Apple reported fiscal fourth-quarter earnings of $430 million (E358 million), or 50 cents (E0.42) per share, on revenue of $3.68 billion (E3.06 billion). That compares with earnings of $106 million (E88 miillon), or 13 cents (E0.11) per share, on revenue of $2.35 billion (E1.96 billion) for the same period a year earlier. The most recent quarter’s earnings included a benefit from tax-related issues. Excluding that benefit, Apple would have had earnings of 38 cents (E0.32) per share. Sales were somewhat less than some analysts were projecting, and investors sent shares down more than 10 percent in after-hours trading. Apple said it sold 1.24 million Macs and 6.45 million iPods during the past quarter.
…and on the heals of this great news of Apple’s best quarter and year… stock prices plummet!
This is so typical… the ANALysts just don’t get it. I really wish I had money to invest a few years ago when they were at $16.00/share.
Jb
stock was heavily overbought and the iPod sales didn’t measure up to expectations.
if Apple cant fix $my_favorite_rant, Apple is doomed! Like I said before, their entire future lies upon how they handle $my_favorite_rant. Steve Jobs is not smarter than me, he just got lucky on his couple of wildly sucessful companies.
Heh. I hate it when people imply intelligence via success. I’ve met too many utter failures who were geniuses with real talent to buy into that idea of perfect capitalism (I’m no socialist, but I recognize the caveats of capitalism).
But you know, Apple is serving customers, and therefore fixing @my_favorite_rant is important (notice I made that an array).
A more measured reaction might go like this. One day’s movement in the stock price doesn’t amount to anything and will have no discoverable cause. All you know from it is that people have sold. Whether because they were disappointed, or because they think the fun part of the ride is over, or because they are leaving the market in general….who knows?
However, there is food for thought in these numbers, and its not all good news for the computer product line. The Register has quite an interesting look at them. The issue – it may not be a problem for the company – is that computers, and particularly desktop machines, are getting to be a less important part of the company. Looking at it as an investor, I would conclude that the company is moving into a higher risk lower margin business area. So to a greater and greater extent, you are betting on management agility in consumer goods. Now, can they make it here for the next give years?
Sorry, didn’t finish. As an investor, your bets have now changed. There was a couple of years ago one kind of bet – that the company would pull out of its slump in computers, and helped by a new OS, recover some share and increase sales. Here you had going for you the brand name and franchise and a very loyal and committed user group. However, when you buy a consumer goods company, particularly one that is at the fashion end of the business, its a very different and riskier proposition. Just as they could make it with iPod very fast, so they could lose it. And they are all new customers, but they probably are not particularly loyal other than to the next big thing. I don’t hold the stock, but if I did, I would think yes, its been a good ride, but its time to take some off the table. And one of the things that would make me think so is that the PC line is doing well, by comparison to the past, but maybe not well enough to anchor the business as a whole in case, just in case, competition hots up, and something else gets to be the next big thing in the iPod space.
The Intel conversion is going to be very interesting.
yet, the mac now has a 6.6% market share for last quarter in the US.
“yet, the mac now has a 6.6% market share for last quarter in the US.”
Its true, and the share of laptops must be even higher. Its a real achievement. It would be interesting to know how many of those are sales to new Apple users, and how many are to the traditional repeat buyers. You would have to agree that if a large proportion are new buyers, this would be a positive development with longer term implications. Are there any ‘real facts’ on this?
Its true, and the share of laptops must be even higher. Its a real achievement. It would be interesting to know how many of those are sales to new Apple users, and how many are to the traditional repeat buyers. You would have to agree that if a large proportion are new buyers, this would be a positive development with longer term implications. Are there any ‘real facts’ on this?
Well, the thing is, Apple know that their iPod probably has atleast another 18months to two years before saturation occurs, and new advances simply replace existing customer iPods thus resulting in a slower growth. With that being said, however, that depends on whether something revolutionary actually happens; whether or not there is first a video iPod and whether the movie industry pull their full out of their proverbiabal ass and allow Apple to create an iTunes for Movies as to allow end users to easily rip their favourite movie off dvd and dump it onto their iPod for viewing.
You’ll probably see a big Mac push once the Intel processors get inside their machines; they don’t want to start pushing their machines heavily on this side, only to find that there is a backlash later on when customers realise that their machines will basically become irrelivant within 18 months of their purchase – atleast if they start pushing their Intel machines, customers know that this is the big change, its permanant and if they purchase an Intel based Mac, barring any major speed improvements down the road, they’ve got a machine that’ll atleast last for another 2-3 years, with the ability to access more software as many software houses will try to mothball their PPC versions asap.
from 4.3% to 6.6%, and they sold more computers than expected. Hopefully this will put an end to the speculation that the Intel announcement would hurt sales.
