Apple, iPhone, Irrational Exuberance, Etc.
from the invest-with-confidence dept
You might have heard that Apple's released a mobile phone tomorrow. Since this "iPhone" device was announced back in January, a nice $34 billion or so has been added to Apple's market cap by investors. Breaking Views compares that to Nokia's market cap, which stands at $108 billion -- despite the fact that it will sell 55 times more handsets than Apple at the end of the year. The piece argues that the $34 billion increase in Apple's market cap reflects investors' perceived value of Apple's phone business, and using Apple's reported margins of 13% -- which happen to be identical to Nokia's -- the phone business is valued at 100 times projected 2008 operating profits. Nokia trades at a much lower 10 times multiple, leading the site to conclude that either it's badly undervalued, or Apple is massively overvalued. Perhaps that's true, though the runup in Apple's share price reflects the ridiculous level of hype and expectations for the iPhone, and it's something that could change quite quickly should the device not prove to be an overwhelming success. Furthermore, it just reinforces the reality that stock prices are disconnected from a company's underlying business, and often have far more to do with investors' perception of a company than financial reality. Also, watch for Apple stock to tumble a few points Friday, as investors dump their shares so they can finance their own iPhone purchases.![Hide This Hide this](https://ii.techdirt.com/s/t/i/topclose.png)
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Sounds like
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This really isn't news...
As for the iPhone I'm taking a wait and see approach. Innovative? Maybe in one way or another, but they are entering a market where there are much better established players and I'm a bit skeptical of the ability to perform here.
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innovative?
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supply shortage?
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thats not mixing up past or future tenses or anything like that at all. =P
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Re: supply shortage?
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Iphone
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Gurney: And why will the 3 year service agreement by cingular have anything to do with Apples stock price?
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Re:
How did you think it had to do with stock prices anyway? He didn't even respond to a comment that had to do with stock prices...
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You activate them at home via iTunes. That opens up the secondary market.
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Why pay $500??
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You might have heard...
The initial assumption here -- that the stock price appreciation can be linked 1:1 with the phone release -- is fallacious to the point of idiocy. Then the extrapolation -- that the increase is solely due to increased profits from sales of the phone -- is shortsighted and naive.
Investors are betting that Apple will be able to leverage the iPhone into larger *corporate wide* profits. Hello? You know all those people queuing up at Apple stores? Think some of them might buy something other than just a phone?
And once people have the phone, might not some of them, oh I don't know, buy music on iTunes? Be more likely to buy a Mac? Buy phone acccessories?
There are good arguments to be made that Apple's stock is overvalued. There are good arguments to be made that Nokia's stock is undervalued. Unfortunately, this article is sadly lacking in basic logic, let alone any kind of good argument.
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Re: Iphone
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Re: Re: Iphone
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Re: You might have heard...
LOL!!!! Oh man you had me on the floor laughing after reading that. Are you THAT far gone? Who the hell buys a computer based on their phone purchase? The only people who will buy a Mac are those who want one. They will not buy a Mac just because they are in line to by the iPhone.
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Re: Re: supply shortage?
There are phones all over ebay. Though it may not be immediate, I'm sure iphones will make their way onto ebay in no time.
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Re: Re: You might have heard...
There's this phenomenon called "brand loyalty." Basically, the principle goes that it's easier to sell someone the second time than the first. Sure, not a lot of people will buy a Mac while waiting in line for an iPhone (duh). But I'll bet that a lot of people passionate enough to wait in line for an iPhone will end up buying a Mac in the near future.
In fact, I'll bet real money, if you will. Here's my proposition: over the course of the next year, the percentage of current PC users who switch to a Mac after buying an iPhone will be higher than the percentage of current PC users who do not buy an iPhone but still switch to a Mac. I think that's a fair test of your "no correlation between phone and computer purchases" hypothesis. Up for a wager? You will be betting against the entire history of branding, of course, but you seem pretty sure of your position.
Modern companies, and especially marketing-driven companies like Apple, are all about the cheesy sounding but quite real phenomenon of brand synergy. If you don't think that Apple's looking to the iPhone to drive across-the-board earnings, you really should just stay on the floor where it's safe.
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Re: Re: Re: You might have heard...
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Iphone is super cool
That said I'll wait till they have been out for a year before I get one so all the bugs are worked out and the price might come down a bit.
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Nokia isn't going to take PC marketshare, Apple mi
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Re: Re: Re: Re: You might have heard...
The iPod did a pretty good job of re-invigorating Apple and driving sales across product lines. I would anticipate that the iPhone may have a similar (probably on a smaller scale though) effect.
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Re: Re: Re: Iphone
My "REAL business" uses a macs throughout. I just could not continue to pay someone to fix all the crap that infested my Windows PCs on a weekly (and daily) basis. Seems I switched to using a Macs oh about 4 years ago and I have had one crash (do to an issue with Microsoft Office locking it up), no virus issues, no hack attempts, and never had to shut my Mac down because of a system overload.
The macs we use have the same specs as my PCs did and they work with all of the programs I use. I'm not sure what your definition of hardcore is, but I would say using Adobe: Photoshop, Illustrator, Dreamweaver, & Fireworks simultaneously for 8 hours day is pretty "hardcore". Try doing that on a Windows PC...two words come to mind... Yeah followed by RIGHT!
BTW-Being an IT pro of 15 years, I would have though you knew that Mac OSx is based on Unix. And if you haven't seen a business running Macs for their business in all of your 15 year glory, I would suggest you get out a bit more often. While Windows still dominates the industry (at least for now) as well as most of the businesses in my home town. However, the population in this town is just under 20,000 and there at least a dozen business using Macs here.
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My Samsung Is Better
I have Verizon's network, with excellent coverage, speed good enough for a slingbox (& player), and WiFi if I can't get on Verizon.
I've had this for nearly two years now.
Oh yeah, it will do Exchange.
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More - My Samsung Is Better
I has a slide-out illuminated keyboard, same resolution as the iPhone, it has been going for $299 with a TWO year Verizon contract, it shares my shirt pocket with my glasses (but mostly I use my leather belt holster), it will tether to my laptop as a modem, giving my laptop EVDO-speed connections.
I guess that's enough.
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More Yet My Samsung Is Better
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