As Anticipated At BoomBustBlog, Android's Cutting Through Apple's Aggressively Sized Margins?

Let's make this quick and clean. After all, a picture is worth a
thousand words, and I have crowed for over a year now that Apple has
been handily outgunned in the smartphone race by Google and its hardware
vendors.

Click any image to expand to printer size...

Of
course, I have met more flack, resistance and general hateful rhetoric
than for any opinion I have given on any company, ever. Needless to say,
that doesn't negate the facts on the ground, does it? I can
legitimately say I almost the only Apple skeptic, and by far the most
vocal. So, on the eve of Apple's flagship iPhone 4GS announcement, we
see the MSM report: Apple's New iPhone 4S Leaves Some Fans Disappointed...

The
maddening pace of Android technology development is simply too much for
Apple to keep pace, or at least keep pace with while maintaining those
fat margins. So what do they do? they release a marginally improved
product that has yet to match the 6 month old Android flagship tech that
is about to be refreshed/replaced/updated in exactly ONE WEEK!

I
was the lone Apple vs Google realist that I know in the blogosphere. Go
to 3:40 in the video below to hear the truth that no one else on CNBC
would tell you. As a matter of fact, after you do that, go to the
beginning of said video to hear more truths that no one else on CNBC
would tell you, like what was said in my Hunt for the Squid!

Simple
math, simple business logic, simply common sense, yet the Apple hordes
attacked relentlessly. Listen, what Google has created to compete with
Apple, RIM, MSFT and Nokia, was not a new technology - but a new way of
doing business. Less than free was their new business model and it
proved to be pretty damn effective.

Armed with such a weapon,
Amazon is selling tablets (24 hours after launch) at a rate of 50,000
per DAY. That's right! Per day! Amazon is also selling them 60% cheaper
than Apple's cheapest offering over a retail network that has both
broader reach and matching if not more content.

Samsung has set
records with their Galaxy S II phones, which are drasctically superior
in nearly every way to the iPhone 4 and apparently (from what I have
gleaned thus far) the iPhone 4GS. These phones are in very high demand,
and if Apple does get close in functionality, Samsung is announcing a
dramatic upgrade to this best of breed device... Next week!

Is
that not enough margin bashing competition for you? Well HTC, Motorola
(just purchased by Google, itself) and LG are coming with their own
superphones, you know... The product that supplies ~ 70% of Apple's
profit. Being that subsidized iPhone 3GS are being given away for free
now, the margin compression theory makes sense, no?

As excerpted from Apple on the Margin:

Writing
about Apple is like writing about gold, despite the fact that there is a
strong fundamental argument for or against it, the emotional response
and lack of empirical outlook clouds the fundamentals, ex. Apple  and
the iPhone vs Android or Gold and fiat currencies/inflation. I am not a
Apple hater, and I am probably one of the most advanced iPad users you
know of. Apple has its pluses and minuses, but people (including many
professionals) are failing to look at the facts and instead are joining
their respective "fanboi" clubs. Thus, in continuing with my attempt to
educate my readers on the folly of believing Apple's position to be
unassailable, I am illustrating exactly how vulnerable Apple is to
either a compression of margin on the iPhone or a slow down in sales.
Apple is just penetrating the market and has a fertile field to conquer,
it is just that it will not be able to pursue that field devoid of
competition as it has over the past 3 years. This should dictate an
adjustment to the highly optimistic aura attached to the multiples used
in forecasting economic results.

The
graph below illustrates the importance the iPhone represents to Apple's
franchise. Believe it or not, this graph actually understates the
importance of the iPhone to Apple for while it brings in 45% of the
revenues, it is responsible for about 70% of the profits. Apple has
become too reliant on one product, although that reliance was borne from
the fabulous success of said product. While Apple will probably derive
some much needed revenue diversification from iPad sales, the iPad will
face the same hurdles that the iPhone is coming up against - and that is
competition from Android-based devices and potentially even Windows
Mobile 7 8 (albeit this is an admittedly much more speculative statement).

Breaking
the argument down even further, you see how the iPod and the iPhone
have literally transformed this company. While I am sure it will
continue to be fantastic company with cool products, I doubt very
seriously that it will be able to grow in the future as it has in during
the last 7 years.

