has been moving towards integration ... then consider the sudden shift last year to the Intel platform. You think that's all about IBM's slow deliveries and Intel's power consumption? Please.

What the Intel move was about was preventing a head-to-head confrontation Apple couldn't win. Apple was moving towards it's own flavor of consumer electronics integration, then got a look at what Intel was doing with Viiv and figured it was smarter to switch than to fight.

And so Apple cut a deal with Intel -- a really good deal, one that includes becoming the showcase provider of Viiv-enabled systems. Does that mean Apple has to sell its own HDTV? No ... but at the very least, it would mean providing a form of OS X to CE manufacturers to use in these Viiv enabled systems.

So if you're a long-time Apple fanatic, what do you think is more likely -- 1) Apple surrendering the HDTV/consumer electronics marketplace to Microsoft 2) Apple licensing OS-X as part of Viiv to compete with the Windows Media systems or 3) Apple jumping head first into this market and selling their own top-to-bottom, platinum Viiv solutions?

Given what market analysts are saying about Apple's stock price, Apple's new relationship with Intel, widely-accepted rumors that a set-top box is on the way and the absence of any other big, groundbreaking rumors in what needs to be a monster MacWorld to keep the stock flying, I'm inclined to believe that O'Grady (at least partially) has it right.


Well, your off base here, imo. Your basing your ideas upon the thinking that Apple actually cares about and makes decisions based on the stock price. They don't. They are, like virtually every other company, looking to grow and improve the bottomline. The stock price takes care of itself if they execute.

And even if they do care about the stock, they don't need any sort of groundbreaking, radical device to keep the stock moving up. Last years big intro was what, the mini? The stock still doubled. Basic analysis shows that a) Apple stock isn't ridiculously overpriced and b) it will go up simply if the iPod market continues to grow(which it will) and if they execute with the Intel Macs and manage to grow share even a little. Those 2 factors alone will be good for a 25-35% increase in earnings, conservatively. Yes, that's a lot less than what Apple stock has done over the past 3 years, but its still nothing to sneeze at. And far better than the overall market, which is why Apple commands a premium.

And if the Intel Macs turn out to be a hit, and they actually take some share, Apple stock could easily double again. 1% of the pc market is worth about 1 billion. If Apple goes to 10% marketshare thats an additional 4-5 billion in revenue. Which would be about a 40% boost to revenue.

If Apple introduces Intel laptops at Macworld, that's plenty big news by itself.

Btw, stock analysts are morons. Its amazing how wrong they are. At best they are behind the curve.

As for some of your other assumptions... afaik Apple switched to Intel partly because of viiv, but mainly because IBM could not provide the chips Apple needed or wanted and had no clear processor map. You really think Apple didn't significantly update the Powerbook for 2 years because they liked it? Please.

As for the other bits... Apple has not surrendered the marketplace to Microsoft. In fact, with iTunes and video, its setting the trend. They announce video content for sale, and all of a sudden everyone is doing it. Apple's technology is at the core of mpeg4 video. The only place where they don't have a presence is in the htpc space. Which, until very recently was not worth anything. Microsoft has been touting htpc convergence for years. Only now is it even close to being viable. But without mpeg4 and HD recording capabilities, the htpc has serious flaws. As in, can I record hd from satellite or cable? No. Frankly, I'm starting to think its doa. Consider this: dvr's are about to become a commodity, with cable and satellite providers basically giving them away. Dvd players are 50 bucks. And an airport express gets your music into your stereo. And throw in the whole pay per view, vod model as being shaped by Apple. All of those things start to make the idea of a htpc moot.

Does all this mean Apple isn't coming out with a plasma/pc device? I have no idea. But I do think Microsoft's vision of the htpc is flawed. And resultingly, I have a hard time seeing Apple directly competing with mce and its flawed, monolithic model. I think it a lot more likely seeing Apple coming out with a simple, highly focused device, like a wireless control point(that would pull from a computer/internet) that hooks into your tv.

