Who waited in line for an I-Phone?

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CFA_Halifax

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ok...what was the market expecting on this, It sold 525,000 units, way above analysts expectations and the stock is trading down???

say what??
 
Well, the 525,000 number is a) unreliable and b) apparently not that much ahead of market expectations.
 
I think you are seeing a bit of a "sell the fact" effect here. Also, some were probably expecting a complete sellout, and with units still available on Monday they find that disappointing.
 
interesting. I think that there is far too much euphoria built into this stock if that is the case. More than we have perhaps previously thought
 
a nice commentary from breakingviews.com...

iPhone, but will uPhone?

iPhone: If there's one company that can capture the tech zeitgeist, it's Apple. But will the group's new handset, the iPhone, capture the market after its release Friday? Investors certainly think so. Since the device was unveiled in January, $34bn has been tacked onto the group's market capitalisation. A bit of scepticism is called for.

Apple hopes to sell 10m of the devices by the end of next year. Yet the cheaper version of the iPhone will cost a hefty $499 - about eight times what a US customer pays for a typical handset and 2.5 times the cost of a high-end one. It will only be sold by one of the big mobile operators, AT&T. And users may also be turned off by the device's touch-screen keyboard.

On the other hand, Apple is known for low-balling its estimates, and there certainly is high initial demand. So let's assume the company's estimates are correct. In contrast, cell phone giant Nokia should sell about 550m phones in the same period. The Finnish group's market cap is $108bn. So even though it will sell 55-times as many phones, investors think the business is only worth three times as much as Apple's.

Or look at it this way. Apple and Nokia both had operating margins of 13% last year. If Apple sells 7m phones next year, and earns similar margins, operating profit for the phone business would be around $350m. So the phone business is valued at close to 100 times estimated 2008 operating profits. Nokia trades at 10 times. This looks a bit excessive even if one assumes the iPhone snatches some of Nokia's market share.

The conclusion: either Nokia is dirt cheap or Apple is extremely overvalued. Of course, betting against Steve Jobs has never been a profitable activity - an iPhone may yet appear in every pocket now housing an iPod or phone. But if it merely becomes an accessory of rich hipsters, Apple's stock would have a long way to fall.



Edited 1 time(s). Last edit at Monday, July 2, 2007 at 01:21PM by itstoohot.
 
Not more than I thought. I am long puts.

CFA_Halifax Wrote:
-------------------------------------------------------
> interesting. I think that there is far too much
> euphoria built into this stock if that is the
> case. More than we have perhaps previously thought
 
itstoohot Wrote:
-------------------------------------------------------
>
> Or look at it this way. Apple and Nokia both had
> operating margins of 13% last year. If Apple sells
> 7m phones next year, and earns similar margins,
> operating profit for the phone business would be
> around $350m. So the phone business is valued at
> close to 100 times estimated 2008 operating
> profits. Nokia trades at 10 times. This looks a
> bit excessive even if one assumes the iPhone
> snatches some of Nokia's market share.
>


Have a feeling the margins on the iPhone will be higher than 13%...1) The price seems to include a hefty premium and 2) under its contract with AT&T, Apple will receive a monthly revenue stream from iPhone users (one of the reasons Verizon turned Apple down).

Good points though, AAPL is certainly trading at a premium to Nokia and all other cellular manufacturers. Might be warranted given its growth trajectory, but too early to tell.
 
i think there's stg wrong with the piper jaffray analyst's 500,000 estimate, b/c all at&t stores were sold out which makes 150,000. Apple has 177 stores according to latest 10Q. So average sales per store for the weekend must be around 2,000, which doesn't make sense. But overall it's a phomenal device indeed.
 
Goldman upped the estimate to 12mil sold by end of `08. They also noted that over 700,000 were sold the first weekend.
 
wow. I can't believe I doubted Steve Jobs. Still, I mean, what are the valuations like now with these sort of numbers, anyone familar with the company enough to now at what sort of P/E, imlied growth etc. the stock would be trading at even given these current sales forecasts. It's likely still a bit rich?
 
Great device but Apple is too slow in this market. HTC have already announced a similiar touchflo technology for the multitouch option, and many handhelds today are far more advanced in terms of connectivity and software availability.

Apple should have sold the iphone all over the world, which is a big mistake. On top of that, the system in the US is really annoying. Having a phone locked to one provider is plain silly.
 
Well, the market seems to be moving today...

Speaking of moving, check out RIM!
 
What's wrong with At&t's network? I use it for my cel and it's fine.

Att stock looks cheap? Analysts are saying $3 eps next year and it has a big dividend.
 
Most of the component part manufacturers' stock jumped yesterday as research firms and nerds alike disected the iPhones over the weekend and then posted who was making what. They're all sworn to secrecy. I really can't believe how much hype there is about this thing.

A bunch of iPhoners in the West and Midwest couldn't get onto EDGE...hahahah. They don't know why the network crashed. It's the iPhoners...they're coming to get us!
 
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