iPad vs. iPhone: BOM, pricing gaffes, etc.

[mike123abc]

The BOM is important for investors of Apple. If you see a company that is low margin you can expect lower earnings. If Apple has to cut prices some to compete with future tablets, you can see they have room to do so, important for investing in Apple. You have to know they are making money and will not be forced to sell at a loss any time soon.

Like watching Sony selling the PS3 at a substantial loss for so long. Look how much it hurt their profits. They were not able to make it up with the sale of games in the short run.

For the consumer the BOM is not very useful. The product is worth what they can sell it for.

 

[TheForce]

Mike- as an investor for both long term ( in my Roth IRA) as well as short term ( in my trading account) I look at EPS, P/E, and the company's liquidity growth first and then determine buy times and price to pay and sell at based on TA. I don't have the intuitive skills to see how a BOM on one product, evan a big one, can affect these bottom line numbers except in a very general way as you proposed. That would play a very minor role in any trading decision as the numbers I mentioned have more immediate affect. But, I'm always game to learn a new trick if it can be meaningful.

Here is an excellent read of a timely article I got today. Particularly, notice the last paragraph in the article which says it all for Apple.

 

[diogen]

Therefore, I'd go on record with a prediction that (entry level) iPad (announced to be $500 when released) will be no more than $400 by no later than summer.

I was off by one season: they reached $400 by fall
$399 iPads, fondue sets appearing at TJ Maxx locations across the country -- Engadget

Diogen.

 

[TheForce]

$299 by April for ipad2 ? If so, I'll be in play for my second one. After a half year with mine, it has completely streamlined the way I access information around the house and how I access the internet and watch video content while traveling. ( Netflix and slingbox )

 

[Foxbat]

I was off by one season: they reached $400 by fall
$399 iPads, fondue sets appearing at TJ Maxx locations across the country -- Engadget

Diogen.

Check out the iPad deal at 25 seconds into the Mega-Mart Black Friday commercial I saw last night during SNL...