Frankly, what I see happening with "convergence" is a media server under a desk or in a closet that is accessed by multiple devices, like a computer, ipod, phone, pda, tv, whatever. One device, with centralized media storage, that all the others can access. Think about it, its a simple, elegant solution, imo.
 
macidiot said:
Frankly, what I see happening with "convergence" is a media server under a desk or in a closet that is accessed by multiple devices, like a computer, ipod, phone, pda, tv, whatever. One device, with centralized media storage, that all the others can access. Think about it, its a simple, elegant solution, imo.

Good analysis. That's sort of the model with the home computer as the mother ship and the iPods, burned CDs, .Mac photo books, etc., as the satellites. The closet model doesn't really change anything; it just moves the mother ship from the desktop to a "home server."

I just don't see that things really change when the TV becomes a smart device, i.e., just another appendage of the home computer/internet device/media center. At the moment, it sounds like the question is whether Apple envisions the .Mac server -- as directed by the user online -- is an integral part of the TV content development plan.
 
macidiot said:
Well, your off base here, imo. Your basing your ideas upon the thinking that Apple actually cares about and makes decisions based on the stock price. They don't.

I still haven't stopped laughing from that one. Buddy, have you ever worked for a corporation or owned a share of stock? How old are you? And have you ever heard of something called fiduciary responsibility? In a nutshell, that means you can be sued if you act without regard to your investors -- meaning stockholders.

Believe me, there's not a single person who works in Infinite Loop who doesn't have the Apple stock price widget on his or her screen all day ... and probably a running counter for the value of his or her stock options right next to it. Those stock options created a lot of paper millionaires in the past year and many of them make life changing decisions based on the price of those options when they become available to exercise.

Apple has a PE ratio of 60 to 1. Do you understand PE ratios? If you did you'd know that a normal one is around 20 to 1, meaning that Apple is trading on a lot of speculation of future growth. Intel processors you say? No, that's last year's news, already factored into the price.

Apple's stock took off this year because the iPod took off like a rocket. But how much more iPod growth do you think the company has left? If they double their home computer market share, does that come anywhere close to justifying a 60 to 1 PE ratio?

Don't mock my analysis when you clearly know nothing about investing or corporate strategy. If you think Apple can muddle along selling computers and iPods ad infinitum without stockholders revolting, I can only say that I'm happy you don't actually work for the company.
 
Whoa there..

macidiot said:
Well, your off base here, imo. Your basing your ideas upon the thinking that Apple actually cares about and makes decisions based on the stock price. They don't. They are, like virtually every other company, looking to grow and improve the bottomline. The stock price takes care of itself if they execute.

I'll agree with you that Apple is unlike other companies, but EVERY CEO and company cares about stock price. You say above that "stock price takes care of itself if they execute".

If your stock price sucks, you have to - heaven forbid - acquire other companies with cash. Apple has lots of that, but would rather use stock. Look at google, yahoo, etc, and what they can do buying with stock rather than cash.

Do you think Dell has executed over the last 5 years? I do. Their stock price has hardly budged. Michael Dell hasnt fired himself though. They're doing a pretty good job at executing, yet the stock price has been stuck at $30/share for 5 yrs (unfortunately, I bought after the last split then).

The evil empire (MS) has done a pretty good job at executing - making Billions of profit every quarter. Their stock price is fairly constant too - between $24 and $28 per share for the last year.

Anyway, just noting a big flaw in what you're saying. Sure Steve can choose not to worry about it, but there wont be many happy people if Apple doesn't continue to "execute". In the tech world, "execute" means coming out with cool ideas after cool ideas, not just making money.

