patrick.net

Here what's not in steve's house. Lighten up.
thomas.wong1986 says

That was the B2B revolution which happened back in 1997-2005. Pretty much every companyin various industries from small start ups to billion $$ global mfg have a supply chain and product life management software program.

I think Apple is going to do fine in the short to medium term, but I'm firmly in the camp that says that they owe virtually all of their success to Steve Jobs. Without him, I don't think they'll be the leaders of whatever comes next.

It could be that without Jobs Apple will devolve into simply being like Microsoft, making a gazillion bucks but not doing anything really creative or interesting. Time will tell. Either way, AAPL will be good to own because now it's a juggernaut.

The GOP says

You do realize Apple is only doing Marginally better than Chipotle Mexican Grill?

If a fucking hoitey toitey burrito company can be worth 300 plus clams, then damn it, Apple should be like $1200.

Sounds like you are not factoring in shares outstanding into your 'analysis'. Apple's market cap is 398.41B, Chipotle's is 11.28B. Apple is worth $387.13B more than Chipotle - this is more than marginally better. That is Google (189.64B) plus HP (56.90B) plus Groupon (13.24B) plus ... better

clambo says

AAPL will be good to own because now it's a juggernaut

Juggernauts are not dependent on their vendors who provide the chips, storage and other components.

Whoah, I really didn't expect this. I mean I thought it would be good, but this may be so good that next quarter will look like a disaster when it only meets expectations.

The Apple juggernaut barrels onward.
Wait until Chinamobile finally gets an iPhone (300 million subscribers).

Vicente says

Whoah, I really didn't expect this. I mean I thought it would be good, but this may be so good that next quarter will look like a disaster when it only meets expectations

The apple stores I see are always packed with consumers. Will know better when their SEC filings are filed.

Anyway, there is i heard a backlog of some of their products.. which may indicate further higher shipments down the road. Check the press release may have some comments on this.

The server market is much smaller. Graph of Intel revenues

Apple epitomizes the disruptive business model.
In the Wintel ecosystem, Intel and Msft eat the lion’s share of the system integrators’ (HP, Dell) profit. The downstream participants must fight for the left over scraps. This business model is a duopoly. There were no real second sources in cpu and os. Intel and Msft do whatever is best for themselves, not for the integrators. One may even question the value added by the integrators other than marketing and distribution.
Job’s genius was not challenging this model from a position of weakness in the earlier days. Instead he attacked from the mobile gadgets where bloated os and power hungry cpu are handicaps. The rest is history. I am sure Ballmer wished he can go back in time and crush Apple like a gnat when he had the opportunity.

Correct me if I'm wrong - isn't Linux/Unix the dominant OS when it comes to Servers?

Are you asking, as measured by revenue, licenses? For current sales or installed base?
My guess, IBM and some form of proprietary unix dominate the top end. Msft dominate the low end where they are growing.

http://www.computerworld.com/s/article/9223561/Microsoft_Q2_revenue_up_5_net_income_slightly_down

Business and server sectors combined is bigger than windows, that is a surprise for me.

kt1652 says

Apple epitomizes the disruptive business model.

And yet for decades they gave up on corporate customers unable to compete with everyone else.. HP, Compaq, Dell, IBM and many others. No matter if they had innovative products, and slick marketing. No one was buying. You call that disruptive... How long till the IT managers puts a Sexy Mac Laptop on my desk at work... Will it plug into my Oracle ERP system ??

Apple underestimated the “staggering” demand for the iPhone 4S when it started sales in China this month...
http://www.bloomberg.com/news/2012-01-25/apple-didn-t-bet-high-enough-on-chinese-demand-for-iphone-4s-cook-says.html
thomas.wong1986 says

kt1652 says

Apple epitomizes the disruptive business model.

And yet for decades they gave up on corporate customers unable to compete with everyone else.. HP, Compaq, Dell, IBM and many others. No matter if they had innovative products, and slick marketing. No one was buying. You call that disruptive... How long till the IT managers puts a Sexy Mac Laptop on my desk at work... Will it plug into my Oracle ERP system ??

I give up. Compaq died 10 years ago!
Carly killed Alpha and PA-Risc, double-downed on PC.

Apple had a blowout qtr, a decade of straight up mkt cap grwth.
They have almost enough cash to buy Intel. I tried to show you they are killing everyone else because their margin is much much higher than PC integrators.
High margin and forking unbelievable volume.
Intel pricing of Xeons is 2-3x that of X86s. But the server revenue is only 1/3 the pc products.
Apple does not need to jump into the server market - yet.
After they conquered the telecom industry :)
They do have servers. They are in danger of growing too fast too quickly - the mother of understatement.

