To: Cogito who wrote (132578 ) 4/30/2012 4:43:49 PM From: XoFruitCake Read Replies (1) | Respond to I see a couple of things wrong in here. First, you're implying that it's better for Apple to have supply constraints when launching a new product. In the fast moving mobile markets, I think being able to satisfy demand is better. Fast rollout is a 2-edge sword. It distorted the data for subsequent quarter and hence it is very easy to overbuild inventory and end up with a situation where they may have to cut price to clear the inventory. They also pay a big upfront cost to build up the capacity for the launch and then has to pay to idle those capacity (and all the supplier too). One advantage Apple has is the consistent volume, so the yo yo effect may reflect in the negotiation with suppliers. . During the few weeks around Ipad 3 launch, rumor were that all the commerical flight out of China cost went up about 20% because all the capacity were booked. I would imagine that Apple will have to pay a good price to lock up all the shipping capacity as well.. I tend to agree with you that it is better to pay the price and get the sales first and damn the GM. But I think as the sales number become lumpy, we will start seeing GM erosion as the need to pay money upfront for the massive launch and then pay money later to reset the production to a low and more substainable rate.As far as Apple being cyclical and therefore not a growth company, when the low parts of the cycle continue to be higher than previous lows, and when the high parts continue to represent new highs, I don't think you can logically argue that Apple isn't a growth company I think we have to adjust our earning model for future quarter based on fast rollout economic. The big money guy are calling the shot for Apple stock price. If they are bearish stock price will drop. I think case in point will be F3Q earning. We can easily see a 10ish earning if we see 26-28m iphone, 18m ipad and 41-42% GM (I think the analysis earning is about 10.20 now for F3Q. looking back to F2Q estimate, the analyst average are reasonably good except two things: missing the 2.6 m Iphone build and the gorss margin bump to 44.7% from 40% the company guide. Once we adjust that two factor Apple earning would have been around 10 vs 9.8 analyst average for F2Q). At 10ish F3Q earning, fiscal 2012 progress will still be way ahead of 2011, but the F3Q earning headline would be sequential earning drop and may create a great buying opportunity. there seems to be no reason to hold the stock in front of a freight train (may be 8-))