This isnt an indictment - the rest of your post is good stuff. Just dont confuse business with business.
 
narco said:
The one I've been eyeing is the InFocus Screenplay 4805, which does HDTV as well, and is pretty affordable. Right now, Circuit City has a deal where you can get the projector for $1,000 and a free 72" screen for free. It's great for movies, haven't tried it on my Mac but I can't imagine it not being great. A friend of mine did extensive research on projectors and decided on this one, and so far so good! Read the reviews, it's hard to find a negative one!

Fishes,
narco.

THANKS NARCO !=)

...only one question...

is it SILENT ? ...or at least VERY quiet ?

NOW, as far as this rumor goes i'm all for Apple releasing SED displays ASAP, it doesn't matter if they announce them tuesday and ship 2h06; those images i checked on the internet are incredible and i don't even care for 1080p, i'll start looking for that rez in 5 years maybe...
 
hscottm said:
The evil empire (MS) has done a pretty good job at executing - making Billions of profit every quarter. Their stock price is fairly constant too - between $24 and $28 per share for the last year.

Actually I think they've been stuck there for about 5 or 6 years as well.

I'd look at Intel's stock price to move. They're the ones backing up all this cool media stuff from ALL the PC companies. Plus they've got a new roadmap for the company that suggests all sorts of new ventures and avenues to expand. Investors like that if it sounds plausible. Who wouldn't think intel can pull it off? Especially after they just joined forces with a company making cool gear.
 
Someone in a previous post mentioned a "home media server". Am I the only person here interested in such a device?

My dream would be to have some type of media server, hidden away in the basement with some type of "sattelite" media boxes attached to each TV/Stereo in the house. Here's where it gets tricky. I have a library of roughly 400 dvds at home, which doesn't seem too uncommon. A library of this size makes finding a specific title, and even browsing a chore. I wish there was some way for me to store these on a server (preferably uncompressed w/ menus etc) and create a digital library of titles with box art, and some type of metadata like MP3 files have.

Having a library like this available to browse through and watch on any tv in the house (possibly even multiple TVs at once) would be amazing.

If im not mistaken, in order to rip a DVD you have to break the encoding which violates the DCMA, which is a bummer :(

Does anyone else think there would be a market for a device like this?
 
chicagdan said:
I still haven't stopped laughing from that one. Buddy, have you ever worked for a corporation or owned a share of stock? How old are you? And have you ever heard of something called fiduciary responsibility? In a nutshell, that means you can be sued if you act without regard to your investors -- meaning stockholders.

Believe me, there's not a single person who works in Infinite Loop who doesn't have the Apple stock price widget on his or her screen all day ... and probably a running counter for the value of his or her stock options right next to it. Those stock options created a lot of paper millionaires in the past year and many of them make life changing decisions based on the price of those options when they become available to exercise.

Apple has a PE ratio of 60 to 1. Do you understand PE ratios? If you did you'd know that a normal one is around 20 to 1, meaning that Apple is trading on a lot of speculation of future growth. Intel processors you say? No, that's last year's news, already factored into the price.

Apple's stock took off this year because the iPod took off like a rocket. But how much more iPod growth do you think the company has left? If they double their home computer market share, does that come anywhere close to justifying a 60 to 1 PE ratio?

Don't mock my analysis when you clearly know nothing about investing or corporate strategy. If you think Apple can muddle along selling computers and iPods ad infinitum without stockholders revolting, I can only say that I'm happy you don't actually work for the company.

ChicagoDan is on point!

There is soooo much good/bad that can be done to Apple by Wall Street Analysts... e.g. Gene Munster of Piper-Jaffery who rates AAPL as an outperform with a target price of $90 per share.

This gets the attention of the movers & shakers, for Example Disney, et al, who are negotiating deals with Apple.

Apple and Google are currently Wall Street darlings and can negotiate from a position of strength.

Apple can use their stock to acquire other companies/talent or make deals.

I have n shares of AAPL that I purchased at an average price of $39 that are worth $76.30.

Daily (minute-by-minute, actually), I need to determine whether I should Buy/Sell/Hold AAPL stock.

