December 2010
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Month December 2010

Entries 5 Total

Analyzing the iPad as a computer: from a whisper to a roar

Dec 13, ’10 2:47 PM

[Goldman Sachs analyst Bill] Shope also expects both iPad and iPhone sales to exceed expectations in 2011; he sees sales of 37.2 million iPads next year, “which could potentially make Apple one of the largest vendors in the global personal computing market,” if you include both tablets and PCs.

via Apple: Goldman Pounds The Table; Sets $430 Target – Eric Savitz – Tech Musings – Forbes.

Apparently, it’s not just the crazy ones who dare to think the iPad is computer.

My forecast for iPad in calendar 2011 was set at about 33 million since last summer. I may raise it if Q4 units top 6 million.

Meanwhile…

He re-launched coverage of the stock for Goldman this morning, setting a Buy rating and $430 price target, while placing the stock on the firms “America’s Conviction List.”

I don’t make stock price forecasts as they are based on a random number called ‘sentiment’. But by forecasting earnings and assuming a range of P/E multiples between 15 and 20 (essentially in-line or below the S&P 500) values Apple’s stock at between $360 and $480 by this time next year.

Goldman’s target of $430 is about in the middle of this range so I don’t see it as requiring much in the way of conviction.

Comments (31)

Verizon Strikes Out in Smartphones [Updated]

Dec 13, ’10 12:00 AM

[Updated]

[ITG sent an explanation of their methodology and there is no indication that the data represents inside information.]

ITG Investment Research analyst Matthew Goodman is forecasting monthly sales record for all of Verizon’s devices “based largely on our proprietary daily point-of-sale data from thousands of independent wireless retailers across the US.”

Assuming the data is accurate, we are going to dive into it but I will state up-front that without confirmation, the conclusions below should be taken with a grain of salt. All statements should be read with a preceding “if the data is accurate…”

So, if the data is accurate, here is what I conclude [1]:

Verizon Has three strikes against them:

  1. The iPhone has stolen their growth
  2. They are facing the prospect of a single OS platform supplier
  3. Android is not competitive vs. iOS
Continue Reading… Comments (128)

Smartphone parochialism: How operator policies prevent or promote platform adoption

Dec 10, ’10 6:57 PM

When comparing smartphone platforms it’s tempting to consider the global market as unified and commonly addressable. However, when you look at individual countries some strange patterns of behavior emerge:

  • Indonesia, the fourth most populous country in the world (230 million people) loves Nokia’s Communicator. It’s the ultimate mobile status symbol.
  • Japan had one of the largest installed bases of Symbian phones. The version running in Japan is not compatible with versions elsewhere. Famous for its Galapagos mobile culture, the iPhone is changing what the Japanese consider the basis of phone performance.
Continue Reading… Comments (42)

The asymmetric competition between Google and Apple app stores

Dec 8, ’10 3:31 PM

In the latest version of Android, Google shifted from bitmaps to vector rendering for maps.  The shift is probably more a function of available processing power on the device than a strategic shift to position value on the device rather than in the cloud. Vector maps, which are much more efficient in terms of bandwidth and local storage, have been the choice for in-car navigators but Google has always been using bitmap tiles which are fetched from a server and delivered only if the device is using a data connection. The downside for vectors is that they require a bit more local processing power.

I doubt that Google’s move to vectors is part of a shift to more app-centered/edge-of-network strategy.

How is this relevant?

Google has been riding a wave of re-centralization of value toward the center of the network as broadband made the cloud feasible. Keep in mind that Microsoft rode a wave of de-centralization as value moved to the PC and away from the mainframe. As intelligence was pushed to the edge, Microsoft accrued value from enabling the edge as a locus of productivity. This is no small thing.

Then came apps.

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When markets are supply constrained purchase decisions are not based on product performance

Dec 6, ’10 6:20 PM

The difficulty in analyzing the smartphone market lies in its extremely rapid growth. With the market growing at 90% (and 400% in some areas like China) the forces of demand and supply are disconnected. It’s impossible to discern whether a purchase decision is made from a choice of comparable alternatives or if it’s made from a choice between buying nothing and some alternative.

Furthermore, another problem lies in distribution inefficiencies. The global phone market is nominally serving 4.6 billion consumers but they are not all participating in the same market.  Devices and the services they are bundled with are not fungible globally.  You cannot buy a phone is one country and easily couple it with service in another. You can’t even transfer one bundle from one owner to another within the same country. Products are available only in some countries or some operators and not in others.

Commentators focusing on mobile OS platform shares assume a zero sum game and a liquid, efficient market. Both assumptions are false.

Continue Reading… Comments (27)