Still More Apple Pwnage

[Kidlicious]

Originally posted by Asher

I accept your resignation.

You made crazy allegations. I corrected your economics. Then I corrected your accounting knowledge. You kept up your pigheadedness and unsupported claims of "industry standards" even though they contradict business sense, and yet you won. If that's the way you win no one on this site can defeat you, except for Ned.

[asleepathewheel]

Originally posted by Agathon


Yes, but the market was wrong.

You cannot accuse a company of a panic price cut when they are already meeting their own sales expectations without the price cut. The logical inference to make is that the price cut was for other reasons . The obvious reason was stated by me in the other thread.

like what, to reduce profit for tax purposes? reduce stock price for buybacks?

why would a company that is meeting its goals slash its prices? Why would they dump the 4gb version almost immediately?

I'm going to go with the market over semi-anon internet poster, sorry.

[Asher]

Originally posted by Agathon
How can it be speculation that the price cut was not caused by underperforming sales, when sales were in fact performing according to expectations.

This is the entire point in contention, Agathon...

"sold" means "sold to retail", not "sold to consumers". Given the dramatic decline in sales, the VAST majority of sales likely occurred in the first week. Nokia may've had a 1 million "sold" projection that they met as well. But how many actually sold to consumers? Was it 40 or 50 thousand? But if we listen to Agathon and Kid, retailers are NEVER stupid enough to order massive amounts of a hyped device before sales are proven...right?

...

If sales were just fine, there'd be no reason to cut the price so massively so quickly. It comes down to simply that.

All your talk about them "meeting projections" using controversial figures not backed up by activation data is just as much speculation as the panic pricecut. The difference is, logically the panic pricecut makes sense. There's no sense gouging your profits if everything is honky dory.

Just admit it. Demand was abysmal after the Apple fanboys sacrificed their first-born to get the iPhone as soon as possible. Apple overpriced the unit. The pricecut was intended to correct this to introduce it to the REAL market.

...and even then, Blackberries outsold it 2:1 without any new models being released.

[Kidlicious]

Originally posted by asleepathewheel


like what, to reduce profit for tax purposes? reduce stock price for buybacks?

why would a company that is meeting its goals slash its prices? Why would they dump the 4gb version almost immediately?

I'm going to go with the market over semi-anon internet poster, sorry.

Omg, read the other thread.

[lord of the mark]

asleep-

they COULD have been planning on the price cut from the beginning, hoping to get a high price from the foolish early adopters, and then cut to quickly expand the market.

Aggie - the meeting sales is based, as Asher points out, on Apples own sales, and while Im not quite as convinced as Asher, it seems quite possible that ATT is suffering an inventory buildup due to lower than expected sales. Your analyst suggests otherwise, but he COULD be wrong, and the stock market doesnt seem to believe him.

If you are 100% certain hes right, then this would seem to be a great opportunity to buy Apple stock, unless you think theres something else real thats driving the stock down.

[Asher]

LOTM: Maybe analysts don't like the fact that Apple's new iPods are getting blasted in reviews, on top of the panic pricecut.

[Kidlicious]

Price cuts even though you are meeting sales goals is accepted business practice. Analysis accept it, and say that the price cut doesn't indicate fall in forcasted demand.

The price cut doesn't mean there is less demand than Apple of investors thought there was.

[Agathon]

Originally posted by asleepathewheel

like what, to reduce profit for tax purposes? reduce stock price for buybacks?

why would a company that is meeting its goals slash its prices? Why would they dump the 4gb version almost immediately?

You might have noticed that on the very day of the iPhone price cut, Apple announced a new iPod that is basically an iPhone sans the phone. This device was priced at $399 for a 16GB version and $299 for an 8GB version.

Oddly enough, it would seem a pretty hard sell to charge $300 more than the 8GB version for a basically identical item that only differs by including a phone.

You'd think that the smart thing to do would be to cut the price of the phone so that the new iPod didn't cannibalize sales of it and damage your initial foray into the phone market.

