patrick.net

Monday 9AM ET there will be a conference call to discuss what Apple is planning to do with the oceans of cash it's sitting on. The punditocracy leads with "they'll pay dividend".

People will sell Apple if it pays dividend, because they will get a tax bill.
Plus it is a sign that Apple cannot grow anymore.

A "10:1 split" will help :)

Official, quarterly dividend for APPL
http://www.wired.com/epicenter/2012/03/apple-goes-blue-chip-with-new-quarterly-shareholder-dividend/

AND a buyback program.

And.... 3 million units sold over the opening weekend.

How are those puts doing?

Apple announces a $10B stock buyback program and you want to short the stock? You are brave.

Ian Ollmann says

Apple announces a $10B stock buyback program and you want to short the stock? You are brave.

From the beginning of the movie "True Lies:"

Tom Arnold: "...now that's ballsy. Stupid, but ballsy..."

Apple (565B) > Google (206B) + Microsoft (268.5B) + Amazon (87.5B). To put things in perspective.

BoomAndBustCycle says

Apple has the competitors balls in a vice. They are all scrambling to compete with Apple in the high-end tablet market and failing miserably.

Not true. Droid Tablets will probably reach market share dominance over the iPads by 3Q 2012. I believe they are already about 60-40 in market share, with non iOS or Droid tablets being negligible.

As fast or faster than it took the Droid to dominate the iPhone.

Hilarious! Flash crash! AAPL trading stopped due to circuit breaker this morning.

Some brand-spanky new exchange called BATS was putting out spurious trade orders, and submitted a sale of a mere 100 shares AAPL at 9% below market which tripped a "stop trading".

http://www.cnbc.com/id/46835129

I have a 3% trailing stop set on this stock, but it never triggered since the stock stopped trading immediately and it's bid/ask never really dropped much.

thunderlips11 says

Not true. Droid Tablets will probably reach market share dominance over the iPads by 3Q 2012. I believe they are already about 60-40 in market share, with non iOS or Droid tablets being negligible.
As fast or faster than it took the Droid to dominate the iPhone.

OK, but how do you become financially invested in Droid's potential success?

It seems like fragmented market vs The One. AAPL still sells a shit ton of phones and tablets, still at a premium, and without having to compete with other "nearly identical" brothers the way Droid does...

Comparing Apple to Android is so ridiculous but people do it anyway. I own 1. an android phone with the cheapest plan on earth 2. AAPL.
My Android phone does mysterious things from time to time. It's not rock solid by any stretch. I still like it however.
Apple makes a few hundred bucks on 1. every iPhone 2. every iPad 3. every Macbook air and they're selling the shit out of them worldwide. The sales keep increasing, and there are still billions of people who want one of these products, or several of them.
Look only at how much they sell, how much profit they make, and what is going on with both of those.
You have a problem with your phone. Would you rather 1. go into the Apple store? 2. go into radio shack/verizon store and ask for help with your android?
Personally I like the Apple store and my local Radio shack is full of *those people*.

swebb says

OK, but how do you become financially invested in Droid's potential success?

Droid is a verizon brand, so I suppose you'd buy verizon stock.

Assuming that you actually mean Android, obviously you buy Google, Samsung, HTC, etc.

clambo says

I own 1. an android phone with the cheapest plan on earth

Virgin Mobile?

thunderlips11 says

BoomAndBustCycle says

Apple has the competitors balls in a vice. They are all scrambling to compete with Apple in the high-end tablet market and failing miserably.

Not true. Droid Tablets will probably reach market share dominance over the iPads by 3Q 2012. I believe they are already about 60-40 in market share, with non iOS or Droid tablets being negligible.

As fast or faster than it took the Droid to dominate the iPhone.

Homo Economicus. A Legendary Creature, like Bigfoot, claimed to exist by Pseudoscientists.

Droid is dominating the IPHONE? I thought apple had the highest profit margins of the entire cell phone industry? I would rather sell a million iphones and take a 51% share of the cellular market profits over selling a billion "buy one get one free droids" from htc, samsung, Name your crappy brand here... Each with razor thin profit margins.

Bmwman is correct! I pay $25/month unlimited data/texting. For a few months I was tethering my laptop to the android as a wifi hotspot, just to see if it worked. It did work, I was even able to skype video tethered to my android phone.
Those who are predicting some problems for Apple in the future are wrong. The Apple "ecosystem" is growing a bit stronger with icloud and soon you'll shoot pics/videos with your iPhone, see them on your iPad, which will be a large remote for your Apple TV to play it all on.

