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(CNN)   "Apple's core business is selling end users flash memory at steep markups": so that's a "buy" rating for AAPL   ( tech.fortune.cnn.com) divider line
    More: Amusing, Apple Inc., flash memory, core business, EPs, Lazard Capital Markets  
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3420 clicks; posted to Business » on 04 Apr 2013 at 6:05 PM (4 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



60 Comments     (+0 »)
 
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2013-04-04 02:15:23 PM  
I'm pretty sure its selling outdated technology to hipster d-bags for more than what newer, better, technology costs....
 
2013-04-04 05:33:04 PM  
...and it's about to morph into 'milking the last few items designed on Steve Jobs' watch for everything their worth, then watching Samsung drink our milkshake'. They should double Johnathon Ive's salary, and do everything possible to keep him. If they lose him AND Jobs, they're tanked.
 
2013-04-04 06:15:49 PM  

LordZorch: I'm pretty sure its selling outdated technology to hipster d-bags for more than what newer, better, technology costs....


Same difference.
 
2013-04-04 06:22:11 PM  

LordZorch: I'm pretty sure its selling outdated technology to hipster d-bags for more than what newer, better, technology costs....


Right.

So when the average consumer has an IQ higher than their shoe size Apple is finished.

Buying AAPL.
 
2013-04-04 06:33:22 PM  
fortunebrainstormtech.files.wordpress.com

He's basing opinion on data from "LCM Research" - a company who is so forward thinking, they create a new way to spell "advertising."  Seems legit.
 
2013-04-04 06:35:56 PM  
There's a sucker born buying something at the Apple store every minute.
 
2013-04-04 06:43:55 PM  

tillerman35: There's a sucker born buying something at the Apple store every minute.


There's a douchebag parroting anti-Apple propaganda on the internet every minute. Some do it for a living.
 
2013-04-04 07:08:05 PM  

bingethinker: tillerman35: There's a sucker born buying something at the Apple store every minute.

There's a douchebag parroting anti-Apple propaganda on the internet every minute. Some do it for a living.


www.inquisitr.com

/problem?
 
2013-04-04 07:16:34 PM  
Apple trifecta in play?
 
2013-04-04 07:30:26 PM  
FTA: "We propose," he writes, "that Apple is a 'storage' company, not only levered to data creation but instrumental in driving data creation in ways its competitors are not. Apple sells storage by delicately but deliberately incenting customers to purchase NAND flash memory at 80%-90% incremental margins. We believe this model is unique in the industry and will ensure Apple avoids the pitfalls of former handset innovators that are rapidly falling into the annals of history."

In other words, your average 15 year old Slashdot user printed out some business cards that say "Lazard Capital" and is now trolling people over at Time Warner.
 
2013-04-04 07:38:25 PM  
That's a "Dear God why did I buy this non-dividend stock at $700" rating.
 
2013-04-04 07:43:14 PM  

wildcardjack: That's a "Dear God why did I buy this non-dividend stock at $700" rating.


Heh...remember all the analysts that had $1100 targets?  Good times.
 
2013-04-04 07:45:54 PM  
Gee the guy must be reading my mind.  I've always said that Apple monetizes flash memory.
 
2013-04-04 07:57:10 PM  
"Only Apple gives its uniquely loyal customers ever stronger reasons to buy higher-capacity phones, tablets, music players and computers at margins far higher than the market for raw memory can bear. "

Is this true?  Have Apple device capacities been growing year over year to keep up with the alleged increase in demand that they're allegedly cultivating?

iPhone:
2007: 4/8GB models available
2008: 8/16GB
2009: 8/16/32GB
2010: 8/16/32GB
2011: 8/16/32/64GB
2012: 8/16/32/64GB
2013: 8/16/32/64GB

Looks to me like the the low-end capacity is staying basically static, and the high-end capacity is growing at a somewhat slower rate than even indicators like Moore's Law would predict.
 
2013-04-04 07:58:41 PM  

whistleridge: They should double Johnathon Ive's salary, and do everything possible to keep him.


Well, they did put him in charge of software design in addition to hardware design, so there's that.

