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if we all know that aapl's stock price will tank after earnings report, why is aapl a good long term investment?

Too many people don't draw their conclusions from logical, factual premises - instead, they start with the conclusion they want, and either find or invent premises which seem to support that conclusion.

Since Mr. Caulfield writes for Forbes, I suppose it shouldn't be much of a surprise that he employs this style of "logic".

(Side note: This is the same magazine which tried to argue that Kevin McHale was the best GM in sports in 2007, despite having an impressively long trail of missed chances and squandered opportunities on his resume. So, Forbes haven't been acquitting themselves very well lately when it comes to analysis. http://blogs.wsj.com/numbersguy/the-best-gm-in-sports-kevin-mchale-65/)

Caufield's comments show that he has no understanding of Apple's clients and targeted markets. Apple isn't interested in selling low cost, low performance products even if their is a market for them. By the way, these are the customers that are most impacted by a bad economy. Is success modeled after Dell and/or HP ? Is success reducing your workforce and closing plants to stay in business ? Not my idea of a successful business model. Know where your targeted market is and focus on it .... which is what Apple does best.

Jan 20, 09 - 02:52 pm Comment from: Eric

It's Forbes... Who cares? You have to be an idiot to read that rag anymore.

Jan 20, 09 - 02:53 pm Comment from: AAPLguy

"if we all know that aapl's stock price will tank after earnings report, why is aapl a good long term investment?"

Because most of us consider "long-term" to be farther away than tomorrow.

Jan 20, 09 - 02:59 pm Comment from: Demon

Netbooks are a gimmick designed to sell hardware in the bed economy from vendors who could not compete with Apple in the Notebook space.
Retailers are using the low priced Netbooks as lost Leaders in their advertising to drive traffic into the store to look at new computers. The Idea of course is the Store doesn't want to sell Netbooks at no profit, the manufactures don't want to sell Netbooks at no (or pennies on the dollar profit). Intel is being slammed in the profit margin because the ATOM Processor is being used in so many Netbooks and the processor was only intended to used in small consumer electronic devices produced in high volumes. Netbooks while being sold by the tech punters as the future of the laptop have it all wrong. All the so called sales of Netbooks don't equal a gnats load. If Netbooks were selling as good as the Tech punters claimed Intel would be profits from the Atom Processors. The facts are Intel can sell them through fast enough to turn the production volume up to make a profit.
Netbooks will not save the computer industry from the recession only great, innovative, products with a real profit margin in the end will sell.
The choice is you flush $300.00 to $500.00 or more on a Netbook or you buy a real serious light thin MacBook, MacBook Pro or MacBook Air the choice is do you a very limited, tiny screen, tiny keyboard, very limited feature set Netbook that will fall apart in 3 months or a solid piece of computer hardware?

my iphone and ipod touch are my netbook

and all his numbers are totally wrong because he mixes up apple's fy q1 with calendar q1. apple is expected to report revenue of 9,8 bn (a slight increase over last year). of course this is gaap. and he probably never heard of apple's huge subscription revenue waiting to be reported over the next quarters and its gigantic additional free cashflow of probably 3 bn this quarter alone (non-gaap numbers). apple will report tomorrow that they now have now $31 a share in cash on the bank. that means that as of tommorow apple has a 2009 p/e non gaap ratio of 5! (that used to be 30) unbelievable. capitalism doesn't work anymore.

and the stupidity and cluelesness of these so called "writers" amazes me again and again.

I suppose it's inevitable that if times continue hard many people will settle for lower-priced equipment. But I'd have thought that would more likely mean that companies churning out low-end fullsized laptops would be bitten than that a company that makes mid-to-high-end fullsized laptops would be. People will quite likely think "I'll buy a netbook rather than pay a hundred dollars more". The gap between a netbook and a Macbook is so much larger that if you were even considering the former you likely would never have been in the market for the latter in the first place.

What makes Caulfield *sure* there's not room for Apple to grow in the higher-end markets?

And how does he know Apple aren't working on a netbook anyway? Maybe they are, and maybe they're not - it depends on whether they see any milage in that form factor.

What he's missing is who netbooks actually *do* spell trouble for. That's the Beast of Redmond. These are such low-margin products that it doesn't pay their makers to forl out exorbitant sums to Microsoft for Windows licences for them. (Besides which these devices wont even run that hog Vista.) This means that the OEMs selling netbooks are left with:

1. offering Linux - thereby eating into into Microsoft's OS share (and its mindshare for the future), which is bad for the Beast.

or

2. they bid MS down on the cost of the licences, explaining the alternative to MS in words of one syllable, which is also bad for the Beast.

