That's simply wrong and everybody knows it, no matter what Jobs might have said once in one of his promotional videos.
"Wrong"? No. Counterintuitive I'll agree. Apple sells a vertically integrated product but (almost) no one buys a Mac to run Windows or Linux on it. They buy it because of OS X. OS X is what makes a Mac a Mac. Without OS X a Mac is just another me-too PC.
Oh and just because you dislike Steve Jobs doesn't mean he is wrong. I've listened to a lot of his talks over the years and I've seen few instances where he was wrong about the big picture business model stuff. He got the details wrong sometimes but I'm pretty sure he understood perfectly what made Apple profitable and what did not.
Apple's profit still mostly comes from hardware sales and it has always been that way.
Apple's profit is almost entirely in their software. Their revenue comes from selling that software on Apple hardware. Huge difference. Apple hardware is essentially a commodity and would not command much if any profit without Apple's software. The functional parts of a Mac are almost identical to a randomly chosen PC. iPhones internals are close to identical to those of any other similarly spec'ed smartphone. Same with iPods and same with iPads. The ONLY functional piece of the device that is meaningfully different is the software.
If they were a software company, they could easily open OS X and iOS to other hardware manufacturers, but in fact that would be their immediate death sentence.
You just made my argument for me. If Apple were not a software company then it would not matter if they opened up their operating systems. After all, if the software is not the critical piece of Apple's business model then there would be no harm in trying to spread the software to third parties. You can tell what the core business of a company is by examining what would happen if you gave that piece of the business away. Apple doesn't even manufacture their own hardware for the most part. The design it and have someone else build it. But they do manufacture their own software and they don't outsource that to anyone.
Frankly, I don't understand why people are so enamored with their offerings.
Because they are well made, easy to use, have a well thought out interface and for the most part require very little fiddling to work. My 94 year old technologically illiterate grandmother is able to effectively utilize an iPad while at the same time I am able to get what I want out of an iPhone and I'm about big a tech geek as you are likely to run into. What makes Apple products attractive and different is the software.
They don't do anything different in my opinion.
Ahh but they do and those differences are what people are willing to pay for. What you have to understand is that Apple is fundamentally a software company. Steve Jobs himself has said so explicitly. What is different about Apple's products is the software and what it does. It's not so much about them doing tasks that no one else can do as it is how they do those tasks. Apple (usually) provides a well designed and well executed experience and software is how they tie it all together. People buy Macs for the software - the hardware is barely different from PCs from Dell or HP. People buy iPods, iPhones and iPads for the software. The hardware isn't much different from the competition and in fact some competitors have rather slavishly copies Apple's designs. What Apple does differently is found in their software.
I prefer the Android approach that "opens the innovation tent" to everyone willing to give it a shot.
Nothing wrong with that but there are positives as well as drawbacks. If you are someone (like me and probably you) who really likes to fiddle with your gear then Android might very well be a better choice. But for my non-tech savvy relatives who just want a smartphone I point them at an iPhone. Not everyone wants to endlessly mess around with arcane features of their phones. Apple's products aren't for everyone but Apple has never pretended that they were. That said they sell an awful lot of product so they clearly are doing something that appeals to a lot of people.
I have been thinking about this since you first asked me and I came up with an answer.
Nice to see someone actually taking some time to think about something rather than just shooting from the hip. And for the record even though I disagree with you in places below I think your response was a thoughtful one.
And that answer is to offer a slightly bulky phone with a classic Nokia look and smell.
Just my opinion but I think you likely are overestimating the amount of nostalgia for old Nokia phones. I had them for about 10 years straight and I don't miss them a bit. They were fine but they weren't particularly amazing bits of design and I don't really see anyone lusting for "classic phones" the way they do for classic cars. Plus going for nostalgia in such a relentlessly forward marching industry carries HUGE risk. It would be really easy for a competitor to make the argument "do you really want a 10 year old phone?" Blackberry continues to insist in the face of all the evidence otherwise that people want "classic" blackberry styling and a physical keyboard.
There is no way to completely eliminate the problem of shattered screens (it is glass after all) but there are ways to mitigate it. Doing so would require phone makers to design phones with less emphasis on thin/shiny and actually pad them a bit as well as put a raised bezel around the screen face. It is already known how to engineer a more durable phone. The problem is how do you engineer one that people will actually buy? No one has cracked that problem yet.
it's irrelevant if they build an Android phone, because if they do nothing they will serve the desires of the majority of their potential customer base as Android already includes acceptable checkbox apps
Great. Why should I buy a Nokia phone then instead of Samsung? The ONLY company making any profit on Android phones is Samsung (they have 95% profit-share of android phones in 2013) and from what I can tell there is no company in danger of displacing them. Samsung made around $5.1 Billion on Android. The next most profitable Android maker (HTC) made around $50 Million in profits. Samsung absolutely dominates the Android platform. I really don't see any way for Nokia to jump into the Android game at this point and win. They are WAY too far behind. Maybe if they had gotten on board right at the beginning but even then I doubt it. I think that the only company with a realistic chance to displace Samsung on Android is Google themselves.