And if he leaves, so?  There's plenty of old Braun catalogs laying around his office that his replacement can use for inspiration.
 
2013-04-04 08:00:14 PM  

poot_rootbeer: "Only Apple gives its uniquely loyal customers ever stronger reasons to buy higher-capacity phones, tablets, music players and computers at margins far higher than the market for raw memory can bear. "

Is this true?  Have Apple device capacities been growing year over year to keep up with the alleged increase in demand that they're allegedly cultivating?

iPhone:
2007: 4/8GB models available
2008: 8/16GB
2009: 8/16/32GB
2010: 8/16/32GB
2011: 8/16/32/64GB
2012: 8/16/32/64GB
2013: 8/16/32/64GB

Looks to me like the the low-end capacity is staying basically static, and the high-end capacity is growing at a somewhat slower rate than even indicators like Moore's Law would predict.


You're misinterpreting the statement.  What it's saying is that Apple's markup is far higher than what they're buying the memory for.
 
2013-04-04 08:14:59 PM  
Well duh. A 32 GB iPhone 5 is $300 with contact. A 32 GB Lumia 920, with a better camera, a higher resolution screen, NFC, built-in wireless charging, and navigation that doesn't suck is $100. Apple's raking it in with the iPhone 5.
 
2013-04-04 09:02:49 PM  

Shazam999: poot_rootbeer: "Only Apple gives its uniquely loyal customers ever stronger reasons to buy higher-capacity phones, tablets, music players and computers at margins far higher than the market for raw memory can bear. "

Is this true?  Have Apple device capacities been growing year over year to keep up with the alleged increase in demand that they're allegedly cultivating?

iPhone:
2007: 4/8GB models available
2008: 8/16GB
2009: 8/16/32GB
2010: 8/16/32GB
2011: 8/16/32/64GB
2012: 8/16/32/64GB
2013: 8/16/32/64GB

Looks to me like the the low-end capacity is staying basically static, and the high-end capacity is growing at a somewhat slower rate than even indicators like Moore's Law would predict.

You're misinterpreting the statement.  What it's saying is that Apple's markup is far higher than what they're buying the memory for.


Shame on them. We all know that companies are supposed to price their products in order to barely get by. These bastards are daring to price products for what the market will bare.
 
2013-04-04 09:28:22 PM  

Mad_Radhu: Well duh. A 32 GB iPhone 5 is $300 with contact. A 32 GB Lumia 920, with a better camera, a higher resolution screen, NFC, built-in wireless charging, and navigation that doesn't suck is $100. Apple's raking it in with the iPhone 5.


The Nokia has windows.
We live in a weird world, people like well designed software.
 
2013-04-04 09:29:59 PM  

Shazam999: You're misinterpreting the statement. What it's saying is that Apple's markup is far higher than what they're buying the memory for.


And if that were the only cost, it would be a relevant statement.
 
2013-04-04 09:47:02 PM  

GameSprocket: Shazam999: poot_rootbeer: "Only Apple gives its uniquely loyal customers ever stronger reasons to buy higher-capacity phones, tablets, music players and computers at margins far higher than the market for raw memory can bear. "

Is this true?  Have Apple device capacities been growing year over year to keep up with the alleged increase in demand that they're allegedly cultivating?

iPhone:
2007: 4/8GB models available
2008: 8/16GB
2009: 8/16/32GB
2010: 8/16/32GB
2011: 8/16/32/64GB
2012: 8/16/32/64GB
2013: 8/16/32/64GB

Looks to me like the the low-end capacity is staying basically static, and the high-end capacity is growing at a somewhat slower rate than even indicators like Moore's Law would predict.

You're misinterpreting the statement.  What it's saying is that Apple's markup is far higher than what they're buying the memory for.

Shame on them. We all know that companies are supposed to price their products in order to barely get by. These bastards are daring to price products for what the market will bare.


You would have to be an sucker to buy the same product for more money.
 
