Some more things to remember about Apple’s financials

Apple spent only $5.5 billion on sales, marketing, and general and administrative expenses last year. Microsoft spent $17 billion.

Apple spent only $1.7 billion on research and development last year. Microsoft, with smaller sales and vastly slower growth, spent $8.7 billion.

Last quarter, research and development increased to $575 million, a yearly pace of $2.3 billion. But as a percentage of total revenue, it went down from 2.5% to 2.2%.

Similarly, sales, marketing and general and administrative costs also went up, to $1.9 billion. While a yearly cost at 1$7.6 billion, it also represents a drop in over all percentages, now representing 7.1% of total revenues instead of last year’s 8.2%.

So Apple continues to grow at astounding rates while keeping its R&D costs, as well as sales and marketing, very low. Last year MS spent over $25 billion in these two areas. Apple spent about $7 billion. Almost 1/4 the costs yet much more profit.

Astounding.


When was the last time Microsoft’s revenue went up over 70%?

Apple’s growth is unprecedented, staggering; 15 amazing things we learned on Apple’s earnings call
[Via MacDailyNews]

“Listening to Apple’s quarterly conference calls these days is like watching a once-in-a-generation sports team demolish every other team in the league,” Henry Blodget writes for The Business Insider. “Apple is absolutely at the peak of its game right now. Each quarter brings astonishing new miracles that leave analysts gasping. Yesterday’s quarter was no exception.”

[More]

One key number – revenue up 71% over last years Companies the size of Apple simply do not grow that much. And they are predicted to grow over 60% this year, assuming the experts are even close.

And they still have $60 billion in cash, if they need to shut out their competitors from suppliers.

I really think that Apple is the first 21st Century company. Now if more companies can create adaptive, creative organizations, we might really see a new economy.

I respect/hate/fear ice

Cars sliding down icy road in Pittsburgh
[Via Boing Boing]

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[Video Link] “It’s a lot of cars hitting each other,” observes an astute man offscreen.

(Thanks, Felipe Li)

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I have always respected/hated/feared ice since then. I’ve been in 4 wheel drive vehicles that suddenly moved two lanes right because of ice. I’ve tried to steer backwards as my car slide down the hill, hoping to grab some purchase before the bottom.

My entire family and many friends know about my experiences with my brother in an ice storm we got into west of San Antonio – going backwards at 70 mph on the freeway in a Pinto; sliding off the road and watching several other cars slide off after us; leaving my brother behind at the bottom of a hill after his push got the car going because if I stopped I’d slide back.

This video has similar attempts to deal with ice, especially 4WD vehicles where the driver things they can drive out of it. None of them figured out that once ice gets you, nothing will help.

I’ll get the Playboy app because I want to read the articles

Playboy Magazine coming to iPad in its uncensored form in March, including full back catalog
[Via Engadget]

From its very first issue in 1953 to its latest incarnation, the full catalog of Playboy Magazine is coming to the iPad this March. And not only that, it’ll be faithful to its original form by arriving to your Apple slate uncensored. Such is the word direct from the man responsible for that first copy, one Mr. Hugh Hefner. Anyone who’s followed Apple’s App Store rulings and Steve Jobs’ forthright comments on the subject of keeping adult material off mobile devices will surely find this a bemusing, if not entirely inconsistent, decision. The details of how this slice of software will be delivered to the iPad (and what restrictions it may come with) will be most intriguing indeed.

[More]

I’ll believe this when I see it. Perhaps just a straight ahead web app that reformats what is already online. II expect this will create more buzz than Hefner’s latest marriage.

2010 Lie of the Year is …

lieby grisei

PolitiFact | PolitiFact’s Lie of the Year: ‘A government takeover of health care’
[Via Politifact]

In the spring of 2009, a Republican strategist settled on a brilliant and powerful attack line for President Barack Obama’s ambitious plan to overhaul America’s health insurance system. Frank Luntz, a consultant famous for his phraseology, urged GOP leaders to call it a “government takeover.”

“Takeovers are like coups,” Luntz wrote in a 28-page memo. “They both lead to dictators and a loss of freedom.”

[More]

We know from historical precedent that political lies can have severe consequences when they are taken as truth.  Politifact states “The phrase is simply not true.” There is no government takeover. Check out all the “pants on Fire” links the page provides.

In second place was Republican MIchele Bachmann’s asserton that President Obama was going to spend $200 million a day on a trip to India. It just nudged out Republican Governor-elect of Florida Rick Scott’s statement ”The stimulus has not created one private sector job.”