Go read in one aspect of Apple innovation, not necessarily of technical kind. Cites lightning fast response from suppliers.
http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?pagewanted=all

(Edit) Here is a summary, no subscrptn reqd:
http://9to5mac.com/2012/01/21/nytimes-why-apple-builds-its-products-in-china/

There is so much room for growth--servers, yes. But even on the desktops, laptops, various sized touch screen devices (from iPad size to John King size!--I can really picture them become ubiquitous in board rooms. Here in SF, they are using iPads for checkout counters and all kinds of random functions).

And the fabled iTv.

The Server thing is a pipe dream.

Apple will have it's work cut out if it tries to replace Linux:

Apple would be trying to replace a free or low cost Linux ecosystem with what, if Apple stays true to form, will be an expensive, high premium, system. I don't think the beancounters at most businesses are going to like that.

Apple would have to replace the incredibly broad range of component, consulting, and software providers for Linux-based systems with themselves as a single source provider. That will make many managers uncomfortable. Basically, their entire business will be at the mercy of a single source for both hardware and software.

Apples would have to make a compelling case to replace a Linux based system that is not only high customizable, but can be customized without paying licensing fees, without engaging in legal struggles over what can be changed where and how, etc. Linux has countless versions and can be customized at whim; Apple will certainly not be so open to customization.

Finally, Linux Admins are ubiquitous. Apple Admins are not. That means sourcing Labor for Apple Servers will be more expensive and difficult.

It's one thing to convince members of marketing segments to buy Apple products.

It's another thing to make a compelling business case to replace Linux servers.

kt1652 says

Are you asking, as measured by revenue, licenses? For current sales or installed base?

My guess, IBM and some form of proprietary unix dominate the top end. Msft dominate the low end where they are growing.

http://www.computerworld.com/s/article/9223561/Microsoft_Q2_revenue_up_5_net_income_slightly_down

Business and server sectors combined is bigger than windows, that is a surprise for me.

The vast majority of modern servers run linux. Nothing else is even close, despite what Microsoft might want people to believe.

You can't compare revenue though. Most people aren't paying a penny for linux. Anyone who tries to make revenue comparison the basis for a market share comparison in that market is just pushing an agenda.

Apple isn't going to waste their time on any serious effort on server hardware. The margins are shit and it does not play to their traditional strengths.

My question is very close to an affirmative answer now.

I was predicting $500 by the end of the year, LOL

Kevin says

The vast majority of modern servers run linux. Nothing else is even close, despite what Microsoft might want people to believe.

Sorry, modern day ERP software (Oracle, SAP, etc ) that run the backbone of business like Apple, GE, HP, Adobe, IBM or any other small, middle, larger size companies dont run on LINUX.

uomo_senza_nome says

looks waay over extended.

Thing is, there is some uncertainty where Apple gets off this train.

Their market share in PCs is well under 10%. Like phones, Apple is perfectly happy letting the crap offerings duke it out for the bottom 80% of the market.

A doubling of Mac's market share will just bring more strength to the Apple ecosphere.

Windows appears to be going in a rather odd direction at the moment, too.

Apple is worth more than google+microsoft.
Apple's phone business alone is bigger than microsoft.
There is a momentum from a monstrous successful business that is like a giant snowball rolling down a hill.
Businesses are going to iPads. They are also going to Macs (OS=UNIX), dropping Crackberries for iPhones.
After a couple new products come out, AAPL will probably go up another $50/share.
My crystal ball which is from the same dollar store as some clown at Merrill says that AAPL is $600 by December.

clambo says

Businesses are going to iPads. They are also going to Macs (OS=UNIX),

Sorry, modern day ERP software (Oracle, SAP, etc ) that run the backbone of business like Apple, GE, HP, Adobe, IBM, Banks or any other small, middle, larger size companies dont run on Mac OsX or iTabs or iPhones.

PE looks good.

Yep, Imagine using SAP on a Tablet. Most people who do serious work in SAP and other ERP tools have multiple widescreens, not a single 10" screen. Tablets are consumption, not creation, tools.

Apple is a Smartphone company now. Macs pale in comparison to iPhones in the Apple Revenue Stream. More than 2/3rds of Apple revenue comes from iPhones and Tablets.

Samsung makes the A4/5 Chip. Motorola just won a patent fight. Both manufacture their own Smartphones.

You got patent risk, margin compression risk, and shrinking Market Share right now with no end in sight. Apple's revenue is based on selling a phone made with the same components it's competitors use (and Design and Manufacture!), made in the same facility that makes many of their competitors products, at a very high premium, thanks to fantastic marketing.

