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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (102903)	9/12/2010 12:42:22 PM
From: Doren	Read Replies (1) \| Respond to of 213173

>> margins are bound to fall 1) A 90% margin on a $1 candy bar doesn't matter. 2) a 50% margin on a $200 high tech device doesn't matter much. 3) a 50% margin on a $500 device starts to matter. 4) a 50% margin on a $2000 device matters. What is surprising is that Android devices are almost as expensive or more expensive than an iPhone despite the fact they are not paying for their OS. You can buy an HTC droid on Amazon for $80 with a 2 year verizon contract. But that $120 savings over 2 years is $5 per month. Not much to worry about. It's more the carrier or the perception of the carrier since there really are no accurate comparisons in most urban areas.

To: slacker711 who wrote (102903)	9/12/2010 2:21:38 PM
From: Cogito	1 Recommendation Read Replies (1) \| Respond to of 213173

>>1) Profit per share is the measuring stick for investors, and a dominant Android OS will certainly impact that number. 2) To the extent that the iPhone shrinks as a share of total business, margins are bound to fall. The rest of the business lines dont have margins anywhere near the iPhone. My question is, why have 50%+ margins on the iPhone suddenly become sacrosanct? They have lower margins in every other business, so lowering margins should at least be under consideration....and yes, at least part of that decision process would include whether they could stem the sudden rise of Android.<< You're stating number one that as an axiom, which I am not sure I can agree with, unless you want to provide some supporting logic. I suppose that if there were no Android, some people who would otherwise buy an iPhone won't. But given that Apple currently sells all the iPhones they can make, I don't see that having a meaningful effect on revenues or earnings per share. I'm also not sure why the iPhone (and other iOS devices) will necessarily shrink as a share of total business. All that having been said, I am not claiming that Apple's margins will always stay exactly where they are. The company may well reduce them somewhat for competitive reasons. But the margins aren't going to "fall through the floor" as many Android boosters have predicted. That was my point, and I'm sticking to it.

To: slacker711 who wrote (102903)	9/12/2010 3:39:36 PM
From: Cogito	Read Replies (2) \| Respond to of 213173

>>My question is, why have 50%+ margins on the iPhone suddenly become sacrosanct? They have lower margins in every other business, so lowering margins should at least be under consideration....and yes, at least part of that decision process would include whether they could stem the sudden rise of Android.<< I forgot to respond to this part, which I think is important. First, the margins on the iPhone aren't sacrosanct. Apple can certainly afford to reduce them if they need to stimulate demand. But since they have no demand problem right now, I don't see why they'd need to do that. Second, I don't think there's anything Apple can do to slow the rise of Android. As I stated in an earlier post, while there's some overlap between the two groups, the Android buyer and the iPhone buyer have different priorities. A lot of Android buyers would never buy an iPhone, no matter what Apple does. If you will remember, when Jobs introduced the iPhone, he said Apple would like to capture 1% of the cellphone market, which at that time meant they would be selling more than ten million phones a year. But the iPhone did better than that. It blew the roof off the smartphone market, changing the game entirely.