A subscriber convinced me to post the 1st quarter's valuation bands (subscribers, see Apple Margin & Valuation Note 03/15/2012 [3]) for
Apple to squelch the comments of those who are guessing what's behind
the firewall. Our base case scenario was right on target, and during
the target and after the earnings release I realized that we
underestimated international (especially Asian) sell though and shifted
the weight to out optimistic band which also proved fairly accurate. As
all can notice, the pessimistic band is not show, and that is where the
value lies here. I am not shifting my bias towards (that's towards, not to) the
pessimistic band, for I feel Apple has now started to feel the
competitive and margin pressures that I warned of, and has done so right
at the deadline that I gave in 2010 (this is just as much a factor of
luck as it is skill, alas, if it bears fruit it bears fruit). The latest
valuation bands can be accessed by paying subscribers below (click here to subscribe [4]):
Apple 4Q2012 update professional & institutional [5]
Apple 4Q2012 update - retail [6]
"iPhone Margin worksheet - blog download [7]
[8]image005
Keep the following in mind as you peruse this post...
[9]apple product chart growth
This the BoomBustBlog quarterly update analyzing the info released after Apple's Q1 release. Let me know how prescient you think we have been come the 3rd quarter of the same year.
[10]Apple 2Q2012 results analysis Final - redacted Page 1
[11]Apple 2Q2012 results analysis Final - redacted Page 2
[12]Apple 2Q2012 results analysis Final - redacted Page 3
[13]Apple 2Q2012 results analysis Final Page 4
I discussed this in detail with Lauren Lyster on Capital Account. The margin discussion started at 7:55.
For those who haven't heard my description of Apple's arch competitor, Google's, business model, look here:
See Right On Time, My Prediction Of Apple Margin Compression 8 Quarters From My CNBC Warning Landed Right On The Money! [14] for more on the mechanics of the margin compression theory for Apple