2013-04-04 09:55:21 PM  

Kanemano: GameSprocket: Shazam999: poot_rootbeer: "Only Apple gives its uniquely loyal customers ever stronger reasons to buy higher-capacity phones, tablets, music players and computers at margins far higher than the market for raw memory can bear. "

Is this true?  Have Apple device capacities been growing year over year to keep up with the alleged increase in demand that they're allegedly cultivating?

iPhone:
2007: 4/8GB models available
2008: 8/16GB
2009: 8/16/32GB
2010: 8/16/32GB
2011: 8/16/32/64GB
2012: 8/16/32/64GB
2013: 8/16/32/64GB

Looks to me like the the low-end capacity is staying basically static, and the high-end capacity is growing at a somewhat slower rate than even indicators like Moore's Law would predict.

You're misinterpreting the statement.  What it's saying is that Apple's markup is far higher than what they're buying the memory for.

Shame on them. We all know that companies are supposed to price their products in order to barely get by. These bastards are daring to price products for what the market will bare.

You would have to be an sucker to buy the same product for more money.


Apparently there are more and more suckers every day.

http://www.macrumors.com/2013/04/04/apple-continues-to-gain-smartpho ne -market-share-in-u-s/
 
2013-04-04 10:06:52 PM  

DenisVengeance: Kanemano: GameSprocket: Shazam999: poot_rootbeer: "Only Apple gives its uniquely loyal customers ever stronger reasons to buy higher-capacity phones, tablets, music players and computers at margins far higher than the market for raw memory can bear. "

Is this true?  Have Apple device capacities been growing year over year to keep up with the alleged increase in demand that they're allegedly cultivating?

iPhone:
2007: 4/8GB models available
2008: 8/16GB
2009: 8/16/32GB
2010: 8/16/32GB
2011: 8/16/32/64GB
2012: 8/16/32/64GB
2013: 8/16/32/64GB

Looks to me like the the low-end capacity is staying basically static, and the high-end capacity is growing at a somewhat slower rate than even indicators like Moore's Law would predict.

You're misinterpreting the statement.  What it's saying is that Apple's markup is far higher than what they're buying the memory for.

Shame on them. We all know that companies are supposed to price their products in order to barely get by. These bastards are daring to price products for what the market will bare.

You would have to be an sucker to buy the same product for more money.

Apparently there are more and more suckers every day.

http://www.macrumors.com/2013/04/04/apple-continues-to-gain-smartpho ne -market-share-in-u-s/


one born every minute
 
2013-04-04 10:18:51 PM  

MrSteve007: [fortunebrainstormtech.files.wordpress.com image 459x276]

He's basing opinion on data from "LCM Research" - a company who is so forward thinking international, they create a new use the Britishway to spell "advertising."  Seems legit.

 
2013-04-04 10:23:51 PM  

DenisVengeance: Apparently there are more and more suckers every day.


I think Apple's recent growth comes from the fact that this is the first year that you can get a choice between a free iPhone or free Android phone with a two year contract of all three major carriers.

A lot of Android devices were going to old people who didn't even know what a smart phone was or how to use it, but since it was free with contract, they let the sales guy talk them into it.

Now they get a choice things have changed.
 
2013-04-04 10:42:14 PM  

Komplex: Mad_Radhu: Well duh. A 32 GB iPhone 5 is $300 with contact. A 32 GB Lumia 920, with a better camera, a higher resolution screen, NFC, built-in wireless charging, and navigation that doesn't suck is $100. Apple's raking it in with the iPhone 5.

The Nokia has windows.
We live in a weird world, people like well designed software.


Says someone who has obviously never used Windows Phone 8.  WP8 kicks the IOS up and down the street.  Put an iPhone 5 and a 920 in front of any non-fan-boy and they'll pick the 920.
 
2013-04-04 10:50:36 PM  
And Intel sells sand for $150 per microprocessor.
 
2013-04-04 11:04:39 PM  

BullBearMS: DenisVengeance: Apparently there are more and more suckers every day.

I think Apple's recent growth comes from the fact that this is the first year that you can get a choice between a free iPhone or free Android phone with a two year contract of all three major carriers.

A lot of Android devices were going to old people who didn't even know what a smart phone was or how to use it, but since it was free with contract, they let the sales guy talk them into it.

Now they get a choice things have changed.


Umm, from what I typically see it is usually the old people with Apple products, if you don't count the stupid hipsters.
 
