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It's fascinating to me how many analysts "know" exactly what Apple's strategic goals are. Or "should be."

yah of for that matter how many people actually believe them and mess up apple's stock.

God damn AnalFysts

Jeeez... Do these guys actually get paid for this crap? Following this analyst's line of reasoning, we should all be worried about the future of BMW or Bose or any other product maker who doesn't sell low-end junk. When will these idiots get a clue -- Apple doesn't want to be in the commodity computer business because there is no money to be made there. As both a user and a stockholder, I would far rather have Apple be a highly profitable player with 10%-15% market share, than a company like Dell. And at 15%, Apple's market share would be roughly triple what it was last year, suggesting there is a lot of upside left to its financial picture.

People selling Apple stock do so at their own peril. Third quarter numbers will include: New ilife and iwork revenue, Apple TV revenue, .mac revenue, increasing notebook and desktop revenue, not to mention the first full three months of iphone. Anybody selling cause they think they made money just picked up nickels and left the dollars on the ground.

This moron does not deserve to write for a "business" magazine, since he doesn't seem to know much about business. The reason Apple shares are doing so well is precisely because Apple DOESN'T aim at the mass market. That is why they actually make PROFITS on the machines they sell.

Why would they want to sell lots of boxes they don't make any profits on, like Dell does? We see how well that worked out for them.

While this guys is a total asshat for mis-reporting some facts, I do agree that Apple may be moving towards more mainstream CE products. Remember years ago Steve Jobs mentioned that he wanted Apple to be more like Sony. Now that Sony has lost its shine, it may be time for Apple to pick up that torch and march into the space where Sony once dominated. If they can pull off a cellphone, they can pull off anything. An Apple camcorder isn't out of the question: Multitouch pan/zoom, 8-16GB memory, plays with iMovie/iPhone/Apple TV, size of a (thinner) Canon Elph. I would get one.

All the above is so true. Dell has to sell computers for $400.00 and include a monitor. Apple sells the base Mac Mini for $599 without any input/output devices, so you do the math on profits! Sure, the minitaurized components in the Mac Mini are more expensive to produce/include, but it's not that much more expensive. Apple knows exactly what it's doing when it comes to operating a profitable business, which is all Wall Street cares about.

Laptops are great. But there is definitely a place for desktops that can have much larger screens, better brightness, and no constraints such as energy, heat, or storage. The iMac is the desktop computer for people who like laptops, but want a better screen and system performance for the same (or lower) price. For the price of a 13" MacBook, you can get the low end 20" iMac. For the price of even the least expensive 15" MacBook Pro, you can get the 24" iMac. I'd say that represents value for customers who mainly use their Mac at a stationary location. I think Apple's desktops computers will be a source for the company's growth.

Short post here: Moron.

I think iWork will become the next surprise product for a number of reasons:
• it runs on a G3 up to Core2 (barely useable on a 500 mhz G3 but it runs)
• is much snappier than iWork '06
• has useable WP ('06 was not)
• acts as a viewer after 30 days
• is downloadable so everyone can try it
• costs about the same as 3 shareware apps
• exports to .Mac in PDF which is fine for most people
• Numbers tips the equation (pun intended) like PowerPoint tipped everyone into Office rather than just Word/Excel
• Office 08 has been delayed
• Office 08 will get us used to not having macros anyway
• Office 08's extra features over Office 04 (except it is Intel-native) are unknown
• iWork has excellent integration with iLife
• Apple's consumer customers don't care do much for Office since their friends will probably have iWork
• all the AppleWorks users will finally have something to more to that is better (for its market).
• the AppleWorks Equation editor runs standalone and the results can be cut and pasted into iWork (or anything else).
• Google has already opened the market to the idea of Office alternatives

Even if successful it won't make a gent on the Apple share price, but finally remove the "Mac will die if MS stop making Office" issue. If MS did stop making Office for the Mac - likely since it is only one of few apps left - iWork and OpenOffice would easily take over.

In the 1960s IBM got the IT world used to expensive hardware and expensive software. DEC then got the IT world used to cheap hardware and expensive software. Microsoft got the IT world used to cheap hardware and expensive software. Unix got the IT world used to cheap hardware and cheap software. Now Apple is getting the IT world used to expensive hardware and cheap software!

