Horace Dediu Stories August 18, 2014

The $210B cash Apple would have by now without the dividend & share buyback schemes

Asymco’s Horace Dediu has been doing some number-crunching on AAPL’s cash stockpile, which sat at around $120B before the company began paying dividends and initiated a share buyback scheme two years ago. He calculates that, had nothing changed, Apple would now be sitting on around $210B in cash.

To put that into perspective, there are only about a dozen companies in the world Apple wouldn’t have been able to buy outright for that amount.

Despite the $53B spent on buying its own shares and the $21.5B paid out in dividends, the continuing flow of profits into the company means that Apple today still has about the same amount of cash it did two years ago. The share purchases themselves have proven a good deal for Apple as their value has increased.

Dediu also wryly comments on the ‘Apple is doomed’ sentiment voiced by some analysts based on ‘only’ linear growth, noting that while that “might be seen as evidence of failure, it’s more useful to treat this vast quantity as a recognition of past successes.”

Horace Dediu Stories July 18, 2014

Someone once said that if you put three analysts in a room and ask them a question, you’ll get four different opinions. This certainly appears to be the case today, with Fortune finding no more consensus on iPad sales than it did on iPhone numbers.

Asked to predict how many iPad sales Apple will announce in next week’s Q3 earnings announcement, the overall average suggested year-on-year sales would be flat at 14.35M. However, no consensus view emerged …  expand full story

Horace Dediu Stories July 8, 2014

Market share of iPhone may increase as U.S. smartphone growth tails off, predicts analyst

There are early signs that Apple’s market share of the U.S. smartphone market may increase as we move through the ‘Late Majority’ phase and into ‘Laggards’, suggests Asymco’s Horace Dediu.

For those who weren’t paying attention in economics classes in school, new products tend to experience an S-curve pattern to their growth. In the tech sector, Innovators are pretty much synonymous with techies.

Innovators (first 2.5%) need to be sold on the premise of novelty itself. Early adopters (next 13.5%) seek status and exclusivity. Early majority (34%) seek acceptance and Late Majority (34%) seek pragmatic productivity. Laggards (last 16%) seek safety.

If those percentages appear rather random, it’s because they are derived from the shape of the curve – the typical points at which it gets steeper or shallower.

With U.S. smartphone penetration now at 70 percent, we’re about two years into the Late Majority stage, with around two further years of growth to come. What Dediu’s analysis suggests is that iPhone growth has a steadier pattern to it than Android growth, which appears to be more closely driven by product launches and promotions. The more mature a market, the fewer product launches and promotions there are designed to drive adoption.

Why, when we are in a late stage of the market, does the iPhone do well when users are not incentivized to adopt? As we crossed 70% adoption, 1.4 million more users adopted the iPhone than Android.

Even if we look out to the last six months, iPhone added 15.5 million late majority users while Android added 14.2 million. If promotions decrease for the “late late majority” and laggards then would the iPhone do even better relative to Android?

Dediu points to the featurephone market as support for his hypothesis: at the tail-end of the curve, before smartphones took over, the most popular phone in the U.S. was the RAZR – a premium handset.

Horace Dediu Stories July 7, 2014

IFC Hong Kong Apple store facade

Yep, it’s that time of the quarter again, when we start hearing analyst predictions for Apple’s quarterly earnings. Asymco analyst Horace Dediu has just tweeted his, forecasting that Apple will hit $38.62B revenue, above the company’s guidance of $36-38M. Wells Fargo’s Maynard Um recently predicted $38.2B …  expand full story

The best 4K & 5K displays for Mac

Horace Dediu Stories May 28, 2014

Declining iTunes sales highlighted by Morgan Stanley’s Katy Huberty and reported by Fortune appear to underline the need for Apple to move beyond sales of music downloads and into the subscription music business. iTunes sales are down 24 percent year-on-year.

While the slack is being picked up by app sales – a trend previously noted by Asymco’s Horace Dediu – that falling blue line reflects the wider shift in consumer behaviour from purchasing downloads to subscribing to streaming services noted last year by Billboard magazine …  expand full story

Horace Dediu Stories April 18, 2014

As highlighted by Fortune, analysts’ consensus on iPad sales for last quarter suggest that iPad sales will actually decline year-over-year by about 0.7%. Although the expected decline is small, this would represent a big shift in iPad momentum, especially since Apple saw a strong increase in sales for the holiday quarter, going from 22.9M units in the previous year to 26M this year.

If iPad sales have fallen, it wouldn’t be because of different market conditions to last year. Apple introduced the iPad Air at the end of 2014 around a year from the introduction of the iPad 4 at the end of 2012. Last year, Apple dropped the price of the iPad Mini a modest $30 while also introducing the highly anticipated retina iPad Mini. In 2012, it introduced the iPad mini. The product cycles are similar, so the decline isn’t due to any artificial inflation of sales last year.

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