If you're following the call (fantastic liveblog from Jacqui Cheng at Ars[1]) really great exchange when they try to shoehorn the mac-windows analogy into mobile OS's:
Tim: I wouldn't classify it like Mac and Windows at all. The Mac has outgrown the market for over 20 quarters in a row, but still has a single-digit percentage of the worldwide market
whereas iOS, if you look at phones and tablets and iPod touch, we've sold over 315 million iOS devices
If you look at the NPD data, it shows in the US, and this is just looking at October & November, so part of our launch in October and all of it in November, it shows iPhone at 43% and Android at 47%
the Nielsen data from a few days ago shows iPhone at 45% versus Android at 47%
Comscore data that came out on October/November shows iPhone at 42% and Android at 41%
it seems that all of the data from the US would seem it's a very close race for iPhone, and I think on the iPad side, I think all of us inherently believe the iPad is way ahead
there's really no comparable product to the iPod touch out there
I wouldn't say it's a two-horse race. There's a horse in Redmond that always suits up and always runs and will keep running
So what we focus on is innovating and making the world's best products. We'll just keep doing that and somewhat ignore how many horses there are.
Nice hat tip to Microsoft when he says "I wouldn't say it's a two-horse race. There's a horse in Redmond that always suits up and always runs and will keep running".
I wouldn't expect these words coming from an Apple executive. It means that Cook thinks WP is a good product that can be a rival for iOS; or that he's trying to be politically correct without following Jobs' style. Whichever it is, I really like the new path they're following.
Oh, and it also means that BlackBerry is completely out of the race, but we all knew that already, didn't we?
It is a nice gesture, but I see it more as a setup for the next statement - "...what we focus on is innovating... and somewhat ignore how many horses there are." He's throwing MS in the race to deflate that prior binary Windows/Mac mind share dynamic being applicable to mobile - that for one to win the other has to lose.
In other words, I read that as Tim trying to convey they are more in competition with themselves than with others; that they're raising the bar by their own standards rather than paying attention to what the competition is doing.
And don't forget the upcoming windows 8. I think that they can recognize that Microsoft will finally offer something new. And maybe, the true rival for iOS and iPad format will come from Redmond, not from Mountain View.
I think it means Tim Cook is a smart executive who doesn't write off his competitors.
Even if you look at Apple's history, way back when, IBM wrote off "all that software stuff" that Microsoft was doing. MSFT ended up having the last laugh there as they ate IBM's lunch with software.
(True, IBM did pivot, but I'm thinking in the Apple/Microsoft perspective).
[EDIT: plus, Microsoft trounced Apple once. That means they could do it again.]
> [EDIT: plus, Microsoft trounced Apple once. That means they could do it again.]
Those were different companies. It was Sculley's Apple (with a lot of an immature Jobs thrown in) and Bill's Microsoft helped by a seriously shortsighted IBM. Plus, Microsoft really didn't eat Apple's lunch until Windows 3, which also ate IBM's lunch for dessert.
I don't think Microsoft is capable of betting the company on some disruptive innovation like they were with Windows 3. They are too big and there is too much infighting between the various divisions.
For Steve it was personal and bitter with Microsoft. For Tim, who's been with Apple during the ascent from the abyss back in 1998, it's a different story, although I'm sure he still takes Microsoft seriously.
I think more its an acknowledgement of two things, the first being that Microsoft really is a company that always suits up. The second being that WP7 is an attempt at coming up with something new and innovative. I think from the Apple executives perspective that's a significant change.
It's not a very convincing rebuttal. Note how they switch from percentages to total sales and then from worldwide to US share.
However globally in smartphones, they're at 15% and slipping by about 2% over the last year which doesn't seem that far from single digit percentage. And while they're selling a lot of phones, so is everyone, the market as a whole is nearly doubling yearly and even the phones losing share like Blackberry are actually selling more phones than last year.
He should have just pointed at a large pile of money instead, that'll go a long way to help them survive any potential Android hegemony.
A giant cash pile earning 2% a year is not compelling for investors. AAPL has very high growth expectations priced into the stock which they somehow need to continue to meet.
P/E can be argued both ways - Exxon has a P/E of 10.43, and over a 5-10 year timeframe, Apple probably has a riskier income stream than they do. AAPL's rev is highly dependent on 2-3 trendy, high-growth, high-margin HW products, competing in markets which barely existed 5 years ago.
When's the last time you bought electronics from Sony?
"Very high growth expectations" is what the OP referred to, not sustainability of income stream. Of course Exxon has a lower PE, do you really expect a high growth rate for them?
UPDATE: Why do you keep changing your post? Just reply to my comment instead of changing your comment.
My point is that Apple stock seems priced based on revenue and growth expectations which are probably unrealistic in the long term.
The fact that you can find other tech companies with a higher P/E doesn't prove or disprove that either way. Market irrationality is not limited to 1 stock at a time.
"... seems priced based on revenue and growth expectations..."
Seems based on what? One method, and probably the most popular, is to look at the PE ratio, which for AAPL is a low value, not in comparison to other tech companies, but in general.
Your opinion that there is growth expectations priced into the stock must be based on something, but it's definitely not PE.
Tim: I wouldn't classify it like Mac and Windows at all. The Mac has outgrown the market for over 20 quarters in a row, but still has a single-digit percentage of the worldwide market
whereas iOS, if you look at phones and tablets and iPod touch, we've sold over 315 million iOS devices
If you look at the NPD data, it shows in the US, and this is just looking at October & November, so part of our launch in October and all of it in November, it shows iPhone at 43% and Android at 47%
the Nielsen data from a few days ago shows iPhone at 45% versus Android at 47%
Comscore data that came out on October/November shows iPhone at 42% and Android at 41%
it seems that all of the data from the US would seem it's a very close race for iPhone, and I think on the iPad side, I think all of us inherently believe the iPad is way ahead
there's really no comparable product to the iPod touch out there
I wouldn't say it's a two-horse race. There's a horse in Redmond that always suits up and always runs and will keep running
So what we focus on is innovating and making the world's best products. We'll just keep doing that and somewhat ignore how many horses there are.
[1] http://arstechnica.com/apple/news/2012/01/apple-q1fy2012-liv...