Google made $10B on mobile advertising last year. Anyway you slice it, it's less than $10 a user. Apple making only $10 a user would cause the share price to fall to $20 per share (reflecting annual revenue of about $5B rather than their current run rate of $150B). 1) Apple need not eliminate profits from all sources to make more money from the use of their devices. They have room to decrease prices/margins to gain share and boost sales while simultaneously increasing monetization.
2) $10 per *what* user? What are you counting as a user?
3) Apple users are different from Android users in terms of spending patterns. If Apple had Google's use-monetization efficientcy on it's US users in particular, the current revenue per user would be a multiple of what Google makes per global mobile user.
4) Whatever the rate is now, it's likley to be vastly higher in a year, two years, five years from now. Mobile revenue is growing rapidly in general. So if Apple could make $50/user/year now (just an example, don't get hung up on the value), it's not improbable that number could double or triple in the coming years.
What do you mean by "objective statistical measures?" MGV claims that AAPL was a less risky investment than peer companies, justifying the tolerance of it's lower return (negative return using the 20 month lookback he cited if dividends aren't included). A company's risk isn't defined merely by his opinion, my opinion, or your opinion. There are more objective measures of a stock's risk, such as its beta and others that use its historical patterns. There are also accounting metrics that similarly paint a more objective (albeit not perfectly) picture of risk. |
