Apple

[Breand]

phones not the least bit priced competitively for China, and the carriers there don't subsidize the phones:

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$733 for the 5C and only about 20% less than the 5S. Hell, an American would never pay $700 for a phone.

[strife]

Hell, an American would never pay $700 for a phone.

Sure they would... tell them this is the most technologically advanced phone in the history of phones and charge them $30 a month over a 2 year contract and bam, $700 phone. You don't think people would pay that? Hell right now I'm paying over 500 for my phone(granted, the only reason I am is because I'm on T-mobile and my plan is still cheaper paying the $20 a month for my phone than it would be if I got a subsidized phone on AT&T or Verizon). I believe the Iphones on tmobile right now are $25 a month over 2 years + tax is about $650.

But yes, they missed the mark if their cheap phone is still over $500...

[Breand]

Like I said, China does not do contracts. You have to buy the phone. Paying $700 up front is entirely different than over the span of 2 years. How many Americans would plunk down $700 up front? I mean, I guess they could take out a separate loan for it.

[Grieve]

I am an iPhone and iPad owner, and a big timer gamer, and I have never heard of Infinity Blade until yesterday's unveiling. So if real gamers actually cared about the game, I would have heard. I do not look at my iPad as a gaming rig nor have expectations of such.

I can't comment on whether they are real gamers, but Infinity Blade II alone has sold over 50 million units, which is pretty impressive since it's iOS only. In fact you might be the only iPhone/iPad user who hasn't played it...

[Jakensama]

49 million of those unit sales were Grieve doing his normal tithing to the church of overpriced garbage (now in neon plastic!)

[Grieve]

Like I said, China does not do contracts. You have to buy the phone. Paying $700 up front is entirely different than over the span of 2 years. How many Americans would plunk down $700 up front? I mean, I guess they could take out a separate loan for it.

They do do contracts, but they don't subsidize the phone like we do in the US. However, in India Apple has started to basically do payments plans themselves - put down $100, and then pay $30 a month or whatever, with Apple acting as the "bank". I can see them doing the same in China.

The problem is that the media assumed that the C in 5C stood for cheap, when obviously Apple never intended to release a cheap phone - in fact they've said before they would never release a cheap phone. Which I think is smart - why dilute your brand? If Tiffany started a "Tiffany lite" brand with the jewelry a quarter of the price in their main line, I suspect it would kill their high end image.

I chatted to my team of developers in China last night, and they said it's not so much the price that is the problem, it's the perception that there isn't something new and exciting. I can see that - Apple tends to find a great design and then tweak and perfect it, not completely redesign each year. That's a problem in China, where they like people to see that they have the latest thing.

Selloff is painful. I still think it will be reversed when:

1) China mobile deal announced
2) New iPads announced
3) Blockbuster sales on first weekend.

[Breand]

The China mobile deal is baked in. It's a foregone conclusion that it is a done deal.

[Vanraw]

I chatted to my team of developers in China last night, and they said it's not so much the price that is the problem, it's the perception that there isn't something new and exciting. I can see that - Apple tends to find a great design and then tweak and perfect it, not completely redesign each year. That's a problem in China, where they like people to see that they have the latest thing.

.

This is true in the states as well.

[Jakensama]

China has a lot of nouveau riche though, conspicuous consumption is highly popular for someone who has 'made it'. Thats why you have packed malls that are exclusively Gucci and Prada and Hermes and shit in Shanghai when you could probably get the same sweatshop sewn item down at the fabric market for 1/100th of the price.

Problem is that while Apple used to be considered a Gucci or Prada phone by the trendy rich Chinese, that time has passed - now they are pretty passe.

Not sure what the 5C is going to accomplish - an inferior phone that the rich chinese won't look at, and one that the masses of chinese who make an average of $2100 a year would never be able to afford.

[Slamz]

That's pretty much exactly what I said was the danger with Apple: they were riding on a wave of "cool". Not sophisticated technological advancement or unique features, but just straight up "cool", mainly from a raft of slick marketing schemes.

If they're losing their edge of coolness, then they're losing most of what made them popular. Apple could be MySpace in 5 years if they can't make themselves cool again or innovate.

[Jakensama]

FWIW, all my google employee friends really like the Moto-X at the moment. Also comes with an easily unlockable bootloader so you don't have to hack it and void your warranty in order to get superuser access.

Its more iphone sized than the bigger phones and only has 720P, but if you aren't the type to watch videos on your phone (I know I never have since the novelty of a smartphone wore off) it has apparently very good battery life, a great camera and a bunch of other features. Its also a much more stock android phone so wont have any of Samsung or HTC's bloatware on it.

[Grieve]

Your friends that work for Google recommend the phone made by Google? No, I refuse to believe it....

[Jakensama]

For a couple years they all had iPhones, they have little company loyalty for some reason..