No, Caulfield has it wrong. Netbooks are bad news for MS. Apple is doing just fine, because, as MDN says, it doesn't compete in that market. Besides, if it wants to it can any time. If it can roll out the Mac mini at that price - so that it's even attractive for cheap servers:

http://www.macminicolo.net/i_mini/minisdark.png

I'd guess they can compete on price with sub-notebooks if they want. It goes without saying that they can compete on attractiveness of the product whatever market they enter.

and netbooks had 7% of units sold in the the notebook market in 2008 (most of that came in the second half of the year - so yes it is a rapidly rising category, but still in the single digit numbers).

regarding revenue (a much more important number then units sold, though all the pundits of course will never mention that) netbooks had 3-4% of the netbook market in 2008.

some call that huge, i call that tiny.

I personally can't wait to buy a MacPro 17 incher. I am saving up to do so. I had a customer here yesterday that saw my 24" iMac and loved it- he had bought a dell last summer...but it was at BestBuy to get fixed (took it in last week). He said he was going to look at the iMac this summer as all the PC's he has had have broken down within 2 years. Guess it sounds like Apple is finally getting through to those bargain buyers who want a cheap computer but end up with a piece of junk. Buying Apple might be a little more, but which would you rather have... a computer that just works, or a new door stop every 24 months?

sorry, the last sentence had to be: ...netbooks had 3-4% of the NOTEbook market in 2008.

I love my Apple Netboo- er... iPhone.

I do know that if I had a smaller laptop computer that only did the basics such as internet and email... it would not always be with me since it wouldn't fit in my pocket, and the times that I would have it with me, I'd be pissed off at it because it would be so limited in it's functionality.

Just slightly more useful than barely literate Hollywood celebrities lecturing us with their political visions are journalists, who have never run a taco stand much less a computer company, sharing their vision of what a multi-billion dollar enterprise like Apple needs to be doing. Memo to both groups: Please Shut Up - very few thinking people really care what you think.

MacDaily News gets it *wrong*:
"Anyone who ignores the cyclical nature of Apple's Mac (or any other) business is either a fool and has an agenda. Apple's market share rose 8.3% to take 8% U.S. market share in Q408. That's year-over-year growth, Brian. Q4 to Q4, not Q3 to Q4. That's what matters."

WTF? Year over year growth matters for absolute sales numbers, which are seasonal for the whole industry. But market share is NOT seasonal for the whole industry. How could it be?

A drop in marketshare is always relevant, whatever time scale is being discussed.

MacDailyNews, Think Before You Click™ (on your post button).

All is well. Everyone please calm down! Today, is historic. Today is the beginning of HOPE and CHANGE.

All things will be healed, all things will be mended.

Job's dilemma, Apple's dilemma, and all tech issues are now on the road to salvation.

Release despair. Pass on fear.

Obama is here. Our savior. Our redeemer. Our messiah.

Can you feel it?

What a laugh. If Apple is doing so badly, I cannot believe that any other competing computer company could even exist since Apple is doing better than the whole lot.

Since they do exist (although hurting), you can consider this guy to be stuffed full of horse manure.

Does anyone know if Apple has laid off any of its people like Dell and HP?

This guy is just jealous because he can't afford to buy any Apple products. MS and others probably paid him off to make something bad up about Apple too. Loser.

Jan 20, 09 - 03:49 pm Comment from: John E

sorry fanguys, but netbooks really are an important new market segment that is here to stay. get your heads out of the sand. Apple is being left behind at this moment.

yes, the Forbes guy take on it is goobledegook. forget him. fact still is, Apple needs a Mac product that fills the specific consumer needs netbooks are addressing.

which IMHO would best be a bigger Touch (7" or 9" screen) with some obvious enhancements (e.g. an iWork suite), not a shrunken iBook. many others have suggested this as well.

i use my iPhone like that now. but honestly the screen is just too darn small to be really convenient. even with blowing up the images, i have to hold it no more than 9" away to see stuff well, and i have to be very precise in tapping links. and i'm a lousy typer even on a full sized keyboard, so a bigger virtual keyboard would certainly help too.

Apple really needs to respond this year, in 2009.

