I think it's been reached.

Apple will not ring the bell on that, but their suppliers will.

I argue they just did.

Could be. One significant iPhone or iPad disappointment and the waterfall should appear.

Yep.

The problem you're going to get here is that it will come without warning, and likely be one of those "oh ****" sorts of events.

Anyone remember GE's waterfall miss in early 2008? THAT.

Got featured by Gruber:

http://daringfireball.net/linked/2012/04....

Oook....

Apple has played "next new thing" a number of itmes.

The one time they miss on that they're ****ed, which is exactly my point -- saturation and margin compression always get 'ya when your "valuation model" is built on exponential growth curves.

Lots of cheap iPhone and iPad knock-offs in China with similar styling, form factor, design, look and feel and OS.

Apple's OS is based upon a fork of BSD which means that it would be simple to make it open source again with a few tweaks.

The phones here that copy Apple are 1/10th the price.

Even if you just take Apple products and remove their margins, you get a product that is 1/3rd the price. The Chinese like to work with thin margins to gain market share...

I very rarely have issues with Windows and haven't for the last 5-6 years or so (vista pro and 7 pro)...but I custom built with a clean install and most people get the crap installed with **** tons of stuff already installed.

You'll never be able to replace the keyboard for people that are heavy with processing, gaming, or coding or the like. I strongly prefer to type on a keyboard.

95 was buggy but a great leap forward. Windows ME was garbage and XP was quite buggy as well. Vista was good if you have 4+ gb of RAM...same with 7

The assumption being made about Apple through much of this discussion, both as a stock and as a company, is that they have a product line: iPhone, iPad, Macintosh and an ecosystem broadly defined as iTunes/iCloud, and that at the end of the day these products are static. In other words: this is what Apple produces, period, end of sentence.

Under that set of assumptions (fixed set of products) then yes, margin compression would eventually kill them. And guess what - back in the late 80s through the mid 90s that is *exactly* what happened. Apple got lazy, rested on its laurels, reaped massive profit margins (at that times pushing 60-70% per Macintosh) and released a series of dud products and muddled its product line (Newton, Performa, MacTV, Pippin, eMAte, eWorld, just to name a few clunkers).

If you assume that Apple is reverting back to its old self, then sure, I think these arguments hold tremendous weight. I do not think that as a corporation they operate in that manner - they are far more nimble, culturally more apt to take big calculated risks and have demonstrated in the last ten years that they do not rest on their laurels. Their oldest product line, Macintosh, has seen a significant improvement in sales over the last seven years. While sales of iPods have languished, sales of iPads have skyrocketed.

My point is: so long as Apple continues to develop products that consumers will go out of their way for and to never take their market position for granted, there's plenty of room for potential growth. If, however, they get lazy and/or ignore potential competitors, as did RIMM, the Apple of old, IBM of the early 80s or GM of the late 60s, then Apple will suffer a similar fate.

Genesis wrote..

There is not a snowball's chance in Hell that a laptop can replace my desktop machine. The power dissipation required would literally broil your legs (and/or testicles) and if you tried to engineering something with that much power in a laptop it would cost $15,000.

I believe that it was back in the late 386 & 486 days that Digital Equipment Corp. had a project (ultimately cancelled) to build a laptop using an Alpha processor. Like all projects, it had a code-name; they might have borrowed the name of one of the engineers there for the codename, or not, but the Alpha laptop's codename was...

... Burns

Tully

How fast can balloon air leave you ask? (Bloomberg has the answer for the fanboys)

Before today, Apple’s market value gained more than $250 billion in four months through April 9, more than International Business Machines Corp. (IBM)’s current value, data compiled by Bloomberg show. That’s the most since the 1990s technology bubble, when Cisco Systems Inc. (CSCO) grew even more, expanding by more than $350 billion in eight months, while Intel Corp. gained more than $230 billion in four months.

Cisco subsequently lost more than $200 billion in two months and Intel shrank by almost $130 billion in a month and a half. Cisco is now about one-fifth its peak value from 2000, while Intel is about one-quarter its former size.

Apple has represented more than 4 percent of the Standard & Poor’s (SPX) 500 Index’s value since Feb. 28, data compiled by Bloomberg show. General Electric Co., Microsoft Corp. and Exxon Mobil Corp. all reached the 4 percent threshold during the past 13 years. None stayed above that level longer than 10 months. Cisco lasted nine days.

took a very small long @55999 this morning

Quote:

95 was buggy but a great leap forward. Windows ME was garbage and XP was quite buggy as well. Vista was good if you have 2+ gb of RAM...same with 7

And compatibility has been Microsoft's bread and butter AND Achilles heel ever since. If they'd gone to application virtualization with Vista (which Citrix DID in 2005), we might not be having this conversation.

