Is The Evidence For An Apple Margin Collapse Now Incontrovertible?

Reggie Middleton's picture

My many warnings on the impending dethroning of Apple by Google has produced more flak and negative response since any proclamation since my warning about Goldman Sachs in the spring of 2008. Of course, fast foward to the spring of 2011 an you will find Reggie was right on point. I am just as confident, or more, about Apple vs Google, and for the same reasons as I was confident about Goldman Sachs. You see, its not about the quality of the company. Both are strong American companies with strong management, but both are (or at least in the case of one of them, “were”) also seen as iconic to such a degree that investors and customers failed to look at the actual numbers, outlook and underlying trends beneath said iconic, “spit-shined-to-perfection-through-marketing” patina. Remember, don’t look to BoomBustBlog for what you want to hear, look to us for what you need to hear. With that being said, we have released our valuation numbers for Apple to Subscribers (Pro/institutional level subscribers may contact me directly about the analysis) and the reviews of the latest credible competition to Apple’s fastest selling products are now out – the Samsung Galaxy Tab 10.1 (Samsung’s reworked answer to the iPad) is now taking pre-orders, and the reviews are very positive.

  • Engadget’s Darren Murph: It’s quick, nimble, and easy to hold, and it’s both thinner and lighter than the heralded iPad 2. There’s no question that we prefer the handling of the Tab 10.1 over Apple’s alternative, and with the improvements coming with Android 3.1 (and in time, Ice Cream Sandwich), it’s going to be mighty hard to overlook this device come June 8th. The 16GB WiFi model will hit for $499 — exactly in line with the iPad… There’s just no other way to say it: the iPad 2 finally has a real competitor. If Samsung could somehow undercut Apple by even $25 here, the choice would be obvious, but it’s going to have a whale of a time convincing the masses that a Samsung device is superior to one Designed in California when prices are equal. That said, we’d still recommend the Tab 10.1 over the iPad 2 for heavy Gmail users and all-around fans of Android.

There are several other reviews around, but Endgadget is, by far, one of the most objective, least unbiased reviewers popularly available. Examples of bias were evident when the reviewer would list how the Samsung pre-release product was faster, shot better pictures, had a better screen, was slimmer, lighter etc., yet in the conclusion states that they prefer the iPad 2 over the Samsung because it is “sexiest”, but considers the Samsung the “iPad 2″ of Android world. At least from our perspective, this strays from a straightforward comparison, but does exemplify the results of Apple’s superior marketing capabilities which should serve it quite well as competition is rapidly ramping up.

As a refresher, here are reviews for the Asus Transformer priced at 80% of the cheapest iPad:

Click for video

IT Pro Portal

The Asus Eee Pad Transformer has been a very popular tablet – even topping Amazon’s best selling tablet list – for two main reasons. Firstly, it provides great value for money; it is both cheaper than the iPad 2 and has a bigger screen with a better display resolution.

Then there’s the fact that it has a rather affordable accessory that can convert it into a fully fledged netbook with a 16 hour battery life altogether. The device, which runs on Android 3.0 Honeycomb, is powered by Nvidia’s Tegra 2 chip and comes with 1GB RAM as well as 16GB onboard storage. Apart from Wi-Fi, it has USB, HDMI and Bluetooth connectivity.
Read more: http://www.itproportal.com/2011/05/09/asus-cannot-produce-enough-ipad-2-killer-tablets/#ixzz1MQWRncSz

The release of the Samsung tab 10.1 marks roughly 1% of the Android Honeycomb tablets slated to be released in the next year (4 – Xoom, G-Slate, Iconia Tab, Asus Eee Pad Transformer - out of about 400), and look where we are already. This is going to be a much tougher fight for Apple than even that of the smartphone market, and you see how well Android did in that category as the current market leader in both footprint and growth rate. Literally98% more competition is coming down the pike this year, and products are already widely reviewed as at parity or superior in Apple’s chief diversification segment (remember, derives ~70% of its profits from the iPhone). With that, even the iPhone is supremely challenged by Apple’s own parts vendors, Reference :

Apple’s biggest suppliers (the most important parts vendors for the products that contributes about 75% of Apple’s profits) and the companies that Apples is currently embroiled in global litigation with (no wonder why) also produce similar products, ex. the LG Optimus 3D and the Samsung Galaxy S II.