I do more with my iPhone than I would do with a netbook thingy. What I can't do on my iPhone that I keep in my pocket while walking around I do on my MacBook Pro while sitting at my office.

What's so great about a 'netbook?'
While Apple isn't inoculated from effects of a depression, $25 B cash will go a long way to hold their head above water. Also, if Apple goes does, they'll certainly be the last man standing. No one else will be able to hang on better than Apple.

Anyway, all the others aren't going to innovate until they see what Apple does, then proceed to copy and try to perpetually catch up.

This guy needs a nipple to suck on.

"... we’ve got some pretty interesting ideas if it does evolve" is talking about the products on the development table. Could be a Mac tablet (Big screen iPod touch)? How about that Mac mini DVR?

Now is the time to take market share and new markets!

If his thesis was about how incompetent these analysts were the article would have some value. Yet, he is blaming their incompetence on Apple's accounting methods.

It is like blaming MCAT for poor results for one's exam because they failed to give you the answers.

@lisab Haha! Priceless...I took a screen snap of that one; it's a classic!

@unregistered heathen: What you're feeling is the effects of the crack you're smoking; it's not real man, it's just an illusion.

Actually I think lisab's comment should be posted on billboards, chiseled in marble, printed on flyers and dropped from airplanes over Hollywood, San Francisco, New York, Chicago and Boston.

Jan 20, 09 - 04:29 pm Comment from: ElderNorm

@ John E.

When you see Steve Ballmer, tell him I said "hi".

"sorry fanguys, but netbooks really are an important new market segment that is here to stay. get your heads out of the sand. Apple is being left behind at this moment."

Boy, in your haste to make that M$ money, you really have thought poorly.

Products that lose money are NOT good products for a business. Yes, people will buy netbooks for internet chat, etc, but more and more will buy full powered Mac laptops with its rich set of software. Sorry to disappoint you.

PS, Yes the iPhone could use a larger screen from time to time. I already have a dvd player that lets the iPhone / touch plug right in to display pictures and movies. With a little upgrade, I expect to see them being used for "on the go" laptops.

Just a thought,,,, to those that have none of their own.

en

Seems to me that Apple is missing out on a significant chance to grow their business up from the low end. Just like they didn't try to compete with the $500 notebooks, they shouldn't do a $300 netbook, but they could do a better version at a higher price point, as they do with every other segment they are in.

A $500 machine with a 10 or 11 inch screen with an Atom processor would work well for younger students and people who want an extra machine for the kitchen, non-work travel, or the coffee shop. At that price, there would still be a very good margin.

Er...Eldernorm -
not sure why you were so hostile to John E. I have never bought a PC and have been using Macs for 21 years. I happen to agree with John E.

You have to think about the education market where laptops are beginning to dominate purchases. We buy laptops in quantities of 25-30 at a time to outfit laptop carts. We're looking at going one-to-one in a few years (1,350 students), and we are all cash-strapped right now.

For much of what the students do, they do not need a MacBook - research on the web, writing papers, checking their grades. That's too much for a Touch, however. We can buy 3 Linux-based NetBooks now for the price of an entry-level MacBook. Don't think for a moment that we and most other Mac-based schools aren't considering the possibilities.

If Apple built a 10" basic MacBookLite with no iSight, small or no hard drive, no iLife, I'll bet they could sell it for $600 and make good money, and schools would order millions of them until the economy and budgets improved. We still have all the MacBooks, iBooks, and iMacs everywhere the students would also use, but we'd have more basic computers for students to use in classrooms.

"Products that lose money are NOT good products for a business" - do not agree - loss leaders are in every retailer's ads. We're not talking $400 crap here, but for $600, Apple should be able to build in some quality - they've done it for less with iPhone and iPods. I don't know how long education technologists will be able to hold out against the cheap PC advocates in this climate. The fact is, we do have many 6-7 year old Windows PCs still in use, and properly maintained and locked down, and still useful. The kids prefer the Macs, but the administration prefers a computer of some sort/any sort in the kids' hands, and 3 for the price of 1 is a bad state for Apple to be in.

P.S.
As I now refresh, I see Scott above me made some of the same points.

@ doc e

I've just been trying to drink the Obama Kewl-Aid. Trying to enjoy the worshipful euphoria being peddled.

However, I just can't catch it. The 'crack' is the messiah mantra surely. It's choking me.

Anyway, it'll be interesting to see how the next few years play out. I'll be doing it on my MacBook Pro, iPhone and other Apple products. Happily, I might add.

