July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Investor Warren Buffet, recently the world’s richest man, seems to think that Apple stock is going to do just fine.

Asked on CNBC’s Squawk Box about Apple, its depressed stock price, and the fantastically large $137 billion cash stash that is bulging Apple’s back pocket, Buffet seemed to suggest that its stock is a good buy, although he doesn’t own any himself.

“If you could buy dollar bills for 80 cents, it’s a very good thing to do,” Buffet said.

That’s a generically true statement, of course. But Buffet said it in the context of recounting a conversation with Steve Jobs some years ago about what Apple should do with its rainy-day fund, and when answering a question about what Apple should do with all that money.

Apple’s stock value, of course, has slid a couple hundred billion dollars since the heights of September.

Source: Google Finance

Apple’s stock since late 2012.

Years ago, Buffet had advised Steve Jobs to buy back Apple stock. It seems he would advise current Apple CEO Tim Cook to do the same, but he did add something just a little bit different: ”The best thing you can do with a business is run it well, and the shares will respond.”

One other tidbit that Buffet shared: Part of the reason that Apple has so much tax is that “two-thirds of it has not yet been taxed,” which seems to be a common refrain around the tech world these days.

You can watch the interview on CNBC or catch a summary on CNNMoney.

photo credit: Images_of_Money via photopin cc

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Wall Street and Apple are not cozy bedfellows this morning. Apple’s stock is down another $19 billion this morning in early trading on reports of iPhone component order cuts and softening demand.

This morning UBS analyst Steve Milunovich trimmed his Apple stock targets by $80, saying Apple will sell five million fewer iPhones and two million fewer iPads over each of the next three quarters. Then another analyst, Peter Misek, said companies that supply components for the iPhone 5 have reported “large order cuts” over the last two days.

And this morning we reported that the cheaper iPad mini is outselling the iPad 4 – and may account for half of all iPad sales in 2013. That’s the kind of good news that’s not good news, as the lower-cost and lower-margin item is cannibalizing sales of the higher-cost, higher-margin item.

It all adds up to a tempest in a not-so-small teacup for Apple stock, which had already seen a 20 percent drop from October to November and just this morning lost another $20, hitting a low of $507.66 today, down from a high of $702.10 just three months ago on September 19.

Source: Google Finance

Apple stock (blue) versus NASDAQ (orange)

That means Apple is now down 25 percent from its all-time highs and has dropped another $20 billion in market value — almost as bad as December 5, which saw Apple lose $35 billion in market capitalization, or, as we put it then, a Yahoo, Yelp, and LinkedIn worth.

iPhone and iPad sales, plus iPod, make up 76 percent of Apple’s revenue. Any hiccups in those cash cows, and Apple stock has a serious case of the Mondays — even on a Friday. The core problem is that Android is eating iPhone’s lunch and is starting to more than nibble at iPad’s. And analysts are worried that Apple will not be able to maintain the market leadership position it has held for a couple of years now.

Given Google’s powerful market positioning, it’s hard to imagine they’re wrong.

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July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Heavyweight bouts usually consist of 200-pound plus monsters bashing each other in public for our entertainment. Now we can add multibillion-dollar corporations to the show.

Amazon has launched a full frontal assault on Apple’s new iPad mini.

The massive online retailer is not just comparing the Kindle Fire HD with Cupertino’s latest. It’s not just saying ours is better than yours. And it’s not just hiding its message under the proverbial bushel. Amazon is using its home page — perhaps the most valuable digital real estate on the planet — to absolutely ambush the iPad mini.

Source: Amazon

Amazon’s front-page attack on Apple’s iPad mini

This is not just trash talking. This is in-your-face dialed up to 11, fist in the face, calling Apple out, dropping the gloves and saying “let’s go.” And gadget blog Gizmodo is helping, in a way.

Amazon is using a quote from Gizmodo to help drive home the point:

” … your [Apple's] 7.9-inch tablet has far fewer pixels that the competing 7-inch tablets! You’re cramming a worse screen in there, charging more, and accusing others of compromise? Ballsy.”

Amazon is hitting Apple where it hurts: the display, the dual speakers, and yes, most of all, the price, the price, the price. It’s what we said when we first saw the iPad mini: light, portable, awesome, expensive. And it’s the difference between a company that makes money on the device — no points for guessing Apple, people — and a company that sells hardware at cost so that it can make money on content sales.

Razor, meet blades.

Truthfully, it is also the tale of a company that makes money hand-over-fist – still no points — and a company that makes less than nothing on $14 billion in sales.

The issue is perhaps not so much whether Amazon is freaked out by the iPad mini as whether it is freaking out with joy, amazed to be handed a potential marketing coup on a platter. And it’s one that, if Apple had started its pricing at $250, as the rumors had at one point indicated, would be a tougher sell.

The real question, if you’re an Amazon shareholder, is whether Jeff Bezos can ever turn the biggest digital marketing platform on the planet into a content cash cow. Or, when he wants to.

For Apple shareholders, of course, the question is whether Apple’s legendary brand, its content and apps ecosystem, and its industry-best quality, fit, and finish are enough to overcome a $130 price gap.

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July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Can you hear the iPhone 5′s footsteps? Anyone buying an iPhone 4S today can.

Apple stores are now price-matching Sprint’s discounted online pricing for iPhone 4S when asked. Officially — and online — the price is still $199 for the cheapest iPhone 4S, the 16GB model, but in Apple Stores around the county, you can get a $49 discount on any iPhone 4s model.

Source: Apple

Official online iPhone 4S pricing

While the iPhone is a bit better of a deal today, the bigger story is that the iPhone 5 must be very, very near. Apple, which typically keeps 4-6 weeks of channel inventory, looks to be clearing out old stock in preparation for the new model.

The updated pricing takes the 16GB model down to $149, the 32GB to $249, and the top-of-the-line 64GB model to $349. An Apple employee at the Apple Store at University Village in Seattle verified the price cuts verbally on the phone.

(Note: All prices are based on a two-year contract.)

But don’t expect to see any 25 percent off signs at your local Apple store. You may have to ask for the deal to get it.

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