Apple would have great margins on TVs because they'd more than likely create a TV that starts a whole new market, kind of like they did with iPhones.

Even today there's no sexiness about buying a TV. It's all about things like picture quality, refresh rates, pixels, etc. Apple won't be looking to compete with that. They'll be focusing on how you use and interact with it. A really good user experience is something that is completely missing from TVs today. Think about it. Have you ever bought a TV because you liked the way you interact with it? Have you ever bought a TV because of the remote? This is the area Apple will be attacking. And if they hit it like they've hit everything else lately they'll be in a market all by themselves. They won't have to worry about competing on price because there will be no competition.

There is decent evidence that Apple had an amazing quarter (January-now) with their iPhones which will come up in next earnings next month. It's not being reported in the media, which seem to suggest from different reports orders are being reduced at suppliers, especially for iPad components. So like you I am quite bullish short term for $550+. I wouldn't buy the stock, but a medium term options play is a no brainer. Longer term is a different story.

I agree. Apple is huge in the US. They own over half the smartphone market, which is complete domination, and much of the tablet market. You need to remember that the US is 5% of the world's population though, and maybe 15% of its middle class. The market is close to saturated there. And despite this Apple saturation, they have 12% Mac market share, and declining since Windows 8 came out. Macs are irrelevant and will never be an important part of Apple valuation or their future growth. Because of the small installed base, they also have no crossover or ecosystem benefits for selling profitable high volume items (phones and tablets). The opposite is the case with Windows 8/9, which is huge in terms of pushing sales into phones and tablets via a highly unified ecosystem, which will be on a billion PCs within a few years.

Let me ask you though: What does Apple have now that Blackberry didn't in 2008? Blackberry had lock in, massive cult following ("Crackberry"), ubiquitous in business, and highly functional.

More money? Dividends - a collection of products that all work together -


Also - I think they are big in other parts of the world. They keep talking that they have tons of money overseas that they don't want to bring in because it will get taxed.

Samsung beat AAPL to the t.v. already didn't they? I just saw the news that samsung is already setting up their tablets to be compatible with T.V.'s.

Hi,

I develop software. I use mac laptops because they are unix computers with nice hardware. Many developers do the same. Among rails developers I know, almost 90% are probably using macs. Among Python web developers, similar. Among Java developers in my circles linux has the lead with mac second.

I thought you had AAPL going to Zero in Five Years

.

Truthsayer:

What you’re not taking into consideration is the lack of Apple products that have been available to the mainstream market.

In 2012, the average selling price for PC notebooks was $764, and it was $638 for PC desktops. Apple has exactly one comparable product in either range (the Mac Mini). And that’s being generous, as the base model Mini presently only starts at $600 and doesn’t include a keyboard or display or anything else.

Meanwhile the base-entry prices of the iMac ($1,300), the smallest 11" MacBook Air ($1,000), and smallest MacBook Pro ($1,200) are well above that range. And those prices scale up if you want bigger screen or specs. I won’t even get into the outstanding but expensive retina MacBook Pros, or the Mac Pro desktop which hasn’t seen a real update in years, both of which are priced far beyond mainstream.

So to see an OSX install base of over 6% globally on desktops, 12% in the US, I think is an awfully good result considering they don’t have anything in their lineup aimed the entry-level market, or really even mid-level. Their ASP of the MBP is something like $1k above the average IIRC. Their hardware markup makes that an even more impressive accomplishment from what I see.

Now to talk about Windows for a second, there’s a clear trend happening even over the past two years in NMS stats, which by the way does NOT show an OSX decline:

http://www.netmarketshare.com/os-mar...&qptimeframe=M

What you do see is a steep Windows decline. At the start of 2011 Windows had a 90% share, by the end of this year it will likely be below 75%. That’s understandable given the rise of mobile (and in fairness, I’d tinker with that number further as not all Windows machines are used as net devices btw). But yet, during this mobile onslaught, OSX has held their ground, even showing a tiny increase.