Speaking of the Samsung Galaxy, this newest refresh is nearly universally thought of to be the best smartphone available, including the Apple iPhone. I haven’t found a single review yet that has said otherwise. This is an impressive feat considering how “Apple-centric” the media currently is. Reference this snippet from Endgadget:

For a handset with such a broad range of standout features and specs, the Galaxy S II is remarkably easy to summarize. It’s the best Android smartphone yet, but more importantly, it might well be the best smartphone, period. Of course, a 4.3-inch screen size won’t suit everyone, no matter how stupendously thin the device that carries it may be, and we also can’t say for sure that the Galaxy S II would justify a long-term iOS user foresaking his investment into one ecosystem and making the leap to another. Nonetheless, if you’re asking us what smartphone to buy today, unconstrained by such externalities, the Galaxy S II would be the clear choice. Sometimes it’s just as simple as that.

Endgadget is not the only reviewer to go head over heals over Android super-powered phones. Check it out, courtesy of onlinesocialmedia.net:

    1. Dan Sung of Pocket-Lint rates the phone with 4.5 out of 5 stars and calls it a “cracking experience” and like Engadget, “better than any other Android smartphone.” Very minor complaints included the 1080p DLNA streaming, which was noted could be better, plus minor quibbles with the camera lens but overall the conclusion is that “no one buying this superphone will have anything to complain about.
    2. Chris Davies over on Slash Gear. Guess what, Davies also says, “this could well be the best Android smartphone on the market today” and noted that iPhone users that were shown the Galaxy S II said they could have their heads turned by it. There were minor criticisms, such as the keyboard, but these were said to “pale in comparison to the Samsung’s strengths.” In conclusion Davies says “we’re running out of reasons not to buy the Galaxy S II.”
    3. Electric Pig by Ben Sillis, who gave the phone a staggering 5 out of 5 star rating and says “Samsung has triumphed again with theSamsung Galaxy S 2.” There are some quibbles about software in this review but not enough to get in the way of it being a “surefire contender for phone of the year,” and again the superb display gets a special mention.

Be aware that Samsung builds the chips for Apple’s iPad and iPhones, is embroiled in a 4 or 5 country IP lawsuit with Apple, and also happens to build their own proprietary chip for the phone above and most likely the chips for their new (thinner, faster, lighter and possibly less expensive) tablets as well. It appears as if the stuff they build for their own Apple-competing products are cheaper and faster than what they produce for Apple. This puts Apple in a bind as they not only compete directly and sue Samsung, but will have a problem as they cannot quickly jump to another vendor that can produce the volume and tech that Samsung does. What happens when your biggest and most valuable vendor becomes your biggest biggest competitor and you start suing them? What happens when they produce superior tech for their own competing products? Well, we’re about to find out. We may also find out what happens when your second largest and most valuable supplier does the same, for LG is going full steam ahead with high end Android tablets and phones as well, supplying equal or superior screens for their devices as well.

This also begs the question, “What happens when the market tightens up on either the supply or the demand side?” I anticipated this several months ago when I penned, “Steve Jobs Calls End Of the PC, We Call The End Of The Fat Margin Tablet – Including The Pretty iPad, With Proof!“. Well, in the news (due largely to the issues that Japan has faced), “Component shortage to hit tablet makers“. When things get scarce, whose products and enduser customers do you think LG and Samsung will cater to first? Their own or Apples?

Last year, pundits and analysts were supremely bullish on Apple’s tablet prospects. Unfortunately, they were comparing early products running cell phone software offered at non-competitive prices to Apple’s dedicated tablets and established sourcing channel. We, at Boombustblog warned against said optimism – or more accurately against such pessimism in regards to Androd’s prospects (Steve Jobs Calls End Of the PC, We Call The End Of The Fat Margin Tablet – Including The Pretty iPad, With Proof! and The Tablet Pricing Wars Have Commenced, Targeting Apple’s iPad 2 Which Is Not Even For Sale Yet). One of the main reasons was that the very few companies that have the capacity and pricing power to offer Apple the tech that it needs to produce the iPad/iPhone are the same companies that are ramping up design and production for Android devices. It is highly unlikely they can do it for Apple at a cost of X% and not do it for themselves at a cost of X-5%. We appear to have been proven correct on this point.