I'll skip it myself. I have a roku and use dropbox, but my computers are macs.

BoomAndBustCycle says

Droid is dominating the IPHONE? I thought apple had the highest profit margins of the entire cell phone industry? I would rather sell a million iphones and take a 51% share of the cellular market profits over selling a billion "buy one get one free droids" from htc, samsung, Name your crappy brand here... Each with razor thin profit margins.

Only they don't have "razor thin" profit margins. Samsung has only slightly lower margins than Apple on their smartphones. HTC is also doing quite well, even though their revenues tanked last year when samsung hit them in their main markets.

BoomAndBustCycle says

Droid is dominating the IPHONE? I thought apple had the highest profit margins of the entire cell phone industry?

The Chart I posted is clearly showing Market Share, which is an entirely different concept than Margins.

Apple's margins are fat, but they depend on their Android-making competitors for Apple Components, which could grow into an issue later on.

BoomAndBustCycle says

I would rather sell a million iphones and take a 51% share of the cellular market profits over selling a billion "buy one get one free droids" from htc, samsung,

High Margin or High Volume. Sachs 5th Avenue vs. The Dollar Tree. McD's versus Ruth's Chris. You can make money either way, however when an industry matures it tends towards Volume. They also tend to be mutually exclusive.

At the time of orginal post AAPL was ~$550/share.

Now trading well north of $600.

The answer to end this thread is:

NOT YET

Too bad I couldn't prove that on March 11th, hope the OP didn't lose their nest egg on put contracts.

thunderlips11 says

The Chart I posted is clearly showing Market Share, which is an entirely different concept than Margins.

Apple's margins are fat, but they depend on their Android-making competitors for Apple Components, which could grow into an issue later on.

Your charts are useless and misleading. iOs and OTHERS are the only two categories...

If it were broken down by specific model of phone... or company. The share of iOS would DWARF everything else.

Android is such a fragmented market... Apple does have to watch it's back because the Android market is a lot like the PC market of the 80s/90s.

But i don't believe the tech consumers of 2000 on are anything like the tech consumers of the 80s/90s. They no longer want fragmented open-source market.. The CONSUMER enjoys the ease of use of a SAFE walled garden ecosystem that Apple has nurtured. Apple's brand has never been stronger either.

2 year-olds love the IPAD and 99 year olds love the IPAD. They've done a great job of branding and converting people to Apple products for life.

clambo says

with icloud and soon you'll shoot pics/videos with your iPhone, see them on your iPad, which will be a large remote for your Apple TV to play it all on.

You can already have the photos show up automagically on your AppleTv as well.

Just fyi!

I think it's time to short AAPL in a decade or so, maybe when it's a split adjusted $2000 per share.

I wouldn't short them unless I thought that people were going to stop being fickle consumer whores. Apple is running strong right now, they have mountains of cash and international demand is just getting ramped up. Unless consumers stop being consumers, Apple still has some room to grow.

BoomAndBustCycle says

Your charts are useless and misleading. iOs and OTHERS are the only two categories...

Others is almost entirely Android, Windows and "Other" are a tiny fraction, as seen in the Ring-chart below.

Android is the dominant OS. Here's more charts from various sources for you:

Note that Android dominated iOS despite a lead of several months, within just 2 years.

BoomAndBustCycle says

If it were broken down by specific model of phone... or company. The share of iOS would DWARF everything else.

Why would we do that, it's misleading. If we were to break down PCs by Manufacturer rather than OS, then it might appear that Snow Leopard was running neck and neck with Dell or something. It would be misinformative, since Windows is the most important factor in determining what software your PC can run, not the maker of the PC.

What counts is that Android OS powers the majority of SmartPhones. That determines the ecosystem the user has access to, just like your PC's OS determines what software you can run (Emulators are far from perfect, and the more complicated the software, the less it's likely to work). The App Store or the Multitude of Android Stores

BoomAndBustCycle says

But i don't believe the tech consumers of 2000 on are anything like the tech consumers of the 80s/90s. They no longer want fragmented open-source market.. The CONSUMER enjoys the ease of use of a SAFE walled garden ecosystem that Apple has nurtured. Apple's brand has never been stronger either.