Let me explain. Despite all the ballyhoo over Apple's hardware design, what makes people pay a premium for Apple products is NOT the hardware. Apple is fundamentally a software company. Steve Jobs himself has said so explicitly. (watch some of the Q&A interviews on youtube to find the clip) Their hardware, while nice and well designed, is not really much different from their competitors underneath and others copy their hardware designs almost as soon as they are released. You can run Windows on a Mac or Android on an iPhone. The underlying hardware is pretty much the same. Put Windows on a Mac and you'd be hard pressed to tell if the box was Apple or Dell without looking at the label. But the software is what makes Apple's devices different AND what makes people willing to pay extra for them. There is some variation between Android phones but the differences are of the same degree as between Windows PCs. If you buy a Dell or an HP there isn't really much difference. Same with buying a Samsung or a HTC phone. The differences are mostly cosmetic or relatively minor.
Without differentiated software Nokia has almost no chance of making any significant profit. By tying up with Microsoft they at least had a good chance to differentiate their product. Right now there are essentially 4 mobile platforms of consequence. Android, iOS, Blackberry and Windows. iOS and Blackberry are not options so the choice for Nokia was t
As you say, it represents what people are willing to pay for the shares, but that value is based off guesses at what other people will pay for them, not on the state of the company itself.
Market cap is the latest sale price of the stock multiplied by the number of shares outstanding. It is a measure of what it would cost you to buy all the shares outstanding at the current market price for those shares. If anything market cap *understates* what it would actually cost to buy the company. Most acquisitions are at a premium to the current market cap.
Stocks are like trading cards, once they are out there they are generally only worth what other collectors will pay for them.
Everything is only worth what someone is willing to pay for it. Market cap is a fairly reliable proxy for what the current purchase price of the company would actually be. To buy a company you have to buy the stock. On a publicly traded company the price of that stock is a known quantity. You can make an offer for less but very few shareholders are likely to accept less than they can get on the open market.
LG made $54 million on phones in the last quarter. That sounds pretty significant.
Samsung took 95% of all Android profits in 2013. That is $5.1 Billion out of total profits of $5.3 Billion. So yeah, $54 million is quite insignificant. LG's share of the profit is 2.5%. Everyone else combined made 2.7%. And somehow we are supposed to believe that Nokia somehow is going to displace Samsung from the top of the Android market segment? VERY doubtful.
not only is apple's R&D growing, Apple's capital expenses are in the billions of $$$ every year.
None of which is a guarantee of future profits. Dollars invested in R&D do not have a guaranteed return on investment. Same with capital expenditures in many cases.
They needed to apply their hardware engineers to creating an Android phone, and their software engineers to making a nice Android release for it.
Only one company (Samsung) is making significant profits selling hardware running Android. Nokia *might* succeed but the odds would be pretty long against them. Furthermore if they threw their hat into the Android camp they lose the most important factor in making a differentiated product. What makes the iPhone different is (mostly) the software. You could put android on iPhone hardware but then Apple's profit margins would shrink faster than you could say "shareholder lawsuit". If you do not have a differentiated product you are by definition competing on price. I have to say Nokia probably took the best route available to them even though it hasn't worked out very well thus far. Throwing in with Microsoft wasn't a spectacular option but producing another me-too Android phone wasn't an attractive option either.
Who wouldn't like a hot-shit Android phone with the indestructability of a Nokia?
Explain to me how Nokia is going to fix the problem of shattered screens when no one else can. Nokia hardware was mostly fine but it's reputation for "indestructibility" is rather overstated. I used various Nokia phones exclusively for about 10 straight years. Their hardware was decent. Nothing that blew me away but mostly competently built. Their software sucked big time. Nokia was never good at software. Their interfaces were horrid and the compatibility with other devices (like PCs) was so bad as to be useless. If Nokia had any competence in interface design they did a very good job of hiding it.
Nokia was also one of the worst offenders when it came to feature checklist engineering. They would build in say a web browser or calendar so they could say they had one but it would be so bad as to be useless. Now they were hardly the only ones doing this pre-iphone/android but they certainly didn't extend any effort to make their phones actually usable for much besides phone calls.
We're talking microns of gold plating on the surface of another metal. If you're paying more than a few dollars extra for that, it's not the gold that's driving up the price.
I run a company that makes wire harnesses. We crimp terminals all day long and I buy them in reels of 4000-8000 at a time including gold plated, tin, brass, bronze-phosphor and more.
Gold plated terminals are typically around 10X the cost of tin, brass or bronze-phosphor. A terminal that might cost $0.03 in tin will cost around $0.30 if gold plated. And that is before there are any profit or overhead markups which are usually on a percentage of cost. That's a 10X markup just on the materials. Gold plated terminals are also completely pointless in 99.99% of cases as they provide no electrical advantage you could measure. There are some highly specialized applications where gold plating is appropriate but they are quite rare.
Gold connectors do in fact do provide benefits of low resistance connections without corrosion problems because of golds properties.
Gold plating is utterly pointless in 99.99% of applications. There really are only two circumstances where gold has any advantage. One is that it provides a lubrication advantages for mating of terminal. The other is that in some cases it can provide modest corrosion resistance in particularly harsh environments. They do not provide a meaningful benefit in reducing resistance as the terminal they plate is made of tin, brass or bronze phosphor. In typical household or business office use gold terminals have no measurable advantage of any kind unless you consider them bling.