Hey, I give props to the new Netbooks technology. It's not for everyone, but it is the cool new thing that's out there and one technology that Apple hasn't embraced just yet. We've had some Mac users posting here that wanted to see a Macintosh tablet type computer.

Is it for everyone? No, of course not. Is it a mistake that Apple doesn't make an iTablet? Not necessarily, and it certainly doesn't ring the death nell to Apple, for crying out loud. Nothing to see here folks. Move along.

@unregistered heathen

Okay, I understand you now.... I've noticed those who've been seduced not only drank the kool aid, but ate the cup and are sucking on the dispenser.

Historically, this kind of blind worship, especially when it's based on nothing but desire (certainly not on anything he's actually done; his biggest accomplishment is running for office) is a prelude to something extremely off-balance and crazy. Many times it concludes in tragedy on rather large scales. The last time we saw anything remotely like this was Hitler and Germany in the 1930's. They too were caught up and seduced by their "messiah" and didn't realize until it was too late what they had actually put in power. We are at a very dangerous moment in this country's history. So much is at stake and it's all teetering in the winds of uncertainty.

@doc e

"Actually I think lisab's comment should be posted on billboards, chiseled in marble, printed on flyers and dropped from airplanes over Hollywood, San Francisco, New York, Chicago and Boston"

Thanks! When Apple's stock price starts reflecting the true value of the company, maybe we can afford to follow-through on that idea.

If netbooks were so hot and the next "gotta have it" gadget, I probably would have seen someone with one by now.

Oh, wait, I have – they're all using iPhones.

@unregistered heathen

Okay, I understand you now.... I've noticed those who've been seduced not only drank the kool aid, but ate the cup and are sucking on the dispenser.

Historically, this kind of blind worship, especially when it's based on nothing but desire (certainly not on anything he's actually done; his biggest accomplishment is running for office) is a prelude to something extremely off-balance and crazy. Many times it concludes in tragedy on rather large scales. The last time we saw anything remotely like this was Hitler and Germany in the 1930's. They too were caught up and seduced by their "messiah" and didn't realize until it was too late what they had actually put in power. We are at a very dangerous moment in this country's history. So is at stake and it's all teetering in the winds of uncertainty.



Sorry, but I think you're the one who's been drinking kool aid, my friend. Obviously you've been out of the country (or more like off the planet) for the past 8 years and have some catching up to do on what went on with our last administration. It shouldn't take you long to catch up, the pain from failed policies has only just begun to be realized. Obama does not have the power of a dictator. You can relax.

Apple's only REAL problem is the recession.

Without the recession, AAPL would probably be around $235 right now.

"Because most of us consider "long-term" to be farther away than tomorrow."

WIN. Thread over.

I think netbooks are a fad that will pass. They may be cheap, but they don't seem very functional. That being said, I think Apple should dominate the space while they're popular. So what if they lose money on them. They'll make it up in volume.

The iPhone and iPod touch are not netbooks. You can't type up an essay on an iPhone. You can't run OSX Leopard on an iPhone.

People want small laptops. Apple's macbooks aren't as portable as the ibook and powerbook models they replaced.

A 10 to 12 inch macbook would sell like hotcakes.

Besides the macbook, every computer on amazon's best selling hardware list is a 10 inch netbook. The demand is clearly there.

Apple needs to release something similar to a netbook. Not necessarily a netbook though.

It wouldn't necessarily need to be a cheap laptop. Make it more powerful than any netbook to make it different from other small laptops. Or make it a large multitouch tablet type device.

Jan 21, 09 - 12:02 am Comment from: John E

@ Eldernorm - nice to see that after you finished insulting me you actually kinda agreed ...

@ Name - yes some will prefer a very small Apple laptop with full OS X power. to run iLife programs for example, especially iMovie where processing power really helps. i'm not against that; Apple would be smart to release one of those too to protect that flank of its laptop business.

but as to what is selling netbooks, i think it is really convenience with much simpler tasks that won't need the full OS X but will work great with just iPhone/Touch apps, adding like i said an 'office' type iWork "lite" suite for light document editing - and an iPhoto "lite" too.

i just want to be able to lay a bigger Touch (with a bigger battery for extra hours), a little propped up, on my airplane fold-down tray in coach and watch movies comfortably instead of hunched over on that 12 hour flight to China or wherever. can't do that now with either the iPhone or clamshell iBook.