Obliterating the thesis that Apple has superior pricing power, Samsung has come out with a competing tablet with a better screen, that is lighter and thinner than the iPad 2, running superior cameras – all for the same same price point (see reviews above). Asus, the inventor of the netbook category which prompted Apple to reinvent the tablet computer in the first place) has come out with a tablet featuring a better screen, a different (and in our opinion, as well as others) superior add-on form factor (keyboard dock) that enables production of content as well as mere consumption of content, and comparable performance for a full 20% less than Apple’s entry level product! Reference New Taiwanese Tablets Show What So Few Have Suspected: Apple’s iPad 2 Is An Expensive Toy!

And to think that just a few months ago it was believed by most that Apple could undercut these competitors in pricing. Actually, Apple may be able to compete in a price war with the high volume, low margin, south east Asian kings of the tech manufacturing world, but in order to do so, those industry leading fat margins simply have to go. This has been the crux of our thesis from the beginning, and the evidence that supports it gets stronger and stronger every day. Again, reference Steve Jobs Calls End Of the PC, We Call The End Of The Fat Margin Tablet – Including The Pretty iPad, With Proof! and The Tablet Pricing Wars Have Commenced, Targeting Apple’s iPad 2 Which Is Not Even For Sale Yet

As explained in the last article on this topic, Apple is not lacking for demand in tablets but is truly lacking for supply. The Japanese Tsunami/nuclear disaster has curtailed supply and Apple is also forced to fight (literally, as in through global law suits) with it’s major suppliers for its most profitable products as direct competitors in the tablet and smartphone space. Thus, whatever remaining supply that Apple previously negotiated as the sole large volume buyer is now hotly contested by nearly every large computer and media device manufacturer in the world. We called this occurrence last summer, and it is now becoming apparent as Apple strains to retain costs (ie save margins) while simultaneously swapping inferior components. As excerpted from New Taiwanese Tablets Show What So Few Have Suspected: Apple’s iPad 2 Is An Expensive Toy!

Not only is competition expected to put significant pressure on prospective demand, it is driving costs up as well. The following is excerpted from the subscriber document File Icon Apple – Competition and Cost Structure.

While Apple’s battle with Samsung has made the most headlines in the pop media, it’s there competition with LG Electronics that is really hurting them from a line item perspective. As practically every new Honeycomb tablet (except for the first, the Mororala Xoom) features a superior screen at a comparable (or in the case of the Asus Transformer, much lower price), the cost of said components are not only the largest line item cost for Apple, but the largest expense increase over generation as well. Apple will be very hard pressed to find a vendor who can supply in the volume and quality that LG Display can (giving them ample pricing power), and if it were to shop around it will probably have to solicit… Samsung, it’s largest competitor in the tablet/smartphone space, via Android.

In the meantime, as an answer to all of those professional analysts and market researchers who failed to see what BoomBustBlog made quite clear early in 2010 (see the Mobile Computing Wars series in its entirety), Google’s Android Market Share Explodes As It Expands Its Reach To Cars, Toys, Home Automation, Music & Movies – All In The Cloud:

Amazingly enough, despite Apple’s stellar performance ad launch on Verzon’s network,, Google’s Android still managed to pull ahead significantly in market share.

These are the numbers pr-Verizon – Even With Apple’s Successful Launch On Verizon, Google Continues To Increase It’s Lead In The Smarthphone Space Friday, May 6th, 2011

65.8 million people in the U.S. owned smartphones during the three months ending in January 2011, up 8 percent from the preceding three-month period. Google Android captured the #1 ranking among smartphone platforms for the first time in January with 31.2 percent market share. RIM ranked second with 30.4 percent market share, followed by Apple with 24.7 percent. Microsoft (8.0 percent) and Palm (3.2 percent) rounded out the top five.