2013-04-04 11:09:12 PM  

StRalphTheLiar: MrSteve007: [fortunebrainstormtech.files.wordpress.com image 459x276]

He's basing opinion on data from "LCM Research" - a company who is so forward thinking international, they create a new use the Britishway to spell "advertising."  Seems legit.


Sorry, but no.

No such word exists in the Oxford Dictionary, Merriam-Webster, or the Cambridge Dictionary. It is a misspelling.
 
2013-04-04 11:20:35 PM  

wildcardjack: That's a "Dear God why did I buy this non-dividend stock at $700" rating.


You do realize that Apple pays a dividend?

/continue to hate tho ... I'm sure you will be dead by 50 of a heart attack
 
2013-04-04 11:26:48 PM  

fatalvenom: BullBearMS: DenisVengeance: Apparently there are more and more suckers every day.

I think Apple's recent growth comes from the fact that this is the first year that you can get a choice between a free iPhone or free Android phone with a two year contract of all three major carriers.

A lot of Android devices were going to old people who didn't even know what a smart phone was or how to use it, but since it was free with contract, they let the sales guy talk them into it.

Now they get a choice things have changed.

Umm, from what I typically see it is usually the old people with Apple products, if you don't count the stupid hipsters.


You're confusing Samsung's commercials with reality.

Multiple studies show Android skews to older users than iOS.

Here.

Here.
 
2013-04-04 11:29:14 PM  
My next phone will be an iphone because Microsoft will never get another dime of my money. Their products suck and I won't be throwing good money after bad.
 
2013-04-04 11:32:58 PM  

Omnivorous: And Intel sells sand for $150


Nothing beats the Stradivarius markup on wood
upload.wikimedia.org
 
2013-04-05 12:48:11 AM  

BullBearMS: fatalvenom: BullBearMS: DenisVengeance: Apparently there are more and more suckers every day.

I think Apple's recent growth comes from the fact that this is the first year that you can get a choice between a free iPhone or free Android phone with a two year contract of all three major carriers.

A lot of Android devices were going to old people who didn't even know what a smart phone was or how to use it, but since it was free with contract, they let the sales guy talk them into it.

Now they get a choice things have changed.

Umm, from what I typically see it is usually the old people with Apple products, if you don't count the stupid hipsters.

You're confusing Samsung's commercials with reality.

Multiple studies show Android skews to older users than iOS.

Here.

Here.


...and that's bad, right?  Because old people are icky?
 
2013-04-05 02:53:03 AM  
Farty McPooPants:

Apparently so. Samsung has been outspending Apple on advertising by a factor of four recently and they've certainly been pushing that message.

It's just that when you run the actual numbers, it turns out that Android is for old people.
 
2013-04-05 06:46:34 AM  

Farty McPooPants: BullBearMS: fatalvenom: BullBearMS: DenisVengeance: Apparently there are more and more suckers every day.

I think Apple's recent growth comes from the fact that this is the first year that you can get a choice between a free iPhone or free Android phone with a two year contract of all three major carriers.

A lot of Android devices were going to old people who didn't even know what a smart phone was or how to use it, but since it was free with contract, they let the sales guy talk them into it.

Now they get a choice things have changed.

Umm, from what I typically see it is usually the old people with Apple products, if you don't count the stupid hipsters.

You're confusing Samsung's commercials with reality.

Multiple studies show Android skews to older users than iOS.

Here.

Here.

...and that's bad, right?  Because old people are icky?


Yeah.
It's not like older people have more money than 20-something douchebags.
 
2013-04-05 08:00:00 AM  
Everybody knew this already right? $100 more for $4 worth of memory is obviously the profit driver here. Google did the same with the their nexus.

I applaud the galaxy for having external memory. Most consumers don't get those types of benefits.

/have the entry level nexus and love it, use drop box to deal with memory issues
//apple fans are still terrible
 
2013-04-05 08:14:07 AM  
Ha ha! It's funny cause people that buy apple products are dumb.
 
2013-04-05 08:42:00 AM  

Incontinent_dog_and_monkey_rodeo: wildcardjack: That's a "Dear God why did I buy this non-dividend stock at $700" rating.