[Slamz]

HTC has been making unlocking easier lately too. Not sure about Samsung (ask again in a few months -- we're converting to them soon at work and rooting phones is part of the process).

I actually like a lot of Samsung's "bloatware" though. When I switched over from the Thunderbolt I replaced several of my 3rd party apps with Samsung apps that did the same thing slightly better. The Samsung camera app is very nice too (I assume it's Samsung...it's a lot different than the "Camera" app on my Thunderbolt) -- burst shot, anti-shake video (automatically crops the edges and uses that space to make the image more stable), voice control, etc.

The only stuff I'd like to get rid of is the Verizon shit. I don't know why Verizon continues to make apps/widgets. All of them are absolute shit. And seriously, Verizon, nobody is going to use your shit navigation app when Google Navigation is included for free.

[Grieve]

Great article in the NYT about what goes on behind the scenes for one of these huge technological leaps to happen. Pretty eye opening.

http://www.nytimes.com/2013/10/06/magazi...anted=all&

[Vanraw]

Why I returned my iphone 5s.
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The biggest reason I returned the iPhone 5s is because it didn't offer a different experience from the iPhone 5. Aside from the Touch ID fingerprint sensor, there was no obvious change in how the device performed. Sure, the 5s has a slightly better camera and faster processor, but the difference in performance is hardly noticeable. If you look at it from this angle, I spent $900 to get a fingerprint sensor. Let me tell you something: I don't need a fingerprint sensor on my smartphone. At least, not right now.

[Grieve]

This is pretty silly for a number of reasons:

1) His biggest reason seems to be that 5S is physically largely the same as the 5. Um...he didn't know that BEFORE he bought the phone...?

2) He didn't need a fingerprint sensor. Um...he didn't know that BEFORE he bought the phone...?

3) Apple only changes the external look of the phone once every couple of years. "If you're upgrading from an iPhone 4s, it's a big step up. If you're coming from an iPhone 5, it's more of the same." Again, he knew this going in, but frankly I don't understand people, at least in the West where we typically have 2 year contacts, wanting to upgrade every year. I have never done that. I upgrade once every two years, as soon as I can get a fully subsidized upgrade. He's complaining about spending $900 a year after he got his 5? That's because he's a dumbass.

4) He thinks Samsung's "throw a million different phones out there and see what sticks" approach is better. Well okay, fair enough. Nothing is stopping him from buying a Samsung. I forget the actual number, but I recall reading that Samsung has something like 50 different smartphones or variants of smartphones (S4 Google, S4 Active, S4 mini, S4 zoom, etc...) out in the last year. To me that just sounds like fragmentation and a supportability nightmare (are they really going to support all those phones for any extended time?), but each to their own.

Finally, Maul, I'm not sure if you are making the argument that this shows that people are getting sick of Apple and moving to Android, but the numbers show the opposite.

If you look at Comscore's chart below, it suggests that Android has plateaued, and growth in users in the US is falling, while for Apple it's growing. Plus this chart only goes up to August, before the new iPhones launched. If Apple was outgrowing Android in the months where their phones were almost a year old (and right after the S4 came out), how do you think it's going to look for the rest of the year? In fact I'm on such a hot winning streak against Jake, I feel like another bet coming on...

[Jakensama]

One thing is for sure, the 5C has turned out to be a joke.

And apple couldn't even beat others to the punch in the idiotic wearable iproduct line..

[Vanraw]

You keep missing the point Grieve. As does Apple. There is no innovation coming out of this company in any sort of a timely fashion. Nothing.

[Grieve]

One thing is for sure, the 5C has turned out to be a joke.

I don’t see how you can possibly claim that. Based on what? In just a few weeks they’ve sold millions of them, more than many phones sell in their entire lifetime.

Earlier this year, Tim Cook was asked if Apple would ever put out a “cheap” phone to compete with Android, and he said no. Despite that, when news leaked out that Apple was working on a phone called “5C” every analyst assumed that meant it was a “C”heap phone. Then when it wasn’t, they all declared Apple had “failed”. Which is pretty stupid, since Apple obviously never intended it to be a cheap phone, just a replacement for the 5 at a $99 price point.

There seems to be a lot of anxiety over the fact that Apple has sold more 5S models than 5C models. Um…that’s a good thing! Every 5S is higher revenue and higher margins (so more EPS) than a 5C!

Most of the analysts who downgraded AAPL after the phones were announced have now backtracked and upgraded them again. In fact just this morning Societe Generale upgraded AAPL citing:

data he’s gathered from Taiwan and China, which “correlated to Apple handset revenues,” indicate “strong rises” in the iPhone 5S and 5C since the two phones hit 9 million in unit sales in their first weekend of sales, in September.

http://blogs.barrons.com/techtraderdaily...s&ru=yahoo

He also pointed to weakness in Android…

And apple couldn't even beat others to the punch in the idiotic wearable iproduct line..

