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  1. #26
    nightflier
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    Hyperbole makes for little more than FUD

    Quote Originally Posted by Woochifer
    Again, your points about the cash reserves are flatout wrong. Apple is currently sitting on $29 billion, and the company paid off its long-term debt back in 2004. Apple's cash reserves surpassed MS' back in October. The quote below was pulled from an eWeek article.
    Convenient how you don't mention Microsoft's cash reserves. Here are the actual figures, as of this morning, June 19, 2009:

    Apple:
    Cash = 25B
    Debt = near 0%
    Market Cap = 122B
    Stock Price = $137
    P/E = 24.67

    Microsoft:
    Cash = 21B
    Debt = 1%
    Market Cap = 115B
    Stock Price = $24
    P/E = 13.91

    So yes, Apple's numbers are a tad better, something I wasn't aware of, but it's hardly the huge discrepancy you make it sound like. Also, with Apple's stock price at more than 5 times Microsoft's, it would be a lot harder to buy back stock. So yes, Apple is riding high on their new 3G iPhone and probably will continue to do so with the upcoming iPod, but they still have all their eggs in that one portable-device basket and this makes their valuation that much more volatile. And this is reflected in the sales volume of the stocks: Microsoft's volume is nearly 10 times that of Apple's because it's a less expensive and more stable investment vehicle. Also consider that Apple's 52-week low was nearly half today's price, while Microsoft fared much better back in March. Finally, let's not forget that it was Microsoft that bailed out Apple with cold hard cash just a few years ago.

    The bottom line is that Microsoft has a number of stable and consistent revenue streams, certainly far more than Apple's. This allows the company to release a flop like Zune and still survive quite well. If something should go awry with the iPhone/iPod (think overheating batteries like with the Sony laptops), and it's curtains for Apple's golden-egg laying goose.

    Quote Originally Posted by Woochifer
    During all the speculation about MS taking over Yahoo!, analysts kept pointing out that MS no longer had enough cash to do the acquisition and would have to take on billions in debt. MS has been acquiring companies, buying back stock, increasing its dividend, and bleeding billions with its consumer products -- all of which has cut deeply into its cash reserves. Apple has spent far less, and is operating a similarly tight ship as when the company was on its death bed.
    Nice hyperbole again. Microsoft's increasing of dividends and buying back stock is not a bad thing, especially in this economy. It's a stabilizing move and one that investors favor. Bleeding billions? Care to explain that? For all it's misery, Vista about broke even for Microsoft, especially because Microsoft's revenue is more tied to ongoing licensing than new product sales. So let's not call that a bleed, shall we? So what's left? What else is "bleeding billions," exactly? Zune? Pluueeze, it was a failure, but it didn't bleed millions. What else bled billions?

    Quote Originally Posted by Woochifer
    My example is also supported by the market trends, which show RIM and Symbian outselling Windows mobile and continuing to gain market share at MS' expense. You keep claiming that Windows mobile has the "lion's share' of the market and cite your own corporate policies as proof of that.
    If you would bother to read what I actually wrote, it would become obvious that you're twisting around what I said. I didn't cite our "corporate policies" as evidence that Windows Mobile was succeeding in the market place, so don't even go there. I said that our corporate policy is based on the fact that integration with Exchange is oodles simpler with Windows on the client (oh and it's a bunch cheaper too: no BES server to add to the mix).

    RIM and Symbian have greater growth of late, yes, but Windows Mobile is still a significant portion of the installed base. And the statement this is at Window's expense completely ignores the fact that this market as a whole is also growing. Hyperbole with a smidgen of truth, that's all that is.

    Quote Originally Posted by Woochifer
    And again, the market share and trends don't support your claims. You can try and parse it with anecdotes and wishful thinking, but the bottomline is that Windows mobile is in decline and has been for the last couple of years. Even parsing the market to exclude the consumer market, RIM's sales far outpace Windows mobile. RIM's growth has been fueled by the corporate sector, not "finicky fad-chasing" college kids (where the hell do you come up with these presumptions?). RIM and the iPhone have upward momentum, Windows mobile does not.
    Last 2 years? I think you need to re-check your headlines. Two years ago, RIM was still struggling to get a foot-hold and going through some rather embarrassing legal issues. You're really painting this picture with a broad brush without looking at the details. That's great for standing on soap-boxes and inciting misguided frenzy, but it doesn't shed much light on what's really happening. Because this market is growing, all OSes have upward momentum. Yes, Windows' share of that market growth is lessening, but that doesn't mean it's not going to grow anymore. From what I've read much of the slowing growth is due to the wait for Windows 7. Let's wait and see what it brings to the table, shall we?

