Comments on: Why Apple's shares rose as its market share shrank

By: Steven, Atlanta GA

Steven, Atlanta GA — Tue, 05 May 2009 05:16:45 +0000

@Fred

"I just bought my kids netbooks. They are solid state and have Wireless G and bluetooth. They weight about 2 pounds and their battery life is 3 hours real use. I got them on sale for 300 a piece. Yeah, Apples are nice. They are also big, high in inertia, high in price, and no longer leading edge."

Fred, you are showing your age – "solid state" is an archaic term from the early days of electronics when not having any moving parts was a major selling point. Are you sure these aren't your grandkids?

Fred – Apple no longer leading edge? Really? Are you serious?

Fred – think about what you just said. You just bought your kids a couple of toys. They'll be nice for about a year. Then the plastic starts to crack and the letters start to wear off the keys and the display starts to fade and they begin to grow up and realize all the stuff they can't do on them, and you're right back where you started, except now with a couple of solid state bookends.

By: Roger, Grand Rapids, MI

Roger, Grand Rapids, MI — Mon, 20 Apr 2009 17:08:09 +0000

The reason iPhone deferred revenue IS a BIG DEAL is threefold:

1. Apple gets the purchase price up front (nearly 600 per iPhone, 199 from consumers and the rest from upfront payments from carrriers).

2. Deferred revenue has accumulated to nearly 10 billion, parts of which are being realized in ever larger numbers per quarter.

3. The POSITIVE cash flow each quarter is between 2 and 4 billion dollars, far more than the net profits shown, and mostly because of UPFRONT cash payments for deferred revenue products like the iPhone! This means that Apple's cash will grow to well north of 40 billion sometime in early 2010!

What other company can you name with a setup like this?

By: Roger, Grand Rapids, MI

Roger, Grand Rapids, MI — Mon, 20 Apr 2009 17:05:10 +0000

The reason iPhone deferred revenue IS a BIG DEAL is threefold:

1. The get the purchase price up front (nearly 600 per, 199 from consumers and the rest from upfront payments from carrriers).

2. Deferred revenue has accumulated to nearly 10 billion, parts of which are being realized in ever larger numbers per quarter.

3. The POSITIVE cash flow each quarter is between 2 and 4 billion dollars, far more than the revenue shown, and mostly because of UPFRONT cash payments for deferred revenue products like the iPhone! This means that Apple's cash will grow to well north of 40 billion sometime in early 2010!

What other company can you name with a setup like this?

By: Rick, Miami FL

Rick, Miami FL — Sun, 19 Apr 2009 13:12:30 +0000

The deferred revenue seems to me to be a way to help avoiding unwanted heating-up/cooling-off of the stock. If Apple suddenly starts making an avalanche of new cash, the frenzy around the stock, while maybe good for some, will only lead to added riskiness. Deferred earnings at least help pain the picture of steadier growth, not landslide windfalls. There may be a bit of smoke and a mirror or two, but as others have said, Apple really is raking in a lot of money.

On another site, someone who has had some accuracy predicting Apple's past growth foresees a possible future when Apple may be one of the the biggest company in the world. It matters little to me whether this is true, but it's a shocking turn of events that the discussion could even be had, considering how Apple seemed to be falling apart in the 90s.

Go Apple! The future is bright, it seems!

By: KD, Montclair, NJ

KD, Montclair, NJ — Sat, 18 Apr 2009 19:56:50 +0000

They have been talking so much about revenue from iphone sales and they haven't even made it to the 8th quarter yet from the deferred revenue. The iphone profits are only going up if you look at the growth of the iphone sales in the past that haven't been taken into account yet. With the exponential growth of iphone sales if in the next quarter they don't sell 1 iphone on earth it is still possible that they could make more profit in the next quarter than the previous. It is still the same profit no matter how you divide it up but gives apple more flexibility in their numbers if they have a bad quarter or makes their numbers look more solid if they have a good quarter.

By: Fred, Portland, Maine

Fred, Portland, Maine — Sat, 18 Apr 2009 14:00:32 +0000

I just bought my kids netbooks. They are solid state and have Wireless G and bluetooth. They weight about 2 pounds and their battery life is 3 hours real use. I got them on sale for 300 a piece. Yeah, Apples are nice. They are also big, high in inertia, high in price, and no longer leading edge.

By: Wayne, Morgantown, WV

Wayne, Morgantown, WV — Sat, 18 Apr 2009 10:33:47 +0000

Steve sad quite well a while ago:

"Apple & Dell are the only ones in the pc industry making money. The make it by being like WalMart. We make it through innovation and great products"

'Nuff said

By: max, albany ny

max, albany ny — Fri, 17 Apr 2009 20:43:58 +0000

if you think of netbooks as junk you certainly havent tried the hp netbook. my house has 4. 3 running xp and 1 running ubuntu.

as for apple, give them credit for making a quality product.

as for iphone sales – they deserve every dollar. hell of a product and the leader in the space as far as quality.

By: Sacto Joe, Sacramento, CA

Sacto Joe, Sacramento, CA — Fri, 17 Apr 2009 18:14:11 +0000

Mr. T Evanson – two minds with the same thought! Note that our posts came within one minute of each other!

The new paradigm of the Pocket Computer is born!

By: Johnny Walker - Houston, Tx

Johnny Walker - Houston, Tx — Fri, 17 Apr 2009 17:18:32 +0000

Randy B.: If you pay attention to Apple's non GAAP earnings results, you'll see how significant the deferred revenue/earnings are for Apple (which is around 10b of deferred rev now on B/S). In last year's Jul-Sep quarter, Apples' earnings were 1.1b. If they reported iPhone sales/earnings at point of sale, it would have been 2.4b. The iphone would have realized more earnings in that quarter than the whole rest of the company!! That was $1.43 EPS just for that quarter attributable to the iPhone. Compare that number to their usual quarterly earnings. And remember, that was one quarter….albeit the best iPhone quarter….but the other quarters also add signicant deferred rev/earnings. In the last quarter, the deferred revenue had gross margins of 61%.