Categories

Padcast: Reviewing Apple's Third Fiscal Quarter 2012

Here is the second Perspective “padcast” where I discuss:

  1. Top and bottom line growth
  2. iPhone, iPad, iPod and Mac revenue growth
  3. iPad vs. Mac
  4. iOS product mix
  5. Other product line growth
  6. Gross Margins by product
  7. Pricing and revenue per unit by product
  8. Cash and cash growth
  9. Guidance and whether results were a surprise to management

The discussion is an audio presentation with animated, interactive motion charts which can be manipulated by the user.

It’s available as an in-app purchase for $0.99 on the iTunes app store via the Perspective iPad app.

  • http://profiles.google.com/larry.davis Larry Davis

    I’ll be honest, I’m not a fan of the new pay-per-view padcasts. It introduces friction by first having me download the app, which only works for someone who owns an iPad (we have one in the house shared by 3 people). Then I have to actually buy the particular padcast, by clicking either through from the site or from within the app. By that time I start asking if it’s worth the effort.

    Perspective looks like a great app and I am thinking of ways to use it for my own work. And I also like the idea of being able to market and sell padcasts in general. I paid for your first padcast, which was the prediction. Now I also have to pay for the second, which is a follow up? I’m not sure I see the continued value, though that is all relative.

    Maybe it’s just change and change is scary, but it’s (relatively speaking) expensive change for something that was once “free”, though this is admittedly more in-depth. I’m on the fence but appreciate you trying something new. Good luck.

    • Joe

      I’m sure Horace understands how much work it is for you to go through all those described steps. I can’t believe Horace would want paid anything for all his hard work. (sarcasm heavy). Keep up the great analysis!!!

  • Joe

    I couldn’t get the audio to work.

  • Robert

    I agree with Larry on him comment about not seeing the value. It kind of seems like you’re “nickel-and-diming” the customers. Maybe make the predication cast free and charge for the post-analysis or charge for the prediction and make the post-analysis free to those who purchased the pre-cast.

    • DataGeni

      So let me understand this, you want to USE someone’s hard work for FREE ? It’s a DOLLAR and you’re making HOW much off his life’s work ? Please.
      Financial Advisers charge $500 for this quality stuff and make worse predictions.

      • http://twitter.com/handleym99 Maynard Handley

        You are missing the point.

        There are two different sorts of markets for what Horace is doing. There are those who actually get some financial benefit out of it — people who are playing the market, people who are deciding to start an Apple based company, etc. Then there amateurs who simply find this stuff interesting — but not important enough to pay money for, or go through any sort of hassle for.

        In an ideal world, Horace would find a way to address both groups of users, charging those who care about the details, while not charging those who are just interested amateurs.

        Obviously Horace has the right to do whatever he wants with his data analysis. But your talking about how other people charge $500 for this stuff is not adding anything useful to the conversation. Financial professions who charge $500 for their insights don’t have a population of amateurs following them; and how they behave provides no useful information about how Horace can both make some money off those to whom his insights are valuable while SIMULTANEOUSLY making the world a better place by providing top-notch insight for free.

        Another possibility to solve the problem might be time delay — charge for data when it is released, but make it free after a week or a month or whatever sort of delay makes business sense.

    • http://www.facebook.com/markgoldmd Mark Gold

      I agree that it should be one charge for related podcasts. Note I bought the prediction podcast. I found the prediction podcast useful and found the charge acceptable.

  • ron

    Horace, you have done a lot of great work. I follow everything that you write. I would have gladly paid more for the padcast and would have paid for much of your previous work.

    I would guess that you would grade yourself pretty poorly on the estimates given in that padcast. It leaves a sour taste in my mouth that I have to pay anything to review the quarter when your numbers were so far off of the actual results.

    It seems to me that this would have been an excellent time to offer a free “mea culpa” padcast. Many investors lost a lot of money incorporating your estimates into their models.

    In general, you deserve to be able to monetize the value your analysis adds. I will begrudgingly pay for this padcast.

    • christophe

      I totally agree…

    • oases

      Most of your comment is measured, but the line about people losing a lot of money is so uncalled for and so unfair.

      • Jeff G

        Oases, you are right on. And besides how would “ron” know what any other investors besides himself have been doing?

        Secondly, losing a lot of money in Apple doesn’t make any sense unless they have been shorting the stock, or have owned it for such a short time as to render at any conclusion about losses, far too premature. In general I though it was an emotional reaction on Ron’s part, probably due to hard feelings about his own poor investment experience.

    • http://www.asymco.com Horace Dediu

      If you’re coming to this site for investment advice, you’ve come to the wrong place.

      • Rael

        Then, why are you publishing your forecasts?

      • http://www.asymco.com Horace Dediu

        Because it tests (crudely) the quality of analysis. Results from the test improve the understanding of the business.