    And since we were talking about market valuation earlier, should we take a closer look at RIM's market position compared to Apple or Microsoft? Yeah, I didn't think you'd want to go there, either. For all it's potential and recent growth, RIM is still a model of volatility in this very tough market. Actually, I take that back, Nokia/Symbian), takes the crown there, LOL.

    Quote Originally Posted by Woochifer
    Anyone who buys into Apple does so knowing that you take the innovations in their products along with their often frustrating drawbacks.
    Apple's iPod customers are much more fickle than you think. If Samsung were to come out with a better player in the next year, something they would probably do at a much lower price point, then Apple will have one tough battle on its hands. Look at it another way: what else can Apple offer on the iPod? It's music and video, something that it does not own complete rights to. Unless Apple buys one of the major media companies (like Sony did), it will be struggling to re-invent the iPod to (1) get its existing customers to buy a newer model, and (2) get new customers to jump on board. I'm not saying they won't, but let's be honest, what other technology can they add to it? That is, what other technology that does not undermine their iTunes sales, like SD cards or radio tuners.

    ++++++++++

    Look, I could go on, but this is not interesting anymore. Just ask yourself this: will the new iPod/iPhone really keep Apple richer than Microsoft for the foreseeable future? Will Windows 7 not be enough to put Microsoft back on top? As I said, I don't like Microsoft, but the evidence you present is way too reminiscent of media hype. Unfortunately, the reality is a lot less sexy.

  2. #27
    Forum Regular Woochifer's Avatar
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    Quote Originally Posted by nightflier
    Convenient how you don't mention Microsoft's cash reserves.
    Convenient how you don't get your facts straight before claiming that MS' cash reserves are "much greater than Apple's."

    Quote Originally Posted by nightflier
    So yes, Apple's numbers are a tad better, something I wasn't aware of, but it's hardly the huge discrepancy you make it sound like.
    The only person who claimed a "huge discrepancy" was you. I simply pointed out that Apple's cash reserves surpassed MS' back in October, a fact that still holds true.

    Quote Originally Posted by nightflier
    Also, with Apple's stock price at more than 5 times Microsoft's, it would be a lot harder to buy back stock. So yes, Apple is riding high on their new 3G iPhone and probably will continue to do so with the upcoming iPod, but they still have all their eggs in that one portable-device basket and this makes their valuation that much more volatile. And this is reflected in the sales volume of the stocks: Microsoft's volume is nearly 10 times that of Apple's because it's a less expensive and more stable investment vehicle. Also consider that Apple's 52-week low was nearly half today's price, while Microsoft fared much better back in March. Finally, let's not forget that it was Microsoft that bailed out Apple with cold hard cash just a few years ago.
    What does this have to do with your debunked cash reserves claim?

    Quote Originally Posted by nightflier
    The bottom line is that Microsoft has a number of stable and consistent revenue streams, certainly far more than Apple's. This allows the company to release a flop like Zune and still survive quite well. If something should go awry with the iPhone/iPod (think overheating batteries like with the Sony laptops), and it's curtains for Apple's golden-egg laying goose.
    That's why Apple more often than not gets their products right before putting them out. MS has proven time and again that their corporate culture is to put ill-conceived products into the market and let the public do their beta testing for them. Works fine for the computer software market, where they have monopolies in both the OS and office applications markets and where updates can get uploaded. But, it's a disaster in the consumer electronics market, where the expectation is that things work out of the box.

    And overheating batteries did not bring down anyone's "golden-egg laying goose" given that those same Sony batteries were supplied to numerous other companies like Dell, IBM, Toshiba, oh yeah and Apple. Sony dealt with it, and paid for replacements to get out. They did the same thing when they produced a defective batch of digital camera CCDs a few years ago. My Canon was affected by the defect and I got a brand new camera as a replacement.

