Supply chain cuts for the Ipad. Here we go again…

  • Posted: 27 September 2011 11:39 AM #31

    About Analysts

    I am amazed at how little most analysts know about what constitutes a well run business.  (I might extend this to many businessmen, some of whom are deemed to be successful, but this diatribe is about analysts).  In my not so humble opinion, the epitome of a well run business is Apple. 

    They are adept at identifying market opportunities. 
    They develop excellent products which exploit these opportunities. 
    They are relentless in driving manufacturing costs down.
    They keep the number of products to an easily manageable level.
    They control their working capital extremely well.  Inventory, receivables and payables are always well controlled.
    They have an incredible balance sheet with a huge amount of cash, yet they control their operating expenses as well as any company I know. 
    Their marketing, sales and distribution are stellar. 
    Their retail stores have no peer.
    Their pricing is exemplary.
    They obviously have excellent short and long term plans which they keep to themselves.
    They are proactive rather than reactive, yet they are adaptable and quick on their feet. 
    I don?t know what I left out but I am sure that this is not a complete list.

    In spite of this most analysts do not understand that Apple?s success is because they are very good at what they do, not because they are lucky or dupe customers into overpaying or steal other?s intellectual property.  Many probably don’t even know that this is a list of GOOD business practices.  They are just waiting impatiently for Apple to slip so they can hit a home run.

    Analysts make their reputation based in part on making good predictions.  An analyst who is first to predict a major change can get a lot of attention.  Many of them are swinging for the fences, no matter how unrealistic they are.  That is why we see headlines r? the iPad such as ?multiple supply- chain vendors indicated a 25 percent reduction in so-called sell-in orders in the past two weeks?.  They are trying to be first with the sensational story, truth be damned.  Of course the media also wants a scoop so they often jump in too without doing their homework.  Antennagate, anyone?

    All successful companies eventually lose their mojo, and I am sure Apple will have its problems at some point in the future…the very distant future, as long as they continue to run their business the way they do.

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    The measure of the worth of a product is how much people are willing to pay for it, not how many people will buy it if the price is low enough.

         
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    Posted: 28 September 2011 04:53 PM #32

    If I pretend not to know how Apple operates and send a resume, can I get his awesome job too?

    How many WS analysts does it take to realize that no iPhone 5 with A5 for something like 6-7 months after an A5-equipped iPad came out = ABSOLUTELY NO CHANCE of a new iPad this year?  Never mind that it makes ZERO sense for Apple to shorten its 12-month-ish iPad update “cycle”?

    Apple has never planned for a new iPad to launch this year.  Wait ‘til March 2012 or later, like everybody else.

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
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    Posted: 30 September 2011 01:57 AM #33

    No one has any clue of max production capacity or even max orders for iPad 2.  Considering iPad 1’s sales high was 7.33 million, 15 million would be just fine. 

    Apple doesn’t need to triple sales YOY with iPad.  Apple is free to take its time and grow the iPad market in an organic, sustainable way.  A nice and easy 120% YOY pace.  wink

    Signature

    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.