The
saving grace is that the smart phone and portable computing market will
grow quite quickly, allowing companies with dwindling market share to
still capture increasing revenues. The ugly reality is that those
revenues will have to be burdened with increasing R&D, marketing and
distribution costs since the amount of competition will probably scale
faster than the market itself. That, my friends, is a very good thing
for you and I, the consumer!

All
paying subscribers are welcome to download the mini-model which shows
Apple's earnings sensitivity to margin compression through competition.
This is the very crux of determining the extent of Apple's success or
lack thereof, in the near to medium term. Click here to download ( Apple iPhone Profit Margin Scenario Analysis Model), and click here to subscribe.

Look
to my writings from last summer to determine the common sense reasons
why Apple is at risk despite the lovefest that the media, the sell side
of Wall Street and the equity markets have for it: How
Google is Looking to Cut Apple’s Margin and How the Sell Side of Wall
Street Will Enable This Without Sheeple Investor’s Having a Clue. After
nearly a year of showing nearly incontrovertible evidence that Apple
has seen its heyday, the mainstream media is catching on. First a quick
overview of my thoughts...

1. 1. Look & Listen Closely As The Solitary Margin Compression Theory Slowly Bears Fruit: Apple to Drop Flagship iPad Prices?
   2. Steve Jobs Calls End Of the PC, We Call The End Of The Fat Margin Tablet – Including The Pretty iPad, With Proof! 
   3. Is The Evidence For An Apple Margin Collapse Now Incontrovertible? 
   4. I
      Absolutely Dare Anyone To Read This And Still Not Consider The
      Probability (Not Possibility) Of Apple Suffering From Margin Compression 

What
Google has created to compete with Apple, RIM, MSFT and Nokia, was not a
new technology - but a new way of doing business, reference "Looking at the Results of Google's "Negative Cost" Business Model Employed Through Android". Less
than free is their innovative new (and old, since they simply applied
their cloud services model to the smartphone OS) business model and it
proved to be pretty damn effective. Armed with such a weapon, Amazon is
selling tablets (24 hours after launch) at a rate of 50,000 per DAY.
That's right! Per day! Amazon is also selling them 60% cheaper than
Apple's cheapest offering over a retail network that has both broader
reach and greater access to content and native retail shopping. Not only
does this threaten the iTunes/App Store ecosystem, it threatens the
iPad and itself!

Samsung has set records with their Galaxy S II
phones, which are drasctically superior in nearly every way to the
iPhone 4 and apparently (from what I have gleaned thus far) the iPhone
5. These phones are in very high demand, and if Apple does get close in
functionality, Samsung is announcing a dramatic upgrade to this best of
breed device... This Month!

That not enough margin bashing
competition for you? Well HTC, Motorola (just purchased by Google,
itself) and LG are coming with their own superphones, you know... The
product that suppies ~ 70% of Apple's profit. Being that subsidized
iPhone 3GS are being given away for free now, the margin compression
theory makes sense, no?

 Check out the progress of "Google's "Negative Cost" Business Model Employed Through Android"
in this table sourced from Endgadget, which displays the prowess of
Apple's yet to be released flaghsip phone with the arleady dated and
aging Android flagships -- the results are pretty clear cut!

As excerpted from "Is The Evidence For An Apple Margin Collapse Now Incontrovertible?" 5/19/11:

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 Looking at the Results of Google’s “Negative Cost” Business Model Employed Through Android:

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. 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?

And
there you have it, logic and common sense. Lower prices and/or higher
technological bars will lead to lower margins. For those that are paying
attention, it is evident that it is already happening.  The
disappointment felt throughout the web at the release of the iPhone 4GS
was not due to Apple releasing a subpar product. It was due to Android
raising the bar so high that pple simply could not match it without
busting its extremely fat (72%) margins. Google knows this,
hence Google is firing ahead at a technology refresh rate that is not
only unprecedented and unheard of, but makes Moore's Law appear to be
behind the times, Matrix style Bullet time effect.

Let's reference the model behind the subscriber document  Apple - Competition, Cost Structure and Forensic Valuation and
go through the basic fundamentals, step by step for the iPad and iPhone
(together nearly 80% of Apple's profits) are very strategic segments
for both Apple and the industry.