It can also be applied in quite a thin layer so can also be fairly cheap too.
I run a company that makes wire harnesses. Gold terminals are approximately ten times the cost of tin, brass or bronze-phosphor terminals. If you consider a 10X markup "cheap" you must live in some alternate universe from me. If you are buying gold terminals you are paying a huge mark up for no measurable benefit whatsoever.
Put bluntly if you buy gold plated terminals of any kind you are almost certainly wasting money.
They claim things like freeze dried foods, which existed long before NASA. It's just self-serving, rationalizing, hype.
Rockets existed before NASA but that doesn't mean NASA's research contributed nothing to the technology. There was a tremendous amount of useful research that has gone into food for the space program which has had all sorts of commercial and military spin off benefits. NASA has serious problems to be sure but the value of their research is not among them. In fact from an economic perspective the value of NASA research is THE most valuable thing to come out of NASA with even conservative ROI estimates at between 3-8X money spent in economic return to the economy.
And exactly what technology would that be? Tang or Velcro?
There are a huge number of spinoff technologies from NASA research which 20 seconds of time with Google would have found for you. Off the top of my head: freeze dried food, portable cordless vacuums, memory foam, de-icing systems, infrared ear thermometers, solar panels, fire fighting equipment.
Furthermore Tang was not developed by or for NASA and neither was Velcro. NASA merely popularized it. Tang was created by General Foods in the 1950s and Velcro was invented in the 1940s and later commercialized in the 1950s. If you are going to pick examples of "NASA technology" then you should actually pick examples of technology funded by NASA.
Seriously, name a single technology (useful for other than NASA purposes) which wouldn't have appeared within a few years anyway.
So we're supposed to hypothetically presume that everything created by NASA would somehow have been invented anyway despite the fact that there is no actual evidence that the technology would have appeared without NASA research? And for some reason the fact that NASA did it first is somehow not deserving of our respect? Peculiar argument you have there.
It's really not that hard to switch back and forth between them.
Some people can do this but most of us would find it irritating even if we could do it. There is really no benefit and there is a downside. It requires learning two things that are functionally equivalent neither of which is objectively better than the other. It's not that one is right and the other is wrong. It's that you are learning the same thing twice to no obvious advantage. To get proficient you also need to practice it both ways. There are a LOT of well established advantages in having standard interfaces even in cases where they might not be optimized for a specific task. We use the steering wheel and two/three pedals in automobiles. We could use a joystick or other arrangement but there is no obvious advantage to doing so and there IS an advantage to having a consistent interface between cars. (less training, less accidents, cheaper to build, etc)
The ironic thing is that Apple gets props for being design gurus but this pretty much violates what is good design if you are using a mouse. (for trackpads it's a different story - those actually make sense to do like a smartphone screen) I've been using scroll wheels the traditional way for 15+ years now and if I run into one that works in reverse it just screws me up for a while. I don't really want to think about that anymore.
I hated... HATED... "Natural Scrolling" when it first came out. But I gave it a week. You push up on the trackpad... screen goes up. You push down, screen goes down. It just feels.. natural.
I'm agnostic about it but since I have to use lots of machines that scroll the traditional way I don't really want to screw myself up. I could get used to either direction but I don't want to have to get used to both.
Of course, technological change and its impact on the workforce is nothing new; just look at the Industrial Revolution, when labor-saving devices put many a hard-working homo sapien out of economic commission.
If my eyes were rolling any harder I'd be looking at my brain. Those same labor saving devices unleashed the greatest economic prosperity the world has ever seen. Yeah, some people had their jobs replace. Then they found other things to do which on the whole were usually more productive than whatever they were doing before. Do we *really* want to go back to the days of using ox to plow fields or harvesting corn by hand? Do you really think we would be better off using hand tools for construction instead of power tools because the hand tools require more people to do the same work?
When is this stupid argument that we should halt technological progress because some people might need to learn something new going to die?
Mostly all the shareholders can do is vote for a new board and hope that the new board forces management to do what they want.
That's not remotely true. In fact what you'll typically see is one or more activist shareholders basically replace the board with their own hand picked candidates. Once you get to the point where significant blocks of shareholders band together they can essentially dictate whatever they want, especially once the magic 50%+1 level is reached. There might be some bylaws to deal with but a large enough block of shareholders can pretty much do anything.
Ultimately under Jobs it was on an upwards trend, and whilst no one expected Cook to be able to keep up the pace (no one could) one would at least expect him not to oversee a 50% decline from that peak.
It wouldn't be hard to argue that Apple was 50% overvalued at its peak. Furthermore the stock right now is sitting right in the middle of its 52 week range and the long term trend puts it right about where it currently sits. Take 2012 out of the mix and the stock price is right on the trajectory it was on between 2009-2011.
But if Cook was doing a good job then it would've kept increasing, or plateaued or declined slightly.
CEO performance and stock price are only loosely correlated, particularly in the short term.
That's a rather circular definition because stock prices move according to what other shareholders think about the stock, not what the CEO is doing as such.
