Research archive for AAPL

A rare miss is what the Apple earnings, posted afterhours yesterday, is being called by the boxes in front of me, and the online publications that I read. I do not think that I have bought a newspaper this year, the physical stuff I mean. I pay for subscriptions, sure, but only the online ones, and the ones that I think are worth paying for. For instance, I will not pay for a New York Times subscription, but the FT, happy to pay for that. Off the topic, apologies, back to the Apple numbers. The results are on their investor relations portion of their website and for reference sake I will be quoting from here: Apple Reports Third Quarter Results. Both the top and bottom line miss estimates, and that was a rarity for the street, it is usually the street that misses by a country mile. Notwithstanding that, these numbers are impressive if you take a few steps back, sales for the quarter clocked 35 billion Dollars, and the company reported a net profit of 8.8 billion Dollars, or 9.32 Dollars per diluted share.

I am not too sure that the Google announcement was supposed to coincide with the Apple iPhone celebrating their 5th birthday yesterday. 150 billion Dollars worth of collective sales since 2007 and 250 million of them shipped over that time is nothing short of amazing. The app store will celebrate their fourth birthday next month. The iPhone 4S was released in October last year, and was a resounding success. I have seen various analysts stick a 1000 Dollar plus price on the stock. I see that most analysts still have a conviction buy on the stock, the next quarterly numbers will be a catalyst for the stock to move higher (or lower), it has had a cracking year so far, 41 percent higher, but is lower over the last three months.

When Apple makes announcements everyone gets very excited about what new life changing products will be introduced to the world. Yesterday they had a Worldwide Developers conference which included introductions of both new hardware and software. They started it off with some interesting facts about the App store. There are now over 400 million iTunes App store accounts with access to over 650 000 apps. These have been downloaded over 30 billion times. In the last quarter over $5 billion was paid out to app developers. That is an industry that did not exist a few years ago.

There was a bit of excitement at the opening bell when the Apple share price traded up to 644 Dollars exactly, which meant that the market cap of Apple had passed through the 600 billion Dollar mark. It has been pointed out several times that Microsoft was of course a 619 billion Dollar market cap back on December 30 in 1999. General Electric got close to 600 billion Dollars in the summer (northern hemisphere) of 2000, but did not quite crack that mark. If you needed reminding, Microsoft market cap last evening was 255 billion Dollars, GE was last at 198 billion Dollars.

On Friday the US market was on the up yet Apple fell 1.7%. Of late this is almost unheard of. Apple have been extremely resilient regardless of any economic data. Apple was down on company specific news this time as worker demands in China hit the spotlight. This is not a new phenomena, Apple have faced criticism about the condition of the workers who assemble their products for years.

It was basically all about the Apple announcement (actually from Cupertino, California) for the better part of the morning in the US. We listened into the conference call, but our bandwidth was poor and the call was not always reliable. But it was awesome nevertheless to hear the analysts asking Tim Cook (CEO) and Peter Oppenheimer (CFO) questions, and to hear them answered. We thought of submitting a typical analyst question, but it was both too late and we were talking about flow channels and blue sky in the kind of way that analysts think makes them sound so smart. So we just listened to the end, not for long and then we watched the share price. The share price in the after (pre) market had initially spiked on the news of the conference call, but then fell after the company announced that they expect to "spend" 45 billion Dollars in three years.

Apple launched their much anticipated new iPad yesterday. The only negative comment I saw immediately about the device was old Bloomberg journalist Lizzie O'Leary who said that she did not fancy FaceTime on the device. Meaning that the clarity of the new iPad is so awesome that she would prefer using fewer pixels when speaking via video, because it would show up every flaw. Which is, I am guessing is a good thing to have a whole lot more clarity. And the 3.1 million pixel display in the same place has as much as 44 percent better colour saturation according to the official release documents on the Apple website. Know what that means? Super duper amazing clarity compared to what is awesome clarity in the first place.