Top Smartphone Platforms
3 Month Avg. Ending Jan. 2011 vs. 3 Month Avg. Ending Oct. 2010

Total U.S. Smartphone Subscribers Ages 13+

Source: comScore MobiLens
Share (%) of Smartphone Subscribers
Oct-10 Jan-11 Point Change
Total Smartphone Subscribers 100.0% 100.0% N/A
Google (via Android)
23.5% 31.2% 7.7
RIM 35.8% 30.4% -5.4
Apple 24.6% 24.7% 0.1
Microsoft 9.7% 8.0% -1.7
Palm 3.9% 3.2% -0.7

With all of the evidence introduced above, our original thesis is stronger than ever. We never called for the fall of Apple, but definitely did call for the fall of Apple’s margins – which is, as we see it, a given. With the extreme emotional sentiment directed at Apple, this proposed margin fall may very well be faced with outsized reaction from the market – you know, as if the impossible has actually occurred.

Apple valuation

Yes, we are more optimistic on Apples’ earnings than the sell side (reference page 16 in subscription document File Icon Apple – Competition and Cost Structure) Look to my writings from last summer to determine the common sense reasons why: :

No, Google is not in the mobile space for search ads, it’s looking to become the next Microsoft with Android as the next Windows. It is thinking big, simultaneously going after both the consumer and the enterprise space with cloud-based software and services – and advertising!

In the meantime, sheeple-like investors are being hoodwinked by quarter after quarter of Apple blow out earnings. Don’t get me wrong. I feel and fully acknowledge that Apple is executing on all 8 cylinders of a 6 cylinder engine, but it still has its real world limitations. Apple will start to bump up against these limitation over the next 4 quarters, and the signs of this bump are already apparent. Of course, the signs are being handily masked by the games that Apple management and the sell side analysts of Wall Street play, with the “Sheeple” retail and the lazier component of the institutional investors being put out to take the eventual bullet.

Riddle me this – If Apple can consistently beat the estimates of your favorite analysts quarter after quarter, after quarter – for 11 quarters straight, shouldn’t you fire said analysts for incompetency in lieu of celebrating Apple’s ability to surprise? After all, it is no longer a surprise after the 11th consecutive occurrence, is it? I would be surprised if my readers were surprised by an Apple surprise. Seriously! Apple management consistently lowballs guidance to such an extent that it can easily manage, no – actually create outperformance. This has has a very positive effect on their valuation. Of course, I do not blame Apple management for this, of they are charged with maximizing shareholder return. The analytical community and the (sheeple) investors which they serve is another matter though. Subscribers can download the data that shows the blatant game being played between Apple and the Sell Side here: File Icon Apple Earnings Guidance Analysis. Those who need to subscribe can do so here.

Below, I drilled down on the date and used a percentage difference view to illustrate the improvement in P/E stemming from the earnings beats.

In our analysis of Apple, we are using real world assumptions of future performance derived from backing in to the low balling this company is prone to. If you look at its history carefully you can gauge what management is comfortable with, hence what they may be capable of on the margin. Using these more realistic numbers, it is much more likely Apple will deliver a miss in the upcoming quarters in its battle with the Android! The following is the reason why…

Of course, our valuation flies in the face of that of Goldman’s: Goldman’s $430 Target, Screaming Buy On Apple At Its All Time High Is In Direct Contravention To Reggie Middleton’s Logic – Who’s Right? Well, Who Has Been More Right In The Past? Tuesday, December 14th, 2010a and Reggie Middleton Takes The Challenge To Goldman Sach’s Apple Proclamation One Step Farther, Apple’s Closed System Risks Failure! Wednesday, December 15th, 2010

Before anybody decides to jump on the Goldman bandwagon, it may be worthwhile to ascertain who was has been the most accurate over time. After all, we often query “Is It Now Common Knowledge That Goldman’s Investment Advice Sucks???” It has been asked in the past…Did Reggie Middleton, a Blogger at BoomBustBlog, Best Wall Streets Best of the Best?

