Tag Archives: amazon

P/E ratios, or fun with numbers.

Amazon’s P/E is around 4.000. Apple’s is at around 10.

If Apple would be treated by Wall Street like Amazon, it’s stock prize would be about 160.000 USD a piece (no, that’s not a typo), and it would be worth …um… 150 TRILLION dollars!

Apple makes more profit each quarter than Amazon EVER made – all quarters combined. Ever.

If you apply Google’s P/E to Apple, Apple’s stock would trade at around 1.000 USD a pop. It’s market valuation would be a cool 1 Trillion USD.

Just sayin’…

Apple’s earnings.

So, profits are up nearly 25% on sales of 26.9M iPhones, 14M iPads, and 4.9M Macs, but Wall Street is disappointed?

Get this: Apple reported Q4/12 profits, PROFITS!, of 8.2 BILLION dollars, and Wall Street is disappointed.

And get this: 36 BILLION revenue in the quarter, 40% gross margin, another cash dividend of 2.65 dollars per share, 41 BILLION net income for FY12, but Wall Street is disappointed…

Now, I don’t hold any shares of Apple, which have been 700+ just a few weeks ago – now they’re at around 600. This begs the question: What the hell is wrong with Wall Street??

I recently read somewhere that if Apple were treated equally to Amazon by Wall Street it would be a 2 – 3 TRILLION dollar company!

See the thing I don’t get: Amazon, or Google for that matter, make a billion a quarter, and in Amazon’s case even lose around 65 million, but their stock is going up. Google’s market cap is (right now) at 222 billion, Apple’s is at 571 billion, so about twice as much, yet Apple makes 8 times more in PROFIT each quarter.

I think Wall Street is stupid, analysts are overpaid monkeys, and people should wake up and smell the coffee.

@tcarmody: Missing the point…or: How Amazon can’t compete with Apple

Tim Carmody has an interesting piece over at The Verge entitled Amazon to Apple: The Game Starts now, and while all he says isn’t really wrong, he’s still missing the point.

Go ahead and read it at the link above. I’ll wait.

Read it? Ok, good.

Here’s the problem: Amazon made 7 million bucks last quarter. Apple made 8.8 billion bucks in its “disappointing” last quarter. Think about that.

Amazon will never, ever be able to take on Apple as long as it loses substantial money on every Kindle sold, while making almost zero money on all other items it sells. Simple as that.

About the Mat Honan “hack”.

via Wired:

In the space of one hour, my entire digital life was destroyed. First my Google account was taken over, then deleted. Next my Twitter account was compromised, and used as a platform to broadcast racist and homophobic messages. And worst of all, my AppleID account was broken into, and my hackers used it to remotely erase all of the data on my iPhone, iPad, and MacBook.

In many ways, this was all my fault. My accounts were daisy-chained together. Getting into Amazon let my hackers get into my Apple ID account, which helped them get into Gmail, which gave them access to Twitter. Had I used two-factor authentication for my Google account, it’s possible that none of this would have happened, because their ultimate goal was always to take over my Twitter account and wreak havoc. Lulz.

Had I been regularly backing up the data on my MacBook, I wouldn’t have had to worry about losing more than a year’s worth of photos, covering the entire lifespan of my daughter, or documents and e-mails that I had stored in no other location.

Those security lapses are my fault, and I deeply, deeply regret them.

..and that my friends, is really all you need to know.

Yes, the hackers were clever. Yes, Amazon and Apple fell for social engineering. Yes, it’s Mat Honan’s fault.

@parislemon on Apple’s vs. Amazon’s last quarter.

MG Siegler:

…$7 million. Amazon made $7 million dollars last quarter on sales of $12.83 billion. That’s insane. Let’s pretend the sales were $12.837 billion. Amazon kept the 7, everything else vanished.

and

…Apple’s “disappointing” quarter included $8.8 billion in profit. Or maybe I should write it this way: $8.800 billion — if that last zero was a seven and you removed everything before it, that would be Amazon’s profit.

Think about that for a second. Which one is the stock you would rather own?

Google’s tablet story: A lack of vision.

According to documents (via The Verge) presented in the Oracle vs. Google trial over copyrighted Java technology used in Google’s Android OS, Google expected to take around 33% of the tablet marketshare in 2011 by selling 10 million tablets to consumers.

The documents go on by detailing another expectation: 2012 they wanted to sell (obviously through OEM’s, as Google doesn’t sell it’s own tablets yet) about 10 million more tablets.

Lofty expectations that didn’t quite materialize.

All research points to less than 10 million tablets, running Google’s Android OS, in the hands of customers. Andy Rubin himself said during AllThingsAsia in October of 2011 that there were 6 million of them out there.
Considering the lackluster sales of Android-based tablets since then, it’s fairly easy to see that Google massively failed to deliver the forecasts they themselves made.