Let us crunch the Apple inc. quarterly numbers, which were released after the bell. I am trying to care less and less about what the expectations are, because that is not what we do here, we DO NOT want to contract quarteritis. Quarteritis is not a disease, but rather an affliction of sorts, where you measure the performance of a company on a quarter to quarter basis. It is the wrong way to go about investing! Having said that, hah-hah, let us have a look at these quarterlies. Record quarterly revenues and records sales across their iPhones and iPads, and their Macs too, iPods are so last decade. Check it out:

Let's start with the Apple app. It was always going to happen and is already happening with other initiatives but when Apple set their sights on something, you know it's going to be done properly. Remember the good old days when you had to lug a bag full of textbooks around campus. I was lucky because I was in hostel and I could get my books during breaks but the dayboys literally had to carry up to 10 kilos of former trees on their backs. Now imagine walking around with just an iPad which has everything from a calculator to all your textbooks and notebooks all installed in that piece of metal. Not only does it preserve resources and your back structure but it will also turn out to be cheaper. Textbooks electronically are much cheaper than hard copies.

Apple reached an all time high, the stock price that is, the company itself is yet to reach a pinnacle (personal opinion that), but closed down. That all time high price is 427.75 Dollars. The ten year history of this company is phenomenal. The stock price is up 3460 percent over that time. The current valuation is a little over 15 times earnings.

Apple. Hey Apple? Remember those clips, they are so old now, YouTube has a captive audience for around three hours to three days. Which is fine. Joe Weisenthal at the Business Insider had this piece yesterday afternoon: You'll Never Guess The One Thing That Made Retail Sales So Strong. And this was in light of a beat in retail sales expectations. But from that Goldman note that they got their hands on, it turns out that the beat in US retail sales (the single biggest consumer base in the world) could be attributable to the launch of the iPhone 4S. Amazing. Really amazing. More amazing -> Once Wary, Apple Warms Up to Business Market. The applications are endless, not so? Each handset used for business means that you lock someone in. Ask the Crackberry addicts.

Apple missed their lofty market forecasts for the first time in 40 quarters as far as I can understand it, from the twittersphere. The first earnings miss in 40 quarters? That is like, wait, ten years? The analysts have been wrong all along, and it turns out that they are wrong this time too, because they missed and did not blow the street away, as they usually do. Predictably the stock is lower in the pre market and in Germany where it is listed too. As is Intel, GE and a whole host of other tech stocks we know. I waited and waited afterhours, but just before 10:30 last evening I decided to call it a night and rest my head. I had read a couple more chapters of "This time it is different" and learned again that serial defaulters have to move to the next level in order to break the cycle. For instance, as I believe it, France last defaulted in 1788. So the book tells me (or my reading of it is like that).

Well, I thought about it this morning and realised that there was no way that I could do the life of Steve Jobs justice in such a small piece. I saw that Neil Diamond (who is still cool in my book) tweet simply: "iSad", that pretty sums up the passing of Steve Jobs for me too. iSad too. My kids and I actually listened to some songs from the Toy Story movies last evening, the favourites include from Toy Story 2 the "Jessie Doll" song, and You've got a friend in me, in both English and Spanish I might add, the kids like both versions.

Err..... what was everyone expecting from the new Apple CEO Tim Cook? An amazing new device that will change the world? Perhaps, but I suspect after all was said and done, the unveiling of the iPhone 4 S, an updated version of the existing one was all that people got. No new iPhone 5, like many had been perhaps anticipating. Not all bad news, I guess if you scratched beyond the surface and the main announcement there were some encouraging signs. The new phone will have a better camera (8 megapixel), a faster operating system and wait for it, run the same chip as the iPad 2. The camera is apparently very, very cool, and according to the fellows over at Apple, the best still camera that you could own. Maybe. In a phone, has Nokia really fallen that far behind?

What is happening with Apple? On Saturday they opened their first store in Hong Kong. Yes, their first, we were surprised too. A day earlier there was a less hyped store opening in Shanghai. The Hong Kong one is where I saw all sorts of pictures and videos, some folks even waited for two days at the front of the queue, outside the store. WHAT? All I can say is that in the tablets and phones market, this only seems to happen for Apple. Check out this mainstream view: Hong Kong gets its first Apple Store. Hah-hah, never thought that CNN was mainstream.