If I stand to make a profit, I will have lower taxes if I hold off any profits for 1 year. But, if I hold, the stock may go down & I may lose more (on paper) than I would have avoided by selling at a higher tax rate.

That's an over simplification, but there are hundreds of mutual funds that own 33% of outstanding AAPL shares.

Now, If Apple doesn't pay attention to investors, the investors could get the idea that Apple is stagnating and the word will go out to sell AAPL.

At the very least, this will affect me (where i live) and millions of other APPL investors.

It will also affect Apple-- they will lose their ability to negotiate deals from a position of strength, and may begin a downward spiral (and could be, possibly, subject to lawsuits).

Apple's Mgmt, particularly Jobs & Peter Oppenheimer (CFO) understand this well and are doing an excellent job of maintaining relationships with Wall Street/Analysts/Investors...

To succeed in today's marketplace involves a lot more than excellent producte and customer satisfaction-- if you don't take care of investors, you may never get the chance to do the other.

Here's a URL to get some background info on AAPL from an investor's viewpoint:

http://moneycentral.msn.com/investor/research/profile.asp?Symbol=aapl

HTH

Dick
 
zpapasmurf said:
If im not mistaken, in order to rip a DVD you have to break the encoding which violates the DCMA, which is a bummer :(

There are ways of "backing up" your DVD collection without violating DCMA. :cool: I used this device in my guesthouse to back up about 100 DVDs. A buddy of mine and I set up an AMX video server and now have direct asynchronous/on demand video feeds into three rooms, each with 5.1 DTS (how i got the 5.1 is a secret ;) ) routed from a centralized sound station. The video library is searchable via the AMX database and accessed via a smart remote, similar to this. It would be really cool if Apple had something like what you mentioned above, out of the box
 
Already DONE

LG Wireless Plasma Display
READ MORE: 50-inch, Home Entertainment, LG, TOP, Wireless, plasma


The LG 50-inch Wireless Plasma Display (50PB2DW) has already won a Best of Innovations 2006 award for the upcoming CES, according to the Consumer Electronics Association’s website. A huge 50-inch TV, this display uses wireless technology to cut all your cords, which seems almost too good to be true. It actually includes a separate transmitter unit that will display all your pictures from any connected source—without wires. Not much more information than that right now, but more when we get it.

CES Innovations 2006 Awards Honorees
 
Peace said:
Think this over folks...

WHY did Apple make the iMac with Front Row and remote no less?

And why not make it a 42" LCD ?

For a community that's supposed to "think different" some here sure are closed minded.

Yeah man, that's what I'm saying. The first time I saw Front Row (and remote) it seemed like the most unneccessary superflous thing. Granted I don't HAVE an new iMac, so I've never used it. How many people were like "oh my god I just *gotta* have this new interface on my mac for presenting my media files!"

I'm really bad at drawing comparisions... but the front row thing had the same "wtf factor" as say if Honda released a new car that sports vibrating/massage chairs.
 
chicagdan said:
I still haven't stopped laughing from that one. Buddy, have you ever worked for a corporation or owned a share of stock? How old are you? And have you ever heard of something called fiduciary responsibility? In a nutshell, that means you can be sued if you act without regard to your investors -- meaning stockholders.

Believe me, there's not a single person who works in Infinite Loop who doesn't have the Apple stock price widget on his or her screen all day ... and probably a running counter for the value of his or her stock options right next to it. Those stock options created a lot of paper millionaires in the past year and many of them make life changing decisions based on the price of those options when they become available to exercise.

Apple has a PE ratio of 60 to 1. Do you understand PE ratios? If you did you'd know that a normal one is around 20 to 1, meaning that Apple is trading on a lot of speculation of future growth. Intel processors you say? No, that's last year's news, already factored into the price.

Apple's stock took off this year because the iPod took off like a rocket. But how much more iPod growth do you think the company has left? If they double their home computer market share, does that come anywhere close to justifying a 60 to 1 PE ratio?

