The NY Times is all wrong about Apple - again.

  • Posted: 26 February 2012 03:31 PM

    Apple Riding High, but for How Long?
    By KEVIN J. O’BRIEN
    Published: February 26, 2012

    Apple, the global market leader in smartphones, is enjoying record profits and sales that have transformed it into one of the world?s most valuable companies. But the mobile computing industry it has conquered in just five years is changing rapidly, and nothing, not even Apple?s vaunted brand premium ? the ability to charge more than its competitors for premium smartphones ? appears guaranteed.

    Question for the NY Times: Do you think that Apple’s “vaunted brand premium” is some kind of magic talisman? Have you ever asked yourself exactly WHY Apple can charge more for its products that its competitors? Because if you had, you never would have written this silly, silly article.

    Tongue in cheek, Mr. Cook called the 37 million ?pretty good,? drawing laughs, but then put it in stark perspective: ?As I see it, that 37 million for last quarter represented 24 percent of the smartphone market. So three out of four people bought something else. And it represented less than 9 percent of the handset market, so 9 out of 10 people are buying something else.

    Question for the NY Times: Were you born fools or do you have to take special classes at the NY Times to become so foolish? Cook wasn’t pointing out Apple’s small market share in phones in order to put last quarter’s record setting numbers in “stark perspective”. On the contrary, he was - and he explicitly stated this - trying to point out that the oft misused “law of large numbers” could not apply to Apple when there was so very much room left for Apple to grow!

    ?The smartphone market last year was a half billion units,? (Cook) continued. ?In 2015, it is projected to be a billion units. When you take it in the context of these numbers, the truth is, this is a jaw-dropping industry. It has enormous opportunities to it. Up against those, the numbers don?t seem so large anymore.?

    See?

    ?All of a sudden, every teenage girl has an iPhone,? Mr. Walkley said. ?The real danger is that Apple becomes so mainstream that there is a breakaway by consumers to something new.?

    You mean Apple is in danger of capturing 70 plus percent of the market - like they did with iPods - and then - like they did with iPods - continuing to maintain both their market share and their profit share - like they did with iPods - ad infanitum? Is that the danger you’re worried about, Mr. Walkley?

    Apple?s competitors are waiting for that chance, said Mark Newman, the director of mobile research at Informa Telecoms and Media, a research firm in London.

    That puts pressure on Apple to continue innovating with each new iPhone. Mr. Newman said that Siri, the Apple voice-activated command function introduced with the iPhone 4S, had been an incremental improvement, not a paradigm change.

    Yeah right. Siri is not a paradigm change. I guess that’s why no competitor has anything like it and every competitor is trying to copy it.

    ?Apple is focused on defending the high end of the market and that is becoming harder to do each year,? he said. ?Competitors, such as the Galaxy from Samsung, are starting to catch up. I think it is inevitable that the margin pressure increases.?

    So let me get the straight. Last quarter Apple might have taken 80% of the profits from the smart phone market with Samsung taking 15% - yet it’s Apple that’s feeling the pressure? WTF?

    Conclusion:

    The future is uncertain and there’s no guarantee that Apple will continue to be as successful as it has been for the past five years. But if the NY Times is going to apply such shallow and boneheaded analysis to Apple, then there is one thing that I can absolutely guarantee: The NY Times not going to understand Apple anytime soon.

         
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    Posted: 26 February 2012 03:48 PM #1

    Welcome back:)

         
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    Posted: 26 February 2012 04:55 PM #2

    Been a while Fal!

    Nice to see you back every now and then.

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  • Posted: 26 February 2012 04:55 PM #3

    Nice job, Falkirk.  Great to hear from you.

    Over the last 25 years, the NYT has gradually devolved from journalism to religion.

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    You will find hard currency at Midas Mulligan’s.

         
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    Posted: 26 February 2012 05:09 PM #4

    Pogue gets Apple, and no one else on NYT - and really, Pogue is “NYT” the same way that Mossberg is “WSJ” - they have much more sway than your typical journo.

    [ Edited: 26 February 2012 05:12 PM by Mav ]

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

         
  • Posted: 26 February 2012 05:20 PM #5

    I got so infuriated reading that article,  I actually tried to tear the newspaper in half. 

    And then I got so sad, because:

    1)  The NYTimes is the best paper in the country, and when it features such a flawed piece of business journalism it highlights the worsening problems of journalism in general;

    2)  So many people will be influenced by that article not to invest in one of the best companies of their generation; and

    3)  I actually failed to tear up the paper.  I’ve got to get to the gym.

         
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    Posted: 26 February 2012 05:25 PM #6

    Were you reading it on your iPad?

         
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    Posted: 26 February 2012 05:28 PM #7

    macorange - 26 February 2012 09:20 PM

    I got so infuriated reading that article,  I actually tried to tear the newspaper in half. 

    And then I got so sad, because:

    1)  The NYTimes is the best paper in the country, and when it features such a flawed piece of business journalism it highlights the worsening problems of journalism in general;

    2)  So many people will be influenced by that article not to invest in one of the best companies of their generation; and

    3)  I actually failed to tear up the paper.  I’ve got to get to the gym.

    The NY Times is the most biased piece of trash masquerading as journalism in the country. And The NY Times poking fun at Apple’s business model is like an Apatosaurus snickering at a Velociraptor, telling the Raptor that the end is near, and it had better grow feathers to stay warm.

    5 years from now, Apple will be a $2K stock, and The NY Times will be a Jeopardy question. I will have a party when The NY Times ceases printing.