That is correct but nevertheless CEOs usually are judged by the returns to shareholders. Share price is at best an indirect measure of performance and in the short run can be completely uncorrelated with actual performance. But since the shareholders are the owners of the company, share price + dividends are ultimately what they (usually) care about and those are the measure shareholders are going to evaluate management performance against. It is a HIGHLY imperfect measure and frequently unfairly rewards or punishes those who don't deserve it. In theory the board is supposed to evaluate management performance but they too often either are asleep at the wheel or are too cozy with management to properly carry out their duties.
In most companies, the board and CEO own a tiny slice of the company, yet the shareholders have little say about critical issues.
Think of it a little like congress. Most of the time the citizens are too divided to force their leaders to act one way or another. However on those occasions when the citizens speak with a coherent voice then their leaders are forced into action. Substitute citizens for shareholders and the result is the same. The shareholders own the company and can force management to do whatever they want. Too often though the shareholders are too disinterested to really effect significant change. Most shareholders act like absentee landlords.
ReadIris is far better then OmniPage at OCR as it supports multiple Languages plus can scan PDF's and create them.
Omnipage 18 (the version I use) can scan PDFs and create them. I do that daily. Did you mean something else?
Multiple languages is interesting but not very useful to me since I only need English for what I do. I know Omnipage can recognize Asian characters and I'm pretty sure it can handle characters in most languages since they are mostly the same.
The software used to be highly rated but fell in popularity over the years.
I use Omnipage almost daily, mostly for the batch document processing and it's the best OCR software I've run across. (If you know of something better I'd love to hear about it) I use it to batch process work instructions and manufacturing orders so that I can search for them more easily. All I have to do is put a pdf (or other file) in a particular folder and it takes care of the rest. It really does a surprisingly good job of it.
One of the most successful companies of all time, which is still doing billions in business, and everyone can't wait to tell them how they are fucking it up...
The fact that they remain (absurdly) profitable doesn't mean their strategic position is a good one. What made Microsoft a success for the last 20 years isn't what is going to matter in the next 20 years. The world has changed but Microsoft has struggled with that change. While still very important, PCs aren't the epicenter of computing they once were. Mobile devices are where almost all of the growth is and Microsoft does not have a dominant position or even particularly promising products in that space. Windows and Office are cash cows that Microsoft is (probably) going to be able to milk for the next 10+ years. The PC market isn't going to die but it isn't showing signs of growth either and without new products outside the PC market Microsoft isn't going to grow much either. Microsoft isn't going to shrivel up and die tomorrow but there is no obvious path for them to grow much beyond what they have already achieved with their current strategy and product offerings.
So yeah, they are "fucking it up". Microsoft's stock price has been flat for a decade. That means that while most people believe they are strong currently they also believe that the company's future growth prospects are either limited or unclear. Microsoft could prove everyone wrong but that's what most of us are thinking right now.
Why don't all these brilliant analysts go make billions if they are so smart?
You think that wall street analysts aren't making some serious coin? Why take the risk of investing huge amounts of capital when you can make some pretty serious money analyzing the business?
Anybody who's coded for more then a year in business is fully familiar with accounting.
And speaking as both an engineer and a certified accountant I call bullshit. I've met relatively few engineers who have even a modest grasp of basic bookkeeping. They certainly don't understand asset valuation, tax law, cost accounting, and quite a few other topics.
Double entry accounting is so easy I can explain it to you in ten minutes.
If you think that is all there is to accounting then I suggest you never try to do anything financially complicated.
Tax accounting, trust accounting and (if I recall my acronyms) GAP.
It's GAAP (Generally Accepted Accounting Principles) you ignoramus. You're seriously going to pretend you understand everything about a topic you don't even know the name of? Wow. That's a fairly stunning amount of arrogance from someone who has clearly demonstrated in this very thread that they don't actually understand even basic accounting.
Which is harder; Accounting or Engineering? Women fall into bean counting because it's fucking easy.
I have degrees in both and have done both professionally I can safely answer that question. The answer is that neither is harder than the other, especially at the deep end of the difficulty pool. But since you don't actually know anything about accounting (demonstrated clearly below) I would suggest you don't ask a question you don't actually know the answer to.
No unsolvable problems to do their best with, concrete answers, right or wrong.
Congratulations! You just displayed your complete ignorance of accounting and finance for the world to see. Only someone who hasn't even studied basic accounting would be under the delusion that accounting has no difficult problems or that all answers are "concrete". Nothing could be further from the truth. There is a huge amount of ambiguity in even relatively basic bookkeeping. Valuation of assets can be frickin' hard and some outrageously smart people spend their lives trying to figure valuation problems out. (That's basically all everyone on wall street does) Since valuation is to a large degree fundamentally a psychology problem it's often pretty much unsolvable much of the time and what solutions we do have tend to work inconsistently at best in the real world. If you want to get into the most arcane accounting topics you can easily get into problems that they award Nobel prizes for.
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That's simply wrong and everybody knows it, no matter what Jobs might have said once in one of his promotional videos.
"Wrong"? No. Counterintuitive I'll agree. Apple sells a vertically integrated product but (almost) no one buys a Mac to run Windows or Linux on it. They buy it because of OS X. OS X is what makes a Mac a Mac. Without OS X a Mac is just another me-too PC.