I don't know about you, but that seems completely reasonable to me. I remember following the announcements and thinking that a $600 iPhone was going to be a tough sell when you could get something almost as cool from Apple for half that.

I'm going to go with the market over semi-anon internet poster, sorry.

OK, then go with the market that rebounded after Apple sold the millionth iPhone, as was stated in the MSNBC article I linked to.

[Kidlicious]

Originally posted by lord of the mark
Aggie - the meeting sales is based, as Asher points out, on Apples own sales, and while Im not quite as convinced as Asher, it seems quite possible that ATT is suffering an inventory buildup due to lower than expected sales. Your analyst suggests otherwise, but he COULD be wrong, and the stock market doesnt seem to believe him.

What analyst?

[Kidlicious]

LotM,

The lower stock price doesn't mean that investors believe that there is built up inventory at ATT. It means that sales aren't meeting some people's expectations. The latter doesn't mean the former.

[asleepathewheel]

Originally posted by lord of the mark
asleep-

they COULD have been planning on the price cut from the beginning, hoping to get a high price from the foolish early adopters, and then cut to quickly expand the market.

Sure, but, its pretty obvious that this would result in the stock price dropping. Sure targets will be met, but at not nearly the price that was expectedless than three months ago.

[Asher]

http://online.wsj.com/article/SB118954864913424277.html?mod=googlenews_wsj

Why Some Apple Fans
Won't Buy the iPhone

Apple Inc.'s move last week to cut the price of its iPhone by $200 seems like just the inducement to persuade those on the fence to buy. But despite strong sales overall, some potential buyers -- even Apple devotees -- say the gadget still has too many drawbacks.

Cellphone users and tech enthusiasts have fawned over the iPhone's elegant interface, the luxury of having a full-blown Web browser on a phone, and the coolness of rolling several of their favorite gadgets into one. But some still won't buy it.
[photo]
Apple sold its one millionth iPhone 74 days after its debut.

Sticker shock is a big impediment. Even with the price cut, the iPhone (at $399 now) is one of the pricier phones on the market. And Apple isn't offering the discounts and promotions that other smart phones and cellphones offer periodically for buyers. Also, for now, the phone is available only via AT&T Wireless. For some who now get their cell service via another provider, the hassle of switching to AT&T is enough to stop them from buying. And while some say that the email capabilities of the iPhone work well enough, many are still hesitant to leave their trusty BlackBerrys and Treos.

Still, the iPhone is selling fairly swiftly. Earlier this week, Apple announced that it sold its one millionth iPhone -- 74 days after its debut. And even with the iPhone's hefty price tag before the reduction, the phone made up 1.8% of all cellphone sales in July, the first full month of sales for the phone, according to a survey released by iSuppli Corp., an electronic research firm. It also was able to beat the sales of all smart-phone models, including the BlackBerry series, and it matched the sales of the top selling traditional cellphone model, LG's Chocolate. ISuppli estimates that 4.5 million iPhones will be shipped by the end of the year.

But even some big Apple fans are holding out. Matthew Clark, a 36-year-old director and cinematographer from Seattle, owns several Apple products including a MacBook Pro and a video iPod. A few weeks ago, he and several of his friends were out on a bike ride and decided to find a coffee shop for a break. One of his friends used his iPhone to find the nearest coffee shop using Google maps. Mr. Clark says he couldn't help but be impressed. "I thought that was pretty cool," he says.

Mr. Clark says he fell in love with the iPhone's user interface but has yet to purchase the phone. "I thought it was a little too early to jump into the technology," Mr. Clark says. "I'm waiting for things to get flushed out." He says he is waiting for a second generation iPhone to make sure he isn't taking a risk on a hip product that may still need to have some bugs worked out. And Mr. Clark says he would like to be able to choose his own cellphone carrier instead of being forced to work with AT&T should he choose to purchase the phone.

Bruce Oksol, a 56-year-old retiree from San Antonio, Texas, has been buying Apple products since the 1980s. Mr. Oksol says he's enamored with the phone, and that Apple's Safari Web browser is the phone's most attractive feature.

