“In real estate it’s ‘location, location location,’ but Apple has always been evaluated on ‘margin, margin, margin.’ Apple has met or exceeded its margin guidance for three consecutive quarters but analysts have never been content,” Richard Saintvilus writes for TheStreet.
“Apple will report fiscal second-quarter results Wednesday, so to what extent will Apple’s margins play a role in the stock’s direction? We know when it comes to Apple’s unit sales for iPhones and iPads the Street will be obsessed over quarter-to-quarter average selling price (ASP) figures and try to dissect what they mean in terms of margins and market share,” Saintvilus writes. “The fact that Apple still has margins hovering around 37%-38% is a testament to the quality of the company’s products and management’s ability to market to those who can see the value in those products.”
“There is a growing belief that Apple’s gross margins could see a decline with the new iPhone 6. But I wouldn’t get carried away. According to reports, Apple will release two iPhones in its upcoming product cycle. One will have 4.7-inch screen while the other will sport a 5.5-inch screen; this bigger phone is where Apple plans to maintain its hefty margins,” Saintvilus writes. “Also, investors shouldn’t discount the viability of the iPhone 4S and management’s ability to prolong that life cycle for another year or even two. It seems inconceivable. But consider the 4S still ranks at the fifth-best-selling phone around the world. So keeping the 4S around would benefit Apple more in the long term from a gross margin perspective as opposed to maintaing the iPhone 5C at the low end.”
Read more in the full article here.
According to stock experts, Apple’s performance has been all doom and gloom. Yet Apple keeps making money and breaking records. I have stopped thinking the problem was Apple 8 years ago.
I don’t see “stock experts” as living, breathing human beings. At the very least, those who ignore or underestimate Apple are surely brainless. As a species, there are many variations of us. Amazing that some of us actually know how to breathe.
IF these prognosticators were truly experts who could generate reliable forecasts with respect to stocks, then they would be independently wealthy and, very likely, running a large and successful investment business with their own name over the front door.
As nice as it is to sell the iPhone 4S. I would like to see Apple start dropping off the 32-bit iOS devices and move the line to 64-bit AND START TALKING ABOUT IT IN THE ADVERTISING! People do not care about cheap plastic iPhone 5C’s in many colors. The iPhones are inserted into a customized protective sleeve or edge protection. And put the bio-security in all the iOS mobile devices and get on with taking over the payment industry. Then, do the next market. Apple is to big to require 2 or 3 years to take over each and every market. Like CarPlay, where is the iPod or iPad CarPlay stereo device? I would own and install it in a heart beat vs. buy a new car with hopes it will properly incorporate it into it’s entertainment system.
Think Different and Get It Done!
All good thought. People do like the 5c colored phones though. If you take the 5s sales out of the worlds total smartphone sales, it would be the number two.
“Apple is to big to require 2 or 3 years to take over each and every market.”
Yep, I am in a hurry so Apple should take over the world by this time next year. One section per month and I am good to go. After all World domination is easy. I do it all the time in my video game! ” /s
The world tends to move at its own pace. Its gotten much faster since I was a boy, but young people today are in just too much of a hurry.
Majority of consumers don’t know the difference between 32 bit and 64 bit. Apple is not about marketing specs. For Apple it has always been about what you can do with a device and how it can improve your life.
Touch ID will come to all devices when manufacturing and product strategy align. This May or may not have been driven by secure payment processing. You can’t expect to enter a mature market doing the same thing and make an impact. Changing an industry takes time and often includes unforeseen obstacles.
The main feature of CarPlay is navigation. There is no guarantee iPod and iPad will have a constant data connection. Needless to say why spend resources supporting devices that may or may not be fully functional.