There’s things to talk about with the Surface Pro, Win8, and I guess Windows Phone on the mobile end which has encouraging but mixed news coming in. But the bottom line is for that for two years MS has been losing relative position with Windows, and at a rate that doesn’t appear to be slowing down. We can speculate that it will but I’d like to actually see it first. Conversely OSX seems to have carved out a niche they can hold with purely higher-end machines.

What I do think is that a $650 OSX notebook, plastic body and common specs and all, would crush today. To say otherwise overlooks a tremendous number end users who have no real loyalty to Windows and just lack what they see a viable alternative they can afford to buy. Personally I don’t think Mountain Lion is overall their strongest recent OSX but it’s still comparable to 7, which I thought was marginally better than 8 factoring in the somewhat awkward GUI. Of course I'm not an everyday casual user. For those, excluding the gaming crowd and a few select others, I don’t see how it wouldn’t be a better experience overall. The reduced issues with malware, viruses and drivers alone justify that statement.

what he said.

There's an inherent contradiction is some of truthsayer's arguments.

He's basically saying Windows is superior in performance, but then goes on to point out that the normal boring people are the people who use PC's and drive the market. So basically, the people who use and buy Windows don't give a ****.

Which goes on to make my point even more, which is that if Mac had a more affordable option they would crush PC's. They're more user friendly, have way way less virus and malware problems, don't require additional program purchases like Microsoft Office, and aesthetically they are miles ahead of any PC. People more and more are caring about style and appearance and Mac rules in this area.

I honestly don't understand these figures. Is that all computing device usage including phones? If you look at it that way, Windows has 20% market share on all computing devices including mobile phones, not 75%. The numbers are badly skewed by the fact that mobiles only make up 14% of web traffic, so they're kind of worthless.

If you exclude things for which Windows had no viable touch operating system until now - tablets and phones - Windows is doing as well as ever, which is remarkable given the rise of Apple and Google. They have over 90% market share in anything that runs a full operating system - the desktop, laptop & netbook segment. Which is precisely my point. There is no evidence of the market wanting anything except Windows when they purchase a full operating system. And full operating systems have, just this year, become viable on tablets, something which vastly improves the experience and usability over iOS/Android once the kinks are ironed out. Within a few years they'll be viable on phones - Windows Blue already shares much of its code with Windows Phone, and makes it trivial to developer for both simultaneously.

I don't understand - at all - why Apple has not pursued this if this was the case. They have access to market data, surveys, consumer sentiment, etc. They had this for 25 years, even while they nearly went bankrupt. If what you say is true, they are leaving hordes of money on the table and risking their company, for what?

They must understand that the future of mobile, from tablet to phones, lies in having full operating systems on all of those devices. To have any chance of competing in that space, they'd want Mac to go majorly mainstream ASAP and attract developers. Instead they sit on high priced models while Mac continues to have ****ty market share and ecosystem. It makes no sense.

I think Mac and iPhones appeal to only a percentage of people - high end professional/fanboy/aesthetic/designer market, and most other people prefer Windows for its ecosystem, backward compatibility, and openness. Look at the Samsung Galaxy S I/II/III. They are ****ty, horrible phones compared to iPhones in terms of aesthetics, bugs, malware, software and user experience. The price is similar. Yet the market loves them and they've been growing rapidly at the expense of what would otherwise presumably be iPhone growth in that price category. How do you explain that? I see the rapid rise of high priced Android as proof that most of the market do not want Apple's closed ecosystem and limitations. For computers with full operating systems the limitations of a closed ecosystem are even more apparent.

Inertia takes time to turn. Seriously, have a look at Blackberry's run up to 2008. Slow growth for years followed by explosive sales growth into a growing market and market domination that created a bubble. The timeframes aren't that different to Apple, nor is the level of lock in, love for the product and company, and total dominance of high end market share, or mockery of the competition (at that time the iPhone) and predictions of endless success by analysts and Blackberry fans.



