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Author Horace Dediu

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Margin call update: About those changes in service policies

Apr 26, ’13 1:23 PM

In the March quarter, our gross margin was 37.5%. It was at the low end of our range. We had a few items that on balance resulted in us reporting at the low end. They included mix, in particular, selling more iPads than we had planned, including getting iPad mini into our four- to six-week channel inventory range, some changes in our service policies that required us to make provisions for prior quarter sales, and we had some unfavorable adjustments.

- Peter Oppenheimer, Apple CFO, FQ2 2013 Earnings Conference Call

[my emphasis]

Thanks to Philip Elmer DeWitt for bringing this quote to my attention in the comments to Margin Call 2.

I was curious about the “changes in service policies” and what that might have meant, especially since they seem to have been retroactive (provisions for prior quarter sales).

The 10Q offers more details:

Accruals for product warranty for the three months ended March 30, 2013 include $414 million associated with product sales in prior fiscal periods reflecting the impact of changes to certain of the Company’s service policies and other estimated warranty costs. Of this amount, $224 million is associated with product sales in the first quarter of 2013, and the remainder is associated with product sales in 2012.

- Apple 10Q, Note 6, Page 17, second paragraph.

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Sponsor: Filepicker.io Cloud Connect APIs

Apr 25, ’13 3:16 PM

Develop Smarter, Simpler and Better Connected Apps with Javascript

Imagine connecting your app to everything with just 2 lines of code – files from all over the web, across cloud storage source, social networks and devices. Filepicker.io provides a full file system API for your web and mobile applications that allows your app to upload, open, read, write, store, sync and convert files from over 17 sources including Dropbox, Google Docs, Facebook, Skydrive and Box.

With the Filepicker.io Javascript API, request a file and receive a simplified URL. Then, upload the URL to your server or serve through your CDN. Filepicker.io includes a customizable drop-in UI widget and an API library allowing you to send uploaded files directly to your S3. Sign up for Filepicker.io today!

Sponsorship by The Syndicate

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Margin Call 2

Apr 25, ’13 9:38 AM

I expected Apple’s margins to improve  last quarter. They didn’t and so the question I needed to answer is why. Here is a history of Apple’s gross margin and operating margin as reported since late 2005:

Screen Shot 2013-04-25 at 4-25-9.26.53 AM

For a company selling hardware these are extraordinarily high margins. They are higher than those of Google and have narrowed the gap with Microsoft,  neither of which has a high proportion of hardware sales:

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Asymco Workshops Australia 2013

Apr 24, ’13 12:13 PM

Screen Shot 2013-04-24 at 4-24-6.38.35 PM

I will be in Australia in May and thought to invite local readers to join me for a few hours of in-depth discussion on the future of our industry.

I plan to have an event in Sydney on the 3rd in the morning (9:00 to noon at the Radisson Blu 27 O’Connell. Press Room) and in Melbourne on the 6th in the afternoon (1:30 to 4:30 PM at Victoria University City Flinders Campus: Level 12, Function Room 4, 300 Flinders Street, Melbourne, VIC, 3000).

Nominally, the topic will be: The history and future of computing using disruptive analysis.

I will present recent material (including the latest data from Apple) and we will have a few hours of Q&A.

Tickets are $120 and seating will be limited to 100.

You can register here: Asymco Workshops Australia 2013.

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The Critical Path #81: Continuous Flow

Apr 23, ’13 9:11 PM

We cover misleading headlines with respect to the iPhone at Verizon while questioning the ebb and flow of media tone on Apple news. We also dive deeper into Asymcar and how to think about car manufacturing. Finally, how to approach industry analysis regardless of your industry.

via 5by5 | The Critical Path #81: Continuous Flow.

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