Now, I've told you before, and I'm telling you again, and I'll probably have to tell you several times in the future... I'm Hunting for Squid!

It Should Now Be Common Knowledge That Goldman’s Investment Advice Sucks???

I'm not going to bother to mention that Goldman advised clients to by European banks in direct contravention to my Pan-European Sovereign Debt Crisis research. Hopefully, you see how that ended - And The European Bank Run Continues... An equally egregious offense is daring to go against the BoomBustBlog grain on Apple...

• “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, 2010
• “Reggie
  Middleton Takes The Challenge To Goldman Sach’s Apple Proclamation One
  Step Farther, Apple’s Closed System Risks Failure!” Wednesday, December 15th, 2010

Of
course, that doesn't necessarily mean that there is any credibility in
said proclamations, though. Reference this priceless nugget in light of
the links above...

• Goldman
  Sells Nearly Half $Billion Of Apple Stock Directly Into Their Client’s
  Conviction Buy Recommendation: Guess Who Really Agrees With Reggie Now! Friday, May 27th, 2011

And as a reminder...

Fear
not, oh ye deprived consumers of the truth! Subscribers can access
unfettered, unbiased analysis on Apple's situation and prospects, by the
numbers:  Apple – Competition and Cost Structure Forensic Analysis and accompanying Apple iPhone Profit Margin Scenario Analysis Model – suggested use with Apple Earnings Guidance Analysis

More on the Creatively Destructive Pace of Technology Innovation and the Paradigm Shift known as the Mobile Computing Wars!

1. There Is Another Paradigm Shift Coming in Technology and Media: Apple, Microsoft and Google Know its Winner Takes All
2. The Mobile Computing and Content Wars: Part 2, the Google Response to the Paradigm Shift
3. An Introduction to How Apple Apple Will Compete With the Google/Android Onslaught
4. Don’t Count Microsoft Out of the Ultra-Mobile Computing Wars Just Yet
5. This article should drive the point home: An iPhone 4 Recall Will Hurt Apple More By Opening Additional Opportunity for Android Devices Than Increased Expenses
6. A First in the Mainstream Media: Apple’s Flagship Product Loses In a Comparison Review to HTC’s Google-Powered Phone
7. After Getting a Glimpse of the New Windows Phone 7 Functionality, RIMM is Looking More Like a Short Play
8. RIM Smart Phone Market Share, RIP?
9. Android is gaining preference as the long-term choice of application developers
10. A Glimpse of the BoomBustBlog Internal Discussion Concerning the Fate of Apple
11. Math and the Pace of Smart Phone Innovation May Take a Byte Out of Apple’s (Short-lived?) Dominance
12. Apple on the Margin
13. RIM Smart Phone Market Share, RIP?
14. Motorola, the Company That INVENTED the Cellphone is Trying to Uninvent the iPad With Android
15. Android Now Outselling iOS? Explaining the Game of Chess That Google Plays in the Smart Phone Space
16. There
    Goes Those Fancy eBook Aspirations from Apple, Barnes and Noble, and
    Amazon: 100,000’s of FREE eBooks from the Public Library
17. How
    Google is Looking to Cut Apple’s Margin and How the Sell Side of Wall
    Street Will Enable This Without Sheeple Investor’s Having a Clue
18. Empirical Evidence of Android Eating Apple!
19. More of the Android Onslaught: Increasing Handset Revenues and Growth
20. Many More Black Eyes for the Blackberry? A Complete Forensic Analysis of Research in Motion
21. The BoomBustBlog Multivariate Research in Motion Valuation Model: Ready for Download
22. The Complete, 63 pg Google Forensic Valuation is Available for Download
23. iSuppli Continues to Validate BoomBustBlog’s Original Thesis: Android as the Viral Game Changer!
24. BoomBustBlog Research Hits Another One Out the Park! Google up nearly 10% after hours, true blowout earnings unlike JPM
25. As
    I Warned in June, DO NOT DISCOUNT Microsoft in This Mobile Computing
    War! Their Marketing Campaign is PURE GENIUS! and it Appears as if the
    Phone Ain’t Bad Either
26. Reggie Middleton Wasn’t the ONLY Openly Apple Bear in the Blogoshpere, Was He?

The following are subscriber downloads and illustrations. Please click here to subscribe or to upgrade your subscription.