2 year-olds love the IPAD and 99 year olds love the IPAD. They've done a great job of branding and converting people to Apple products for life.

Not seeing this reflected in any trends or numbers. Consumers love choice. If they didn't, they'd all have dumped their Windows machines for Macs and it would be apparent in the trend line. Yet Mac market share is still in the single digits.

And of course, the charts above reinforce that for Smartphones as well. And the power users - the key influencers who influence the casual buyer - prefer flexibility and openness more than most.

Everybody keeps announcing the death of Windows that never happens.

BoomAndBustCycle says

The CONSUMER enjoys the ease of use of a SAFE walled garden ecosystem that Apple has nurtured.

http://securitywatch.pcmag.com/none/296449-flashback-ends-mac-s-no-virus-reputation-experts-say

Kaspersky: Reputation Already Lost

Roel Schouwenberg, Senior Researcher for Kaspersky Lab, observed that "the MacDefender and DNSChanger epidemics from last year were the turning point." He goes on to note that "it became clear to the cyber-crime world that there's money to be made with OSX malware, and we’ve seen an increase in OSX malware since then."

Schowenberg stated, "Percentage-wise, Flashback is roughly the equivalent of Conficker," referring to the multi-vector Conficker Worm that created such a stir in 2008-2009. Most industry metrics for prevalence of PC viruses rely in part on telemetry from security software, so "because so few OSX users are running security software, so the metrics the industry has are limited." Schowenberg concluded, "I hope we can now finally lay the 'Mac has no malware' myth to rest."

Microsoft’s Windows 7 operating system is more secure than Apple’s Mac OS X, claims security researchers at Black Hat.

According to Alex Stamos of iSec Partners, OS X has a greater number of vulnerabilities compared to Windows 7, and when it comes to network security, ’OS X networks are significantly more vulnerable to network privilege escalation,’ and that ‘almost every OSX server service offers weak or broken authentication mechanisms.’

Stamos also goes on to dispel the myth that Mac OS X isn’t attracting attention from hackers. To support this he points out that over the past three years 1,151 major vulnerabilities have affected Apple products, only slightly less than the 1,325 affecting Windows.

http://www.zdnet.com/blog/hardware/black-hat-os-x-networks-are-significantly-more-vulnerable/14130

Owning laptops running windows, linux and mac there is no way windows is "secure" on your pc compared to mac and linux.
Mac is unix so it's inherently more secure for your own equipment.
Windows is already slowly losing it. They are charging computer companies less and less for it since the guys in India and China have decided that Linux is fine for their needs and why pay a huge microsoft tax?
Apple macbook airs are the cool laptop I saw in airport lounges here and there. So are iPads. Of course every place has one sad sack sitting next to the power outlet so he can run his windows craptop for a few minutes, gotta finish that chart "sales by region".
Apple is going to scream when Chinamobile and they finally work out a deal and the iPhone can be bought by those additional 600 million subscribers.

Not yet.

If you want to short something short Facebook once it's done with IPO. That thing looks extremely overvalued.

Look at the aapl chart. It has stable but very high (40% or doubling in 2 yrs) growth for 3 yrs. Steve Jobs dies in Oct. 2011. Within 2 months, it starts to explode, on track to double in just 6 months. It seems like when Jobs died, suddenly a bunch of ppl took note and jumped on the bandwagon.

This is clearly not sustainable & it will come crashing down. If only we knew when...

Apple's valuation is very reasonable. But I don't invest in anything I don't fundamentally understand. And I don't really understand the "Cult of Apple." Consumers are fickle. What happens when they go to the Next Big Thing?

They have a P:E of 17, which is reasonable, but if you look at their quarterly reports for 2011, they were around 25 to 30 billion in revenue and 6 to 7 billion in profits. Then, suddenly after Jobs dies, they get 45 billion in revenue and 13 billion in profits. So, they double profits on 50% increase in sales? Maybe they sold more of their profitable products, but it seems like someone may be adjusting their accounting systems or not keeping R&D up in proportion to revenue.

That said, I haven't been following them, b/c I'm not invested directly, dislike their crappy windows software enough to stop using my ipods, and am also put off by the cult of apple.