If you recall this time last year, no one thought Research in Motion would take such a precipitous fall at the cyberorganic hands of Android either – at least no one other than subscribers of BoomBustBlog: Blackberries Getting Blacked Out, Imitate Amateur Base Jumpers Sans Parachute! Friday, April 29th, 2011

Next up in the technology space: Google valuation adjustments in our proprietary valuation model for professional/institutional subscribers re: Chromium/Android (see Google Valuation Model (pro and institutional)) and how Chrome netbooks and Android tabets (ex. the Transformer) can (and probably will) curtail Apple’s move into the enterprise in next article.

Related reading:

  1. Google’s Q1 2011 Review: Part 2 Of My Comments On The Gross Misvaluation of Google
  2. The Google forensic report (63 pg Google Forensic Valuation, to plug in your own assumptions see Google Valuation Model (pro and institutional)

 

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RezaAlmaneih's picture

Apple’s value proposition can be summed up with the following:

* Apple is the only company that owns/controls its entire user experience. Hardware, software, usability, media, retail outlets, etc. You can make cheaper products by integrating but it is difficult to provide the same user experience by integrating from multiple players.

*  Apple is all about the user experience, not doing all things for all people. These feature for feature comparisons are missing the point. People don’t buy Apple products because they have the most features.

* Apple’s ecosystem provides significant cross-selling. This can be seen in the stats provided as well as anecdotally. People start with an Iphone, next getting an Apple computer, then follow-up with an Ipad. Recently, IPads have been beginning the cycle as well.

* The percentage of the total addressable market that they persue for most product categories is in the single digit to teens. This is small enough that they can continue to have growth for quite some time. This would include cell phones, computers, tablets, etc.

Measuring Apple, the growth rate is high, PE is low, cash reserves is high, sound product strategy, and execution is good.  I get bringing Google (Another solid company) into the discussion so the topic can we about one or the other but these markets are so large and growing that both players will have plenty of room to generate growth and profits.

 

I find it disappointing that reports like this do the same mistakes as main stream media, (MSM) but from a contrarian perspective. I would find it much more credible if the “facts” were stated so we can draw our own conclusions and then specify the belief at the end, similar to Chris Martenson, and other credible contrarian perspectives. I do like Reggie, but the tone of his articles have a propaganda type approach which is an indication that he is treating his readers like sheepable as well.

longorshort's picture

Rule number 1 never mary a stock.  When in doubt see rule number 1.  70% of apples profits come from freaking telephones.  Watch what happens to it as adroid overtakes 40% of market and the few phone companies we have rape their margins.  Then next move will these multiprocessor phones and tablets will be to emulate your favorite iphone apps.   Apple really only owns the OS.  Other people make the apps for apple, the hardware for apple, accessories for apple.  You know why, because it has marketshare.  As Adroid overtakes the market because it is open, cheap and can run a variety of apps when you change manufacturers, vendors will go where market share is, because thats where profits are.  You think your precious iphone can stand up to open.  It cant just look at linux.  Its buggy as hell compared to some comercial UNIX products but its growing like mad because its perceived as a cheaper solution that will fit the job. It probably wont happen overnight but Apples days are numbered unless it opens up more.  Even amazon tried this business model and really struggled before becoming a marketplace of vendors.

Zero Govt's picture

a perfect summation of Goo-Droid as cheap, mass produced, low margin product (ie. like a doormat)

presumably you also think Tata bringing out the Nano micro-car for $1,250.00 effects BMW selling $50,000.00 saloons and me as a consumers purchasing decision (forget BMW's over-engineered high quality barnstormers, i'm going right out to buy a cheap-as-chips Nano!)

i'm not going to hold my breath waiting for Goos business model to have any impact on Apples... but i suggest you learn to whistle Dixie on your long wait for 'results' 

falak pema's picture

I asked RM the same question : What is his projected fallout on the MS vs Margin battle between the three, AAPL, MS, GG/EOM. In a one year planning horizon. Would be nice if RM gave us HIS projected fallout. But I think he is too clever to play crystal ball gazing.

jimijon's picture

Next up... iCloud

Ah moving slowly into Google Space now are we?