Comments

[SILVERGEDDON]

Reggie, I wanna see you perform that jump, with a willing female waiting for the hard landing. Takes the gay speculators out to the wood shed for a beating. Just sayin'

[Reggie Middleton]

You provide the "willing" female and its a deal.

[Hunch Trader]

Galaxy S2 is awesome, so slim it will fit anywere;  an organizer, a woman's pouch, even a large wallet; yet powerful. Very happy with mine, bought it as soon as the device came to market, finally everything good enough and better in one.

[MarketTruth]

100% spot on Reggie!!! Not trying to be fanboy yet u r sooo right!

i could care less about politics of the moble platforms, yet being a DEVELOPER and geek consumer who is DEEPLY involved in mobile technology since the Motorola 8000H (brick phone... then did WAP sites and now apps for EVERY major mobile platform).

Apple sux, seriously. From a dev point of view they are conceited assholes.

WP7, good MS device hardware, typical problems with implementation and offering all the features people want.

Android was easy to deal with, dev for, and get app approval.

As for actual use, the newest Android devices make MS look limited and Apple is for stupid sheeple who have no clue imho. Apple will suck and steal every dollar from you to buy the next POS hardware and app they can. Apple is the Vampire Squid Goldman Sachs of mobile devices.

REGGIE, just wait until you see/get the new Jetstream tablet. Dual 1.5Ghz processor, 8M cam, Honeycomb 3.1... and 4gLTE with 40+ Mbs downloads and 10+Mbs uploading.

Apple can kiss my tanned white ass. MS, close but no cigar. Android FTW… plus Android just got another Adobe Flash update :)  How many Apple fanboys can seamlessly play the MANY streaming video/audio sites in HIGH rez like i do right now with Android? Answer: Zero.

[divide_by_zero]

Not an Apple fanboi perse but heck I've uninstalled Flash even on my PCs(no Apple laps or desks), on Linux box I lucked out admin never installed. What a waste of bandwidth! There's very little content now that I miss seeing now on the phone, occasionally a youtube vid or some embedded vid but most sites provide something else in HTML5 or whatever.

[nah]

whats good for apple is good for America

[beatus12]

Thank you RM, excellent. Especially liked your thoughts on

who is dependent on the fabrication of key components, - very

similar to how Hyundai is making big gains in auto industry.

[learning2]

Reggie - Off topic. I think it would be interesting to hear your opinion and interpretation of the Insider Selling and Buying that's been going on. For instance, on FinViz.Com I've been watching the Owners/CEOs/Directors/Others buying and selling their company stock. It seems to me they are buying/selling small lots for small dollars just to influence the Market Volume. Can you give us some more insights? Here is a typical table of transactions from the above site:

Ticker Latest Insider Trading Relationship Date Transaction Cost #Shares Value($)
ADGF ADAMS B H Director Oct 03 Sale 5.09 2,800 14,242
ADGF ADAMS B H Director Oct 04 Sale 5.01 1,600 8,009
SYBT TASMAN NORMAN Director Oct 03 Buy 18.25 246 4,493
SYBT SIMON NICHOLAS X Director Oct 03 Buy 18.25 70 1,276
SYBT Northern Richard Director Oct 03 Buy 18.25 9 156
SYBT MADISON BRUCE P Director Oct 03 Buy 18.25 329 6,004

[divide_by_zero]

Not a fanboi, still on PC Win and Linux, but when it came time to retire my Vzw flip to the cell museum I went to the local Vzw store and tried all offerings thinking I'd get an Android. I did extensive user type testing of Samsung/HTC/Moto Androids and iPhone, while raw hardware stats may make the Androids look "far superior", the software left much to be desired and I found the iPhone to outperform on basic web surfing and even Youtube videos(unless wrong format of course). Add to that user reviews on the Vzw site itself indicated Android users were not very satisfied with their phones 1) for battery life and 2) OS freezing up(saw this several times in the store too many times for 2 visitis of a couple of hours). So for $70 more I ended up with an iPhone4 16GB, though I was pissed at having to install Apple iTunes S/W on my computer to activate the damn thing, very needy stuff always interrupting but it's gone now. The screen size also worked against some of the Androids IMO, iPhone and several of the Androids I thought were more correctly sized, much bigger and you might as well carry a tablet. Anecdotally, I also have several friends that have recently switched from Androids back to iPhones.

