Mobile: Maintaining Margins, Demands, China Are Reasons Why You Should Not Expect A Cheap iPhone

It’s not for us to be talking about Apple’s stock prices here and its value as a company in fiscal terms. However, what’s going on in the stock market could lead to certain mobile expectations that I would like to dispel now. Here is one that I want to dispel now. There will not be a cheap iPhone coming out any time soon. There. You have it. No cheap iPhones that cost $99 or $199 without contract. Why do I believe this? In order to do that, we do have to talk about Apple’s earnings and profit margins a bit in order to do that. See, one of the reasons Apple’s stock is getting killed is the perception that growth is slowing. Sure, it’ll happen eventually but growth is still there if you don’t look at the last financial quarter as a whole but on a week-by-week basis. And Apple is killing it by growing more than 25%. However, what some investors are concerned about is the drop in profit margins from a low forties to high thirties. This is largely due to the fact that Apple introduced a lower margin iPad mini as well as refreshed just about every product it sells for the last Holidays quarter. There are cries for Tim Cook’s head despite the fact that even with lower margins, Apple made more money than ever before. There are also cries that Apple has to release a cheap iPhone to compete in the emerging market. What these idiots don’t realize is that by releasing cheaper iPhones, it would put a squeeze further the valued high profit margins that Apple is appreciated for and lower the average selling price of the iPhone. There are two classes of pundits here who are trying to pull Apple in two directions. One is the tech pundits who wants Apple to increase iPhone market share with a cheap iPhone. On the other side are investors who wants to maintain high profit margins. You can’t expect Apple to do both. Having said that, China was the highlight of Apple’s last financial quarter. Tim Cook said China will eclipse the US market as the largest market for Apple. That means a couple of things. Apple is growing and will continue to grow by selling even just its current lineup. And demand for Apple’s iOS devices and Macs have not reach any point the point where those in China who can afford Apple’s higher price gears are being met. Apple is still looking to open up more stores and places where its products can be bought locally. On top of that, Apple still isn’t selling iPhones and iPads on the biggest mobile network in the world: China Mobile with its 600 million subscribers. You can bet there a few tens of millions of subscribers who can afford iPhones and iPads haven’t jumped ship to other networks will be eager once Apple’s products are available on China Mobile’s network. On top of that, Apple just introduced a payment plan that allows users to buy an iPhone and pay for it over time. Seriously, folks. This is huge and not enough bloggers are picking up on this. What Apple’s doing here isn’t different from most Americans buying cars on installment plans. By doing this, Apple has instantly made its products much more affordable to hundreds of millions of Chinese who do have not the ability to buy an iOS device outright on day one. So, demand in China for Apple products are still at an all time high. Installment plans have made the iPhone available to millions more. Apple is still opening up stores. Anything else to dispel the need for Apple to produce a cheap iPhone? There’s also another market where Apple is just starting to turn its laser focus on: India. Apple may ship a cheap iPhone someday. I’m not ruling it out. It’s not going to happen until iOS devices has so saturated the market that Apple has no where to go but to try to steal its competitors’ lower-end market lunch money. Note: Apple’s last quarter was “bad” for another reason. It could not make enough to meet demands.

Apple Just Starting to Sell Apple TV To South Africa – Maybe Newer Apple TV Not Coming For A While

Apple will start selling the $99 Apple TV in South Africa.  It’ll probably cost more so the $99 price is US only.

There is a bit more information at Macnn.  What can we take away from this?  Well, it’s probably unlikely we’ll get an update to the Apple TV any soon then.  The reason is because if Apple is just starting to sell the Apple TV in a new region, an update would make the current model just beginning to go on sale already obsolete.  Of course, Apple could be looking to stagger sales of the device but that’s not likely the situation here.  This isn’t like the iPhone.

I’m hoping that I’m wrong.  Still, what can Apple update to the current Apple TV other than the OS that would give us more apps or features?  I don’t see a major hardware update to the Apple TV (like being able to display 720p to 1080p video) unless Apple has decided to add a major feature like being able to handle major 3D video games or something like that.

Plus, I’m comfortable with what I can ready do on mine for now.