Oh and just because you dislike Steve Jobs doesn't mean he is wrong. I've listened to a lot of his talks over the years and I've seen few instances where he was wrong about the big picture business model stuff. He got the details wrong sometimes but I'm pretty sure he understood perfectly what made Apple profitable and what did not.
Apple's profit still mostly comes from hardware sales and it has always been that way.
Apple's profit is almost entirely in their software. Their revenue comes from selling that software on Apple hardware. Huge difference. Apple hardware is essentially a commodity and would not command much if any profit without Apple's software. The functional parts of a Mac are almost identical to a randomly chosen PC. iPhones internals are close to identical to those of any other similarly spec'ed smartphone. Same with iPods and same with iPads. The ONLY functional piece of the device that is meaningfully different is the software.
If they were a software company, they could easily open OS X and iOS to other hardware manufacturers, but in fact that would be their immediate death sentence.
You just made my argument for me. If Apple were not a software company then it would not matter if they opened up their operating systems. After all, if the software is not the critical piece of Apple's business model then there would be no harm in trying to spread the software to third parties. You can tell what the core business of a company is by examining what would happen if you gave that piece of the business away. Apple doesn't even manufacture their own hardware for the most part. The design it and have someone else build it. But they do manufacture their own software and they don't outsource that to anyone.
Frankly, I don't understand why people are so enamored with their offerings.
Because they are well made, easy to use, have a well thought out interface and for the most part require very little fiddling to work. My 94 year old technologically illiterate grandmother is able to effectively utilize an iPad while at the same time I am able to get what I want out of an iPhone and I'm about big a tech geek as you are likely to run into. What makes Apple products attractive and different is the software.
They don't do anything different in my opinion.
Ahh but they do and those differences are what people are willing to pay for. What you have to understand is that Apple is fundamentally a software company. Steve Jobs himself has said so explicitly. What is different about Apple's products is the software and what it does. It's not so much about them doing tasks that no one else can do as it is how they do those tasks. Apple (usually) provides a well designed and well executed experience and software is how they tie it all together. People buy Macs for the software - the hardware is barely different from PCs from Dell or HP. People buy iPods, iPhones and iPads for the software. The hardware isn't much different from the competition and in fact some competitors have rather slavishly copies Apple's designs. What Apple does differently is found in their software.
I prefer the Android approach that "opens the innovation tent" to everyone willing to give it a shot.
Nothing wrong with that but there are positives as well as drawbacks. If you are someone (like me and probably you) who really likes to fiddle with your gear then Android might very well be a better choice. But for my non-tech savvy relatives who just want a smartphone I point them at an iPhone. Not everyone wants to endlessly mess around with arcane features of their phones. Apple's products aren't for everyone but Apple has never pretended that they were. That said they sell an awful lot of product so they clearly are doing something that appeals to a lot of people.
I have been thinking about this since you first asked me and I came up with an answer.
Nice to see someone actually taking some time to think about something rather than just shooting from the hip. And for the record even though I disagree with you in places below I think your response was a thoughtful one.
And that answer is to offer a slightly bulky phone with a classic Nokia look and smell.
Just my opinion but I think you likely are overestimating the amount of nostalgia for old Nokia phones. I had them for about 10 years straight and I don't miss them a bit. They were fine but they weren't particularly amazing bits of design and I don't really see anyone lusting for "classic phones" the way they do for classic cars. Plus going for nostalgia in such a relentlessly forward marching industry carries HUGE risk. It would be really easy for a competitor to make the argument "do you really want a 10 year old phone?" Blackberry continues to insist in the face of all the evidence otherwise that people want "classic" blackberry styling and a physical keyboard.
There is no way to completely eliminate the problem of shattered screens (it is glass after all) but there are ways to mitigate it. Doing so would require phone makers to design phones with less emphasis on thin/shiny and actually pad them a bit as well as put a raised bezel around the screen face. It is already known how to engineer a more durable phone. The problem is how do you engineer one that people will actually buy? No one has cracked that problem yet.
it's irrelevant if they build an Android phone, because if they do nothing they will serve the desires of the majority of their potential customer base as Android already includes acceptable checkbox apps
Great. Why should I buy a Nokia phone then instead of Samsung? The ONLY company making any profit on Android phones is Samsung (they have 95% profit-share of android phones in 2013) and from what I can tell there is no company in danger of displacing them. Samsung made around $5.1 Billion on Android. The next most profitable Android maker (HTC) made around $50 Million in profits. Samsung absolutely dominates the Android platform. I really don't see any way for Nokia to jump into the Android game at this point and win. They are WAY too far behind. Maybe if they had gotten on board right at the beginning but even then I doubt it. I think that the only company with a realistic chance to displace Samsung on Android is Google themselves.