Blackberry went through a similar scenario with sales inertia creating record quarters even as other platforms grew (note: these figures are into an rapidly growing market, so a flat line is significant growth):



If there's anything you should take away from that graph, it's that every market leader eventually get destroyed by new innovators in the smartphone market. Apple hasn't innovated in years. Their growth has been destroyed by Android, but their figures still look excellent because the market has been exploding exponentially. It's slowing down soon. Unless you're going to argue that consumers are going to alter their purchase habits favoring Apple, and that Android and Windows Phone will continue to be very inferior despite huge advantages coming to both platforms, where is the case for Apple growth, and particularly growth that maintains their absurdly high margins, needed for a $400 billion plus valuation? In the end, only profit matters, not market share. Ask Nokia.

China could be a huge catalyst for AAPL. They made 6.9B from China last quarter and Tim Cook has said that he sees China becoming the biggest part of Apple's business in the future.

Multiple revenue streams. Itunes is best of breed in it's space. I would still say that Ipads are best of breed in their space, however I wouldn't Iphone is best in it's space even though it has SOME perks like how much easier it is to use for someone that's not tech savvy.

To answer the question as to why the Samsung phone has outperformed the iphone? Size.

Apple has rested on its laurels a bit the past year or so, but theyve been afforded that luxury. Eventually theyll make a bigger screened phone, but probably not as big as the John Holmesian Galaxy and people will prefer it. I know a few galaxy owners with buyer's remorse due to it being too big. It hurts! Lol.

Like i said, the innovation now is baby steps.

I think its easy to count Apple out if you're only seeing with presentism, but the full story hasnt been told yet.

Comments from Cook (and Jobs when he was alive) were that they couldn't build a good netbook/notebook at that price without it being crap. They also made it a point figure to have a simplified line that all "fits on a kitchen table" aimed at the higher end, and preserve desirability/reputation. Others suggest that it could dig into the sales of their higher-end lines which I guess is possible. I don't know how many $1,200 MBA sales you'd lose with a $700 notebook but I guess there's some.

The fact is they want to hold on to their giant margins which would be harder to do in that space. It's no more difficult for Apple to get a typical notebook built than it is for Dell or anyone else, after all they're just PCs with OSX added anymore. They'd need to temper their requirements a bit. But there's more longevity in that game than with phones and gadgets. Especially if they want to grow more into the content business with iTunes, TV and beyond.

As far as comparing Apple to BB/RIM, I don't know how you can do that. BB had a great run with phones and that's about it. That's a better argument against the iPhone than the entirety of Apple that's got more going on, even as critical as the iPhone is for them. But that's all the more reason to find other avenues to expand their install base to support their ecosystem plans.

You're missing the point.

Apple doesn't make low priced laptops because it leads to margin compression, cannibalization and dilution of its status as "premier" brand.

apple is a master of cannibalizing its own product the right way. the downstream conversions of cheap apple products (shuffles, ipods, music tracks, even apps) towards high margin products (itouch, iphone, ipad, appletv, etc.), and even further towards truly high-end mbp's, is quite literally second to none. lose a little profit on the cheap products, but convert that customer into a high-margin ATM.

microsoft/google do the opposite. launch an expensive platform (regardless of what you think, android has cost google a ton of money before it made a cent. same with current variants of windows), then have oem's rush to try to cram more and more features at a lower and lower price, compressing the margins. ultimately, what killed blackberry is the fact that they tried to compress margins while their product was headed for the toilet. it could be argued that they should have doubled down on improving the product while charging MORE for it.

you may think that apple's way is not sustainable, and that's fair. it doesn't sound like it should be, but you simply can't take away from apple that they understand apple's users better than google understands google's users.

I addressed all three of these points in the very post you're responding to. Literally all three points, right in the first five sentences.

