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Is It Time To Pile Upon The Apple Shorts Or Should We Go Long The Greatest Company In The World?

Reggie Middleton's picture




 

Apple continues to under-perform, yet continues to go exactly as anticipated by the latest 3 quarters of BoomBustBlog research. Let's take a more granular look at this, shall we...

appl copyappl copy

Believe it or not there are still many naysayers who are attempting to hold on to the notion that Apple is simply in  temporary dip, despite having a precise historical template from which to read the#margincompressiontheory (seeRight On Time, My Prediction Of Apple Margin Compression 8 Quarters From My CNBC Warning Landed Right On The Money!) tea leaves from. Those tea leaves are steeped in a essence of Blackberry (reference BoomBustBlog Research Performs a RIM Job!) and they demonstrate clearly how quickly a seemingly fundamentally strong company that is an adored brand name can hit the skids when it fails to cannibalize its own margins. Basically, if you don't do it, someone else will do it for you.

For those of you who feel that Apple's slide is correlated with the fall of the NAZ, simply look again at the chart above. Apple's fall has taken on a macro-fundamental- forward looking fall of its own. Why is that? Well, after Deconstructing The Most Hated Trade Of The Decade, The 375% BoomBustBlog Apple Call!! I went into detail with Deconstructing The Most Accurate Apple Analysis Ever Made - Share Price, Market Share, Strategy and All. But wait, it goes deeper than that. The seminal research that we released that predicted the rise of Samsung over Apple  over a year ago has been proven accurate beyond a shadow of a doubt, now...

Apple -Competition and Cost Structure - unlocked Page 08Apple -Competition and Cost Structure - unlocked Page 08Apple -Competition and Cost Structure - unlocked Page 08

Apple -Competition and Cost Structure - unlocked Page 09Apple -Competition and Cost Structure - unlocked Page 09Apple -Competition and Cost Structure - unlocked Page 09

As can be corroborated through the latest findings by research company IDC: Q3 share of smart connected device market is: Apple 15.1%; Samsung 21.8%

Top 5 Smart Connected Device Vendors, Shipments, and Market Share, Q3 2012 (shipments in millions) 

 

Vendor

3Q12 Unit Shipments

3Q12 Market Share

3Q11 Unit Shipments

3Q11 Market Share

3Q12/3Q11 Growth

Samsung

66.1

21.8%

33.5

14.0%

97.5%

Apple

45.8

15.1%

33.1

13.9%

38.3%

Lenovo

21.1

7.0%

13.2

5.5%

60.0%

HP

14.0

4.6%

17.6

7.4%

-20.5%

Sony

11.0

3.6%

8.7

3.7%

25.4%

Other

145.6

48.0%

132.7

55.6%

9.7%

Total

303.6

100.0%

238.9

100.0%

27.1%

 

 

What many may fail to notice is the slot below Apple, occupied by Lenovo. The Chinese companies are bustin' ass once it comes to Android phones, not just in price, but also in features and quality as well. As stated in my last missive on this topic, no one can complain about not wanting a phone due to low Chinese quality because they're all Chinese now - including the iPhones and the Galaxy's - reference Smartphone Hardware Manufacturers Are Dead, Long Live The Google-like Solution Providers (this is an article that is a must read for those who do not know what is going in China re: Android phones and technology!).

Currently, the best phone on the market (feature-wise) also happens to be the cheapest phone on the market, and also happens to be a Chinese phone... Sold by a Chinese Company.

The-OPPO-Finders-Different-Views

This phone is one of the thinnest phones ever sold at 6.99 millimeters thick.

It has a 5 inch, FULL HD 1080p screen resolutionwith 441dpi density. This is approaching twice the resolution of the iPhone 5 and a full 1/3 greater pixels more than the "retina' screen.

The phone has the fastest chip on the market, the new quad-core Snapdgragon, materially faster than the chip inside the iPhone, and not just spec-wise but actual real world performance as well.

It has a 2.1 mega-pixel front facing camera that can do full HD video conferencing and a 12 mega-pixel rear facing camera with dual xenon flash (one of the highest resolutions in the market).

This cell phone will outrun and outperform a Macbook air laptop in many instances!

It is not a cheap Chinese knock-off. If anything, the iPhone 5 is a cheap American designed, Chinese made knock-off. Try doing this with your iPhone 5....

Oh yeah! A two year old already tried it, not with a grown man via hammer and nails, but just with her mommy's keys (may I add that iFixit is a well respected outfit):

Long story short, if anything, the iPhone 5 is the cheap knock off in terms of speed, durabilty or functionality!