Let me explain. Despite all the ballyhoo over Apple's hardware design, what makes people pay a premium for Apple products is NOT the hardware. Apple is fundamentally a software company. Steve Jobs himself has said so explicitly. (watch some of the Q&A interviews on youtube to find the clip) Their hardware, while nice and well designed, is not really much different from their competitors underneath and others copy their hardware designs almost as soon as they are released. You can run Windows on a Mac or Android on an iPhone. The underlying hardware is pretty much the same. Put Windows on a Mac and you'd be hard pressed to tell if the box was Apple or Dell without looking at the label. But the software is what makes Apple's devices different AND what makes people willing to pay extra for them. There is some variation between Android phones but the differences are of the same degree as between Windows PCs. If you buy a Dell or an HP there isn't really much difference. Same with buying a Samsung or a HTC phone. The differences are mostly cosmetic or relatively minor.
Without differentiated software Nokia has almost no chance of making any significant profit. By tying up with Microsoft they at least had a good chance to differentiate their product. Right now there are essentially 4 mobile platforms of consequence. Android, iOS, Blackberry and Windows. iOS and Blackberry are not options so the choice for Nokia was t
As you say, it represents what people are willing to pay for the shares, but that value is based off guesses at what other people will pay for them, not on the state of the company itself.
Market cap is the latest sale price of the stock multiplied by the number of shares outstanding. It is a measure of what it would cost you to buy all the shares outstanding at the current market price for those shares. If anything market cap *understates* what it would actually cost to buy the company. Most acquisitions are at a premium to the current market cap.
Stocks are like trading cards, once they are out there they are generally only worth what other collectors will pay for them.
Everything is only worth what someone is willing to pay for it. Market cap is a fairly reliable proxy for what the current purchase price of the company would actually be. To buy a company you have to buy the stock. On a publicly traded company the price of that stock is a known quantity. You can make an offer for less but very few shareholders are likely to accept less than they can get on the open market.
LG made $54 million on phones in the last quarter. That sounds pretty significant.
Samsung took 95% of all Android profits in 2013. That is $5.1 Billion out of total profits of $5.3 Billion. So yeah, $54 million is quite insignificant. LG's share of the profit is 2.5%. Everyone else combined made 2.7%. And somehow we are supposed to believe that Nokia somehow is going to displace Samsung from the top of the Android market segment? VERY doubtful.
not only is apple's R&D growing, Apple's capital expenses are in the billions of $$$ every year.
None of which is a guarantee of future profits. Dollars invested in R&D do not have a guaranteed return on investment. Same with capital expenditures in many cases.
They needed to apply their hardware engineers to creating an Android phone, and their software engineers to making a nice Android release for it.
Only one company (Samsung) is making significant profits selling hardware running Android. Nokia *might* succeed but the odds would be pretty long against them. Furthermore if they threw their hat into the Android camp they lose the most important factor in making a differentiated product. What makes the iPhone different is (mostly) the software. You could put android on iPhone hardware but then Apple's profit margins would shrink faster than you could say "shareholder lawsuit". If you do not have a differentiated product you are by definition competing on price. I have to say Nokia probably took the best route available to them even though it hasn't worked out very well thus far. Throwing in with Microsoft wasn't a spectacular option but producing another me-too Android phone wasn't an attractive option either.
Who wouldn't like a hot-shit Android phone with the indestructability of a Nokia?
Explain to me how Nokia is going to fix the problem of shattered screens when no one else can. Nokia hardware was mostly fine but it's reputation for "indestructibility" is rather overstated. I used various Nokia phones exclusively for about 10 straight years. Their hardware was decent. Nothing that blew me away but mostly competently built. Their software sucked big time. Nokia was never good at software. Their interfaces were horrid and the compatibility with other devices (like PCs) was so bad as to be useless. If Nokia had any competence in interface design they did a very good job of hiding it.
Nokia was also one of the worst offenders when it came to feature checklist engineering. They would build in say a web browser or calendar so they could say they had one but it would be so bad as to be useless. Now they were hardly the only ones doing this pre-iphone/android but they certainly didn't extend any effort to make their phones actually usable for much besides phone calls.
Getting Balmer to cough up 7B for this iterator didn't seem like failure if you ask me.
When Nokia's market cap was $245 Billion circa 10 years ago and as high as $150 Billion as recently as 2007 then that counts as a HUGE failure.
We're talking microns of gold plating on the surface of another metal. If you're paying more than a few dollars extra for that, it's not the gold that's driving up the price.
I run a company that makes wire harnesses. We crimp terminals all day long and I buy them in reels of 4000-8000 at a time including gold plated, tin, brass, bronze-phosphor and more.
Gold plated terminals are typically around 10X the cost of tin, brass or bronze-phosphor. A terminal that might cost $0.03 in tin will cost around $0.30 if gold plated. And that is before there are any profit or overhead markups which are usually on a percentage of cost. That's a 10X markup just on the materials. Gold plated terminals are also completely pointless in 99.99% of cases as they provide no electrical advantage you could measure. There are some highly specialized applications where gold plating is appropriate but they are quite rare.
Gold connectors do in fact do provide benefits of low resistance connections without corrosion problems because of golds properties.
Gold plating is utterly pointless in 99.99% of applications. There really are only two circumstances where gold has any advantage. One is that it provides a lubrication advantages for mating of terminal. The other is that in some cases it can provide modest corrosion resistance in particularly harsh environments. They do not provide a meaningful benefit in reducing resistance as the terminal they plate is made of tin, brass or bronze phosphor. In typical household or business office use gold terminals have no measurable advantage of any kind unless you consider them bling.
