Horace and Gene Munster

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    Posted: 22 July 2012 01:25 PM #16

    Mav - 21 July 2012 05:15 AM

    That’s more like it. rolleyes

    Updating with a few comments so I don’t forget…

    11:40ish - Dediu - Apple must disrupt iPhone or face a crisis in a few years.  Disagree, and it’s a bit too…“cute” an analysis?  I get the continuous disruption theory, but Dediu seems to be saying the very idea of iPhone must be somehow replaced or disrupted. 

    Well, are pocketable computers with on-demand telephony going anywhere in 5, 10, 20 years?  I’m thinking…no.  Thin client tried and failed.  Now, the client CAN be impossibly thin raspberry, but the client itself must remain robust.  I don’t see us taking pictures through our *cough* glasses or cybernetic optics *shiver*, and I don’t see us playing games or getting directions on a virtual or foldable screen where we swipe through the air.  Even if voice service fades, VOIP is here to stay in some form.  So without Dediu explaining how Apple has to disrupt the connected pocket computer, it’s more clever sound bite than deep thought, in my admittedly uneducated opinion.

    14:00ish - Strongly disagree with Dediu about skimming strategy.  It’s best-of-breed, insanely crafted products (see:  iPhone 4/4S) building up as fast as they possibly can with those product/quality goals in mind.  It’s the responsible way to grow at a ridiculous speed.  C’mon, 0 (2007) to probably well over 100M (FY ‘12) in around 5 years is no small feat.  Leaving money on the table is imprecise.  Laser focus is a better description, I’d say, and you can’t really argue with the results.

    Mav

    I think you are reading too much into what Dediu’s comments.

    He always thinks outside the box and it comes across as if he is out of touch with reality.  Reminds you of someone?;) SJ.

    Of course the iPhone will always be around, but what other product can do the job better in the future as iPhone sales reach a saturation point like the iPod.  They can introduce better products that naturally gravitate towards replacing the iPhone in its present shape and use.

    The skimming strategy is one I think they will introduce once they have reached a point that they can no longer sell the iPhone at the present price point.  Horace is correct but just impatient.

         
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    Posted: 22 July 2012 02:35 PM #17

    sideliner - 22 July 2012 02:11 AM

    Gene’s comment about Apple making an error in not partnering with both ATT and Verizon seems to ignore that at the outset neither of those all powerful service providers were interested in Apple’s phone. My recollection is that pretty much all the tellcoms regarded them as arrogant for making demands like unlimited data and suchlike. The iPhone only ended up at ATT because they bought out Cingular that Apple did the exclusive with and presumably had to honour its contract with Apple. It is so easy to forget the power the tellcoms wielded over the manufacturers forcing them to drop features like photo sharing and free ringtones that cut into revenue streams.

    Agreed. And Munster is wrong on at least two more counts in suggesting Apple erred by failing to sign on more carriers at the outset. For one, Apple was able to negotiate a better price (thereby establishing very healthy baseline margins) by giving ATT iPhone exclusivity. Because the iPhone’s popularity then shifted the balance of power (i.e., the telecoms then needed Apple - to add subscribers - more than they did previously), Apple was able to maintain those healthy margins. And two, Apple was already selling all of the phones they could make. Thus, adding new carriers would have added nothing to the bottom line. Munster claiming that Apple could have done better by adding more carriers at the outset gives credence to AT’s disrespect of his intelligence.

    Next to Horace, IMHO, Munster’s intellect compares to bringing a knife to a machine-gun fight. There are few who can match that Harvard-grad’s intellectual reach. And, from the small amount of time I’ve spent with him, he’s also caring and passionate. A true intellectual giant.

    Regarding Horace’s comments about Apple killing the iPhone with something new, I think it’s important to hear him emphasize the user interface. Apple’s disruptions have centered on the UI. I am confident Apple’s engineers are busy integrating into all Apple products the immediate new UI paridigm of blended input (keyboard/virtual keyboard/touch/voice). Voice is in it’s infancy and promises only to get better.

    I also disagree with Munster (and others) who find Siri lacking. First off, we can’t disparage voice recognition if we have a unique accent or have a bad internet connection. Admittedly, Google’s voice recognition remains superior, but that is just a matter of time/data crunching before Apple closes that gap. Meanwhile, I find Siri VERY useful and competent for the things I know she can do. And, I’ll repeat the slogan of the year, “We are just getting started.”

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    Posted: 22 July 2012 04:08 PM #18

    jjjz,

    I don’t know why Munster doesn’t even seem to acknowledge some obvious reasons why Apple started off with (or eventually settled on) a one-carrier exclusive which was AT&T.  GSM, not exactly a small thing.  Starting “small” with exclusives.  Deep learning by focusing on/partnering with one carrier.  Influencing one carrier to fine-tune the process of gaining leverage over the hundreds of carriers yet to sign (Visual Voicemail, no crapware, Apple handling all iOS updates, APP STORE).  Observing pricing power.  Observing the competition’s (carriers/vendors) response.  Assuring greater ability to meet demand.

    None of this takes particularly deep thinking, IMHO.

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  • Posted: 22 July 2012 04:55 PM #19

    jjjz - 22 July 2012 05:35 PM

    SNIP…..Admittedly, Google’s voice recognition remains superior, but that is just a matter of time/data crunching before Apple closes that gap…”

    Says who?  I think you’ve been reading comparisons between search by text vs. search with Siri.  The former is better if you think it’s fair to compare two very dissimilar means of search.