They are buying these for business. Whether you believe all and any business model requires Oracle or SAP is your bias.
The marketing by Apple follows the old saw by the guy running Procter and Gamble: "The key to marketing is superior product performance".
The Apple products are moving from consumers to businesses and soon will be everywhere.
Of course people will buy a few of the "other" brands. I have an Andriod phone because my data/text/voice plan is about 1/3 what verizon or att cost.
iPads and similar will also be getting into education bigtime.

clambo says

They are buying these for business. Whether you believe all and any business model requires Oracle or SAP is your bias.

Not every business needs SAP or Oracle - not Daddy Green's Pizzeria - but many medium and even small cap businesses need it, depending on how much logistics they engage in.

And Macs are not just rare for Business in the US, they are like the Loch Ness Monster outside of North America.

clambo says

"The key to marketing is superior product performance".

Evidence?

Many electronics components - a wide array of brands from a variety of manufacturers, of which the iPhone is just one, are made at Foxconn.

The same 80+ hour overworked 14-year old girl that made the generic MP3 players last week was put on the iPad line today.

clambo says

The Apple products are moving from consumers to businesses and soon will be everywhere.

Do you have evidence of this adoption?

clambo says

Of course people will buy a few of the "other" brands. I have an Andriod phone

Yes, you own the market dominant phone.

thomas.wong1986 says

Kevin says

The vast majority of modern servers run linux. Nothing else is even close, despite what Microsoft might want people to believe.

Sorry, modern day ERP software (Oracle, SAP, etc ) that run the backbone of business like Apple, GE, HP, Adobe, IBM or any other small, middle, larger size companies dont run on LINUX.

...and ERP software represents a tiny fraction of servers in use. And the assertion that ERP solutions don't run on LInux is simply false. There's a reason why Oracle and SAP are getting into the linux market so aggressively.

thunderlips11 says

Yep, Imagine using SAP on a Tablet. Most people who do serious work in SAP and other ERP tools have multiple widescreens, not a single 10" screen. Tablets are consumption, not creation, tools.

Screens are not computers, they're screens. I can connect a tablet to a screen, a keyboard, and a mouse. I can do that with a smartphone, too.

Kevin says

Screens are not computers, they're screens. I can connect a tablet to a screen, a keyboard, and a mouse. I can do that with a smartphone, too.

Of course not. But not convenient to schlep two 19" monitors, keyboard, and mouse and all to a coffee shop or anywhere else you go. Tiny devices will never wholly replace the need to have large screens and ergonomic input devices to do substantial amounts of work.

Eventually, tablets might be comparable in speed and power to a desktop, but that day is probably many years away, because of the cooling and battery life issues relative to small size have to be conquered.

Then there are the speed and security problems of running off a public wireless instead of a wired connection at a place of business/home office.

And then human ergonomic issues are still there.

Today I helped my wife sell stuff at an event outside. We used Square and her smartphone to take CC's. It took a damn long time to process cards because of the tiny screen and keyboard, which was fine since most people paid cash, but a bear if they didn't. It would have been alot easier had I taken the netbook or laptop along. But then where could I have plugged it in?

Maybe that's where a tablet shines.

The US Air Force just ordered 18,000 iPads. It seems they want to put those aircraft manuals into something slimmer than a Manhattan phone book.
Superior product performance=runs UNIX, is more stable and less prone to viruses and spyware than Windows.
The iPhone is not plastic, etc. Macbook air is selling like hotcakes, it's a super product. Etc.
Anyway, what difference does anything we say make? The truth is that Apple is going to be $500/share.

clambo says

Superior product performance=runs UNIX, is more stable and less prone to viruses and spyware than Windows.
The iPhone is not plastic, etc. Macbook air is selling like hotcakes, it's a super product. Etc.

Ipads = Toys... your talking nickels and dimes.

Talk to me when NORAD system, all our communications, nuke missiles and space defense is put on OSX.

Kevin says

...and ERP software represents a tiny fraction of servers in use. And the assertion that ERP solutions don't run on LInux is simply false. There's a reason why Oracle and SAP are getting into the linux market so aggressively.

Sad fact back in the 80s Apple was running their McCormick and Dodge on an IBM, they run their SAP ERP on WinTel.. Thats about the only servers SAP runs on. All the Apple desktops, laptops they use to run their main system are mear dumb terminals ...

How much to implement a vast SAP ERP system globaly.. about $10M .. with 18% a annual support costs.

Sure Apple makes a great consumer product.. but that is all. The commercial/industrial market is very large and very complicated.. not something Apple can tackle easily overnight.

I'm sort of baffled by thomas.
The Apple personal computers, laptops, phones, ipods and tablets are the best products in consumer electronics. They sell them by the million.
Apple makes money in other ways, such as distributing music via iTunes.
Apple is branching into government and education markets and this trend will continue.
I also remember that Microsoft produced their shareholder annual report years ago on a Mac.