The 4S new(to the iPhone) dual-core A5 processor appears to put it on par with iPad for graphics etc which isn't too shabby plus OS update with many improvements that Android will need to catch up with. While I have no doubt Android OS will eventually will get there in terms of stability and useability it's not there yet. Also, in regards to Apple Samsung conflict, Apple has moved on to TSMC so they will be getting the very latest nm technology, from working for ARM for awhile, ARM's physical IP is tightly coupled with TSMC for power and performance as they are the 800# guerilla in the semi room. I read the other day that iSupply estimates a raw cost of $11 per iPhone so quite a ways to go in margin.

[lilimarlene1]

Gee whiz, I have a Droid Eris that I got two years ago. Had an iphone through my job. Quit my job (crazy) and needed a similar phone. I'd like to know what the Droid OS needs to do to catch up with Iphone? My phone is an antique at this point but still great, and was better in some ways than the Iphone!

[divide_by_zero]

Verizon store was still selling those when I tried the Androids the first time right at the end of life, it was slow and by all reports a comparative battery hog. Stuck forever on v2.1 (at least verizon) which seemed to be real buggy. Waited to compare 2.2s sometime later, still not much improvement.

[SILVERGEDDON]

Apple tweaked an already good phone, made it better. Media came up with the number 5, and bitched when they didn't get what they expected. So the new Galaxy hits, and Apple responds with the IPhone 5 release thereafter covering all the Galaxy bases. Plus, another round of game changing functionality, a completely new look, and the same cross platform functionality with all of their other products. Oops! Gamechanger! Apple steps up front - again. I don't give a fuck about their stock price - it is paper. Paper burns eventually. I invest in gold, silver, lead, copper(jackets), food, solar power, and a community of like minded individuals so we can guard each other's sixes, and contribute skill sets that allow us to thrive and survive. Cut your way out of that, Reggie.

[junkyardjack]

Well they already announced all the functionality of the phone a few months back.  To think that they would release an iPhone 5 in a few weeks is pretty silly. The only thing the phone could have been was an update on looks, iOS 5 works pretty much like iOS 4.  This is how Apple does their release schedule, iphone 4S is all there will be just like the iPhone 3S after the iPhone 3.  People like the iPhone so they don't need to break their necks updating every week.  We'll see whether consumers go for the iPhone 4S or more convert over to Android but Apple seems to be operating in a way that will be very positive for their margins if consumers go along with it.  I'm not a huge Apple bear because consumers are willing to spend their money there, until that changes they are a great company.

[divide_by_zero]

Pretty funny report out that the Chinese fake iPhone makers jumped the gun producing "Hiphone 5s" off rumor mills.

http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10756927

[falak pema]

Very interesting dialogue. Will follow RM's predicitions. For the first time in my memory Apple's backed down on a star product release schedule this week. Its gonna be Iphone-4S not Iphone-5...Just saying, correct me if I'm wrong.

What is unclear to me is how Apple's whole product line profitability projection (laptops, pads, phones, store, software) links into this head-on for the smart phone segment with Google-Android-Samsung which could squeeze smartphone margins.

[jimijon]

Amazon - Interesting company and their fork of the Android OS will be very interesting to see how that plays out. It could seriously rub Google the wrong way. Either way it farther splinters the developers on what to target. Meanwhile, iOS keeps getting better and better and out of beta working very well with more "it just works" features.

The 4S is the perfect devlce to keep up their Margins. Following up with cheap (free) 3GS and cheaper 4, Apple will be accelerating its subscription base again. Throw in some nice iCloud work and Apple will continue to grow its ecosystem while rewarding many of its developers. All in a very "just works" system... who doesn't love AirPlay?

Anyway, currently trying to write a cross platform App with Sencha and PhoneGap. Complete torture I might add. But it is a hobby app so I will continue on it. But iOS/XCode/Simulator is soooo nice. 

Anyway... long AAPL and AMZN and short GOOG is my six month prediction ... all relative of course in case of a market crash.

