Comments on: Apple: Q2 Thoughts

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By: Cyan

Cyan — Wed, 09 May 2012 14:53:56 +0000

When do you know that a bubble will go bust ?

When all normal people are finally convinced that, unlike before, this time, we have indeed reached a world of infinite growth, and all these old common rules do no longer apply.

By: Hamranhansenhansen

Hamranhansenhansen — Wed, 09 May 2012 14:36:36 +0000

There were The Beatles and then later there were The Monkees. Same with iOS and Android.

By: Jean-Louis Gassée

Jean-Louis Gassée — Tue, 08 May 2012 04:38:56 +0000

@ Patrick Taylor: Speaking of prices, let’s recall the breath intake in the room when Jobs said $499 for the iPad. Everyone expected $899 or more. Same thing later in 201o when the 11″ MacBook Air was prices at a “low” $999, and the newer Apple TV at $99. Apple’s command of its Supply Chain + Distribution gives it cost hard to beat cost advantages.

By: Jean-Louis Gassée

Jean-Louis Gassée — Tue, 08 May 2012 04:33:40 +0000

@ KenC: You’re right. I only used KD as a “member” (I couldn’t resist) of a class of commenters who think McDonalds is the standard for food.

By: KenC

KenC — Tue, 08 May 2012 00:52:17 +0000

Having read a few of Denninger’s posts, he doesn’t deserve the attention.

By: chano

chano — Mon, 07 May 2012 18:21:29 +0000

This was a fine post, thank you.
I especially enjoyed the references to augurs and haruspices.
I interrupted my reading of a bull’s fresh dudu (please understand that this was only to help me anticipate when Apple might climb from its lows of today), to express my appreciation of your post.

But lo, and behold, I then returned to my charts only to see AAPL climb from $563 to $571. Imagine the power of these seer methods!

We live in hope.

By: Patrick Taylor

Patrick Taylor — Mon, 07 May 2012 14:19:10 +0000

What I find odd about the analyst position is that they see the high margin as a weakness as opposed to a position of strength.

When Apple has such industry-leading control of their supply chain costs, their gross margin gives them so much room to manoeuvre when their competitors who have small gross margins can only make small adjustments without facing losses.

Apple can reduce their prices and still profit nicely, most of their competitors can’t.

By: Fred

Fred — Mon, 07 May 2012 08:11:08 +0000

There is no reasons to worry about APPL’s fate 10-20 years from now provided it keeps innovating with the right products that make our lives easier.
I look forward to the next disruptive APPL device, which I hope will be a simple TV set plugged to both the cable box and the internet, with an ipod-like touch screen remote control that does it all (channel switch, touchpad, keyboard, video game controller…).

By: Jean-Louis Gassée

Jean-Louis Gassée — Mon, 07 May 2012 04:36:29 +0000

@ Michael and @ WlatFrench: We think alike. I listened to the Clay Christensen conversation with our friend Horace. I’m afraid Clay is wrong on Sony and wrong on open source components being a threat. That’s why I added the Dediu quote at the end of today’s piece.
On Sony, see last week’s MN.

By: Jean-Louis Gassée

Jean-Louis Gassée — Mon, 07 May 2012 04:25:20 +0000

@ all: First, let me repair an omission. I failed to give credit to John Gruber for pointing me to the colorful Karl Denninger http://j.mp/KGKYXi.

By: WaltFrench

WaltFrench — Mon, 07 May 2012 02:18:24 +0000

Heh, seems that actually using an Emoji is a capital offense for your comment system—it chopped my post off but luckily it was still in my Safari cache. 大吉大利

By: WaltFrench

WaltFrench — Mon, 07 May 2012 01:56:48 +0000

Apple makes the case that most users don’t want to be systems integrators (although clearly, a subset of Android users *really* do), and for something as complex as “a widescreen iPod…a phone…and a breakthrough Internet communicator” in your pocket, that makes a lot of sense to me.
.
People who claim otherwise ought to explain why the huge financial incentives to compete with Apple have resulted in the collapse of the Android OHA manufacturers’ profitability and the financial ruin of Palm, RIM and Nokia. Samsung seems to have an idea of how to pull it together, but it’s still rather amateurish. Maybe Microsoft, which can walk and chew bubblegum at the same time. But as MacNamee also seemingly fails to grok, mobile is very different than desktop and very dynamic. So far only Apple has stumbled onto the balance that incents developers and enthuses users looking for something personal.

By: WaltFrench

WaltFrench — Mon, 07 May 2012 01:51:33 +0000

Dedieu’s teacher Christenson similarly worries about modularization (which, in this context, is a three-dollar explanation for how Apple’s unitary model can be broken down into interchangeable pieces. E.g, Android users can choose from a range of keyboards, while I, as an iPhone user, can only opt for Apple’s standard ones plus Emoji

By: Michael

Michael — Mon, 07 May 2012 00:18:01 +0000

The ironic follow-up is that in a recent interview of Clay Christensen (aka Mr. Disruption) by Horace Deidu (http://5by5.tv/s/16k 40 min mark), Christensen himself said that he “worried about Apple” because (i) it has never seld-disrupted and (ii) it’s products are sure to be commoditized. Fortunately Horace set him straight right away (very politely), but it was shocking to hear such nonsense from such a highly respective leader in business education.
Just goes to show that although Apple’s strategy is not that complicated, many people just don’t understand it.

Clearly their 40+ % margin and amazing economies of scale gives them plenty of room to maintain preeminence in the tablet market which is going to continue to explode.

By: Justin

Justin — Sun, 06 May 2012 23:19:12 +0000

Otis elevators, Emerson electric motors and Trane furnaces (part of Ingersoll Rand) are interesting examples of hardware firms who have strong margins, in very competitive spaces. Many have exceptional service organizations, not unlike Apples retail chain.

By: RobDK

RobDK — Sun, 06 May 2012 20:22:12 +0000

Great post, JLG! It is incredible that these analysts can be sooooo wrong on Apple. Its like they have never seen an iPhone. Rumour has it that Karl Denninger has never used an Apple product; he is too busy defragging the registry on his up-to-date version of Windows 95…