Apple 2013 Prediction: Very Sensible Predictions With Comments

Here is a list from an analyst who offered very sensible predictions on what Apple may do on 2013 with respects to its product update.  It's all hardware so nothing about software, services, or cloud updates.  I think both should continue to go hand-in-hand as far as updates go.  That's Apple's claim to innovation and ease of use after all.

It's from Macrumors.  I'm not in the biz of regurgitating rumors but since this is only a prediction, which is as good as any I've seen or I can come up with, I'm willing to pass this along to ya'll.  Having said that, I do have some comments.

• iPhone: I don't know about iPhone getting a shorter update cycle or colors.  Even fingerprint sensors.  I think we will definitely see an updated CPU.  It's also time for new camera sensors as well as smarter iOS that brings Apple's mobile apps and services more in line with its competitors.  Though I don't know if it'll happen, the battery life issue needs to be addressed.  The iPhone and iPod touch is thin enough.  No need to go thinner and sacrificing battery.
• Fingerprint sensors - unlikely
• Colors - unlikely
• Camera Update - 50/50
• Better battery life - 50/50.  It's time the iPhone battery get attention that the Macbook/iPad has been given.  30-Day standby time and 10 hours of use like the iPad.  
• iCloud/iOS update - likely
• Cheap iPhone - unlikely.  No way.  Apple might not have Android-style market share but it does have Apple-style shares in terms of profit.  Being able to control 70% of mobile profit with only 20-25% of the unit sales ain't too shabby.  I'd settle for profit like this over market share any day.  Apple can sell certain iPhones like the iPhone 4 at low prices for some markets as a testing ground but don't expect it to flood the markets with it.
• Macbook Pro:  I don't know if Apple is ready to go all Retina.  Certainly, better Intel and GPU chips should be in order.  I doubt we'll see and update in the second quarter like the analyst says.  I think a summer update around the time of the WWDC is more likely.  It could be updated in June, which does fall in the late 2nd quarter time frame.  But getting rid of non-Retina Macbook Pro is not gonna happen given the cost associated with it
• Macbook Pro With Retina CPU/GPU update - likely
• Getting rid of non-Retina displays - unlikely (unless much of the associated capital expenditure is associated with preparing for this.
• Battery Life Increase - 50/50 (it's about time it happens)
• Macbook Air:  definitely getting a better update via Intel but nothing more.  Nothing to talk about it.  
• Retina Display - unlikely
• Battery Life Increase - 50/50 (it's about time it happens)
• Desktop Mac - the analyst mentioned nothing about the Mac Pro but CEO Tim Cook did mention an update was coming.
• Mac Pro - DEFINITELY.
• iMac - late 2013.  Likely just see new CPU.  
• Retina Display - 50/50.  I only mentioned this because I do see Apple move Retina to the desktop display.  I believe when it happens, it could be related to the Apple HDTV that everyone and their grandmothers is predicting is coming.  
• Mac Mini - late 2013.  Nothing to write home about.
• Display - likely.  The question is if it'll be Retina or not.  Apple may come up with a special Retina unit that costs two to three times more than the regular display just to make first adopters absorb the cost just like what it has done with the Retina Macbook Pros.  
• iPod touch/Apple TV - likely.  There isn't too much to say about either product.  Apple TV is a "hobby" that Apple has a lot of interests in.  The 2012 iPod touch is a very neat device in and of itself and its pretty much for kids.  I don't see a need for Apple to update it in 2013.  
• Seriously.  What can Apple do with the current Apple TV that won't tip its hands on what its future plans are.  Apps?  Some of kind updated audio and video streaming service?  Siri?  In fact, any Apple TV update will likely come from updated iTunes/iCloud services and not the hardware.  After all, the Apple TV already can display 1080p video, an update over the previous 720p capability.  4K?  Not in 2013.  
• If there is an update, we could see FaceTime camera that can be hooked up wireless

New unknown devices - unlikely.  People are all over the place on what Apple should do to this or that.  This is what's floating out there.

• Watch
• Motion remote like Wii's controllers or something like what the Xbox has.
• HDTV
• Car

I can tell you all those above are preposterous.  At least in 2013.  I like the watch idea.  I am sure all those have been considered and may see the light of day one day.  Remember, Steve Jobs said that they're just as happy and proud of products they've decided not to bring to the market so those four mentioned items may exist.  