We'll see if they get it right with Windows 8. All the compatibility of Windows with all the lean-ness of something newer and better? That would be sweet.

MSFT has caught up with Citrix (AppV for virtualization) but they care more about selling Windows than progress in mobile computing. Nifty new features that still demand powerful local processors. And that's their right.

Windows 8 will continue the lineage of a bloated OS, albeit with a pretty, more current face.

Really? Every time I've tried the competitors products (Thinstall, AppV) I've found them lacking. As usual, with Microsoft, make a copy (buy one), and bam, you have a line item. Five more years until they catch up with competitors (HyperV is another example).

That's their right, and it's why I'm not going down that route any longer. They aren't showing real innovations, and their whole home group networking fiasco is just an un-understandable mess if you want to step outside of their pretty little box. Get 10 guys together in a room trying to share files from 8 different unique networks, and odds are 50% of them won't be able to connect to your shares.

It's so bad I carry a portable wifi NAS hard drive just to share ****. It's easier.

In the case of AppV, I guess I'm thinking in terms of maturity and featureset.

For example, Citrix's virt product got its start as AIE - and wow was that an abortion. They've come a long way, but AppV (formerly Softgrid) was a fantastic buy on MSFT's part, as it was clearly the most advanced; for example using block level streaming as opposed to file level as implemented by Citrix. Thinstall was badass because it's portable, but not very configurable and not many controls wrapped around deployment and securing of apps.

But lack of vision, or rather a vision purposely slowed in order to continue to sell Windows units has severely slowed down AppV progress. It's actually very disappointing.

Totally agree on not showing any real innovations there.

Back to the issue at hand. AT&T announced their results today with 5.5 million smartphone activations, of which 4.3 million were iPhones. 21% were new subscribers, profits for the quarter up from $3.4 to $3.6 billion. Customer churn dropped to just 1.1, it's lowest in years.

One other thing to keep in mind: we are all making the assumption that Apple is tied to the carriers. What happens when Apple starts implementing a VOIP system that essentially bypasses the voice carriers? What happens if Apple starts deploying its own wifi system? All ridiculous hypotheticals for sure, but prior to 2007 nobody thought Apple would seriously enter the phone business, either. Prior to 2001 nobody thought Apple would enter the music business, either. These are disruptive moves and they're very possible.

Apple's sell-through at this point from Verizon and AT&T implies a 30+% drop in volume from last quarter.

Their EXPECTATIONS are for much less of a drop (seasonal off the holidays); there's no HONEST way for them to hit the iPhone sales numbers at this point.

If you're thinking they will you're deluded; if they do they're lying in some form or fashion -- they have to be, since Verizon and AT&T are the two largest carriers with the big penetration and they missed BADLY on volume.

43% decreases don't happen outside of market saturation.

Karl -

Noted, but every year Apple reports a significant drop in sales following Christmas. Q4 2008 saw 6.8 million iPhones sold, Q1 2009 saw 4.3 million.

So, not uncommon to see that drop-off. I'm not saying you're not potentially wrong about saturation, but this isn't earth shattering. Also keep in mind that Sprint is a new carrier added to the mix and while doubtful they stole a significant number of sales from Verizon and AT&T, that figure cannot be discounted.

The 4S was NOT a compelling upgrade. Hence the Christmas sales balloon and then radical drop-off. Everyone holding a 3 or 4 is waiting for the LTE-based 5. Verizon had TWO new iPhone releases last year also.

Tempted to take the 940 weekly strike for $9.20 -- but with no real mention/leak of China sales I won't

Many here are missing this I believe:

International sales were 64% of revenue

Does not cost Karl's $1800 for an iPhone in most countries.

But overall margins were up I believe.

Quote:

International sales were 64% of revenue

Just a FWIW update from the trenches.

Attempted to order an iPad mini today. Delivery is not expected until APRIL.

Holy Toledo, that's quite a lot of backorders.

Ding Ding Ding

"Tough break if you were one of the many muppets that bought apple this morning at 620 on the Goldman upgrade...by the way, that CNBC poll yesterday was telling. When asked if they should buy a iPad or a share of stock, many responses said that only one will be worth a 1000 dollars in a couple of months....yeah, no mania here. We will see 450 before 750."

Except as usual I lost money on my QQQ puts back many months ago b/c I was EARLY. I suck. **** Apple.