      • Rael

        Of course the dissecting of the numbers would be beneficial in your understanding of the Apple business, however the benefit is not dependent upon the forecast itself being published here.

      • Noah Berlove

        You know what, I never discuss my methods or theories with anyone nor make them available for public review or criticism. And guess, what…all of my un-published estimates were right on the mark.

        That said, I don’t have Horace’s reputation, so who is going to believe me?

      • http://twitter.com/handleym99 Maynard Handley

        Of course, perhaps if you WERE to share your methods, theories, and forecasts with the world, you might achieve a reputation to match Horace’s…

        Until then, yes, you are right about one thing — no-one out here DOES believe you.

      • http://www.asymco.com Horace Dediu

        I publish as a matter of principle. I also receive feedback through comments which leads to some new ideas or causes me to learn something.

      • http://www.asymco.com Horace Dediu

        I publish as a matter of principle. I also receive feedback through comments which leads to some new ideas or causes me to learn something.

  • KN

    Horace, I respect your work and the analysis you have been generating. Couple of points:
    - pls don’t make us listen to audio bits. Dont know about others, but i hate it. I just want to read
    - dont make us pay for articles. For a lot of us individuals, there is not much value in it.

    • http://www.asymco.com Horace Dediu

      I have no plans for charging for blog posts.

      • Bernhard Grabowski

        @asymco:disqus – I don’t tink that’s what people mean and I don’t think you really did interpret it this way.

        There is an assumption that instead of posting your analysis in your blog, you’ll move the content entirely to your app and blog only the availability of the latest pad cast episode (with one graph attached).

      • http://www.asymco.com Horace Dediu

        That would be an incorrect assumption

  • Lionel

    I agree with the other posts. While your work is very good overall, you blew it on the forecast. (But that can be forgiven, many did because they dont know when to take the guidance as help for earnings). Personally I rely less on your sales volume (because it is no better that Gene and the other standard analysts) but more on the analytical work relating to strategies which you are one of the few to do.
    But you are blowing it even more on the pricing of your site. Make us pay a one time fee if you want. But 99 cents a blog, I dont think so. Nickle and dime in app purchases! The apps I cant stand that make android famous. Take a page out of Bulish Cross or even Cramer. Paying once and done that is Ok but going to the well over and over? not when there are alternatives.

  • Ralph Elliott

    Horace, I really think you need to have a conversation with your readers _before_ you start, in effect, charging us 99c per blog post. Last time, I paid slightly grudgingly. This time, I’m going to hold off for the time being at least.

    The labourer is worthy of his hire, and all that — and I’m quite willing to hear you make a case that the blog can’t continue to function unless you extract some money from us readers. But, like previous posters, I find the present nickel-and-diming approach particularly unappealing.

    (I was slightly surprised that no one seemed to make this kind of comment the first time round.) Another unsatisfactory consequence of the new régime, in the first instance anyway, was that the comments got turned into a Perspective app beta testers’ forum instead of a discussion of the topic at hand.

  • Ralph Elliott

    Horace, I really think you need to have a conversation with your readers _before_ you start, in effect, charging us 99c per blog post. Last time, I paid slightly grudgingly. This time, I’m going to hold off for the time being at least.

    The labourer is worthy of his hire, and all that — and I’m quite willing to hear you make a case that the blog can’t continue to function unless you extract some money from us readers. But, like previous posters, I find the present nickel-and-diming approach particularly unappealing.

    (I was slightly surprised that no one seemed to make this kind of comment the first time round.) Another unsatisfactory consequence of the new régime, in the first instance anyway, was that the comments got turned into a Perspective app beta testers’ forum instead of a discussion of the topic at hand.

    • http://www.asymco.com Horace Dediu

      Blog posts will remain free and ad supported, podcasts are ad supported, attendance at live events will be charged a fee and padcasts are charged by episode or subscription.

      • Ralph Elliott

        Thanks for the reply. I didn’t notice a way of subscribing (to padcasts) — did I miss something?

        A follow-up question: what effect is the advent of padcasts going to have on the volume of padcast-free blogposts? Almost all blogposts of the past week seem to have been padcast/podcast/sponsorship announcements, and so on — Cracking the India Code is the only “proper” blogpost I can remember — i.e. one with all your material in the body of the post, followed by a discussion of that material in the comments.

      • http://www.asymco.com Horace Dediu

        The subscription to padcasts is not yet available. It requires more development work. Regarding the follow-up question, I don’t know. But I also don’t know the volume of posts that I’m going to produce at any time regardless of whether there is a pod/padcast schedule.