The plot thickens, the companies reposition their tactics while adjusting their strategies. Who will win the next battle when it moves into G-Space?

Apple has notoriously protected its margins. I expect no different as they expand, grow, and start offering all those beautiful little iApps to the hungry Lion.

Cheers

Zero Govt's picture

 

Latest score for Reggie...

52 week share price change:

Apple  +42%

Google +11%

your dynamic market-ripping Android Ap despite all your endless frothing at the mouth (got Rabies Reg?) appears to be doing absolutely fuk-all for Goo's stuck-in-the-mud share price! Apple out-stripping ya by an X-Factor of fourfold

How's Reggies short on Apple doing?

Past 3 Months share price:

Apple $360.00 down to $336.00 (down 8%)

Google $610.00 down to $525.00 (down 14%)

..so you would have done twice as well shorting Google rather than Apple there bud'

...looks mightily like you're (still) trying to flog a dead horse ...you won't win this race riding that old nag Reg (Goo's only good for the glue factory) ..get on the thoroughbred Ap

 

Zero Govt's picture

Reggie,

need to ask did you even watch that Samsung Galaxy Tab video you posted above? Is it from your Ronald McDonald vid collection because take a look sometime, it was one fuk-up after another all the way through! Here's a brief list:

- doesn't know what the launch spec is, or if it'll have an SD slot

- some music album covers came up twice, he doesn't know why!

- some albums didn't work at all, he's not sure why!!

- loading a new Ap he had to flip the fuking Tab to get it right way round (twice)

- the Maps were total bollocks, he said "it does work though!"

Jesus H Christ this looks like a rough lemon... typical of a bunch of lemons chasing the leader (that'll be Apple mate)

this reminds me when Microshite launched Windows 7... the '7' stood for the 7 failed attempts of the Microstiff rep' showing journos their new wonder touch-screen technology. The 'wonder' was Apple had the technology working 2-3 years before smooth as silk on the iPhone and how Microcrib copying it with 2 years extra to work on it still fuked it up!

Microshite billed it as an 'all new' never seen before innovation, not at all a copy-cat larger version of Apples touchscreen iPhone (and we were all born yesterday Mr serial-thief Gates)

7 failed attempts to demo Windows 7's wonder touch-screen and the Micostiff rep' gave up saying "don't worry, it works!"

.....i'm getting the exact same feeling for Goos Galaxy as i got for the loser that was Win7...we live today on 'Planet Apple'  ..they don't own the space but they defined it, they shaped it, they made the space smooth.. everyone else is an also-ran and a rough one at that

ebworthen's picture

 

I've worked with Asus hardware for 15 years, good stuff, my go-to brand for a good motherboard.

Apple's challenge is the cost of their desktops and notebooks.

The true battle will come as the newer generations decide how they use media - the trend is to make the smartphone THE portal - I see many millenials just using their smartphone.

The killer device will be a smartphone that can plug into a pad in a docking slot inside the pad - or a 30" monitor - or a flat screen 50" entertainment system - so that the phone is THE device.

Once they get people to accept cloud computing this can be a reality - but everything you do can be tracked and accessed (i.e. - nothing will be truly private).

 

hotkarlandtheclevelandsteamers's picture

Reggie do not forget to remind your readers how you were saying to go long GOOG at $600 and short all the financials some 300% ago.

Reggie Middleton's picture

I don't know who you are, but your statement is not true. I suggested my subscribers go long Goog in the $400s and it hit our target nearly $200 points later. All told rather well done. Unless you are a subscriber (which I am sure you are not), you really don't don't know what I'm saying, do you. Even readers of the free blog were alerted in the $400s, I just didn't publish valuations.