Heh...remember all the analysts that had $1100 targets?  Good times.


Those guys owned AAPL too.  And they sold theirs for a premium because they were able to convince a few people it was going to 1100.
 
2013-04-05 08:50:07 AM  

Kanemano: GameSprocket: Shazam999: poot_rootbeer: "Only Apple gives its uniquely loyal customers ever stronger reasons to buy higher-capacity phones, tablets, music players and computers at margins far higher than the market for raw memory can bear. "

Is this true?  Have Apple device capacities been growing year over year to keep up with the alleged increase in demand that they're allegedly cultivating?

iPhone:
2007: 4/8GB models available
2008: 8/16GB
2009: 8/16/32GB
2010: 8/16/32GB
2011: 8/16/32/64GB
2012: 8/16/32/64GB
2013: 8/16/32/64GB

Looks to me like the the low-end capacity is staying basically static, and the high-end capacity is growing at a somewhat slower rate than even indicators like Moore's Law would predict.

You're misinterpreting the statement.  What it's saying is that Apple's markup is far higher than what they're buying the memory for.

Shame on them. We all know that companies are supposed to price their products in order to barely get by. These bastards are daring to price products for what the market will bare.

You would have to be an sucker to buy the same product for more money.


But memory is not the only component of the device.  Also, at what point does the capability of the phone hit the ceiling of what the existing cell infrastructure/mobile carriers can (or are willing to) provide?

/disclaimer:  I own an iPhone 4s.
//I've owned two LGs, a Motorola, and a Blackberry Storm.  This 4s is going to be the first phone that I didn't feel the need to replace before the two years were up.  I'm happy to ride this phone until it falls apart, and it's shown no signs of doing that in the same time frame as having to get the Storm replaced three times
 
2013-04-05 09:01:36 AM  
UNC_Samurai:
But memory is not the only component of the device.  Also, at what point does the capability of the phone hit the ceiling of what the existing cell infrastructure/mobile carriers can (or are willing to) provide?

/disclaimer:  I own an iPhone 4s.
//I've owned two LGs, a Motorola, and a Blackberry Storm.  This 4s is going to be the first phone that I didn't feel the need to replace before the two years were up.  I'm happy to ride this phone until it falls apart, and it's shown no signs of doing that in the same time frame as having to get the Storm replaced three times


I don't think Apple's strategery was for you to keep your iPhone that long.  Nothing like engineering that battery compartment.

I'd have to hear your actual models of LG and Motorola phones to make an opinion.  I think we can all accept that Blackberry as a shiate Storm.
 
2013-04-05 10:44:13 AM  

buckets_of_fun: UNC_Samurai:
But memory is not the only component of the device.  Also, at what point does the capability of the phone hit the ceiling of what the existing cell infrastructure/mobile carriers can (or are willing to) provide?

/disclaimer:  I own an iPhone 4s.
//I've owned two LGs, a Motorola, and a Blackberry Storm.  This 4s is going to be the first phone that I didn't feel the need to replace before the two years were up.  I'm happy to ride this phone until it falls apart, and it's shown no signs of doing that in the same time frame as having to get the Storm replaced three times

I don't think Apple's strategery was for you to keep your iPhone that long.  Nothing like engineering that battery compartment.

I'd have to hear your actual models of LG and Motorola phones to make an opinion.  I think we can all accept that Blackberry as a shiate Storm.


The LGs and the Motorolas were just flip phones.  By and large amazing, durable, and because they were Alltel I never lost a call that didn't involve several cubic yards of old-school rockwool insulation in an old building.  Hell, I could even get four bars in the basement vaults at the NC Museum of History.  But that was 2003-2008 before smart phones were that prevalent.

I haven't noticed any problems with my battery, but I try to follow all those general pieces of advice about lithium-ion batteries.
 
2013-04-05 10:52:00 AM  
I was an iPhone user that switched to a Samsung Galaxy... That phone was cool, but the battery life sucked, it overheated all the time and the battery eventually burst... I am back to iPhones ... All I really miss is the camera and larger screen
 
2013-04-05 10:53:10 AM  

veive: Yeah.
It's not like older people have more money than 20-something douchebags.


good luck trying to get them to spend that money on every new phone you release or buy apps designed for people with adhd.
 