It can also be applied in quite a thin layer so can also be fairly cheap too.
I run a company that makes wire harnesses. Gold terminals are approximately ten times the cost of tin, brass or bronze-phosphor terminals. If you consider a 10X markup "cheap" you must live in some alternate universe from me. If you are buying gold terminals you are paying a huge mark up for no measurable benefit whatsoever.
Put bluntly if you buy gold plated terminals of any kind you are almost certainly wasting money.
They claim things like freeze dried foods, which existed long before NASA. It's just self-serving, rationalizing, hype.
Rockets existed before NASA but that doesn't mean NASA's research contributed nothing to the technology. There was a tremendous amount of useful research that has gone into food for the space program which has had all sorts of commercial and military spin off benefits. NASA has serious problems to be sure but the value of their research is not among them. In fact from an economic perspective the value of NASA research is THE most valuable thing to come out of NASA with even conservative ROI estimates at between 3-8X money spent in economic return to the economy.
50 years ago THE SOVIETS 'did science'. 40-30-20-10 they were busy trying not to become a 3rd world country.
Rather a bizarre comment since the Soviets were by definition Second World.
And exactly what technology would that be? Tang or Velcro?
There are a huge number of spinoff technologies from NASA research which 20 seconds of time with Google would have found for you. Off the top of my head: freeze dried food, portable cordless vacuums, memory foam, de-icing systems, infrared ear thermometers, solar panels, fire fighting equipment.
Furthermore Tang was not developed by or for NASA and neither was Velcro. NASA merely popularized it. Tang was created by General Foods in the 1950s and Velcro was invented in the 1940s and later commercialized in the 1950s. If you are going to pick examples of "NASA technology" then you should actually pick examples of technology funded by NASA.
Seriously, name a single technology (useful for other than NASA purposes) which wouldn't have appeared within a few years anyway.
So we're supposed to hypothetically presume that everything created by NASA would somehow have been invented anyway despite the fact that there is no actual evidence that the technology would have appeared without NASA research? And for some reason the fact that NASA did it first is somehow not deserving of our respect? Peculiar argument you have there.
It's really not that hard to switch back and forth between them.
Some people can do this but most of us would find it irritating even if we could do it. There is really no benefit and there is a downside. It requires learning two things that are functionally equivalent neither of which is objectively better than the other. It's not that one is right and the other is wrong. It's that you are learning the same thing twice to no obvious advantage. To get proficient you also need to practice it both ways. There are a LOT of well established advantages in having standard interfaces even in cases where they might not be optimized for a specific task. We use the steering wheel and two/three pedals in automobiles. We could use a joystick or other arrangement but there is no obvious advantage to doing so and there IS an advantage to having a consistent interface between cars. (less training, less accidents, cheaper to build, etc)
The ironic thing is that Apple gets props for being design gurus but this pretty much violates what is good design if you are using a mouse. (for trackpads it's a different story - those actually make sense to do like a smartphone screen) I've been using scroll wheels the traditional way for 15+ years now and if I run into one that works in reverse it just screws me up for a while. I don't really want to think about that anymore.
I hated... HATED... "Natural Scrolling" when it first came out. But I gave it a week. You push up on the trackpad... screen goes up. You push down, screen goes down. It just feels.. natural.
I'm agnostic about it but since I have to use lots of machines that scroll the traditional way I don't really want to screw myself up. I could get used to either direction but I don't want to have to get used to both.
Of course, technological change and its impact on the workforce is nothing new; just look at the Industrial Revolution, when labor-saving devices put many a hard-working homo sapien out of economic commission.
If my eyes were rolling any harder I'd be looking at my brain. Those same labor saving devices unleashed the greatest economic prosperity the world has ever seen. Yeah, some people had their jobs replace. Then they found other things to do which on the whole were usually more productive than whatever they were doing before. Do we *really* want to go back to the days of using ox to plow fields or harvesting corn by hand? Do you really think we would be better off using hand tools for construction instead of power tools because the hand tools require more people to do the same work?
When is this stupid argument that we should halt technological progress because some people might need to learn something new going to die?
Mostly all the shareholders can do is vote for a new board and hope that the new board forces management to do what they want.
That's not remotely true. In fact what you'll typically see is one or more activist shareholders basically replace the board with their own hand picked candidates. Once you get to the point where significant blocks of shareholders band together they can essentially dictate whatever they want, especially once the magic 50%+1 level is reached. There might be some bylaws to deal with but a large enough block of shareholders can pretty much do anything.
Ultimately under Jobs it was on an upwards trend, and whilst no one expected Cook to be able to keep up the pace (no one could) one would at least expect him not to oversee a 50% decline from that peak.
It wouldn't be hard to argue that Apple was 50% overvalued at its peak. Furthermore the stock right now is sitting right in the middle of its 52 week range and the long term trend puts it right about where it currently sits. Take 2012 out of the mix and the stock price is right on the trajectory it was on between 2009-2011.
But if Cook was doing a good job then it would've kept increasing, or plateaued or declined slightly.