They sold a huge number of iPods, and demand is phenonmenol. They can’t meet demand. It’s just that some people pulled some speculative number out of the air that was not met.
“from 4.3% to 6.6%, and they sold more computers than expected. Hopefully this will put an end to the speculation that the Intel announcement would hurt sales.”
OR… It’s a bit of panic buying before the switch.
Apple was going out of business? At least that’s what I’ve been hearing for years from the PC drones anyway…
“I hope if I ever get a “death sentence”, it only lasts for a year and I get 30 billion dollars in the bank. That’s the kind of death I could get into.
The 1990’s called — they want “Apple is Dying” back.”
My company just switched 50+ Dells to Powerbooks/iBooks/iMacs.
Couldn’t be happier!!!
Now our job posting ad says “Must know Macs/OSX, PC experience helpful”.
And oh yea, we dismantled IT department.
hello Anonymous (IP: 88.111.137.–
i found your discussion interesting and informative. what tech stocks woudl you invest it?
personally i would not invest in MS as i do not believe vista and xbox 360 are compelling.
The only tech stocks I would INVEST in are those paying good dividends, which to most people will seem a totally insane point of view. Some of the euro telcos fall into this category. The nasdaq tech stocks are manufacturing or service companies which are being perceived as glamour growth plays, which they aren’t if you look at the numbers. The problem is, you are not investing, you are speculating on movements of other peoples’ emotions. I did wonder if Red Hat could have been worth a play, at the bottom, but bottled out. The risk/reward ratio was fairly good on that – the risk was great, but the reward disproportionally great also. Mandrake similarly. But most of them are pure momentum plays. If you have confidence in your ability to do technical momentum investing, pick the turn, and get out in time… few do, though. Apple may do well or badly going forwards, but I think its unpredictable.
I agree with you about MS: wait until it pays good dividends and everyone is saying its growth is over. Then there will be money to be made. In terms of SPECULATION, if you are sincerely interested in OSs and have a little money to burn, and are young, I would spread it around a few linux plays, as pure as possible. But be prepared to be patient, and most especially, be prepared to lose it all!
pc), Why the mac user base share is always estimated to 3% ?
the number everybody seems to refere to it the year sales, right ?
so the userbase keeps increasing indeed….
I don’t understand how do they calculate the mac user base….
can someone explain to me ?
>”pc), Why the mac user base share is always estimated to 3% ?
>I don’t understand how do they calculate the mac user base….
can someone explain to me ?”
People mistakenly interchange “market share” (which only gauges quarterly sales) with usage base (which is the total number of Macs in use.)
The market share statistic is lower than the usage base statistic because Macs typically have a longer lifespan than the average PC and thus aren’t replaced as frequently. Because the market share statistic gauges “sales” the numbers will get skewed to the replacement habits if the consumer.
Apple’s actual usage-base is closer to the 7-10% figure.
The market share statistic is lower than the usage base statistic because Macs typically have a longer lifespan than the average PC and thus aren’t replaced as frequently.
No, they’re not replaced sooner because they’re significanty more expensive that the average PC, and owners don’t want to get rid soon of something that has cost them quite a deal.
Don’t tell me PCs have less useful lifetime, 800Mhz and 512MB are still sufficient for most tasks. It’s simply cheap to replace them with a powerful new PC, and that’s what people do.
🙂
I agree totally. I’ve owned 5 mac’s (since 1984) and 1 PC (built one back in 2000). My previous mac (pm 7600) lasted about 5 years. My PC (granted I’ve added newer drives, PCI cards, etc) is still humming. This being a PIII 1GHz.
So I don’t buy the Macs last longer argument. I think some people just get the wrong equipment to begin with (my sister has gone through something like 4 PC’s during the same time period!)
Having actually worked with ordinary (read ordinary, not technically inclined in any way) people and PC’s before I can tell you Mac’s have a longer lifetime because of their software.
There’s a number of problems in the Windows world that keep people adopting new PC’s faster:
1.) They think they have to because 9x degraded so fast that they felt like their PC needed replacement every 6-12 months. They’ve not got over this yet, first impressions last the longest (and most PC users started at that time, not 5 years before, although a lot have started in the last 4).
2.) Windows XP still degrades without proper maintenance under typical use. Registry bloat is a far smaller problem these days, but it can still creep up on individual, badly written, applications. My understanding is it’s supposed to be localized now, but it still causes small problems.
3.) Bad drivers. It’s amazing how many technical people I’ve known who’ve made the mistake of downloading a driver from Windows Update only to find their PC not working so well. I then intercede with an “I told you so” and they say “yea, you did heh.”
