Apple Announces new iPhone 5

I think the areas that the market is impatient and disappointed in:
1. Distrust in Tim Cook as to whether he can keep the innovation pace that SJ had as a reputation. Wall Street is begging for a new product announcement, Apple TV that will be innovative and a paradigm shift.
2. Mismanagement of cash- Tim Cook has not offered any future for the ever increasing accumulation of cash. When Apple chooses to pay more in taxes than to it's share holders, the shareholders will bail. Shareholders want higher dividend, representative of the profitability. Microsoft pays double the dividend that Apple pays. Share buyback- Shareholders, would accept a faster buyback but smart investors understand that there is no benefit to them until they sell off with a buyback which is self defeating, i.e. no future. Bold investment in M&A. Apple is doing none of this.
3. General greed. Investors need to see everything grow, not just cash, but margins, % market share, new products, numbers that blow away ridiculously high analysts estimates, and everything else. If one of these falls off, then the stock gets hammered mercilessly. Is the company in trouble? No, but investors can be hurt if they sell when the stock gets hammered.

My strategy is to keep my investment in Apple growing up to a maximum % of my portfolio of 15%. I did quite well last year with Apple trading around a core position that I have increased to 50% higher than last year. I'm still trading with stock bought with money gained in Apple gains from the past two years. Currently, my holdings are all short term except for 23 shares which are over a year. I can afford to hold until Apple gives me green numbers on those short shares. But the 23 shares are in positive territory, by $160 a share. That's the good news, the short buys are in deep negative territory. Therefore, it doesn't appear that my Apple income this year will be anywhere near my last two years.

I am not worried that Apple is going down as a company, I'm just looking forward to one of the 3 points be fixed by Tim Cook so my investment can continue to grow. The earnings call last night did not give me much faith that Tim Cook is concerned and plans to do anything. He said, " At Apple we're not concerned over profits our only concern is to make products that are the best user experience." This was shocking to me because I feel we need a leader at Apple who wants both! Maybe the comment was patronizing the questioner because the company is doing a pretty good job of maintaining some of the highest margins in the industry.

Meanwhile, on the lower level, my wife is happy with her new iphone5 and my Verizon bill actually went down by $13 a month. Do we really need more varieties of iphones? I don't care but maybe if Apple has a product that meets everyone's need, then maybe they will gain market share. And, not lose % margin if they convince the public all their iphones are better than the competition.

At least were not in Nokia. Nokia announced today it is suspending its dividend for the first time in 20 years!
 
Weren't most of those the lower cost, lower margin phones rather than iPhone 5?

Apple does not break out the numbers that way. However, you could legitimately make a qualitative guess like that since their gross margins % have fallen year over year but anything specific like ratio of iphone models would be a highly questionable conclusion.

Apple has announced that it will continue to expand the numbers of iphone models to capture the varied wants of the consumer. If there is one thing that we now see gone at Apple is that Steve Jobs is not there to dictate to the consumer what it is that they should be using. Producing and selling a wide variety of models in a line is new to Apple. These different models will come with different margins. The game plan now is to grow the numbers of sales and the dollars of profit at the expense of the gross margin percent. Apple dispelled the rumor that they have supply chain problems with the iphone. They did acknowledge insufficient supply to meet initial demand for the ipad mini and this shortage would be gone by second quarter.
 
They really need a cheap phone that they can sell. Perhaps do not call it an iPhone, but have it be compatible with all the apps.
 
You can find all sorts of people who publish their opinions on the Internet about how these numbers break out. But when the company says it is meaningless because they don't publish those numbers, all it is is bull sh*t. So, you pick your blogger and follow his opinion until you don't like what he says and then you find someone else to believe in. Meanwhile, the company will not confirm any of the BS floating around.
 
Meanwhile, the company will not confirm any of the BS floating around.
In the earnings call, Mr. Cook indicated that the mix was about the same as the iPhone 4s was and that wasn't all that stellar with movement of a lot of iPhone 3 models (not to mention the iPhone 4) back then.