CEO performance and stock price are only loosely correlated, particularly in the short term.
That's a rather circular definition because stock prices move according to what other shareholders think about the stock, not what the CEO is doing as such.
That is correct but nevertheless CEOs usually are judged by the returns to shareholders. Share price is at best an indirect measure of performance and in the short run can be completely uncorrelated with actual performance. But since the shareholders are the owners of the company, share price + dividends are ultimately what they (usually) care about and those are the measure shareholders are going to evaluate management performance against. It is a HIGHLY imperfect measure and frequently unfairly rewards or punishes those who don't deserve it. In theory the board is supposed to evaluate management performance but they too often either are asleep at the wheel or are too cozy with management to properly carry out their duties.
In most companies, the board and CEO own a tiny slice of the company, yet the shareholders have little say about critical issues.
Think of it a little like congress. Most of the time the citizens are too divided to force their leaders to act one way or another. However on those occasions when the citizens speak with a coherent voice then their leaders are forced into action. Substitute citizens for shareholders and the result is the same. The shareholders own the company and can force management to do whatever they want. Too often though the shareholders are too disinterested to really effect significant change. Most shareholders act like absentee landlords.
ReadIris is far better then OmniPage at OCR as it supports multiple Languages plus can scan PDF's and create them.
Omnipage 18 (the version I use) can scan PDFs and create them. I do that daily. Did you mean something else?
Multiple languages is interesting but not very useful to me since I only need English for what I do. I know Omnipage can recognize Asian characters and I'm pretty sure it can handle characters in most languages since they are mostly the same.
The software used to be highly rated but fell in popularity over the years.
I use Omnipage almost daily, mostly for the batch document processing and it's the best OCR software I've run across. (If you know of something better I'd love to hear about it) I use it to batch process work instructions and manufacturing orders so that I can search for them more easily. All I have to do is put a pdf (or other file) in a particular folder and it takes care of the rest. It really does a surprisingly good job of it.
One of the most successful companies of all time, which is still doing billions in business, and everyone can't wait to tell them how they are fucking it up...
The fact that they remain (absurdly) profitable doesn't mean their strategic position is a good one. What made Microsoft a success for the last 20 years isn't what is going to matter in the next 20 years. The world has changed but Microsoft has struggled with that change. While still very important, PCs aren't the epicenter of computing they once were. Mobile devices are where almost all of the growth is and Microsoft does not have a dominant position or even particularly promising products in that space. Windows and Office are cash cows that Microsoft is (probably) going to be able to milk for the next 10+ years. The PC market isn't going to die but it isn't showing signs of growth either and without new products outside the PC market Microsoft isn't going to grow much either. Microsoft isn't going to shrivel up and die tomorrow but there is no obvious path for them to grow much beyond what they have already achieved with their current strategy and product offerings.
So yeah, they are "fucking it up". Microsoft's stock price has been flat for a decade. That means that while most people believe they are strong currently they also believe that the company's future growth prospects are either limited or unclear. Microsoft could prove everyone wrong but that's what most of us are thinking right now.
Why don't all these brilliant analysts go make billions if they are so smart?
You think that wall street analysts aren't making some serious coin? Why take the risk of investing huge amounts of capital when you can make some pretty serious money analyzing the business?
Anybody who's coded for more then a year in business is fully familiar with accounting.
And speaking as both an engineer and a certified accountant I call bullshit. I've met relatively few engineers who have even a modest grasp of basic bookkeeping. They certainly don't understand asset valuation, tax law, cost accounting, and quite a few other topics.
Double entry accounting is so easy I can explain it to you in ten minutes.
If you think that is all there is to accounting then I suggest you never try to do anything financially complicated.
Tax accounting, trust accounting and (if I recall my acronyms) GAP.
It's GAAP (Generally Accepted Accounting Principles) you ignoramus. You're seriously going to pretend you understand everything about a topic you don't even know the name of? Wow. That's a fairly stunning amount of arrogance from someone who has clearly demonstrated in this very thread that they don't actually understand even basic accounting.
Accounting is fucking simple.
Sheldon Cooper? Is that you?
Which is harder; Accounting or Engineering? Women fall into bean counting because it's fucking easy.
I have degrees in both and have done both professionally I can safely answer that question. The answer is that neither is harder than the other, especially at the deep end of the difficulty pool. But since you don't actually know anything about accounting (demonstrated clearly below) I would suggest you don't ask a question you don't actually know the answer to.
No unsolvable problems to do their best with, concrete answers, right or wrong.
Congratulations! You just displayed your complete ignorance of accounting and finance for the world to see. Only someone who hasn't even studied basic accounting would be under the delusion that accounting has no difficult problems or that all answers are "concrete". Nothing could be further from the truth. There is a huge amount of ambiguity in even relatively basic bookkeeping. Valuation of assets can be frickin' hard and some outrageously smart people spend their lives trying to figure valuation problems out. (That's basically all everyone on wall street does) Since valuation is to a large degree fundamentally a psychology problem it's often pretty much unsolvable much of the time and what solutions we do have tend to work inconsistently at best in the real world. If you want to get into the most arcane accounting topics you can easily get into problems that they award Nobel prizes for.