What I like to see is a FaceTime alone camera that could work wireless, either with the Apple TV or not.  Bring back the iSight camera.  If this happens, I like to see the ability to support FaceTime conference.  If Apple offers this feature, we would have to change some of the predictions above.

Anyway, this post ended up being longer than I expected.  But that's what's so fun, isn't it?  Just predicting/speculating - not rumor-mongering or stock manipulating as Wall Street does.

Facebook's New Social Search And Privacy

Source:  Engadget.

On stalker skills scale, I think I'm about a four, maybe a five if I use Google instead of Duckduckgo.  And I don't use Facebook anymore so if I wanted to stalk someone, I would be kinda shut out. But if you're a stalker and you're on Facebook, I reckon today Facebook's new social search engine would benefit you greatly.

So far, I have only heard how people and see what you're doing made all the more easier but nothing about not having what you posted kept from any search results.

And Mark Z claimed that ads displayed will not be influenced by the search.  I don't buy that.  Maybe he's telling the truth about this today but if investor pressure keeps up, FB will eventually turn on that switch and, believe me, there is such a switch.

What's interesting in today's press event is that someone asked FB about working with Google since Microsoft's Bing is involved.  FB nicely threw it back and said that it was willing to work with Google so long as they honor privacy of Facebook users.

Nice parry.  Still, I trust FB even less than ever.

What's interesting is that from a mobile perspective, I see this benefit users greatly if they're willing to be part of Facebook's sphere of influence.  I see apps such as Apple's Siri being asked "what is that Indonesian restaurant that Bob visited last month in Washington?" and the result would come up.  Of course, Google can implement something similar with Google Now too.

All in all, I don't see this as a game changer.

Mobile: Shameful Chinese Courts Employed Double Standard On Copyrights

Source:  WSJ.

A Chinese court fined Apple for copyright-related ebooks in its App Store.  Well, well, well.  Isn't that interesting since China is one of the biggest violators of copyrights, trademarks, and patents.  Yet, finds Apple in the wrong here?

WTF...

Apple Positioned Very Well For Tomorrow

Here is a video from Bloomberg interviewing David Kirkpatrick of Facebook Effect and seemingly nice guy John Scully, failed CEO of Apple because he's a marketing guy and not a product guy, on the future of Apple.

• Hardware success
• Software success
• Cloud - Apple has challenges but is getting there.  

On Apple's competitors, Amazon is great at cloud but is finding hardware difficult and challenging while it does no understand software at all.  For Microsoft, it has no history of success in hardware which I beg to differ since the Xbox has lay waste to Nintendo and Sony in the console business.  However, I have to agree that Microsoft's other ventures have not done well, Zune and Surface to date.

For Samsung, it has a supply chain like that of Apple but relies on Google for software and cloud support and doesn't see it build out its own ecosystem like Apple's iOS-iTunes empire.

Both men are very bullish on Tim Cook but they don't say why.  At one point John Scully said Silicon Valley needs an autocratic product guy.  Obviously, Tim Cook isn't.  In fact, the top-end changes in the executive suites at Apple showed that Tim Cook isn't one but was actively trying to fix that by putting product guys in charge of hardware and software development and designs.

On television, they believe the world is waiting for Apple to reinvent how we watch televsion.  Maybe the key is about video consumption rather than trying to duplicate or making the television experience better - to do away with that completely.

Killing Digitimes: Maybe When Apple Moves Manufacturing Away From Asia

I really detest DigiTimes, you know, the go to site that Apple and tech bloggers, publications, and even Wall Street analysts go to to spice up their readership or report.  But the inside joke here is that everyone and their grandmother know that DT is almost always wrong when it comes to Apple news.

Even now, bloggers would quantify what they report from DT by saying that this bit of news is probably wrong.  So why report on it?

I'm hoping that once Apple shifts manufacturing away from Asia to Brazil, NY, or wherever else, DT will have less leverage over time.  And what's funny, at least to me, is that I'm now able to detect which blog posts are using DT as their source.

These days, bloggers are now adding that while DT is wrong on Apple facts, they're generally okay when it comes to components so it's okay when it comes to reporting on their information as it relates to Apple.  Well, as bad as DT's record is even now regarding components, even that should go away once Apple manages to move production out of China.

So, as always, stop click on rumors that come from DT.  I mean I love reading Apple rumors but even I have my limits.