Don't mock my analysis when you clearly know nothing about investing or corporate strategy. If you think Apple can muddle along selling computers and iPods ad infinitum without stockholders revolting, I can only say that I'm happy you don't actually work for the company.


Where in the world are you getting a pe ratio of 60? Perhaps your analytical skills are decent, but your reading skills aren't.

For the second time (posted this once before in this thread), Apple has a P/E of 48. And its forward P/E is (based on estimates) is about 33. I really have no idea where your numbers are coming from. But don't take my word for it:

http://finance.yahoo.com/q/bc?s=AAPL&t=5y

And to use term fiduciary duty in this context is misguided. Officers have a fiduciary duty to the owners(stockholders) to act in their best interests. Typically, they try to do so by increasing earnings and consequently, increasing returns. And they usually do that by improving the company and executing, whether through organic growth, acquisitions, stock buybacks, dividend increases, whatever. Which is exactly what I said. Perhaps in a roundabout way the stock price is important to them. However, they do not sit around and say things like "if we don't release a plasma tv/computer, our stock price is going to drop 2 points" or "what can we do to get the stock up over 80" or "this new iPod is going to add 10 points to Apple stock." But they do think to themselves, if they have the stock options you talk about, that if they do their jobs well, the company will do well, and their options will do well. And they do think things like, "this new product or process could add 10% to the bottomline." So I suppose in that sense your right. And, to be fair, they do(or did) think the way you describe at some companies. Like Enron. And Worldcom.

What I did say is that Apple officers look to do what is best for the company and execute. If they do so, the stock price will take care of itself. AND guess what, they are then taking care of their fiduciary duty to the shareholders. Funny how that works.

Oh and your wrong about fiduciary responsibility. It means that its your duty, as an officer of the company, to act in what you believe is the best interests of the owners, typically stockholders. Typically they do so by maximizing shareholder return. However, fiduciary responsibility does not mean maximizing sharehholder return.

Apple stock price took off in 2003. Not just 2005. Again, I suggest your use your analytical skills and try looking at a chart. A lot of investors use this thing called a chart. The iPod took off "like a rocket" well before this year. In fact, the biggest gains in Apple stock were not this year, but 2004. I guess you were late to the party.

As for"muddling along selling computers and iPods ad infinitum" Apple, and its stock, has done quite well for the past 3 years doing just that. And as far I know the stockholders haven't revolted. They aren't even muttering...

And as for your analysis of the iPod and dap market, I think you need to do some research. It is projected to double again this year. At least. I'd say that is some decent growth driver for the stock. And considering the overall market for Walkman-type devices was well over 100 million units, the dap market still has some legs.

Sounds like as a shareholder, I'm the one that should be glad your not working for the company. Sounds like you'd have Apple on a ruinous, reactive course, responding to competitors willynilly. Apple tried that once before, and it almost bankrupted them. Oh, or maybe throwing off dividends to "appease" the shareholders, while neglecting the core business. GM has done that for years, and the results have been spectacular... :rolleyes:

Oh, and as for "have I worked for a corporation or owned a share of stock" the answer is yes and yes. Not that it really matters here. But you asked. And in fact, I my portfolio, with, among other things, its 6000 shares of Apple, is pretty decently sized, though, in the investing world, I would hardly call it huge. And btw, Apple is no where near my largest holding. Not even close. Though it does seem to be growing every day. ;)

Oh and if my prior post came across as mocking your analytical skills, I apologize, since I was merely questioning it. This post however, is a different story... ;)
 
Lunja said:
I agree. The UK hasn't even experienced the digital switchover yet- our five major terrestrial channels are still broadcast in analogue. I don't know how things are in Switzerland?

It just seems too expensive, too exclusive, and to be honest, a little too unoriginal for everyone's favourite fruit company...