This guy is a clueless asswipe ... clueless. Why does MDN bother to post this feces? He speculates that laptops are where the growth is for Apple. Really. So genious! Listen, cluess lilttle asswipe, go flip hamburgers are McDonalds and STFU about Apple. You are an embarassing Master of the Obvious.

I remember when everyone had written Apple off and the stock was in the toilet, I even got upset with my husband cause he was buying Apple stock at prices from $9.00 to $16.00 a share in total he spend like $45,000.00 on Apple Stock. Two splits later and a price of over $100.00 a share, I look back on it and have to laugh a bit. His current target selling price on the first 1,000 shares of that stock is $155.00 per share (this will be a automatic program trade). Currently his estimate is in the next 12 months the price will hit a high of $175.00 if the growth looks good forward the Apple Board will opt to do another 1 for 2 split to adjust the price per share down and to benefit the investors. This will allow the market to rebound back to the +$100.00 level as Apple's growth continues to move forward. But this is just his opinion and is not market advice.

He writes: "The jury's out on this one." Jeez -- what a misuse of a cliche.

Why to people continually insist that Apple could create something with almost the same hardware as the iPhone for "a few hundred" and any reasonable amount of storage?

The iPhone costs $500-600 SUBSIDIZED, and the only hardware they could strip out would be the phone and wifi parts, not the most expensive ones like the touchscreen. Most of the iPhone's capabilities compared to a similarly designed iPod come from it's software, not it hardware.

How fast will Apple grow? The answer will determine the stock price. The iPod provided a big shot of growth. Now iPod growth is steady (with new versions along the way) but not exponential. The iPhone will provide big growth for a few years to come. The computers will, I thing provide steady, but not exponential, growth.

I would guess that the iPhone will push growth and therefore stock price up over the next year as the US and other markets are exploited. Then it should be priced into the stock price. Then we will have to see how fast the computers and the entire line are growing. The stock price my plateau at this point it there is nothing greating really big growth.

In the very short run, I think the stock price will be pushed down by traders.

I really should proof read before I send.

Not Bill:
We MDN readers have internal spell check whilst we read...
kinda like the iPhone...lol

I have to say, I'd definitely purchase a solid-state, Apple camcorder! They would make it easy to shoot with making all the features easy to access, and you definitely wouldn't have to jump through any additional hoops to get your video into your Mac (JVC, are you listening?).

Doesn't sound like a bad CE space for Apple to get into. I only use the camcorder for vacation clips anyway (well, that and updating my porn site. Did I just say that out loud?).

I dunno, kinda like the idea of a 'cam-corder/iPod/iPhone' type gizmo

Then pipe it out over wi-fi (or the 'newer-yet-to-come' fast cell-network) to uTube via .Mac for instant viewing by others (also using a variation of the new iPhoto 'Online Album' but for videos), OR just have it act like a 'video-conference' device so as one person walks around with their iPhone they can send a 'live TV-like Cam Shot' to someone else, dig ?

PLUS, have it stream downloaded iTunes Store Movies straight to TV as they download for instant viewing.

AND, all this on a 'hand-held' OSX platform

Sounds pretty cool to me and very plausible and likely to happen. And will probably include some other features we can't even imagine at this moment.

So, basically, the 'desktop' (as we know it today) will eventually go the way of the 'Stanley Steamer'.

Apple is bringing to reality the Dick Tracy wrist-watch.

Thank You
BC Kelly
Tallahassee Fla

They have room to advance a lot. Bought four iMacs yesterday for the office. Went to the Eaton Centre location in Toronto today to see what they look like (the order is being shipped to me) and all they had was one 24 inch for display purposes. All of the new iMacs were sold out.

Note to Fighter of Freedom: The iPhone is one of the few that is not, repeat not, subsidized. Apple makes money on every single one of them, and adds yet more revenue from AT&T;.