Apple could be #1 in that market with that.

@Alec

I know exactly what went on in the last 8 years. The pain we're feeling from failed policies is from the failure of socialism begun by Democrats during the Clinton administration with Fannie Mae and Freddie Mac. Democrats twice blocked the attempts by the Bush administration in 2003 and 2005 to stop what happened last year. And the SAME DEMOCRATS are in charge now...the ones who caused the "pain" we're all experiencing economically.

It's you who need to catch up. Try a google search on president confiscate emergency. Or here's a quick link which gives the basics of it:

http://www.freeliberal.com/archives/002363.html

IF the president declares an economic emergency (and O has been doing just that recently, saying "we're in an economic war" and "we're in an economic emergency") then he has the power to confiscate just about anything he wants to. Remember what Biden was saying during the campaign? "We're going to do something and you're not going to like it but trust us, it's the right thing to do. Just stay with us." Gee...I wonder what he was warning us about?

I think netbooks are here to stay: their size is quite convenient as a satellite laptop, they are cute as a button (which, by the way, it is something Apple has lost a bit: all its designs are a bit too serious these days), and some do offer 6-7 hours of battery life. nVidia's Ion platform will upgrade them to full MacBook chipset-type power this year.

They saved Asus' bacon, and actually it seems the margins are not that narrow as some would want us to believe.

Not just Asus: http://www.theinquirer.net/inquirer/news/498/1050498/mini-notebooks-save-day-pc-vendors

@doc e

Oh doc, you R's are great for entertainment value. You shouldn't listen to so much hate radio. Rush Limbaugh is an entertainer, not a news reporter.

Having been in mortgage for the past 15 years, I have to disagree with you about the problem. Yes, during Clinton he mandated mortgages be given to low/moderate income people. The requirements for that program were a 620 credit score, couldn't spend more than 1/3 of your monthly income on housing, you had to make less than $46,000 per year (these were the poor people we were helping) and you had to provide an insurance policy that would make a 35% downpayment on your behalf if you defaulted. In exchange for that, you could close with $500 out of pocket. I hardly ever did any of these loans because they were far more restrictive than FHA loans were, whose guidelines have remained unchanged since 1937, have provided tens of millions of people with loans they otherwise wouldn't have gotten, and hasn't cost the tax payers a dime in 70 years.

That being said, I have come to learn something about our conservative party in the US. I used to think that they were a party that catered to religious people. I have since had to rethink my position on that and realize that it has become a religion in it's own right. Every Republican I know follows a chosen ideology (religion) and is controlled by fear (as you seem to be).

Here's to hoping we can all look past our fears and join forces to solve the problems that our nation and our world are facing. This economic situation is just beginning. It will be long and ugly. Even uglier if we spend the whole time arguing amongst ourselves.

@Alec

Oh Alec... you D's are so predictable and always say the same things like cardboard cutouts with pre-recorded comments and responses. There are no news reporters anymore...haven't you heard? I rarely tune in to Rush Limbaugh. And after listening to the fearful wailing and moaning about President Bush the last 8 years you have the gall to declare Republicans/Conservatives live in fear? HAHA.....that was actually funny I have to admit.

If you've worked in the mortgage industry the past 15 years then you should well know the problem. Fannie and Freddie had soaked up (at the insistence of the Dems) so much bad debt/artificial value from CountryWide, IndyMac, Wamu, etc. that as early as 2003 the Bush administration recognized where it was headed and tried to put the brakes on it but the same Dems who are now in power blocked that attempt. McCain 2 years later in 2005 attempted to get legislation passed to put the brakes on and issued warnings of precisely what happened last year, and the same Dems who are now in power blocked that attempt too. So Bernanke, Dodd, Frank et. al knew for 5 YEARS at least what was coming and deliberately let it continue until (by sheer coincidence I'm sure) it exploded in an election year so that it (again by sheer coincidence) would assist them in "taking over" by allowing them to blame Bush and take advantage of the "crisis" they had deliberately let happen.

You knew what NINJA loans were...right? No Income, No Job, No Assets? All fostered and forced into the banking system by the same Dems who are in charge now.

Why is it that only when your side has gained power do they suddenly want to "get along" and "look past our fears and work together" with the people they spend every ounce of their energy hating and trashing otherwise? It isn't possible to "work together" because your side only wants to use everyone to glorify themselves and their destructive psychotic ideologies. I am not interested in assisting in setting up communism/socialism in the USA.