2013-04-05 10:57:56 AM  

p the boiler: I was an iPhone user that switched to a Samsung Galaxy... That phone was cool, but the battery life sucked, it overheated all the time and the battery eventually burst... I am back to iPhones ... All I really miss is the camera and larger screen


I thought the iPhone's camera was supposed to be relatively good?  The Galaxy's camera IMO sort of sucks, but maybe all phone cameras suck.
 
2013-04-05 11:00:17 AM  

UNC_Samurai: buckets_of_fun: UNC_Samurai:
But memory is not the only component of the device.  Also, at what point does the capability of the phone hit the ceiling of what the existing cell infrastructure/mobile carriers can (or are willing to) provide?

/disclaimer:  I own an iPhone 4s.
//I've owned two LGs, a Motorola, and a Blackberry Storm.  This 4s is going to be the first phone that I didn't feel the need to replace before the two years were up.  I'm happy to ride this phone until it falls apart, and it's shown no signs of doing that in the same time frame as having to get the Storm replaced three times

I don't think Apple's strategery was for you to keep your iPhone that long.  Nothing like engineering that battery compartment.

I'd have to hear your actual models of LG and Motorola phones to make an opinion.  I think we can all accept that Blackberry as a shiate Storm.

The LGs and the Motorolas were just flip phones.  By and large amazing, durable, and because they were Alltel I never lost a call that didn't involve several cubic yards of old-school rockwool insulation in an old building.  Hell, I could even get four bars in the basement vaults at the NC Museum of History.  But that was 2003-2008 before smart phones were that prevalent.

I haven't noticed any problems with my battery, but I try to follow all those general pieces of advice about lithium-ion batteries.


Not saying you're going to run into problems on the battery, but I've always disliked Apple's non-serviceable approach to design (not just Apple however).  Being able to swap for a back up battery in ~3 seconds on my Galaxy S2 is an essential convenience for me.  Depends on how much you use your phone too.
 
2013-04-05 11:23:48 AM  
Apple is NOT a product company. Apple is a marketing company. They do the same thing that Nike does for shoes, that trendy designers do for clothes --

They take a product that could sell for a lot less, find a way to improve the experience and the sheen, advertise in a distinctive way and get people to pay more for it.

So of COURSE they charge more for flash memory. The markup on everything they do is incredible, and since they make the rules of how the product is used (it's more like a long-term consumable than a durable since you can't upgrade it or modify it), consumers have no choice but to pay more if they want more.

But that's what their business is. It's never been able offering tech at the lowest prices possible; it's about entering into a category before it becomes a commodity, marketing a higher-end alternative to establish a user base and then keeping the prices on the latest and greatest offerings high while using the older product to capture the holdouts.

Companies that follow this model are extremely successful. Apple is the latest in line because they were smart enough to jump on digital media sales channels and devices just as these things were coming into vogue.
 
2013-04-05 12:07:45 PM  
Blackberry Z10 is far superior to iphone 5.  Laugh if you will, but seriously.  As soon as apps are made primarily for Z10 instead of sideloading from Android, the game will be changed.  Plus, flash for browsing and watching sporting events over 4g.  Apple has been dropping.  Android is still on the rise.
 
2013-04-05 12:30:42 PM  
"We propose," he writes, "that Apple is a 'storage' company, not only levered to data creation but instrumental in driving data creation in ways its competitors are not. Apple sells storage by delicately but deliberately incenting customers to purchase NAND flash memory at 80%-90% incremental margins. We believe this model is unique in the industry and will ensure Apple avoids the pitfalls of former handset innovators that are rapidly falling into the annals of history." I made up a lot of these words but buy our stuff cause it's shiny and expensive as hell, like Italian sports cars.  Thanks.
 
2013-04-05 12:42:18 PM  

p the boiler: the battery life sucked, it overheated all the time and the battery eventually burst


That's a battery problem, not a phone problem.  Happens to iPhones, too.

www.techieinsider.com

www.thetechherald.com
 
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