And fwiw, margin compression is coming anyway. You might as well get more users in the process.

Serious question: Why doesn't BMW make an 18k car?

Cuz they couldn't make one that's better than what other companies could make, they'd destroy margins, and damage the brand.

The whole entire point of paying more for a mac is that everyone knows you paid more for it. That and it's fun to wonder when the mac compatable version will be released for every new piece of software.

Maybe I'm in the minority, but I don't care what my computers/phone cost so long as they work. I've been through so many different PCs--dealing with drivers, BSODs, changing hardware just to locate the problem, general compatibility issues, and so on.

I own:
-Iphone 3gs (bought it new when they came out, never needed replaced)
-Macbook Pro from 2007 (girlfriend uses this now)
-Macbook Pro from 2011 (my current laptop)

They work well and always have. I honestly think I saved money compared to buying different PC stuff. That is where my (new) brand loyalty comes from.

Another aside, my parents bought a desktop and laptop on black friday. They both came with Windows 8. I think it is an absolute nightmare and so do they.

Just thought I'd give the perspective of a casual consumer and mark the thread as well.

margin compression comes when the product maturity outweighs improvements through innovation. phones are not at that point yet worldwide.

That's true for some people, but there's a little ignorance that gets parroted too much. Apple has definitely designed some nice machines as of late. And fwiw I don't think you'd find many regs in the CTF forum (or IRL) that would call me very spendy, and they certainly wouldn't call me a helpless computer fish looking to buy shiny expensive things.

The whole point of purchasing a Mac in my case was that they managed to build the best overall non-gaming notebook on the market, regardless of OS. Find a Windows notebook with a current quad-core i7, with an elite SSD and not some junky controller or mechanical job, that isn't particularly loud with fans, with accurate color reproduction, with a keyboard and touchpad that are at least decent, without cheap & creaky plastic everywhere, with an solid IPS and at least 1080 res, and less than 6 pounds. Without an obnoxiously reflective screen. This could go on a while... I had a Word file about 5 pages long listing notebook models and where they came up short on my wish list of stuff.

The offerings on the Windows side just weren't that good, and there isn't anything on the high end I didn't look at. Clevo/Sagers you couldn't get with an IPS. Series 9s maxed out at 900 res. Vizio's weren't bad values provided you don't ever need to type anything or want a backlit keyboard. Other models in the HP Envy line (and I think Sony Vaio S) had panels where the reds were orange. The Zenbook Prime had an okay display but too small at 13.3" and trackpad issues. This list is awfully long too and has a lot of lols in it, I'm stunned that there's still so many machines out there running TN panels and 1600x900 or even less in some cases. Meanwhile Apple kills it with their new display and it's going to be a year later without a comparably high PPI hitting probably. Maybe more.

It has nothing to do with appearances (I have a matte black case on it because glowing logos lol). It has everything to do with other manufacturers who can't seem to build a high-end notebook without stupid design issues or omitting what imo should be standard features beyond the $1,200 price point. I don't even have to get into comparing Windows to OSX to make the argument, because for $90 it's also a full-on Windows machine.

http://www.laptopmag.com/reviews/lap...book-ux31.aspx

ez game

Not sure why you're posting that because it's not a high-end machine in really any sense.

There's more than one version of the UX31, but that has several of the problems I mentioned. In fact that one's not even the 1080 version (though 900 would prob be an improvement given size). Don't know if they improved their keyboards or trackpads but both needed work. Not as bad as the Vizio line but not much better either.

What else - you're stuck at 4GB RAM apparently. A midrange CPU not even of the current generation nor a low-power model. Typical ADATA SSD which is okay enough even at 128GB. No backlit keyboard. Integrated 2011-era graphics. Really there's nothing to say about this other than it's small and light, and I assume they keep the IPS screen on the 900 res model. It's a light use computer that's portable.

Apple charges ~$300 more for nearly identically specced MBA.