Yes, notebooks are on a stronger growth curve than desktops. Apple and HP will tell you the same thing. But there remains a place for desktops, both for home and business use. Not everyone travels, so for some the desktop is the better value proposition. And here in my very large government agency we buy thousands of desktops every year. Sadly, only a few are Apples.

Please bring back the Cube. I ain't the only one hoping that.

- Core 2 :: 2,0GHz - 2,4GHz - 2,8GHz
- 3,5" HDD/Flash memory
- 1GB - ?GB
- 1 16x PCI-E slot (you can go from crap to diamond)

Anyone wanting modern Cube, please end the post with

::: Cube :::

that should give some kind of an idea, how many people would like to have more customisable headless Mac.

iMACs

They are based on laptop components.
Memory, cpu, (HD are different), video cards maybe too... but I don't think so in the iMAC. AM I WRONG here.... if so OK!

My mind sees APPLES knows what they are doing.
It's a win win for them... the customer simply picks the design best suited for them. A desktop that is really based on a laptop. SMART.

j

whatever this article says, the HUGE drop in value of the AAPL shares is puzzling.

i'm trying to understand what happened, i see a combination of unfounded speculation about iPhone sales, a drop of momentum because nothing as big (and new) as the iPhone is on the horizon, and very bad circumstances that hurt the stock market in general.

but, a drop from 153 (premarket, 1 day after the Q2 report) to 125 is very unexpected, and annoying.

i still think AAPL is going over 160 before the end of the year, and 200 in 2008, but i convinced 2 people to invest in AAPL, and i'm a bit worried, even if i told them that the best moment to sell was the day after the Q2 report, or 6 months later (or after that).

i was expecting AAPL to loose it's momentum after the iPhone launch, going up and down by 5% or so, then raising when approaching the XMAS season.

the XMAS season will still do AAPL a lot of good, but now it really needs it.

Free advice from analysts proves the adage that you get what you pay for.

<i>"...The difference is, we don't offer stripped-down, lousy products...." Providing so-so graphic cards is as far as we'll go to get more sales [ <---MDN MW].

"whatever this article says, the HUGE drop in value of the AAPL shares is puzzling."

Funny how you see the drop as puzzling rather than the run up in the price as unfounded in reality.

They're only back to where they were 2-3 months back.

I agree that most of the analysts who write about AAPL are clueless about the company, its market, its prospects, its strategy, and are clueless in general. They are generally IMO, Monday morning armchair quarterbacks, personally incapable of actually building a company into a success. I also believe that there's tremendous value in listening to ill-informed opinions - especially in the financial markets - providing you do your own homework and form your own well-formed opinions.

There's a huge difference between Apple (the company) & AAPL (the shares). While I am pretty much an Apple fan (the company designs & produces great products that I buy and use), I recognize that AAPL competes in an entirely different market than Apple.

Apple as an electronics company is rapidly - and rightly - winning over converts (a,k,a, "switchers"); competing with TANGIBLE products against low-end box builders by producing superior user experiences. Hence the accelerating marketshare in computers and smart phones, hence the total domination in MP3 players, and hence the ever-improving business fundamentals affecting the share price.

This brings us to AAPL (the stock) which competes in an entirely different market, largely based on INTANGIBLES. To list a few: general market conditions, contradictory opinions, mindshare, reputation & public perception, seasonality, target market demographics and their on-going ability to buy the products, market & share price manipulations by hedge funds, company guidance (or lack thereof), competitors' activities, strategic partners' successes or failures, lawsuits plus the classic greed vs. fear. The last illustrates the point:
a - GREED: you wouldn't buy an Apple iPod because you think it will make you rich, whereas you would buy AAPL shares for that reason.
b - FEAR: you wouldn't dump your Apple iPod because you think it will cost you your life savings, whereas you could dump your AAPL shares in a downdraft for that reason.

When it comes to money, I think it's necessary for AAPL investors to understand that not all other AAPL investors are Apple fans. And that if you only listen to opinions you agree with, you quickly learn - painfully - that other investors/traders are listening to competing (mis)information and that their resulting actions affect the share price. This short-sightedness leads to painful lessons like loading up on AAPL in Jan. 2006 based on great Apple fundamentals and prospects, and riding it down to July 14, 2006 because of those same great Apple fundamentals.