  • snoof

    I have always been amazed that this site was free. It is a great resource and well worth the small price placed on the information. Especially easy to justify if you are an investor. I like the perspective app and the ability to have all the charts easily archived. I can go back and check a chart offline and share with someone else quite easily. Screengrab. A text version transcribed on a different page but acceseed by a button on the graph slide might solve the problem of people wanting to read faster than you present. Basically a text info page about each chart. All more work and time but it would be worth it. I’d turn up the volume on the audio a bit more. Great work!!

  • Jony

    Oh come on Horace, your gonna charge us now? Damn it….Let us just buy some shirts and support you while everything else stays free.

  • KirkBurgess

    Since I would gladly pay for access to asymco.com & the critical path podcast, I have no issue paying for padcasts.

    I don’t know if the in-app purchase system allows it, but maybe people would prefer a yearly subscription for all your padcasts? Say $9.99-$19.99 depending on your intended amount produced.

    • http://www.asymco.com Horace Dediu

      Subscriptions are coming.

      • Jeff g

        I like the idea of being able to choose between subscription or buying individual padcasts … It gives max freedom and flexibility.

  • Bernhard Grabowski

    I would gladly pay that dollar, no problem, but I don’t want to listen to audio.
    I prefer going over everything in my own pace, mostly while listening to music.
    It’s true, your analysis deserves full attention, but each one digests information differently.

    Regarding posters demanding a mea culpa or accusing Asymco on lost funds – Horace offers us his opinion to factor into our own decision making, or not. Everyone except the top tier of Apple officers is crystal balling what’s going on inside Apple and the market in general. Some of the analysts deserve praise for breaking down their data points and why they come up with their opinions, others eventually just wild guess or offer black box guidance.

    I read like everything Apple every day to form my own opinion, but I was pretty much as off as I could be. Once again I went back to some literature to remind myself what part “investor overconfidence” plays in making good or bad investment decisions.

    Relying too much on analyst opinion has a tendency to clock my own brain down to selective reading and even more selective interpretation of what the competition does.
    Android is here to stay and while most have predicted it’s just falling down to the low end of devices it’s not. High margins attract competition and with Samsung the competition has arrived on Apples turf. Looking at the S3 they gained their credentials to hunt down iPhone customers.

    I have a strange feeling that Apple needs to double down (or more like up in this case) on their ecosystem to provide the additional value Apple needs to continue inviting more customers into the Appleverse. The hardware lead has come to an end as expected.

  • Rolf

    Horace,
    PERSPECTIVE is a wonderful app with great potential going forward. Congratulations.
    PADCAST is a slightly awkward name. How about
    TAPCAST ? Suggests interactivity and reflects visualization of taps in the app. Catchy, too?

    • GadgetFunkie

      Actually Padcast is the right word. Podcast was derived from “broadcast” and “pod” from the success of the iPod. In the iPad age Podcasts will evolve as Padcasts.

  • Larry Fritzlan

    Maybe I’m the odd duck here but I love the great blogs and the great comments. I hope that does not go away. I’m not understanding the PadCast (not that much of a tech guy) and I sure hope the blogs don’t go away. And I’m waiting for your review of the latest quarter report.

  • Sylvan

    You could call this type of presentation a chartcast. (In your podcast you mentioned you were looking for a better name.)

  • rg

    I am all for paying for someone’s work but please don’t nickel and dime. 9.99 for yearly sub sounds great.

    • http://www.asymco.com Horace Dediu

      How many hours of programming are you expecting for this subscription price?

      • KirkBurgess

        8 apple financial related – 2 each quarter (prediction & result)
        1 each quarter when you update the AMP index on mobile market
        1 each quarter on mobile computing shares?
        Half a dozen other focusing on one off analysis that pops into your head (movie industry, industry disruptions, valuation comparisons, etc)

        So anywhere between 20-30?

      • http://www.asymco.com Horace Dediu

        25 hours of programming for $10/yr. comes to about $0.40/hr. Apple charges about $2 for a half hour TV show (23 min) which comes out to $6.66/hr. Back catalog movies are about $10/1.5hr or the same $6.66/hr. Music comes to about $16/hr. So would you agree that a padcast should be priced at 1/16th a TV show or Movie?

      • KirkBurgess

        Your blazing new territory here Horace. I would gladly pay $1 per padcast (or $25 a year) – Likewise I would also pay at least that for your TCP podcast. However that is just me so I dont know where you will find the sweetspot for pricing.

        The Q&A available in these comment threads accompanying your posts are also a bonus that people should value as a great resource.

        Like TV Shows/Movies, its about the content quality – there are some movies that I would gladly pay $20 for, and others that I would pay zero for.

      • Farshad Nayeri

        OK then, we will strive to be like the movies you really love. :-)

      • KirkBurgess

        Or how about one that accompanies every relevant the critical path podcast?

  • http://www.facebook.com/ovi.popescu.3 Ovi Popescu

    I bought it and listened to 70%. Best deal around for data that helps understand where Apple is going by looking at the past.