[junkyardjack]

GOOG is an awful company because they don't know how to market their products.  They have a lot of stuff that's much cooler than Apple but they will just watch it die.  I have very low hopes for Google Plus which could have been a big hit, Facebook will stamp it out quickly since GOOG doesn't put any effort behind its products until they are runaway successes like Android.  

[ex VRWC]

We built our own cross platform UI tools atop OpenGL ES for Android, IOS, and the regular desktop.  Much less torture when you do it yourself!

[asparagui]

Straight OpenGL, or a library?  I've been messing with Cocos.  I've written some Sencha Touch/jQuery mobile code, but it's useless for my main app (a program that runs offline).

[ex VRWC]

And they are all powered by a little IP company called Imagination Technologies who designs the 3D graphics and video cores that power pretty much every smartphone except the few NVidia Tegras out there, as well as the IPad, IPad2, and over half of the tablets.  Thats my favorite company in this whole mix!

[disabledvet]

You're turning into a raging lunatic Reggie. Apple could be considered a ridiculously over valued stock--that's Wall Street's job to figure out. No one in their right mind thinks this is a poorly run company or that Google's Android is in any way a credible threat to Apple. I love Google--still own it--they're going places and it's gotta be a blast working for them. But via a vis Apple they have about 100 billion in catching up to do. So does Microsoft I might add. Anywho the Federal Government borrows and spends 100 billion in a week so that's why I keep staying in full poo-pooh mode. THAT ability really is amazing--and should it fail--well let's stick to Europe...and calimari instead of squid.

[homersimpson]

The only job Wall Street has is to just make a buck. Everything else is secondary or is a guise to look like they are doing a job other than to make their Wall Street firms.

Do you really think Apple would be this sky high if Apple didn't sandbag their predictions for the last 3 years? Of course not. And the dumb Wall Street analysts just go along with Apple "surprising" or "extraordinary" numbers every time earnings is announced.

[notadouche]

Nice job Reggie, you shorted Apple about 150 points ago.  Of course one day this "prediction" would come true.  I predict, one day that Obama won't be president..   Of course it will be true but I won't predict 2012.  Does that still make me the next coming of Nostradamus?  

[homersimpson]

The way the stock market is setup nowadays, you can take a thousand wins but one big uber-quick loss will wipe you out.

APPL falls into that "one big loss" category considering how overpriced they've been for the longest time.

[Clorox Cowboy]

How will Obama win in 2012?  A sock puppet could defeat that...sock puppet.

[Clorox Cowboy]

Love your analysis but I gotta ask, Reggie...  

Do your neighbors ever call the cops when they see you slaughtering balloons shirtless with a sword on the front lawn?

[ServingMyKing]

Nice job Reggie!

Without Steve Jobs, Apple is just another electronics company.  The margin goes where Steve goes.

[LowProfile]

Lol, first two posters clearly like their Iphones.

And @ Iam a Man etc. since his free analysis that should *at least keep you from buying Apple here* isn't enough, if you want timing on when to sell/short it, why not sub to his blog?

[Kina]

Samsung has been better gear than iphone for while now. I'm waiting patiently for the Galaxy Note.

[Reggie Middleton]

The note truly does appear to be a universal solution, part tablet, part phone. I just bought the Sprint version of the SII and have it running at 1.6 Ghz, dual core, and it's battery lasts LONGER than my previous phones. It's a monster of a performer, besting some desktops and when people see the screen they are literally awed.

The camera is, for the first time in my experience dealing with smartphones and PDAs, truly a point and shoot replacement and the 1080p video is crisp as hell.

I'm so happy with it that I will gladly by the Note, Galaxy HD or the Nexus Prime in a week or two, and simply pass my new (but soon to be legacy device) on down to my kids.

[I am a Man I am...]

Hey Reggie, why don't you project some bottom line numbers??  Cash at the end of the year, earnings per share, etc.  You are doing a touchdown dance a little early, why don't you show a chart of Apple's earnings per share over time.  Google's stock price has been getting crushed by the way.  Your iphone numbers have been consistently wrong.  

BTW, no technology stock goes on forever, but each quarter you have been wrong.  If you keep consistently saying apple is going to lose you will be right eventually.  But your timing so far has been atrocious and TIMING IS EVERYTHING!!

[homersimpson]

Pay for his info and you'll find that your foot has been in your mouth the whole time..