Despite his fondness for the phone, Mr. Oksol says he refuses to switch to AT&T. He would have bought the phone for the original $599 price if he would be able to keep his current phone carrier, Sprint Nextel. Mr. Oksol says he hasn't changed cellphone carriers in more than 10 years, and has no intention of changing now. "You are always surprised with what you are going to get" in your phone bill when you switch, Mr. Oksol says.

This holiday season, however, he says that he may buy an iPhone for his daughter, and "let her deal with the bill."

AT&T and Apple signed a multiyear agreement where AT&T will be the exclusive provider of iPhone service. Todd Smith, a spokesman for AT&T, says some people may be put off from having to switch phone carriers, but "that's going to be a challenge for any device that is exclusive." He noted that 40% of iPhone users have come from other cellphone service providers.

After iPhone owners voiced their anger over last week's price cut, Chief Executive Steve Jobs said Apple would offer a $100 credit for all buyers who paid the original price. Apple and AT&T also said customers who bought the $599 iPhone within the past 14 days of the price slashing can choose a $200 refund instead of the $100 store credit.

Some Apple fans who did buy the iPhone say it has some kinks. Ren Finley, 40-year-old director for advanced engineering for Comcast Corp. who lives in Castle Rock, Colo., says he loves his phone. But it could be better, he says. Mr. Finley says he has to get creative maximizing the eight gigabytes of storage on his phone. He constantly has to add and delete songs and movies on his iPhone. And he isn't happy that the Web browser doesn't support Adobe's Flash technology, which causes him to miss some online video clips of his favorite cycling highlights. And Mr. Finley says that AT&T's cellular data network, called EDGE, that allows users to connect to the Web, can be a bit sluggish.

Mr. Smith, the spokesman for AT&T, says EDGE is the largest network of its kind in the U.S., and is a good choice for customers because it gives a broad range of coverage.

Mr. Finley says he's excited about potential future iPhone's models. But as for now, "I wouldn't buy another iPhone in its current iteration," he says.

[Sirotnikov]

most definitely apple pwnage

[Agathon]

Originally posted by lord of the mark
asleep-

they COULD have been planning on the price cut from the beginning, hoping to get a high price from the foolish early adopters, and then cut to quickly expand the market.

The price cut is more easily explained by the release of the iPod touch. That would also lead one to believe that they knew it was coming.

Aggie - the meeting sales is based, as Asher points out, on Apples own sales, and while Im not quite as convinced as Asher, it seems quite possible that ATT is suffering an inventory buildup due to lower than expected sales. Your analyst suggests otherwise, but he COULD be wrong, and the stock market doesnt seem to believe him.

How can he be wrong? They've sold a million of them. That's in line with their own expectations, which it is now obvious they were going to beat, price cut or no price cut.

Everyone knows that the AT&T stores don't carry nearly as many phones as the Apple stores. That was true on the day of the launch, and has remained true since. The fact that Apple stores are outselling AT&T stores should be no surprise to anyone who has followed the news since the iPhone was launched.

If you are 100% certain hes right, then this would seem to be a great opportunity to buy Apple stock, unless you think theres something else real thats driving the stock down.

What's driving the stock down? If you follow Apple, you'll know that Apple shares almost always fall after new product announcements. People buy on the rumour and sell on the news. When Jobs checks the stock ticker widget in his keynote demos, AAPL is always down and he groans.

It went down a bit until announcements of the millionth sale, and now it is tracking up again.

I don't know if I'd buy the stock. It seems pretty stable to me at $135-145. Mac sales are going to spike up this quarter, but everyone knows that already. The new iPods may outperform (especially the touch), but I don't think that will add much to the price.

[Kidlicious]

Originally posted by asleepathewheel


Sure, but, its pretty obvious that this would result in the stock price dropping. Sure targets will be met, but at not nearly the price that was expectedless than three months ago.

The lower stock price reflect unmet expectations on investors part.

Apple has still sold 1million phones. Some people don't believe that. Everyone who does believe that admits that Apple is doing very well.