  • LRLee

    Airplay Mirroring works great now. No sound issues and looks great on my TV.

    As to the content, informative analysis as always.

    There seems to be a discussion here on whether to pay for it or not, so here’re my two cents.

    If you don’t have an iPad, the discussion is over.

    If you don’t have a dollar, the discussion is over.

    If you don’t like or gain nothing from Horace’s information, then the padcast is worth nothing to you no matter the price including free. I would argue it is actually negative worth since you’re using up your valuable time watching something you do not value.

    If you have a dollar and you value Horace’s information, then you should get it.

    I value Horace’s information and so far am getting his very best analysis all for a dollar. I can pick up a soft drink for the cost of a padcast if I’m careful where I go. I will tip way more than a dollar to the pizza delivery guy. It’s less than or equal to one iTunes song.

    The experiment here is will people cough up a buck to get valuable information from Horace? Can he monetize his thought processes? And what is he viewing as successful revenue per padcast? Ten bucks? A hundred? A thousand? If only one percent of his twitter followers throw in, that’s 250 bucks per padcast. Enough?

  • LRLee

    Airplay Mirroring works great now. No sound issues and looks great on my TV.

    As to the content, informative analysis as always.

    There seems to be a discussion here on whether to pay for it or not, so here’re my two cents.

    If you don’t have an iPad, the discussion is over.

    If you don’t have a dollar, the discussion is over.

    If you don’t like or gain nothing from Horace’s information, then the padcast is worth nothing to you no matter the price including free. I would argue it is actually negative worth since you’re using up your valuable time watching something you do not value.

    If you have a dollar and you value Horace’s information, then you should get it.

    I value Horace’s information and so far am getting his very best analysis all for a dollar. I can pick up a soft drink for the cost of a padcast if I’m careful where I go. I will tip way more than a dollar to the pizza delivery guy. It’s less than or equal to one iTunes song.

    The experiment here is will people cough up a buck to get valuable information from Horace? Can he monetize his thought processes? And what is he viewing as successful revenue per padcast? Ten bucks? A hundred? A thousand? If only one percent of his twitter followers throw in, that’s 250 bucks per padcast. Enough?

  • LRLee

    Airplay Mirroring works great now. No sound issues and looks great on my TV.

    As to the content, informative analysis as always.

    There seems to be a discussion here on whether to pay for it or not, so here’re my two cents.

    If you don’t have an iPad, the discussion is over.

    If you don’t have a dollar, the discussion is over.

    If you don’t like or gain nothing from Horace’s information, then the padcast is worth nothing to you no matter the price including free. I would argue it is actually negative worth since you’re using up your valuable time watching something you do not value.

    If you have a dollar and you value Horace’s information, then you should get it.

    I value Horace’s information and so far am getting his very best analysis all for a dollar. I can pick up a soft drink for the cost of a padcast if I’m careful where I go. I will tip way more than a dollar to the pizza delivery guy. It’s less than or equal to one iTunes song.

    The experiment here is will people cough up a buck to get valuable information from Horace? Can he monetize his thought processes? And what is he viewing as successful revenue per padcast? Ten bucks? A hundred? A thousand? If only one percent of his twitter followers throw in, that’s 250 bucks per padcast. Enough?

  • Henry_3_Dogg

    I bought and listened to the presentation and played with the sexy graphs.

    But on each slide the sound cut off part off mid sentence.

    I say mid. Maybe I heard 10%. Maybe I heard 90%. How would I know?

    I was left on the last slide with the idea that the issue was all going to be about the accuracy of the final guidance,

    But the punch line was again missing.

    Very unsatisfactory. Though not Horace’s fault I assume.

    So I’ve bought and heard the shaggy dog story. What was the punch line?

  • billy k

    Fabulous presentation, sound was too low.

  • http://www.facebook.com/bobby.zangrilli Bobby Zangrilli

    Horace – just listened to the Padcast…thanks for putting that together. Quick comment and question:

    The iPad – there are only 53 million people in the US aged 5 to 17 (K12). I think that explains a lot about the fact your estimates were not met there…the market just isn’t that big. Also, why do you think that schools do their buying in Spring? Wouldn’t a lot of it be happening right now?

    • http://www.facebook.com/bobby.zangrilli Bobby Zangrilli

      Also, I’m surprised you’re focusing so much on the growth rate of iPad vs iPhone as evidence of the iPads disruptive potential. The distribution models are very different and I think that accounts for iPads fast growth initially versus the iPhone.

    • http://www.asymco.com Horace Dediu

      The US is 30% of the iPhone market I assume it will be the same for the iPad.

    • http://www.asymco.com Horace Dediu

      The US is 30% of the iPhone market I assume it will be the same for the iPad.