IMO it's always helpful to listen to what's being said no matter how moronic and ill-informed, no matter whether you agree or not. You can lose your butt by refusing to listen.

re: Martin
"whatever this article says, the HUGE drop in value of the AAPL shares is puzzling."

The last week or two has seen huge background dumping of stocks by hedge funds to cover huge trading losses. This has not been affecting just AAPL, but many others as well. Large forced liquidations put selling pressures on stocks and markets in general. AAPL, because it's so highly liquid, was probably among those being dumped to raise quick cash. Because of selling pressure, market fear & turmoil, credit & liquidity crisis, etc. the price has declined - not due to AAPL's fundamentals.

"the price has declined - not due to AAPL's fundamentals."

Since you're fundamentals kid of guy, you'll understand that today (without growth) Apple's fundamentals don't support it's stock price. There's a huge expectation of growth there.

It has declined due to concerns over Apple's growth rates. Most of the stock's value is in future expectations of where Apple will get to.

There was a big run up when there were predictions of up to a million iPhones to be sold in the first two days, and a corresponding decline when much fewer actually were. The new iMac announcement, is so me too that people now have to be concerned about the growth rates in that business.

So in short, Apple was pushed up by unrealistic expectations for the future, and now, as normal when those are not met, is declining.

It probably comes as a shock to the fanboys, who thought they were on a one way elevator ride, to find that Apple behaves just like any other over-hyped stock after all.

@iPhoneSlowdown:

The depth and breadth of the ignorance you display is astounding. I've traded AAPL daily for 5 years. Apple's current growth is around 30% annually, not zero, and it's accellerating rather than slowing. Apple's market share is increasing, not declining. The end of July is typically the low point of the year for Apple, and it typically comes close to doubling by January. The iPhone is an exciting new product and there's been some over-exuberance around it, but it's by no means a mature product. The few hundred thousand units sold in the last 30 hours of the previous quarter were constrained by AT&T;'s activation difficulties, where as many as half the units sold coudn't be registered until after the close of the quarter. I hope you're not investing any money based on your notions of what's going on with Apple these days.

"Apple's current growth is around 30% annually, not zero, and it's accellerating rather than slowing. "

Who said it was zero? Contrary to your opinion, earnings growth is slowing. The current price is based on growing at 18% or so every year for the next decade. $150 would require 20% growth every year for a decade, as you can see, small changes in expected growth rates = big changes in stock price. Take a course on company valuation, then get back to me.

"Apple's market share is increasing, not declining. "

Again, who said it was declining, just not growing as fast as people expected. That means a lower stock price.

Zeke, what you as a "Trader" (if you were actually a trader rather than an AAPL apologist pretending to be a trader) would understand is that the market prices in expectations.

Around the iPhone launch there were very high expecations which were not met.

Even if 50% of phones couldn't be activated, you still don't come close to Piper Jaffray's over-hyped 700,000 iPhones sold number, or the million plus numbers being predicted by others.

Again if you were a trader, you would understand the effect of projected growth rates on company valuations, and the consequences of people changing their opinion about future growth rates.

Alas you don't so therefore cannot possibly be a trader.

Who said Apple growth was zero? You!

iPhoneSlowDown: "Since you're fundamentals kid [sic] of guy, you'll understand that today (without growth) Apple's fundamentals don't support it's stock price."

"Without growth" now means what? A little growth? Growth but not as much as before?

"CUPERTINO, California—July 25, 2007—Apple® today announced financial results for its fiscal 2007 third quarter ended June 30, 2007. The Company posted revenue of $5.41 billion and net quarterly profit of $818 million, or $.92 per diluted share. These results compare to revenue of $4.37 billion and net quarterly profit of $472 million, or $.54 per diluted share, in the year-ago quarter. Gross margin was 36.9 percent, up from 30.3 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter’s revenue.

Apple shipped 1,764,000 Macintosh® computers, representing 33 percent growth over the year-ago quarter and exceeding the previous company record for quarterly Mac® shipments by over 150,000. The Company also sold 9,815,000 iPods during the quarter, representing 21 percent growth over the year-ago quarter.