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    Posted: 26 February 2012 05:43 PM #8

    I look forward to what’s around the corner.  I’ll leave it at that. :innocent:  But I will say - remember those Foxconn articles?  And what Nightline wasn’t exactly finding?

    I’ll pick up where FalKirk left off:

    BARCELONA ? When Ellie Turner decided she wanted an upgrade from her iPhone 3G, she expected to pay more for Apple?s new iPhone 4S than for the other leading smartphones on the market.

    Wait, Barcelona?!  Nice setup there NYT.  Cherry picking your markets and your interview subjects?  Everybody knows this is not true of the uh, US market.  (See:  Not-derivative-at-all white Galaxy S II for $229 on T-Mo; $299 Galaxy Nexus on Verizon; etc.)  You know, the US.  Where the NYT is.

    In Britain, for example, the iPhone 4S costs at least ?170 more than the Samsung Galaxy S II with a two-year commitment at O2 U.K. At T-Mobile in Germany, the Samsung model costs about ?80, or $108, and the 4S ?130. In the United States, the difference between the two models at AT&T is at least $50 and as much as $250.

    See above, Mr. O’Brien.

    But Apple?s main rivals ? Samsung and other sellers of cellphones using the Google Android operating system, like HTC of Taiwan and Huawei and ZTE of China ? are making smartphones for much less, and the iPhone is becoming ubiquitous, threatening to dull its cachet.

    Way to forget the iPhone 3(GS) at this point, O’Brien.  “Cachet.”  Right.  You’ll never understand, so why bother trying to explain?

    ?All of a sudden, every teenage girl has an iPhone,? Mr. Walkley said. ?The real danger is that Apple becomes so mainstream that there is a breakaway by consumers to something new.?

    Mind if I chime in on this paragraph Fal?  Let the marginalizing continue!  Walkley, “the real danger is that Apple becomes so ubiquitous that even in maturity, it continues to suck the oxygen out of the market it’s thoroughly conquered.”  If you noticed iPod, that is.

    But competition, especially from lower-priced rivals, is not standing still.

    By 2016, more than half of all smartphones sold will cost less than $300, according to Informa. Last year, 81 percent ? most of them iPhones ? cost more than $300. The proportion costing less than $200, which currently makes up 5 percent of the global market, is expected to increase almost fivefold, to 24 percent, by 2016.

    Anyone wanna take a bet that Informa is pulling numbers out of its - thin air?  And this confusion of “cost” with “cost” - ASP vs. carrier subsidy - is either negligence or intentional misreporting.  And hey, if an individual vendor wants better terms and subsidies, maybe it should make more popular phones than Apple.

    And really, if the trend is towards smartphones and data plans, what moron will save $99 to trade down from an Apple smartphone for an inferior ownership experience?  Never mind that said moron will HAVE an Apple choice at $0 - in two years, a “free” Siri iPhone will probably be up for the taking.

    [ Edited: 26 February 2012 05:48 PM by Mav ]

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

         
  • Posted: 26 February 2012 05:53 PM #9

    Cheer up you guys.  The world needs idiot journalists writing about Apple.  That way we have some positive surprises left, when their amateur-hour predictions are shown to be laughably wrong time-after-time-after-time.  Then we all get to see some shorts burned, which is good for the stock.

         
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    Posted: 26 February 2012 05:57 PM #10

    Idiot journalism is always depressing, but this is more like “sport” for us.

    Almost too easy to be “sport”, really.

    [ Edited: 26 February 2012 06:00 PM by Mav ]

    Signature

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

         
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    Posted: 26 February 2012 06:36 PM #11

    New York Times Apple Article = Trolling for page views.

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    Posted: 26 February 2012 06:48 PM #12

    Well, I get far more entertainment from shredding the articles’ premises to ribbons than they get revenue from a click.

    Signature

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

         
  • Posted: 26 February 2012 07:38 PM #13

    ?Apple is focused on defending the high end of the market and that is becoming harder to do each year,? he said. ?Competitors, such as the Galaxy from Samsung, are starting to catch up. I think it is inevitable that the margin pressure increases.?

    “The high end of the market.”. Uh huh. Which “high end” of the market is that, since iPhones cost the same as Samsungs?

    This is the same kind of idiocy that continues, and it’s hard to understand “why” at this point, unless it’s either deliberate ignorance, sloppiness, laziness, or some combination of those.

    We’ve sure been waiting for these margins to come down for years; and years; haven’t we.

         
  • Posted: 26 February 2012 07:59 PM #14

    Keep in mind that you probably won’t see a ton of positive info on AAPL from the NYT since they weren’t given a copy of Mountain Lion due to their silly labor article. NYT used to be an ally of AAPL, but after that article they seem to have changed polarity.

         
  • Posted: 26 February 2012 08:27 PM #15

    Another great takedown of the AAPL nonsense coming from the NYT here from @drdrang:

    http://www.leancrew.com/all-this/2012/02/arrested-for-breaking-the-law-of-large-numbers/

    “Let?s start with what the Law of Large Numbers really states. Put simply, it says that the sample mean of a random variable will tend toward the underlying population mean as the number of samples grows larger. For example, Wolfram Alpha says the average height of an adult male is 5? 9?. If you measured the height of a few randomly selected men, you might get an average for your sample that?s quite far from 5? 9?. But if you increased the size of the sample, the tendency would be for your sample average to move closer to 5? 9?.