[Reggie Middleton]

Didn't I correct you several times before. I've never been wrong on Apple (thus far), and I predicted that in 6 to 8 quarters from last October, their margins will feel the pressure. We're 4 quarters in and their latest flagship product release (responsible for almost 70% of thier profits) was virtually booed at the same time that Apple failed to catch up to the existing Android tech (or market share growth), exacerbated by the fact that major Android upgrades are due out in 7 days: the most advanced hardware ever manufactured for Android, as well as the universal interface OS - Ice Cream Sandwich. Take this into consideration, after all, the yet to be released iPhone 4GS is not even close in function and perfornance to the 6 month old Samsung Galaxy sII.

So, when the new hipsters and those that need real power and functionality in a phone, where to you think many will choose? Will they ALL still go to Apple knowing a better product is right next door?

Add in the Galaxy Tab threat, which Apple is trying to settle through court, and the very real threat through Amazon, and you mean to tell me you don't see ANY margin pressure?

As for your other request, subscribe and you will see what my numbers look like. I give away more for free than just about anybody on the web, don't ask for the rest as well.

[Toolshed]

That's why they call them fanboys Reggie. No logic, no reason, only blind obsession. Apparently there is no cure.

[Jason_1sandal]

I for one think you are correct Reggie. I love my HTC Android phone. I wouldn't own an iphone now if you gave me one. Simple, fast, high quality video, and voice to text is great fun. Keep your iphone. HTC Rocks

[asparagui]

Um a) nice numbers, as ever.  I'm an iPhone/iPad developer and lately I've been wondering if I've picked the wrong horse.  Android still needs to boost developer revenue drastically would be my only counter-arguement.

b) How do you make these photos?  Are you really out in your front yard with a trampoline and a broadsword?

Because if so, THAT IS AWESOME.

[Reggie Middleton]

I'm out in someone's yard (won't show mine in public), but I don't use trampolines. I use my legs and my legs only, and broadswords, katanas, Samurai swords, sais, spears, 7 section whips, stags, bos, fists/feet/elbows/knes, fantasy (Conan the Barbarian style), light sabers, Spanish Conquistidor blades, Chinese Spring Steel, etc. 

I get down when I'm in the mood. I just turned 44 last week and was rebuffed by this buff, and quite fit/hard 26 year old MMA fighter/instructor. I was thoroughtly insulted! I told him I was knocking people out before he was born (literally) and had a son nearly his age, but then I realized the reason I was being so sensitive was because... well becasue I was sensitive - probably due to that 44th rolling around. I aint' no spring chicken no mo' :-0. All we really needed to do was jump in the ring to settle it.

We all need to get into, and stay in prime physical shape. The cuties aren't going to love us for our minds, hearts and money only, or will they?

I'm off to the Gracie school next...

[asparagui]

So, no trampoline, just raw pent up manliness.  Awesome*2.

And then, offhand, you drop this bombshell: you keep "broadswords, katanas, Samurai swords, sais, spears, 7 section whips, stags, bos, fists/feet/elbows/knes, fantasy (Conan the Barbarian style), light sabers, Spanish Conquistidor blades, Chinese Spring Steel, etc. " about?  For home defense? WHY DO YOU EVEN BOTHER TO LOCK YOUR DOORS AT NIGHT?  DO YOU HAVE A MOAT?!  #@*)&^$(@#*$&^#@($*&#@ OVERLOAD

+++END CARRIER (USER ERROR: HEAD EXPLODED)

[Popo]

Is it just me or is Reggie showing more skin with every accurate call?

Reggie please stop being right.  We don't want to see any more.

[Melin]

Speak for yourself...

[Reggie Middleton]

Funny! You don't want to be around when Goldman collapses, then. Or, at least cover your wife's eyes :-)

[greyghost]

hey reggie what do you think about sprint spending $20 billion for apple products. i don't mean from the apple point of view but how that will play out for sprint? as a sprint customer it means nothing to me. if i had wanted an apple product, i would have bought one by now...lol.

[Buckaroo Banzai]

There are a lot of Sprint customers with grandfathered $69 unlimited plans. Many of those might be interested in an iPhone.

[imaginalis]

Apple will fall one day just like everything else. You are still grinding an axe for some deep and historical personal gripe though.