4.) Bad drivers. Every now and then ATI/Nvidia ship a nasty driver which isn’t totally stable. This won’t hurt most people, but there are some casual gamers who aren’t technically inclined. You call a typical service shop and say “my PC crashes during games” and they say “your video cards is overheating” before asking for more information (but hey, they’re in a tight competitive business and want you to come pay them 14 times their worth for some simple labor: While the tech makes off with half their worth because the owner is a greedy jerk).
5.) Adware. I’m not even gonna mention spyware or virii. Or even the adware that sneaks on, I’m gonna be nice and discount it. But there are those programs with a bunch of extra code to advertise to you: *cough* every website *cough* AOL Instant Messenger and every other messenger. Of course it’s a trade, but the number of ads and the complexity of the ads is only increasing over time (small potatoes). Mac users see this too, but lets just say that their screens (video system) have a lot more horsepower for it.
6.) Increasing program complexity. Every system has this problem (if you can call it a problem); but Windows happens to have the largest number of really badly written programs for it (which people actually use). Remember Kazaa? The last version … yea.
Most people want to keep their PC. They really do. They hate transferring their files. The new PC scares them cause the one they have has worked so far. The extra speed isn’t that attractive.
I’ve known mac people who won’t leave OS 9…. Of course, they’re completely non-technical (they’re actual macheads, not this new wave of former Unix users). Guess how old their computer is!
But I think the “people using the oldest computers award” goes to Digital Unix users
.
“Don’t tell me PCs have less useful lifetime, 800Mhz and 512MB are still sufficient for most tasks. It’s simply cheap to replace them with a powerful new PC, and that’s what people do.”
Depends on your standards, up until about two years ago I was still using a Celeron 466 w/ 128 Mb of ram and with that I could run Windows or Linux+KDE, OpenOffice.org, FireFox/konqueror and play music on it at the same time. That computer is still being used now by my sister with Windows XP on it and it’ll still run MS Office/OpenOffice, several instances of FireFox and a few other applications simultaneously without any trouble. Computers don’t get slower with age, people just get used to faster ones and software requirements go up.
In my experience home PCs can have 10 years of more of use if you go with something that has reasonable parts in it. Most people (myself included) simply get new computers sooner because it’s not too expensive and old computers begin to feel slower in comparisson to the newer machines, even if they don’t run any slower than they used to when they were new.
(Yes, I own Apple stock.)
Have I ever told you that you look quite lovely?
splorfle!
Flattery will get you … everywhere.
And I don’t need a huge dividend. I’m all for plowing profits back into R&D, but on the wave of several profitable quarters, I’d like to see at least 25 cents a share.
I wouldn’t expect anything else from Apple. They are the only computer company with brains enough to think outside the white-box and create compelling and easy to use products.
Two Macs(one is a mini), 2 pcs and one iPod fill my house. The macs by far run better and no viruses on the Macs.
I mean Microsoft has invented things don’t get me wrong. I can think of a few, the Blue Screen, and the ability for Window add-ons, namely 55,000 of them called Viruses. Don’t believe me, just scan your drive!
thanks agent 88.
you seem to have a pretty pessimistic view of linux, as reflected in “be prepared to lose it all”
i had in mind tech stocks that every geek knows about from dell ibm hp to amd/intel to ati/nvidia to adobe symnatic etc
Pessimistic on linux? Not at all, very positive, as an OS, and as a movement. But its hard to forecast in detail, and still harder to buy at the right price. Linux could do great, and your company do great, and you could still lose money. As a friend of mine found, who bought Red Hat on the way down at 40 and watched it go to 4. This is why I would spread it around, be prepared to lose it all, and get as close to the source as possible. But as my friend’s experience shows, its an emerging market, and you can get a lot of your ideas right, including the company itself, and still go bust because you got price wrong.
My point on the other so called tech stocks is exactly that they are not special in respect of being ‘tech’. The ones you mention, look at the nearest manufacturing equivalents who are making other things than computer/communications stuff, and value them by the usual investment parameters. Of which the most important will be PE and dividend. The most important advice to give in INVESTING in tech stocks is: learn to read financial statements, and do not pay too much.
If you are SPECULATING, its a different matter. Which company doesn’t matter so much, because its a matter of momentum. Learn technical analysis, learn about emotion in markets, and try to stay ahead of the mob. But here more than anywhere, be prepared for losses. This is very very hard indeed.
I don’t think any of the companies you mention have particularly wonderful or particularly bad prospects, and that, depending on what you pay and when you buy, you can make or lose money in all. Not very satisfactory…. But markets are not satisfactory.
Here is the best advice I ever heard: always remember, the stock doesn’t know you own it.
Good luck!