But a set top box is plausible. If it comes with a slot for a Sky/Ntl card, it'll open up another market. I can't see people ditching Sky+ boxes for aftermarket PVR/Media systems just yet (in the UK anyway). Do you think an Apple box would be bought in the US by people with TiVo's or BrightHouse boxes already?

Here in Switzerland I don't know for sure, but did some quick research and found an European forum post where a guy says that HDTV, in Europe, will be available "en masse" only after 5 or 10 years...governments are still struggling to find the best way to organize that mess:

http://www.dvdeurope.com/forums/ptopic9261.php

I know that Switzerland already has some digital broadcasting channels (called TNT in the French part - télévision numérique terrestre), but I have no idea how ground digital channels relate to HDTV...besides, even though most households have cable TV, many people here don't even care much about television...that's why I am skeptical, notwithstanding the very reasonable arguments put above by the Chicago guy...1 day to go..!
 
Lunja said:
^ ^ ^

Bingo.

It's also important to consider Europe not as a whole but as separate countries- HD will not be a standard across western Europe (let alone the rest) for another 10-15 years, but the HD roadmap in Britain in much shorter- Sky will broadcast HD this year. Releasing a product such as this might work in the UK, but few other places.

Apple may be working on this, but I doubt we'll see anything on Tuesday.

Just to add to your remarks, big markets like Brazil (I am Brazilian, in fact) are just now deciding on which protocol to use for HDTV (the American, European, Japanese or a proprietary Brazilian one)...maybe HDTV is the buzzword in the US...but in the vast rest of the world (Europe, Brazil and all other big countries/markets such as China, India and Russia) it's still a faint reverie...
 
BRLawyer said:
Just to add to your remarks, big markets like Brazil (I am Brazilian, in fact) are just now deciding on which protocol to use for HDTV (the American, European, Japanese or a proprietary Brazilian one)...maybe HDTV is the buzzword in the US...but in the vast rest of the world (Europe, Brazil and all other big countries/markets such as China, India and Russia) it's still a faint reverie...

Well, that makes those of us without HDTV feel better. If most of the world is fine without it, I can wait too. :)
 
chicagdan said:
I still haven't stopped laughing from that one. Buddy, have you ever worked for a corporation or owned a share of stock? How old are you? And have you ever heard of something called fiduciary responsibility? In a nutshell, that means you can be sued if you act without regard to your investors -- meaning stockholders.

Believe me, there's not a single person who works in Infinite Loop who doesn't have the Apple stock price widget on his or her screen all day ... and probably a running counter for the value of his or her stock options right next to it. Those stock options created a lot of paper millionaires in the past year and many of them make life changing decisions based on the price of those options when they become available to exercise.

Apple has a PE ratio of 60 to 1. Do you understand PE ratios? If you did you'd know that a normal one is around 20 to 1, meaning that Apple is trading on a lot of speculation of future growth. Intel processors you say? No, that's last year's news, already factored into the price.

Apple's stock took off this year because the iPod took off like a rocket. But how much more iPod growth do you think the company has left? If they double their home computer market share, does that come anywhere close to justifying a 60 to 1 PE ratio?

Don't mock my analysis when you clearly know nothing about investing or corporate strategy. If you think Apple can muddle along selling computers and iPods ad infinitum without stockholders revolting, I can only say that I'm happy you don't actually work for the company.

Calm down, Chicago, he is not totally wrong here; even though your point makes sense, it doesn't mean Apple HAS TO excel itself in terms of novelty for every quarter. Your analysis is flawed because you imply that success, for Apple, is dependent on stock options, and this is BS...job attractiveness is one thing, positive financial statements are another.

Nobody here is talking about lack of corporate responsibility, because Apple has been performing better than ANYONE else in the last 2 or 3 years, but Apple has ALWAYS been driven by design, not profit "per se"...its bottomline goes up not because Apple works like Dell, but because it employs a distinct business model based on sustainable excellence (and NOT blind launches of marvel products in every area of computing, as happened back in 1995/96).