Samsung obviously rushed their watch out before it was ready in order to beat Apple to market – one of their execs even admitted that. And they are paying the price – it was panned, and looks like being a massive (and expensive) failure.

It’s not about being first to market, it’s about bringing to market a compelling product. Apple wasn’t first with a smartphone, a tablet, an MP3 player, an app store, or many other things. But when they did bring them out, everyone wanted them, to a level never seen before in any of those markets.

One thing Apple is famous for (with a few exceptions like Maps) is not shipping snuff til it’s ready. As a software engineer, that something I admire a lot. I can’t tell you how many times we’ve been forced to ship a product that isn’t ready in order to “meet a date”, which ends up being way more expensive in support calls and lost reputation that just shipping it when it’s ready.

This also applies to Maul’s criticism. We know they’re working on a lot of big ideas in TV and wearables and other areas, and the fact they haven’t rushed them out early to appease shareholders and analysts is very reassuring.

[Vanraw]

You keep missing the point Grieve. As does Apple. There is no innovation coming out of this company in any sort of a timely fashion. Nothing.

Grieve, what are your thoughts on the iPad releases yesterday? For me,I saw nothing innovated. People were talking about a lap top killer. Is this yet another disappointment or do you see the stock climbing back to 700?

[strife]

If there is a laptop killer, it's the surface pro, not the ipad...

The new ipad is nice, but not innovative like you say. Innovative would be adding a fucking USB to it.

[Grieve]

I think you are looking at it the wrong way. You keep expecting the "wow" moment that blows everyone away, and of course I and everyone else would love that too. But no company can do that year after year. If you can have one "wow" moment every 5 years or so, I'd say you are in good shape.

Apple did the iPod...then spent the next 7 or 8 years just putting out variations of it. It didn't matter that there wasn't anything mind-blowing, they still dominated the market (and still do). The iPhone is the same. The original iPhone blew everyone away, but since they have been tweaking it and improving it. No single feature has been earth-shattering, but the iPhone 5S is a million times better than the first iPhone. And it still has plenty of reviewers calling it the best phone in the world, and sales keep on rising.

Same thing with the iPad. There haven't been revolutionary enhancements, but just look at a couple of the slides from yesterday. The new one is 72 times faster than the original iPad! Which only came out a couple of years ago. Plus it's incredibly light and thin, and has hands down the best tablet app subsystem. Yes, it's more expensive than the competition, but it's including world-class software for free (the equivalent of Microsoft bundling the full MS Office suite). Plus it will keep margins high, which is what investors really care about.

I think it's more than enough to keep in growing sales of the iPhone and iPad, which is going to push the stock up. Come on, it has a PE of 13, compared to Google at 27. Just having the same PE as Google would bring it to well over $1000.

Then you have to figure in the impact of new products. Things like an iWatch or iTV might not bring in iPhone-level revenue, but it will create buzz and excitement and drive up the PE. Earlier this week there was a report out of Japan that Apple is planning a 55" 4k TV for $1500 (and 65" for $2500). That would be huge. Right now 4K TVs go for $5000-20,000. If they can create a mass market for them at that low a price, incorporating a revolutionary control system and interface, the stock is going to go crazy. It's not supposed to be out until NEXT Christmas, but that gives plenty of time for leaks and the buzz to build.

Finally, I know you say they aren’t doing anything innovation, but you are looking for “big” ticket innovation. You have to look at all the less visible innovation going on. For example, not only creating a 64-bit mobile processor, but completely architecting the OS, the developer tools and libraries, the built in apps for 64-bit…that’s huge. It’s an enormous amount of work, that they carried out in total secrecy over years. It gives them a big advantage over Android.

Then there’s the fingerprint scanner. Were they to first to do it? Nope. First to make it easy to use and reliable and successfully mass-market it? Yep. Could have massive implications for online (and regular) commerce…might even replace credit cards entirely. With the hundreds of millions of users in the Apple subsystem (and with Apple have the credit card info of all of then), that could be a massive income generator by itself. It’s a multi-trillion dollar market.

[Breand]

I think everyone except Grieve has way too much faith in the consumer. If you are Apple and continue to tell people it costs $100 more for 16GB of flash storage than 32GB and they BUY IT, you have a customer base that can be sold on just about anything. The new iPhones and iPads will sell very well, and I'm expecting quite soon to finally break even on the stock so I can get out of it. =) They are set up quite nicely this holiday season.

[strife]

I think everyone except Grieve has way too much faith in the consumer. If you are Apple and continue to tell people it costs $100 more for 16GB of flash storage than 32GB and they BUY IT, you have a customer base that can be sold on just about anything. The new iPhones and iPads will sell very well, and I'm expecting quite soon to finally break even on the stock so I can get out of it. =) They are set up quite nicely this holiday season.

I'd argue that Grieve has too much faith in the consumer... to accept mediocrity, and buy apple's shit.