    Google’s Jelly Bean is improving on voice recognition, but I’m not ready to concede that it’s better than Siri, in beta form let’s not forget.  Apple will move the bar here very soon.

    Here’s a recent comparison noting Google’s progress vis a vis Siri. 

    http://forwardthinking.pcmag.com/none/299734-google-s-jelly-bean-voice-recognition-vs-apple-s-siri

    Hey Google….do you ever have any ideas of your own?

         
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    Posted: 22 July 2012 04:56 PM #20

    Mav - 22 July 2012 07:08 PM

    jjjz,

    I don’t know why Munster doesn’t even seem to acknowledge some obvious reasons why Apple started off with (or eventually settled on) a one-carrier exclusive which was AT&T.  GSM, not exactly a small thing.  Starting “small” with exclusives.  Deep learning by focusing on/partnering with one carrier.  Influencing one carrier to fine-tune the process of gaining leverage over the hundreds of carriers yet to sign (Visual Voicemail, no crapware, Apple handling all iOS updates, APP STORE).  Observing pricing power.  Observing the competition’s (carriers/vendors) response.  Assuring greater ability to meet demand.

    None of this takes particularly deep thinking, IMHO.

    All good points, Mav. Munster really blew that one. I’m glad he’s just an under estimating, under achieving analyst and not an Apple executive.

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    Study the natural order of things and work with it rather than against it…  ? Tao Te Ching

         
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    Posted: 22 July 2012 05:00 PM #21

    Mercel - 22 July 2012 07:55 PM
    jjjz - 22 July 2012 05:35 PM

    SNIP…..Admittedly, Google’s voice recognition remains superior, but that is just a matter of time/data crunching before Apple closes that gap…”

    Says who?  I think you’ve been reading comparisons between search by text vs. search with Siri.  The former is better if you think it’s fair to compare two very dissimilar means of search.

    Google’s Jelly Bean is improving on voice recognition, but I’m not ready to concede that it’s better than Siri, in beta form let’s not forget.  Apple will move the bar here very soon.


    Here’s a recent comparison noting Google’s progress vis a vis Siri. 

    http://forwardthinking.pcmag.com/none/299734-google-s-jelly-bean-voice-recognition-vs-apple-s-siri

    Hey Google….do you ever have any ideas of your own?

    My judgement is based on my own experience comparing Google versus Apple voice recognition. Google was clearly ahead but in recent weeks Apple is closing or has already closed the gap.

    By the way, in my own small sampling Bing is a distant third.

    [ Edited: 22 July 2012 05:03 PM by jjjz ]

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    Study the natural order of things and work with it rather than against it…  ? Tao Te Ching

         
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    Posted: 22 July 2012 05:19 PM #22

    I don’t mean to throw Munster under the bus either - just posting my honest impressions of that session.  He’s a “friend” of AAPL bulls, but also a WS analyst, with all that usually implies.

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    Posted: 22 July 2012 07:30 PM #23

    All this hindsight analysis of how Apple could’ve done better is based on the assumption that they are “losing” based on unit market share. The fact that Apple is winning based on profit share proves that they chose the right path in focusing on the best product rather than the product that would garner the highest market share.

    Even though Apple is now clearly raking in the majority of profits, they still are not focusing on unit market share. They may also focus on providing the best inexpensive smartphone experience for the prepaid market. Market share will be incidental to the primary goal of making the iOS experience available to the most number of people.

    BTW, why no headlines about iPad outselling Android tablets 5 to 1? And let’s never forget that Android numbers, both phone & tablet, are all estimates since no OEM is divulging actual sales numbers.

    jjjz - 22 July 2012 05:35 PM

    Admittedly, Google?s voice recognition remains superior, but that is just a matter of time/data crunching before Apple closes that gap.

    I don’t think Google’s voice recognition is superior unless you are referring to the offline capability in Jelly Bean. Munster’s Siri vs Google Search comparison was a total crock. Siri is not a search engine. That’s not what I use it for and that’s not what Google Now is heading towards.

    I think all the major mobile players will be working hard on voice/AI. They’ll all get better with time, but it’ll be many years before any reach sci-fi level. The current iPhone form factor will remain dominant through this decade.

         
  • Posted: 23 July 2012 03:28 AM #24

    Mav - 22 July 2012 05:17 AM

    - Munster’s market cap theory seems to ignore simple supply and demand.  Good old-fashioned outside money can also raise the market cap of a stock.  New buyers and experienced traders/institutions buying in at higher prices.

    Munster’s idea about the overall effect on the whole market if one stock appreciates is flawed to its core. Completely mistaken! It is simply not true that a raised stock price, no matter which stock, means that the corresponding capital (appreciation*number of outstanding shares) is tied up somehow.

    The market cap is not a pile of money, it is just the last traded price times the number of outstanding shares. If news are great, like the last earnings report, and AAPL the next day is traded 50 dollars higher, nothing more than a higher market price has occurred.

    How any very smart person like Munster can think that it would mean that (roughly) 50 billion dollars of the overall cash in the market would have beed drained from the market escapes me.

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    Posted: 23 July 2012 03:44 AM #25

    Yup.

    I bought AAPL stock for under $500, let’s just say.

    Demand for the shares is why my shares are now worth more.  Simple as that.  My paper gains aren’t at another stock’s expense.  It’s just the going rate thanks entirely to Apple’s performance.  Either Munster’s trying too hard to explain an increase in value by trying to tie it to something “tangible”, or he watched too much Cramer (similar theory), or worst of all, he really is that clueless.

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