October 2010
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Day October 19, 2010

[Sponsor] Pi Cubed: Touch Your Equations

I would like to thank Sunset Lake Software for sponsoring Asymco over the past week. Unlike traditional calculators, Pi Cubed lets you construct, typeset, and instantly evaluate mathematical expressions using an interactive menu system.

The ability to compose complex equations visually and then evaluate them instantly makes the iPhone a superior scientific calculator that, with this app, takes the concept to a new level. You literally touch the equation to edit it and can enter values to evaluate it. The visual representation lets you instantly recognize errors in composition, unlike formulas encoded in textual representations. You can share it, use templates and re-use it. It even exports to PDF for use with other documents.

If you are a student of any discipline where math is used, this $9.99 app is a no brainer. If you are a professional engineer, scientist, or an analyst like myself, this is an app you can’t afford not to have.

Available at the App Store here.

Highly recommended.

60 percent of Apple's sales are from products that did not exist three years ago

This chart speaks for itself. Note the bottom two bands and the proportion of the total that they make up.

Also note the seasonality with the holiday spikes. This last quarter is not a holiday quarter. Now imagine what next quarter will look like on this chart.

Apple OPEX: Never have so many owed so much to so few

Apple sales are growing faster than its operating expenses. Although all eyes are on gross margin, the company continues to run a tight ship in fixed costs (costs which do not vary with the output).

In terms of R&D, spending has dropped to 2.4% of sales, a level seen only once since 2005. Sales, General and Administrative costs also dropped to 7.7% of sales, a new record low.

The total operating expenses as a percent of sales stands at 10.2%. The following chart shows the trend.

Apple's cash quintupled in last four years and doubled in last two years.

During the last quarter the company added $5.2 billion to its cash, long- and short-term marketable securities accounts for a total of $51 billion. This amounts to about $53 per share vs. $49.43 per share in July (making the share price about $250 ex-cash).

I would caution again that when reading commentary about Apple’s cash that many observers exclude long-term securities from the “cash” total.

To see the difference in the total, this chart breaks out the three different accounts over time.