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

To: pyslent who wrote (171897)	7/20/2014 1:00:55 PM
From: slacker711	1 Recommendation Recommended By pyslent Respond to of 213182

If, as you say, the Note represents 1/3 of high end Galaxy sales, and most iphone upgraders opt for the 4.7 model, then the 5.5 model will represent 1/3 of Android switchers. I think the numbers end up higher than that. A high-end Samsung consumer is choosing between the Note 3 (5.7") and the S5 (5.2"). I would think that the potential Note purchasers who choose Apple would almost all choose the 5.5" model. Moreover, a significant percentage of those who would have bought the S5 would also opt to move up in size rather than to go down to the 4.7" iPhone. Of course, a bigger question is just how many high-end Android consumers that the new iPhones can attract. Anecdotal comments from various gadget sites make me fairly optimistic on this front, but we'll have to see how it plays out. One big positive is that many of the features that were added in iOS8 should make the transition easier for current Android owners. It would have been nice to see what Dediu calculated for 5/5S gross margin during the product cycle (he shows 50% at launch, no worse than the 4 and 3G, but those rapidly rose to 60%. I don't think that was true the past few years. I would have been interested to see an update from Dediu. My quick calculations show that if gross margins for the iPhone are even 50% right now that the rest of Apple's product lines have GM's well below those shown on his graph. I am sure that changes in accounting have impacted how these numbers compare but the direction seems right. Q1 2014 Total Revenue 57.59 Gross Profit 21.85 Total GM 37.94% iPhone Revenue 32.5 iPhone GM 50% ex-iPhone GM 22.32% iTunes Rev 4.4 ex-iPhone/iTunes 27.07% Is the ex-iPhone GM really all the way down to 22.3%? If I assume that the $4.4 billion in iTunes/software revenue contributes zero gross margin dollars (very unlikely), I still only get a 27.1% gross margin for the rest of Apple's product lines. The changes in accounting are negatively impacting the iPhone margins, but I think the numbers indicate that we didnt get quite the bounce back in margins that we saw after previous new iPhone designs. Slacker