Apple is not a cult. It may have been seen as a cult when we used the mac while the others were still struggling with a $5000 IBM PC running DOS, i.e. NO graphical interface. Do you remember?
But the Apple products are simply superior and the service and software are also great. It's not complicated.
The fact that they also have gained a cache is also inevitable, since as the usually highest priced items they gain status among the women and youngsters. Yet, still, the iPod device was simpler to use than the cheapo Sandisc mp3 player I bought at Walmart.
The reason to buy Apple is the growth of profits as they increase their sales in markets that are still growing. Chinamobile has 600 million subscribers who are waiting for their iPhone.
Almost every American has an Apple product. The population of the rest of the world is another 6 billion or so.
I predict more profits for Apple for a decade or more. Eventually every dinosaur gets too large to support its own weight. So, by then, I hope to be getting dividends and will sell a couple shares of AAPL when I want to buy a small boat, take a trip somewhere, etc.

clambo says

Apple is not a cult.

You sure about that?

http://news.yahoo.com/blogs/technology-blog/kid-sold-kidney-ipad-helps-police-arrest-five-191527813.html

clambo says

Apple is not a cult. It may have been seen as a cult when we used the mac while the others were still struggling with a $5000 IBM PC running DOS, i.e. NO graphical interface. Do you remember?

I don't remember that. I remember Apple IIe's cost 2-3x a C64 with vastly superior graphics and sound. And both didn't come with Graphic Operating Systems.

I also remember Amigas, which blew early Macs out of the water, again vastly superior sound and graphics, and did have a graphic operating system.

Also, Mac OS is based on BSD, but it is only Unix-like.

clambo says

But the Apple products are simply superior and the service and software are also great. It's not complicated.

Quite a few people disagree. They say Apple does everything possible to blame all faults on the customer and fights any and all warranty claims tooth and nail.

Since they are made from the same components and assembled at the same facilities that make Droid Phones, Tablets, and PC Components, I fail to see how Apple components could be superior.

Samsung Galaxy chips and the A4/5 chips are both designed and made by Samsung.

Apple does a great job marketing and branding. That's it.

I wrote when the MAC came out it was the only computer with a graphical interface, while the IBM pc did not. To use the graphical interface, it had the first mouse.
I have an android phone and it does mysterious things sometimes. I have a Sansa MP3 player that is confusing compared to an iPod. I have used an IBM PC when they ran DOS, I owned a mac and a windows 3 laptop, later a mac and a windows xp laptop, so I am familiar with them all.
In my opinion a macbook air is superior to any and all ultrabooks , which are not much cheaper either.
If I have any kind of problem or issue with my Apple stuff I have a place to go. Do you go into Fry's with your windows laptop when it's acting up? Or do you take your Android phone into a verizon store or maybe a radio shack?
The broker I talked to at Vanguard when I bought another 100 shares of AAPL said he also had Apple stuff, the iPhone and the iPad.
Sorry but if you visit the Air France lounge in SFO, you see Apples, if you then are in the airports in Paris, Hong Kong, you see them. Then go down to Mexico and you'll see them in the Starbucks and here and there.
Everyone on earth wants an Apple product. They are just waiting to get the dough together to buy one. There is presently no other brand on earth like it.
Eventually this will not be true. By then I am not going to care.

clambo says

They are just waiting to get the dough together to buy one.

Or to sell their kidney for one.

I'll admit apple devices have always been more reliable and better looking than most of their competition. That seems to be their contribution & I hope it drives their competition to make more reliable products.

I had a mac in early 90s & PCs from then on. Have run Linux on various machines since 1995. Win 95 & millenia were atrocious & drove me to Linux. Win2K & XP were pretty stable & vista/xp are good as far as I am concerned.
Currently running Linux on servers and Win vista / 7 for work/productivity.

For me, the best thing about Apple products is that they are stable and responsive. The worst part is that they are restrictive in many ways, their users are smug & like to proselytize, everything is expensive, & their stores are a nightmare.

I bought a nano and one of those clip-on ipods back when other brands couldn't make a reliable device. The ipods just worked, and the last thing you want is to fuss with the pieces of crap non-apple mp3 players made between 1998 and 2007 or so. Problem is, Apple tries to make you run iCrapware (itunes and family of junk) on your pc to get music onto the ipod. I think that the cult idea comes from the small and dedicated user group & the shitty attempts to install bloatware and screw you into their ecosystem once you buy an ipod or iphone.