This phone retails, unsubsidized and fully unlocked for just over $500 USD, as compared to the iPhone 5 which starts at $649. As I have been saying for quite some time, Apple is WAAAAYYYY behind the curve in terms of functionality, specs and quality and the only way they can catch up to the Android clan (that is if they even can catch up) is through share price destroying#MarginCompression, as told throughout this blog's Apple research history (see, again,Right On Time, My Prediction Of Apple Margin Compression 8 Quarters From My CNBC Warning Landed Right On The Money).

This is not a trading site, but the obvious is... Well... Obvious!

Subscribers, as recommended at the release of the iPhone 5, positions should have been moved to lean towards the pessimistic scenario in the lastest Apple report. Now that we have clearly pierced the optimistic and base case scenario valuations, I am now more convinced than ever that the pessimistic scenario will remain the focus in the upcoming months. If you have ridden this long until the iPhone 5 release then shorted, you should have ample profits. Profit protection is key, so to avoid a pop in the stock, take profits and set up a position to assume the realization of the pessimistic scenario in the upcoming quarters. 

The latest valuation bands can be accessed in the last few pages of the reports below by paying subscribers (click here to subscribe). I'd like to make clear that this research is worth significantly more than the relatively paltry subscription price it takes to access it. In just the last month, it's already worth more than $34,852,564,500 ($34,852,564,500 - That's How Much BoomBustBlog's Apple Research Was Worth Today!). In addition, it would've, could've, should've saved an entire renknown brokergage firm/investment bank from failure, reference The Blog That Could Have Saved That Institutional Broker - Or - Beware Of Those Poison Apples!!!

Subscribers, reference:

Apple 4Q2012 update professional & institutional
Apple 4Q2012 update - retail

 

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Tue, 12/11/2012 - 13:08 | 3052208 hannah
hannah's picture

the herd will leave apple as soon as a few celebrities speak about going to a new brand. piss dady and beyoncc'ass will soon get paid to 'get caught' carring a new brand and apple ownership will plummet. remember all the go bags at awards shows with free ipods and later iphones....paris hilton did more for apple than jobs ever did...

 

*...i just checked with a bloke in the se asia and oppo does sell a phone....

Tue, 12/11/2012 - 13:04 | 3052205 sitenine
sitenine's picture

You are so far off base here Reggie.  The Igeneration doesn't give much of a shit what their devices can do (most of them don't understand the tech anyway).  Apple is not so much about tech as it is about being cool - something you obviously know absolutely nothing about.

Tue, 12/11/2012 - 12:57 | 3052189 Element
Element's picture

You must love it when critics get you all fired up Reggie, makes you go do some more homework to prove them wrong.

Tue, 12/11/2012 - 12:43 | 3052133 jayman21
jayman21's picture

Apple has had product placement in almost all movies for years.  Doubt the herd is giving up on apple so soon.  It takes awhile to recondition the herd.

Tue, 12/11/2012 - 13:58 | 3052382 MrSteve
MrSteve's picture

Like all of us on ZH, I can only marvel like that telegraph guy Morse who said "What hath Reggie wrought?"

As for you comment "almost all movies for years", eh? well I just went to see Spielberg's LINCOLN and there was not one iota of Apple product being showed off, fancy-schmancy style or anythin! If your basic premise were accurate, surely a fine, big studio holiday blockbuster release would have featured at least one of the fiercesome Apple items!

 

Tue, 12/11/2012 - 12:22 | 3052058 HoaX
HoaX's picture

Maybe slightly Off Topic and not appropriate, but what´s your thoughts on NOK (Nokia) for 2013 Reggie? Don´t see them in your list and am hearing quite positive stories about them lately. Especially the new lumia phones.

Tue, 12/11/2012 - 12:05 | 3051989 DeadFred
DeadFred's picture

I'm not seeing the analysis section that deals with cronyism. The most important fundamental is who you know that can pull strings.

Tue, 12/11/2012 - 12:02 | 3051972 imaginalis
imaginalis's picture

I thought Oppo was a US company.

http://www.oppodigital.com/about.asp

 

 

Tue, 12/11/2012 - 12:08 | 3051994 Reggie Middleton
Reggie Middleton's picture

The phones are available from China, and are not listed on the US link that you provided. I assumed they were Chinese. Regardless, the latest kit seems to be pretty good stuff.

Tue, 12/11/2012 - 12:21 | 3052044 imaginalis
imaginalis's picture

Their blu-ray players are audiophile and very well respected. I think some high end audiophile companies rebadge the Oppo players and charge $5000 to $10000 for them. I paid $999 for the BDP95 which is their top player currently.

http://www.avrev.com/forum/blu-ray-players/4294-ayre-dx-5-10-000-rebadge...

http://www.hifivision.com/blu-ray-dvd-players-dvd-hard-disk-recorders/79...