    Quote Originally Posted by nightflier
    Nice hyperbole again. Microsoft's increasing of dividends and buying back stock is not a bad thing, especially in this economy. It's a stabilizing move and one that investors favor. Bleeding billions? Care to explain that? For all it's misery, Vista about broke even for Microsoft, especially because Microsoft's revenue is more tied to ongoing licensing than new product sales. So let's not call that a bleed, shall we? So what's left? What else is "bleeding billions," exactly? Zune? Pluueeze, it was a failure, but it didn't bleed millions. What else bled billions?
    Where do I say that MS' actions are a bad thing? I'm simply pointing out where their cash reserves have gone. You're the one claiming that they're still sitting on the biggest pile on the block.

    The Zune has cost MS millions in losses (their own pre-release projections showed the Zune not turning a profit for at least five years) in unrecouped start up and marketing costs. And Zune sales declined by 55% between 2007 and 2008, even with heavy subsidies from MS. MS' Xbox ventures alone have cost $7 to 9 billion dollars in losses (the Xbox360 finally turned a profit last year, but that comes after years of losses in the billions). Replacement of defective Xbox360 units (ie., the red circle of death, and 25% to 40% failure rate) alone cost MS nearly $2 billion dollars. Their MSN and WebTV ventures cost hundreds of millions, if not billions, in losses. Stock buybacks cost billions of dollars. MS' many R&D ventures cost billions of dollars. MS' corporate acquisitions have cost billions of dollars.

    My understanding is that at one point, MS' cash reserves were close to $50 billion, and they've gone through more than half of that in just a few years. Analysts pointed out that MS could have purchased Yahoo outright before they began their spending binge. Then again, analysts were assailing MS for sitting on such a big pile of cash a few years ago.

    Quote Originally Posted by nightflier
    If you would bother to read what I actually wrote, it would become obvious that you're twisting around what I said. I didn't cite our "corporate policies" as evidence that Windows Mobile was succeeding in the market place, so don't even go there. I said that our corporate policy is based on the fact that integration with Exchange is oodles simpler with Windows on the client (oh and it's a bunch cheaper too: no BES server to add to the mix).
    Yeah, you simply stated that Windows mobile constituted the "lion's share" of the corporate market, and couldn't back it up. How can Windows mobile contitute the "lion's share" of anything, when RIM's corporate sales alone outpaced Windows mobile by more than 50% last year?

    Quote Originally Posted by nightflier
    RIM and Symbian have greater growth of late, yes, but Windows Mobile is still a significant portion of the installed base. And the statement this is at Window's expense completely ignores the fact that this market as a whole is also growing. Hyperbole with a smidgen of truth, that's all that is.
    Hyperbole seems to be something that you know quite well, given that you were the one applying "lion's share" to a product with 12% market share.

    The market as a whole is growing, yet Windows mobile's market share has been cut in half over the last few years. It was around 25% a few years ago, and it's now down to 12%. In the corporate market, RIM outsold Windows mobile by 17 million to 11 million last year, and Windows mobile was barely ahead of Symbian in corporate sales, and barely ahead of the iPhone in the overall market. Yes, it's still a "significant" market share, but it's a rapidly shrinking market share.

    Quote Originally Posted by nightflier
    Last 2 years? I think you need to re-check your headlines. Two years ago, RIM was still struggling to get a foot-hold and going through some rather embarrassing legal issues.
    And last year, RIM outsold Windows mobile in both overall and corporate sales, each by a wide margin. You're looking at headlines from two years ago. I'm looking at what has transpired since that time.

    Quote Originally Posted by nightflier
    You're really painting this picture with a broad brush without looking at the details. That's great for standing on soap-boxes and inciting misguided frenzy, but it doesn't shed much light on what's really happening.
    And you're giving a bunch of disconnected anecdotes that have no bearing on what the broader market is actually doing. Windows mobile's declining market share manifests itself no matter how the numbers get parsed, and trying to paper over it is just buying into MS' talking points.

    Quote Originally Posted by nightflier
    Because this market is growing, all OSes have upward momentum. Yes, Windows' share of that market growth is lessening, but that doesn't mean it's not going to grow anymore. From what I've read much of the slowing growth is due to the wait for Windows 7. Let's wait and see what it brings to the table, shall we?
    Windows 7 has nothing to do with the growth in the smartphone market, aside from MS' attempt to numerically match up Windows mobile's upcoming "7" release in marketing pieces. Why would corporate users put off buying Blackberrys for their employees just because Windows 7's release is imminent? The only stagnating demand that Win7 has created is with Vista.