As an example of the apple store experience, last fall my brother had me drive him to an apple store to get some version of iOS. He had to install this so that he could install an upgrade to the latest iOS, so that he could run some software he got for a gift. Well, the apple store stopped selling that version of iOS, and it could not be purchased and downloaded as an iso from apple. It had to be purchased and shipped by snail mail. Rather than making something pretty basic and needed available, the apple store had bright lights, over-designed displays, crap loads of toys on display, and tons of kids running around drooling on themselves. I was amazed.

They're pending over $5600 per square foot in those Apple stores in between the drooling.
My experience in the Apple store and with all Apple employees was always outstanding.
Similar to yesynot I put ubuntu Linux on an XP craptop just for fun and it was great. I loved it. A friend wanted it so I sold it to him. "But, can you put XP back? I am more familiar with it." Within a month he had destroyed it probably from a porno website and had to take it in to some nerds and pay $100+ for a new XP install.
I gave my friend down in Baja a laptop with Ubuntu Linux on it but she's gonna put XP back on because she wants to use some software or other, not realizing she likely has a free linux version of it anyway. Oh well.

YesYNot says

As an example of the apple store experience, last fall my brother had me drive him to an apple store to get some version of iOS. He had to install this so that he could install an upgrade to the latest iOS, so that he could run some software he got for a gift. Well, the apple store stopped selling that version of iOS, and it could not be purchased and downloaded as an iso from apple. It had to be purchased and shipped by snail mail. Rather than making something pretty basic and needed available, the apple store had bright lights, over-designed displays, crap loads of toys on display, and tons of kids running around drooling on themselves. I was amazed.

That's another funny thing with Apple. The OS upgrades.

I'm proudly 5-6 years behind running Vista and it doesn't stop me from running anything, including brand new software releases. There are still many PC users running XP SP2, which is a decade old, and they also can still run the vast majority of *new* software.

Not to mention the Lion-PPC problem for Mac Users. I'm glad my PC can still run stuff from more than 6 years old.

Seems to me Apple does everything possible to squeeze their fan base. A company with $80B in Cash doesn't need to cut corners and could have easily included some means of running older software on Lion systems - the dev cost would have been a drop in the bucket for them.

The advantage of having the widest distribution OS - the developers have to incorporate the needs of a huge range of users, such as businesses who are running decades-old software.

Power pc chips are on OLD Apples. Upgrading to Lion would be absurd on this stuff. They can however run 10.5
Apple does everything possible to make good products and software. If you are some snot nosed nerd who won't buy something, be satisfied with your computer running 10.4 which works just fine. Or, be satisfied with your power PC old computer and run 10.5 on it.
Apple is going to make money for its shareholders and make good products.
I wonder how many PC people will continue to downgrade to XP which is going to be finally killed by Microsuck?

clambo says

Power pc chips are on OLD Apples. Upgrading to Lion would be absurd on this stuff. They can however run 10.5

Yep. Difference is that you can run old, even ancient, software on new Windows OS. You can't on Apples. Microsoft makes sure users can continue to use old software.

clambo says

Apple does everything possible to make good products and software. If you are some snot nosed nerd who won't buy something, be satisfied with your computer running 10.4 which works just fine. Or, be satisfied with your power PC old computer and run 10.5 on it.

Seems to me snot nosed nerds would be the ones rushing out to buy the newest OS, newest hardware, newest everything. And that a consumer who is just interested in running his software - "It just Works" - would not be pleased with having to give up his old software every time he upgraded.
clambo says

Apple is going to make money for its shareholders and make good products.

Yep, including collusion to set E-book prices.

http://www.csmonitor.com/Innovation/Horizons/2012/0412/Apple-five-major-publishers-accused-of-e-book-collusion-by-DOJ

On Wednesday morning, the Department of Justice filed a complaint in US District Court against Apple and five publishers, including Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster. The allegation: That Apple and the publishers conspired to raise the prices of e-books by as much as $5, in an effort to prevent Amazon, which prices many of its e-books at 10 bucks, from locking in what publishers believe is an artificially low price.

As Amazon likes to say: "The price was set by the Publisher". I fail to see how colluding with big publishing houses to inflate the price of E-books helps the customer.

Interesting that MS is held up as the great Monopolizer. I would rather live in the near-monopoly of Windows today, than in an alt universe where Apple has the dominant OS. I'd probably be forced to update my old OS every couple of years, and have to choose between running my old software or new software, force to pony up another $100+ dollars to get a new version of software I already own when the older version served my purposes just fine: "It just worked".

Like the Lion-Quicken problem.