What went wrong?

I think Google totally overestimated their pull with the carriers – worldwide. The carriers are interested in pushing Android smartphones bcause they get customers locked in into a two-year contract, and because they can add bloatware and skins to the phones. All of this equals revenue for them.
This doesn’t work too well on tablets. Apple set the standard: pay as you go, no contracts. And that is precisely what people expect of tablets, but that’s not what the carriers want. They want their customers to get another data plan. In order to get that they subsidize the price of tablets, but even the most basic math skills tell us that these tablets a immensely expensive.

The next problem that was facing Google was, and still is, the ecosystem. A tablet is basically all screen, so it matters profoundly what you can do with that screen. The Android market…ehm…Google Play…isn’t there yet, and probably will never be.
There’s a simple reason for that: Device fragmentation.
I’m venturing a guess right now, but I believe that there are about 20 different screen sizes and formats, with about 100 different resolutions on the market. This must be a nightmare for developers, and that’s not even accounting for the software fragmentation, which is pretty obvious.

Then there is the race to the bottom issue. The OEM’s can’t compete with Apple’s ecosystem, or it’s supply chain fu, so they try to differentiate themselves with obscure formats, resolutions, add-on’s, etc., and they cut down component cost by, well, using cheap components and materials.
What is amazing to me is that they still, for the most part, can’t compete on price. Sure you can buy an “Android tablet” for 199 Euros, but you instantly see what you get at this price point: A glorified e-reader, and a cheap looking and feeling one at that. That’s not what people want.

I’m not saying the tablet market will always be like this, but right now, and for the foreseeable future, the tablet market is the iPad market.

What can Google do?
Well, that’s the real question here, and I don’t think that Google can do much of anything. If they tighten their grip on what hardware the OEM’s can use to get the best possible Android experience, they run the risk of OEM’s just forking Android, much like Amazon and Barnes & Noble did. Imagine Samsung doing that. Android on tablets would be dead.

Since that’s not an option, they could (and probably should) get their Android team to work extremely close with the soon-to-be acquired Motorola tablet team. They need to work on a Nexus tablet, but not the way as is widely reported right now (subsidizing, cheap components, 199 price-point, etc.).

They need to reinvent their whole effort, change their philosophy radically…
Built one or two Nexus tablets, with Jelly Bean (the next version of Android) in mind.
Double down (Hi Andy!) on the ecosystem by building Google apps that adhere to a strict UI/UX design. Update them regularly.
Give developers tools compareable to the IDE Apple provides.
Don’t announce before you can ship. Don’t over-promise and constantly under-deliver.
In other words: Get real.

I have very little hope that they will though. Google is engineering-driven at the core, and business-driven (ads) at the top, which is fine if you work there, but it doesn’t translate to what the 99% want.

The supply-chains statements of Apple’s “rivals”.

*crickets*

Nick Bilton for the New York Times:

Apple’s rivals are quick to say how much better, faster, cheaper or more popular their smartphones, computers and tablets are.

Yet when it comes to working conditions in the Chinese factories that build these competing products, Apple’s electronics rivals have been silent lately.

I wonder why?

Apple, no paragon of communication, has been publishing reports of the practices of its vendors since 2006, and it eventually, after numerous requests by advocacy and news organizations, shared the names of 156 direct suppliers.

In the last week I have asked Hewlett-Packard, Samsung, Microsoft and others about their reports on labor conditions. Most responded with a boilerplate public relations message. Some didn’t even respond.

Like I said: *crickets*

Although some technology companies, like Microsoft, share some information about their audits, none go into detail about the violations they find inside specific facilities.

HP, Samsung, Microsoft, Barnes & Noble, Lenovo, Amazon, Dell, etc.

*crickets*

About that Google Android Nexus tablet…

The Wall Street Journal reports that Google may start selling Google branded tablets built by Asus and Samsung sometime this year, subsiding the cost of the device to be competitive.

This is a bad idea, and here’s why:

- Remember that Google Nexus phone? Yeah…

- Google is buying Motorola, but they will sell Asus and Samsung tablets? Mkay…

- Tablets are nothing like smartphones. It’s all about the ecosystem.

- There are no subsidies on tablets, at least none that work.

- 2.000 Asus Transformer Prime pre-orders in all of the US. Samsung’s not doing too well either according to them.

- Amazon makes money selling it’s vast digital catalog, not the Kindle hardware. Again, ecosystem.

- Android users do not like to pay for apps. Where’s the money in it for Google?

- Put any, ANY, Android vanilla ICS tablet next to an iPad. Yeah…

- Android on tablets sucks. Imagine that Google Nexus tablet with ads all over the place.

Dead. In. The. Water.