    Windows mobile's declining market share has to do with other mobile OS' more aggressively putting out more functional and up-to-date releases that people actually like using. There's a reason why the Blackberry is nicknamed the Crackberry, and there's a reason why every iPhone release is greeted with long lines in front of stores and product sellouts.

    Quote Originally Posted by nighflier
    And since we were talking about market valuation earlier,
    Actually, you were talking about market valuation. I was more focused on actual sales and what people actually buy.

    Quote Originally Posted by nightflier
    For all it's potential and recent growth, RIM is still a model of volatility in this very tough market. Actually, I take that back, Nokia/Symbian), takes the crown there, LOL.
    Yeah, and MS' smartphone OS is a model for how to lose market share in a rapidly growing market.

    Quote Originally Posted by nightflier
    Apple's iPod customers are much more fickle than you think.
    Why do you think Apple keeps updating it and extending it?

    Quote Originally Posted by nightflier
    If Samsung were to come out with a better player in the next year, something they would probably do at a much lower price point, then Apple will have one tough battle on its hands.
    Once again trying to make a point using hypotheticals. Much like your speculation about the Zune phone that even FUD masters like MS haven't announced yet.

    If Samsung comes out with a better player at a better price, then Apple will have some competition and I might be in line to buy one. But, again you're presuming that the iPod is a stationary target, and presuming that Samsung is interested in investing in a saturated market where revenue growth has already plateaued. Only MS seems interested in dumping money into the market, and they're doing so by copying Apple's tie-in approach.

    Quote Originally Posted by nightflier
    Look at it another way: what else can Apple offer on the iPod?It's music and video, something that it does not own complete rights to. Unless Apple buys one of the major media companies (like Sony did), it will be struggling to re-invent the iPod to (1) get its existing customers to buy a newer model, and (2) get new customers to jump on board. I'm not saying they won't, but let's be honest, what other technology can they add to it? That is, what other technology that does not undermine their iTunes sales, like SD cards or radio tuners
    This question has been asked every year, and Apple has had an answer every time. Four years ago, Apple junked its best selling model in favor of the flash-based Nano line. The iPod touch came out two years ago with the ability to perform most of the iPhone's functions, and is now outselling the iPhone. Other manufacturers have consistently offered cheaper alternatives, yet Apple has consistently been able to deliver products that not only maintain higher margins but also a consistent 60 to 70% market share.

    What else can Apple offer on the iPod? Pretty simple. iPhone apps and continued improvements to the iPhone OS, which the iPod touch shares. It's only a matter of time before more elements of the iPhone OS get incorporated across the rest of the iPod lineup, since that's the direction that Apple has been taking over the last two years. Funny how you all but ignore the iPod touch's very existence, since it answers most of your rhetorical questions.

    Take your pick on which of the many iPhone or Apple netbook rumors will come to fruition (i.e., a "nano" iPhone, an iPhone with a physical keyboard, a one-piece Apple netbook with a touchscreen, etc.). If a new iPhone form factor comes out, you can bet that an iPod derivative of that model will follow suit.

    Quote Originally Posted by nightflier
    Look, I could go on, but this is not interesting anymore. Just ask yourself this: will the new iPod/iPhone really keep Apple richer than Microsoft for the foreseeable future? Will Windows 7 not be enough to put Microsoft back on top? As I said, I don't like Microsoft, but the evidence you present is way too reminiscent of media hype. Unfortunately, the reality is a lot less sexy.
    Where do I ever say that Apple will stay richer than MS? I'm simply pointing out that they're a bigger player than you seem to think they are, and in the media player and downloaded media universe, they are the biggest force in those markets. And in the smartphone market, they are the fastest growing force. In two years, the iPhone has grown from nothing to nearly matching Windows mobile's market share, and sales from the iPod touch further extend the iPhone's OS well beyond the smartphone market.

    The evidence I've cited is from actual sales data. You want media hype? Check out the tech press' fawning over Windows 7. It's reminiscent of their pre-release fawning over Vista, which even the most ardent MS fanboys have come to admit was a less than stellar release.

    The points you keep making about how MS is the big scary bully that eventually comes to dominate all markets they come in contact with is about a decade past date, and ignores their repeated failures in the consumer market and their dwindling influence in emerging markets such as smartphones. Just because Steve Ballmer predicted that the iPhone would fail does not make it so.
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