I heard rumors about an Oppo phone some time ago and was surprised it didn't appear. Your report is the first time I have heard about the phone for a long time. I wonder how much design for the phone was done in Mountain View California.

 

Is Oppo the next Apple?

Tue, 12/11/2012 - 12:15 | 3052020 vast-dom
vast-dom's picture

Reggie: Oppo is not a phone. It's a blu-ray player with some limited network functionality. While the PQ/SQ of newest Oppo may be superior, the Russian owned DUNE PLAYER is best for media when networked to NAS. Not sure how any of this is germane to your above post. But for movie streaming and such, Dune is superior to AppleTV.

Tue, 12/11/2012 - 12:22 | 3052055 imaginalis
imaginalis's picture

Maybe Oppo Digital and Oppo Electronics in China are unrelated.

 

Is there a future trademark battle on the horizon?

Tue, 12/11/2012 - 13:57 | 3052381 vast-dom
vast-dom's picture

HOLY CRAP! okay the Oppo phone looks like the shiznit! Thanks Reg!

 

http://news.cnet.com/8301-1035_3-57514664-94/oppo-reportedly-readying-wo...

 

 

Tue, 12/11/2012 - 11:43 | 3051895 imaginalis
imaginalis's picture

I have an Oppo BDP95 Blu-Ray player which has excellent sound.

Tue, 12/11/2012 - 12:03 | 3051932 Reggie Middleton
Reggie Middleton's picture

The build quality vs specs vs price proposition on many of these Chinese phones vs the iphone 5 is outrageous! Apple has a very large gap to fill to come close to matching them, and the only way to do it is to start chopping those margins!

At the same time, Android 4.2 makes iOS 6 look like Windows 95. They are not even in the same generation of software.

 

  1. Faulty Apple maps 'half-fixed' after iOS 6 system is luring motorists ...

    2 hours ago – APPLE's trouble-plagued Maps app that has been stranding people in the ... of its iOS 6 system that has misdirected travellers looking for Mildura into the ... park and temperatures can reach as high as 46 degrees, putting lives at risk..... If this is indeed the military's next big idea, we may start thinking about ...

    Local police have been called to assist distressed motorists who have become stranded within the Murray-Sunset National Park after following directions on their iPhones.
    Police are extremely concerned as there is no water supply within the park and temperatures can reach as high as 46 degrees, putting lives at risk.
    Inspector Simon Clemence said it took one man 24-hours to make contact with the outside world after following the application's directions.
    "One guy got far enough in to lose phone coverage and he was stuck there and he got bogged and he had to walk out and it took him 24-hours to get to a point where he had phone coverage and then we came and rescued him," he said. "This is a direct result of this map application."
    Police have confirmed five vehicles have become stranded in the park, with many more people presumed to have become lost but found there way back to civilisation.
    "We know there are others because we set up a breath testing station on the road there recently and we had a woman who said every left hand turn up the Mallee Highway her application was trying to send her straight into the dirt," Insp Clemence said. "This is just the tip of the iceberg."

    Read more: http://www.news.com.au/technology/apples-latest-ios-6-maps-system-is-luring-motorists-into-danger-police-warn/story-e6frfro0-1226533592620#ixzz2ElAY3H1o

    That's right, people could actually die using the iOS6 maps product!
  2. Apple fires iOS 6 Maps chief

    appleinsider.com/articles/12/11/.../apple-fires-ios-6-maps-chief

    Nov 27, 2012 – Apple has reportedly fired the executive in charge of its widely ...(Find the lowest prices) ... Richard Williamson, who oversaw Maps in iOS 6, was let go by ... That might be acceptable for an Android device, but not for any Apple ... I livein a midsize US city (one without any 3D?fun but unnecessary to me).

    Of course, they want to fire the maps chief who they probably put under the gun to have a prodcut (any product) ready by deadline versus firing the geniuses who thought they could take on one of Google's core (labor intensive, IP intensive, resource intensive) properties from scratch by buying a start up! I understand why Apple did what it did, but as usual they have woefully underestimated both the difficulty in and the importance of, the cloud and Googles dominance therein.

 

Tue, 12/11/2012 - 13:22 | 3052256 Matt
Matt's picture

This is like that guy that, when his GPS told him to turn right, he did, right onto train tracks. Yes, the maps are inaccurate. Once you know the map is wrong, why would you keep using it? People have to have some responsibility to use their own faculties.

Imagine if people become dependant on self-driving cars, and then the US Government hits the Internet killswitch!

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