This thread is stupid. I'm sending this so I can stop following it.

Oh, and the forum's software is also a terrible piece of software.

Apple crossed the $500 threshold today. I don't buy Apple products myself, can't afford it, but know many others who are sold on the simplicity of them. Apples GUI is always one step ahead, and far as features go, most people don't need or care about them.

thomas.wong1986 says

Kevin says

...and ERP software represents a tiny fraction of servers in use. And the assertion that ERP solutions don't run on LInux is simply false. There's a reason why Oracle and SAP are getting into the linux market so aggressively.

Sad fact back in the 80s Apple was running their McCormick and Dodge on an IBM, they run their SAP ERP on WinTel.. Thats about the only servers SAP runs on. All the Apple desktops, laptops they use to run their main system are mear dumb terminals ...

How much to implement a vast SAP ERP system globaly.. about $10M .. with 18% a annual support costs.

Sure Apple makes a great consumer product.. but that is all. The commercial/industrial market is very large and very complicated.. not something Apple can tackle easily overnight.

I have no idea what you're talking about now. Nobody with two brain cells to rub together thinks apple gives a shit about these markets. They care about the consumer device market because that's where the money is.

Kevin says

I have no idea what you're talking about now. Nobody with two brain cells to rub together thinks apple gives a shit about these markets. They care about the consumer device market because that's where the money is.

No apple isnt interested in the Business market, so some here should stop saying they are.

No the business market, mission critical systems (including PC and servers) are more expensive and carry post contract support at 15-18% additional costs yearly. So by 5 years, a end user would be paying 75-100% on top of list price purchase. Commerical products are very very profitable...

You should know this if you work in places like Silicon Valley.

thomas.wong1986 says

Kevin says

I have no idea what you're talking about now. Nobody with two brain cells to rub together thinks apple gives a shit about these markets. They care about the consumer device market because that's where the money is.

No apple isnt interested in the Business market, so some here should stop saying they are.

No the business market, mission critical systems (including PC and servers) are more expensive and carry post contract support at 15-18% additional costs yearly. So by 5 years, a end user would be paying 75-100% on top of list price purchase. Commerical products are very very profitable...

You should know this if you work in places like Silicon Valley.

"The business market" and "servers" are not even close to the same thing.

Apple is going to do just fine selling macs, ipads and iphones to businesses.

I've worked on plenty of the types of projects you're referring to, and they're not nearly as profitable as you think. The reason they're so expensive is because they tend to be a whole lot of labor that does not replicate for free. There are no benefits from economies of scale, which is really the reason why Apple, Google, and Microsoft are able to make so much money.

1. Stocks prices have little to do with the underlying business.
2. Fundamentals are affect by stock prices as much as the other way around

Pure price action, man. :-)

As mostly a long-term investor, I couldn't see myself investing in AAPL back in April '12. At the time, i felt I missed the boat at the beginning of 2012. I'm glad I didn't chase this stock.

I understand the immense success of Apple the last 5 years. I understand the innovation this company has brought to mobile phones and tablets. It's a great company for consumers, but not a great company (long term) for investors. Why? They busted out in the early 80's w/ the MAC, a game-changer that was quickly copied by Microsoft, and eventually commoditized....Apple busted out again recently w/ the iPhone/iPod/iPad and the ecosystem that's ringing the cash register w/ IMMENSE profits. But both product and ecosystem are being copied as we speak. Talk all you want about 'quality product/customer experience', high-end fit/finish, the 'must have/'IN crowd item' appeal. At the end of the day, it's consumer experience can, and is being copied, just like the MAC back in the early 80's. Apple is a great innovator, but it's missing a "dominate trait" for the long haul. It can't seem to dominate like the Wintel juggernaut (SP?) has the past 25 years.

Am I over-simplifying this? Absolutely. Am I interested in what Apple will do w/ his HUGE pile of cash? Yes. Am I going to invest in Apple and wait to see what happens when they put that pile of cash to use? NO..... Just too much risk for me.....My tech investment dollars are going to Intel at these great prices, because nobody (as of now) can copy their product. it's a 'best of breed' company w/ a real moat that Apple doesn't have. Yes, they are late to the mobile party, but I think we're in the 2nd inning, so to speak. I'll get growing dividend payments (think yield on cost) while I wait... I'm not an Apple hater. I love my iPhone 4s. For me, I just can't invest in this company. I wish those that do, all the best....

Apple is basically a consumer products company in a market segment with the most fickle of tastes. One miss-step or even if they just get a little lazy or behind and Samsung or some other competitor takes 50% of their market share in 90 days. I've already seen Apple rise and fall once in my lifetime. I've seen Nokia and Motorola rise and fall. Apple is not a solid investment iMHO. There are sharks constantly circling it.