The other takeaway from the earnings call was that iPhone 4s supply was "constrained" the entire quarter suggesting that they were selling faster than they could supply them or, alternatively, Apple was suprised by the staying power of a phone that was once considered not worth the wait.

The wizard behind the curtain is really having to work the levers pretty hard.
 
In the earnings call, Mr. Cook indicated that the mix was about the same as the iPhone 4s was and that wasn't all that stellar with movement of a lot of iPhone 3 models (not to mention the iPhone 4) back then.

The other takeaway from the earnings call was that iPhone 4s supply was "constrained" the entire quarter suggesting that they were selling faster than they could supply them or, alternatively, Apple was suprised by the staying power of a phone that was once considered not worth the wait.

The wizard behind the curtain is really having to work the levers pretty hard.

But they didn't state what the mix was. Therefore unknown3 / unknown4 ~= Unknown5 / unknown4s

That does not define what the unknown volumes are even though we know what unknown3 + unknown4 = 37M and unknown5 + unknown4s = 47.8M

Not enough information to define what the 4 unknown quantities are.


Believe me I would be curious to know but without the numbers from the company, all I have are people's wild guesses which are often motivated by other issues and emotions. Of course the bottom line is the bottom line which says the company is making a sh*t load of cash that it does not appear to be managing as it should.

Another interesting fantasy is that the best hope today for a single phone and company to end the iphone craze, is the Blackberry 10. Can you believe that? Samsung is doing well on its phones but Samsung doesn't generate the profit that iphone does. With sales like Verizon reported on iphone vs all other smart phones, 66% for iphone 5 sales, I am not worried that Verizon will stop selling it because they don't like paying the contracted subsidy to Apple. I'll revisit this next quarter, however. When things change I'll change my opinion.
 
There is a momentum of articles saying iPhone5 is losing ground fast to Android. I wonder if this will push Apple to release a new phone sooner rather than later.
 
Could be, mike. The rumors I heard was that Apple plans to make a lower cost smaller screen iphone to tap the Chinese markets. As an investor, I am not fooled by market share, rather I want to see the profits continue to accumulate but want that money to be invested. If Apple makes a cheap phone that has a 5% margin and it eats into the iphone5 sales then that would not be a smart move.

The other direction is whether Apple will go after the Samsung customer who wants a larger screen. This will cost more, so will that sell? The way I see this is Apple has only one advantage over the Samsung customer and the cheap small smartphone customer. They can offer the Apple infrastructure of other integrated iproducts. This appeals to alot of forward thinking customers who are more appliance users than tech geeks.

Are we there yet where Apple will begin to offer more iphone variety than white and black? To offer a variety of colors may have more fashion minded buyers but I don't see this as a big attractor or numbers generator.
 
You can look for confirmation or not, but in some circles it's no secret the iPhone 5 sales have been at zero since new years.
That's west coast, USA.
Sprint, AT&T, Verizon.
Production has ceased due to adequate reserves in warehouses.

However, sales of the 4S has been decent.
Probably due to the lowered price.


The phone flying off the shelf, appears to be the Samsung Galaxy S3.
With all carriers.
 
Zero? I find that hard to believe. Not sure we even could get confirmation for that period.
 
Even if the iPhone 5 is selling like crazy (which I tend to doubt), the perception is that Apple is failing. Apple will have to counter these rumors/reality whether it wants to or not. Which is why I suspect they will have an earlier rather than later response. Whether it is a cheap iPhone compatible handset, a new iPhone 6 or whatever.
 
Even if the iPhone 5 is selling like crazy (which I tend to doubt), the perception is that Apple is failing. Apple will have to counter these rumors/reality whether it wants to or not. Which is why I suspect they will have an earlier rather than later response. Whether it is a cheap iPhone compatible handset, a new iPhone 6 or whatever.

Android is getting 7 out of 10 smartphones worldwide.

That leaves 3 out of 10 for everything else.

Apple's biggest share is the US Market, no surprise there, but our market is saturated, and the growth is abroad.



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Apple is still making most the profit in the smartphone market. The question is if they can maintain that without the mass market share.
 

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