Obviously its stock is kinda overvalued now in terms of PE ratio, but if Apple just keeps the momentum going with good Intel products and one new launch here or there, its share prices will NOT tumble; they won't climb a lot either, as there is little room for improvement, just like Google's stock...but Apple's financial position is, right now, extremely good.
 
hscottm said:
I'll agree with you that Apple is unlike other companies, but EVERY CEO and company cares about stock price. You say above that "stock price takes care of itself if they execute".

If your stock price sucks, you have to - heaven forbid - acquire other companies with cash. Apple has lots of that, but would rather use stock. Look at google, yahoo, etc, and what they can do buying with stock rather than cash.

Do you think Dell has executed over the last 5 years? I do. Their stock price has hardly budged. Michael Dell hasnt fired himself though. They're doing a pretty good job at executing, yet the stock price has been stuck at $30/share for 5 yrs (unfortunately, I bought after the last split then).

The evil empire (MS) has done a pretty good job at executing - making Billions of profit every quarter. Their stock price is fairly constant too - between $24 and $28 per share for the last year.

Anyway, just noting a big flaw in what you're saying. Sure Steve can choose not to worry about it, but there wont be many happy people if Apple doesn't continue to "execute". In the tech world, "execute" means coming out with cool ideas after cool ideas, not just making money.

This isnt an indictment - the rest of your post is good stuff. Just dont confuse business with business.


What I said was that they care in a roundabout way. Dell has executed, but its stock hasn't moved much. Why? Because Dell is already the market leader in a now mature market and has transitioned to a slower growth mature company. This has no relation to the quality of management. It is just a fact in the life of a company. Growth is what fuels the stock price. Growth in the company, which means growth in earnings. Dell has gone from 100-200+ percent growth in the 90's to 10-15% growth. The stock hasn't moved because its p/e is adjusting downward to reflect that slower growth rate (of course, there was a lot of other downward adjusting from the dot com bubble). The same thing could be said of Microsoft. Or Cisco. Or IBM. Or Wrigley, Wal-Mart and CocaCola, for that matter.

Apple is somewhat unique for 2 reasons. One, the iPod. Its an entirely new segment. And 2, because they are starting from a smaller base, its a lot easier to grow dramatically. Its a lot easier for Apple to double its marketshare and earnings than it is for Microsoft or Dell to do so.

And what most companies do when growth slows is start offering dividends. They start returning profits rather than using them to fuel growth. Which is exactly what Microsoft started doing. Of course, they still try to grow, but in a mature market, it becomes harder and harder to do.

Of course, Dell management, if it solely cared about what the stock was doing, could have done a bunch of things to boost the share price. They could have acquired IBM's pc business or some other company. They could have spent all their cash reserves buying stock back. They could sell themselves to another company. But they didn't, because they don't let the stock price drive their decisions directly. And like you said, the management is pretty good. But its apparent that they are not basing their decisions on the stock price. So really, Dell's situation is basically agreeing with what I'm saying.

However, at some point the stock, when its done adjusting, its p/e will become attractive again (or look cheap). That's when you'll see the stock start moving up again.

In the case of Cisco (which I follow, I sold Dell years ago), its p/e has steadily dropped to where its now around 22. And its forward p/e is around 15. Cisco stock has done basically nothing for a few years now. However, its now cheap enough that it should start moving up.

Finally, as for stock price and acquisitions, the stock price matters in an indirect way. Its really more a function of market capitalization rather than the stock price. Say Apple wants to buy Tivo for 400 million (I'm not saying it will its just an example! ;) ). If Apple stock were half what it is today(due to a split for example), they could still do an all stock deal. They would just have to swap more stock. However, if the market cap of the company starts dwindling, they do have reduced options and in fact, can become the target of a takeover. And CEO's definitely care about that.
 
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