As for the finacials trade, those were immensely profitable - BSC, LEH, Wami, Countrywdie, etc. Most positions put on in the high 2 digits low three digits and closed out close to zero! Yeah, lost some profit on the bubble blowing back up, but no one's perfect. Normally I'd ignore a troll like you but I'm in the mood not to have anyone take you seriously.

hotkarlandtheclevelandsteamers's picture

So you were not reiterating your GOOG long call north of $580 prior to earnings.  Also what was AAPL trading at when you started posting negative articles on it 240, 250???  The proof is in the archives, care to post your % returns over the last two years???  No I am not a subscriber I have never seen value in your posts but have monitored your posts, sure you had the hot hand for awhile and I bet you made some nice money on bsc, leh, wamu etc, but what about the posts outlining how PNC, JPM, WFC were overvalued some 100+% ago.  Noone needs to take me serious you should be able to search the archives to see your post history, I think it will speak for itself.

falak pema's picture

You should drink a glass of pinot noir to change your taste. I have an old friend who makes a good one in California.

longorshort's picture

Yah im sure you can taste a hint of fukushima and treehugger.

falak pema's picture

lol, is california so californicated by a fuku fukk? I'm sitting in europe.

jSixPack's picture

Any details on the explosion and fire at the Foxconn iPad2 factory?

 

Zero Govt's picture

no but we should ask Reggie precisely where he was that day!

williambanzai7's picture

Well I was over at the Wanchai IT Market in HK this week. I am sure you can imagine what that is like.Every gadget you have never seen plus all of those that make across the Pacific are on display. I saw all the Android and Tablet clone products and more. 

I'll give you one guess:

(a) what tablet and PDA Phone products were flying off the shelves; and 

(b) what products all those Chinese tech geeks that run the stalls use for themselves.

Now these are the hardcore geeks, not the fashionistas that shop at the electronic chains.

Seeing how China is -the- market. It looks like Apple is doing just fine here in Asia as well.

As for hedgies unloading. I do remember all the counter intuitive trades we saw back in 2008. Lots of funds unloading the liquid crown jewels so they could meet all their other trading pressures. I suspect we are seeing more of the same.

Not that performance makes any difference in today's world. But how quickly we forget the numbers put up on the board before we shot Bin Laden, dumped commodities, arrested an IMF Chief and lost the Oprah Show.

Have a nice Rapture ;-)

BTW: Those who ever make it to the Wanchai IT Market, don't forget to chill out and check the silicone on Lockhart Rd when you are done...The girls all love iPhones

 

d00daa's picture

And right on cue, AAPL cult members materialize out of nowhere to defend their precious.  So fucking predictable.

Keep doing your thing Reggie.

Mec-sick-o's picture

"their precious." LOL... Lord of the Rings.

I'm a computer fanatic.  It took me many years to get an AMD, until they smacked down Intel in 2003.

Now Intel is back, but AMD has been smarter with the AMD-ATI thing.

I use both: an Intel for number crunching power and an AMD for video and personal use (it is a lot smoother experience, IMHO).

Yet when someone brought me a MacBook (last year, the cheapest portable white plastic 13"), I observed great things such as OS (Snow Leopard over my WinVista at that time), display and ergonomy.

So I got also the MacBook, mainly for portability, comfort, arranging pictures, music, entertainment.

This year I got my first Ipod, the standard one, 160GB (I have a considerable music database, too many revolutions around the sun might be the cause).  I stored all my CDs and MP3 compilations.

Now I use Itunes a bit more... it is cheaper to rent a movie there (for me) than going to the local rental store and have many movies from yesteryear.  Heck, I can get the oldies songs with great quality and without buying the whole album that anyway I can't get anymore.

Don't plan to have an Iphone or Smartphone at all. I use a plain cell. No texting.

My wife has an iPad and she uses it a lot.

I started downloading and compiling the Google OS (derivative from Linux) and only worked in my Atom netbook.  But it wasn't that great for me, just dropped it.

I still don't understand why clinging to ONE company, if there are many solutions.

At work, if I had done that, I would have ended pennyless.  Always look for the best.  I enjoy looking and looking and trying and trying, learning and learning and go for it whet it feels right because it was the best choice then.

I have two internet connections, separate companies, they practically tried to play me and forced me to do this.  Now both lines have been incredibly reliable. LOL.

Competition is good.  Variety is good.