“We’re thrilled to report the highest June quarter revenue and profit in Apple’s history, along with the highest quarterly Mac sales ever,” said Steve Jobs, Apple’s CEO. “iPhone is off to a great start—we hope to sell our one-millionth iPhone by the end of its first full quarter of sales—and our new product pipeline is very strong.”

Apparently neither you nor RealInvestor bothered to read the facts before spewing uninformed opinions. According to your own growth versus valuation formula Apple should be at $275 right now. And RealInvestor, the iPhone is just a side issue. Apple CPU sales (where margins are much higher) will increase 40% y/y by January. That's why I control as many shares as I can right now. But perhaps it's easier to naysay and snipe than it is to find the guts to risk real dollars. Money talks. BS walks. Take a hike.

"Who said Apple growth was zero? You!"

Read it again carefully moron, it says the current stock price is not supported without growth therefore the implication is that because the stock price is what it is, and would not be supported by current financials at that level, a lot of growth is currently priced in.

That's why when people have concerns about future growth, the price drops. But I'm tired of teaching investing basics to the ignorant. Get some financial literacy, then re-read your posts.

"According to your own growth versus valuation formula Apple should be at $275 right now."

About that, but only if you believe that growth will continue unabated for 10 years.

That would give Apple revenues in the 300 billion dollar range, or about 15x what they are now. How do you get there? Easy, sell 15x as many PCs, iPods and iPhones as Apple sells today. Sure that sounds reasonable, say 75% of the US PC market, 750 million iPods a year, and lets say 150 million iPhones.

Likely? Not really.

Perhaps you think you understand financials and perhaps you do have a basic understanding of stock pricing, but your models do not apply to AAPL. I've invested in AAPL common stock and options for 5 years now, with an average annual return of 300%. Who's the moron?

I'd say that if AAPL's current growth rate dictates a stock price of $275, but it now sits at $125 then it's significantly discounted to reflect slower growth in the future already. Whether that growth actually slows is another question. You cite the current product lineup and extrapolate required growth in those products to justify your pessimism. Limiting your thinking to those existing products is a poor assumption and it is why your models don't apply to AAPL. Five years ago the iPod, iPhone, and AppleTV did not exist. Five years or ten years from now will Apple have invented anything else? Will there be new and unthought of products fueling growth in areas we can't even imagine? Your thinking is that of the conventional stock technician, without vision. I can read all of that I want in any financial section of the newspaper every day. There's a reason why those writers make their livings writing about investing, instead of investing. There's a reason my barber is a barber and not an investment banker. I don't follow stock advice from my barber for the same reason I don't base my investment decisions on the opinions of people who only talk about investing. Free advice is usually worth about what you pay for it.

"I've invested in AAPL common stock and options for 5 years now, with an average annual return of 300%. Who's the moron?"

You.

When was the last time Apple introduced a new high potential product before the iPhone? hint, about six years ago, the iPod, and the Mac 17 years before that. They're currently averaging about one successful new product idea per decade.


"it now sits at $125 then it's significantly discounted to reflect slower growth in the future already. "

Correct, about 18% compounded year on year, which is still a high growth rate over that long a time. And that still requires that they become a company with about 115 billion revenue.

More likey? Sure. Very likely? You tell me.

"with an average annual return of 300%. Who's the moron?"

Clearly not you, if you started with even a modest $10,000 you have over 10 million in gains now at 300% compounded annualized return. Congratulations.

You've forgotten about Apple's most important innovation in the last 10 years...OS X. It is OS X that will eventually kill Microsoft, and it's OS X that allows development of items like the iPod. The iPod is only the most VISIBLE new product.

I started with much less than $10,000, laughably less, as a matter of fact, and I've taken out enough to pay for a private university education along the way, as well as miscellaneous lifestyle improvements. So while I don't have $10M I am doing very well indeed. How many naysayers have such a track record? No optimism, no risk taking. No risk, no gain. It's only money, after all.

"taken out enough to pay for a private university education along the way,"

That's chump change, a couple of hundred thousand at most. What happened to all the rest?