None of these are impossible, just hard to predict.

If you believe disposable income is not a factor in identifying the ceiling level for a product’s potential sales then I can’t even debate economics with you. Apple only has retail outlets in 12 countries for good reason. If you bother to look it up, they are all – with the exception of China – feature in the top 15 countries by disposable income!

Do you know how long and how often I’ve seen that very same argument expressed? Just to take a recent example, I read that exact sentiment the day the iPad went on sale and sold 300,000 units, the day the iPad sold its first million units, the day the iPad passed 3 million in sales and the day the iPad passed 10 million in sales. The statement is repeated every time iPad sales break a new record and is proven wrong every time the iPad sets another new record. Yet no matter how often the “limited” pool of people who can afford iPads expands, pundits are always quick to assert that “this time” the limit has been reached FOR SURE!

Your statement is based on a misunderstanding of economics. Yes, there is a floor, below which a certain segment of society cannot afford certain goods. But once you rise above that floor, sales are determined by value, not by price. Look around and you will see that this is true. If people value something highly enough, they will find a way to purchase it.

Value – not price – is what matters. 

Does the holiday Q tell you anything about gross margins by product line? Perhaps iPhone margins are better than we previously thought? It seems possible that the 3GS has very high margins even at a “free” price point. Perhaps the 64GB capacity 4S also boosts iPhone margins? Perhaps iPad also has better margins than we previously thought? Perhaps economies of scale across all iOS products and the Mac are continuing to drive overall gross margin expansion? 

Based on Apple’s guidance for the current quarter, gross margin % will be 44%+ this Q and could fairly realistically (based on average past gross margin guidance beat rates) be up sequentially (44.7%+). 

Thoughts?

I’ll go the other way. If there was any effect, it was negligible. 

Apple’s products aren’t art or collectibles. No one is buying them for sentimental reasons or because they think Apple’s products will appreciate in value.

People don’t buy Apple’s products becuase they like Steve Jobs. They buy Apple’s products because they like the products that Steve Jobs made.

Just by the rapid growth rate, most of the devices now in circulation are quite new and not needing replacement. But between FaceTime/Skype, YouTube, Siri, Facebook and a host of others, people are very likely to demand more powerful, more fully-featured and more tightly connected devices. Apple’s customer satisfaction scores will matter here because the apparent lifetime for the nascent mobile category is somewhere around 18–42 months.

Looks to me that supply-side constraints are the only limits to growth. And not just that there are only so many people who can be organized onto assembly lines: Apple needs to keep reinventing its software, hardware and media offerings both quickly and surely. 

We tend to overlook the many turkeys that Apple has produced because its hits are so astonishing, so I think the question for Apple is whether they’ll keep swinging for the fences every couple of years, or whether they’ll go for a Moneyball-like “on-base percentage” that hasn’t worked especially well as Microsoft’s business model.

Your prediction was spot on.

Congratulations.

If the excitement of China continues they can have their run for a while as they are just getting started there in addition to Brazil and other places.

In the USA they still have 1/2 the mobile market to serve. There are still many without smartphones in the States.

(a) Developed markets. Smartphone “non-consumption” is still big. People will continue to switch to Smartphones. Apple is in a good position as we have been oberserving.

(b) Emerging markets. Haven’t you seen the maniacs in front of the Apple store in Beijing?

As insane as it might seem: Growth will continue on an incredible rate.

Granted, yes the iPhone can’t continue to grow at 100% every year indefinitely – but even if it only continues the trend for another 12 -18 months, and then levels out to ‘standard’ 20% growth (conservative), the implications for apples revenue & earnings are gigantic.

With high resolutions displays expected on iPad and Macs this year may well end with Apple delivering multiple blowout quarters

It did surprise me a lot that talented people only wanted to work on startups. What a change!And you’re teasing me a lot on the Amsterdam event. Don’t count on me to sitting still at the audience…

The quarter was not an anomaly.

Just as I feared the Android momentum might be unstoppable, something happened. Because looking around me it doesn’t look like “iphone is winning” it looks like “iPhone won.”

And it’s real momentum considering that anyone not yet using a smart phone is a late adopter and will be swayed by what they see others using.

Now I realize that the US operator subsidized market is not the world. But a seismic shift seems to have happened here. Bigger than the numbers. I wonder what percentage of Android phones are replacing feature phones for people without the budget for a data plan.

Note however: Several of the tax loopholes he mentions in the article have since been closed or curtailed, like the German foreign co-pro and British Section 48 DCMS tax relief rules, both states now apply much stricter rules to what is considered indigenous product.

“The Hollywood Economist 2.0: The Hidden Financial Reality Behind the Movies”

So funny to be given “homework,” he he