Zero Govt's picture

we desperatey need a smarter, better class of anti-Apple troll on here... someone that has a cohesive argument rather than 'Ra Ra' a short skirt and Cheerleader pom-poms flaying about in the air

JW n FL's picture

how about "The Apple tax is for Idiots"? is that a better or of more substantive quality?

Zero Govt's picture

no JW, still not up to scrath i'm afraid ...and while Apples share price and profits still out-gallops Google on the upside and parachutes slower to the downside it just shows Reggies ever more shrill claims about Goos (copy cat Apple) technology and market penetration is falling on deaf ears throughout the investment community 

...the only people that believe Reggies techno-babble and financial-dribble is probably Google and Reggie himself ...i'd be willing to short both these bubbles

Jasper M's picture

Reggie,
Kudos on being enshrined by WB7. Again.
But forgive me for reminding you, as you acknowledge the acclaim of the crowd, that you are but a man, mortal, and doomed to die, and thus all this glory is fleeting . . .
Or not: Telomeres . . .

KingPin 999's picture

You still just don't get it. Which is surprising because it is so simple. No phone competes with the iphone the same way that no one tablet will compete with the ipad for a long time. It takes 500 different android devices (most of which are given away for free, or buy one get 10 free) to equal what the iphone is selling. The reason has NOTHING TO DO WITH THE HARDWARE SPECIFICATIONS, which is what these stupid reviews you cite focus on. The way android competes is just plain stupid, they give the camera one more megapixel, the screen .1 sq inch size advantage, the processor .1% faster and then right reviews claiming it is better. What makes apple products better for the time being is the integration of the hardware and software for a complete package. For Christ sake the android tablets have like 10 apps to choose from. Why on Earth would I buy a tablet whose only functionality is surfing the web and crappy email application that is unsecure. 

moneymutt's picture

you don't think Android tablets won't be able to provide a great software experience? what about intergrating your google things like calendar, google music, gmail, how long does it take to convert my tunes over to an Android phone or tablet, really?

...and yes, I will too will hold off about another 6 months to buy a tablet til Android app market comes around...but I figure I'll have a hundred choices of tablets by Jan '12 and by 6 months into my ownership, 90 percent of the apps I might want to have on Ipad will be available to me for Android tablet.

And hardware choices matter in more ways than slightly different screen. I have an Ipad and I find when I need to do a lot of typing my choices are, put Ipad some sort rigged pillow support and use blue tooth keyboard or crack open a 3 year netbook and type away...and what do I do? netbook....I'm sure there is some overpriced Ipad accessory for keyboard connections, but I like the many types of affordable hardware options we will be seeing from Android tablets, like the intergrated Asus hinged keyboard in this post.

Apple will never offer the diversity of hardware to satisfy each unique customers whim, but soon Google will offer all those hardware options (big screen -heavy unit, small screen - lighter unit, high power - loaded expensive unit, low power casual home user content consumer cheap version, etc...so all these hardware options AND a integrated software via google cloud and ice cream sandwhich.

Today is the whole ecosytem for Ipad tablets better experience?, sure, but with all the money both suppliers and retailers can make from Android tablets, the little green chompy guy is coming like a ton of bricks...Android is not early versions of MS windows compared Apple OS...it is much better and will keep getting better

High Plains Drifter's picture

a day doesn't go by it seems without discussions of security breaches on these things. this is something i don't like. i don't like a machine calling home without my knowledge nor do i like someone easily eavesdropping on my web experience. until the answer the security problems, i am afraid, i am not interested.

aphlaque_duck's picture

This is all about the software. Specsmanship and the race-to-the-bottom never win. Apple's margins may get squeezed going forward, but they will always make more than the guys who have to beat them on price to sell any at all.

I am a Man I am Forty's picture

show some growth and profit charts for apple reggie, and let's not put apple and goldman in the same sentence

 

btw, i own google and have a droid incredible, but do think the iphone is better

falak pema's picture

So your second post today but you don't say how you see this three company market segment evolving in a one year planning horizon. 

JW n FL's picture

APPL Hush Money on its way Reggie!