The Republicans ‘won’ last year with the phrase “death panels.” Two years in a row, both dealing with healthcare.

Lying about healthcare has worked well so far. I would not be surprised to see them win again for it in 2011.

Just a reminder that the MSM has always been stupid

20/20 Punk story from the 1979
[Via Boing Boing]

You gotta love this idiotic 5-minute news segment from 1979 about punk. Watch how they manage to connect punk to the 1979 trampling deaths before a Who concert in Cincinnati. During a clip showing The Clash the announcer says, “To see The Clash *is* exciting… even crazy.” He then goes on to say, “They’ll even *die* for the cause,” without giving an example of anyone dying for a cause.

[More]

And somehow they also demonstrate that the destructive forces unleashed by Bill Haley and the Comets are directly connected to the Clash. And they play third world liberation music essentially from the Caribbean.

Oh No. What will America become if punk ever makes it here.

Of course, they kind of like the Talking Heads. They characterize them as ‘cerebral’ but then use interview clips to make them seem pretty shallow. Then they launch into a performance of “Psycho-killer” probably because it has killer in the title.

What an embarrassing clip.

Why do the pros get paid for their financial predictions?

Apple’s blow-out quarter: The bloggers called it, the Street blew it
[Via Brainstorm Tech]

In the quarterly battle between outsiders and the insiders, it’s the amateurs by a mile

Amateurs in blue, pros in peach. Click to enlarge.

This one wasn’t even close.

In our ranking of the best and worst Apple (AAPL) analysts for Q1 2011, which lists them based on how accurately they predicted seven key numbers — revenue, earnings, gross margins and unit sales — the unaffiliated analysts (blue in the chart at right) took 9 out of the 10 top spots.

[More]

Maybe someday everything will revert to the mean but right now, those being paid to give advice and predict performance are not doing very well. To get an idea, the worst amateur was still better than the average pro.

Maybe some of those amateurs should go pro? That is if the goal is to make the best predictions.

Eating words about the iPad

foodby WordRidden

Hope He’s Hungry
[Via Daring Fireball]

Alex Cook on 3 April 2010:

I don’t buy the iPad hype. Analyst expectations for iPad revenue are way overblown. If I turn out to be wrong, I’ll gladly eat my words, but I’m pretty sure that I’m not wrong.

[More]

Read the whole thing. It is hilariously wrong. For example, the iPad could be worse than the Lisa (Yep he goes back to 1983 to find an Apple failure):

The iPad could be even worse. At least the Lisa was ahead of its time. The iPad isn’t ahead of anything, but it’s certainly expensive. Tablet computers didn’t flop when HP was making them because HP lacked vision or creativity; they flopped because tablets were a bad idea. They’re not as useful as a laptop, and they’re not mobile enough or cheap enough to replace a smartphone—and of course, they can’t make phone calls.

In short, tablets try to fill a niche that doesn’t exist.

Save for when you need to smile.7.3 million iPads sold this last quarter. Looks like it is filling a niche that does exist but only Apple could see.


‘We can’t make enough iPhones, ‘ We’ve got money to keep supply away from others,’ and ‘No tablet comes close to the iPad

number 1by Moe_

Apple COO Tim Cook on Android, Components, and More
[Via Daring Fireball]

Macworld’s transcript of Tim Cook’s comments on the quarterly earnings analyst call earlier today. Things that stood out to me:

  • Demand for the iPhone 4 is still outstripping supply. They can’t make them fast enough, and haven’t even launched on Verizon yet.
  • For phones, he’s talking about the “handset market” in general, not just smartphones. Going forward, “smartphone” market share isn’t the number to look at. It’s handset market share, period. All phones will soon be smart phones. People with feature phones are future smartphone buyers.

[More]

They sold over 16 million iPhones last quarter and they still aren’t meeting demand. What will happen when Verizon comes online?

And Apple made almost $4 billion in the last quarter just form their retail stores. No one else who makes mobile devices also sells them. $4 billion for Apple that no one else has.

But then there is also this:

On the operational side of the house, as you probably remember, we’ve historically entered into certain agreements with different people to secure supply and other benefits. The largest one in the recent past has been, we signed a deal with several flash [memory] suppliers back in the end of 2005 that totaled over a billion dollars, because we anticipated that flash would become increasingly important across our entire product line and increasingly important to the industry. And so we wanted to secure supply for our company. We think that was an absolutely fantastic use of Apple’s cash, and we constantly look for more of these. And so in the past several quarters, we’ve identified another area and come to some recent agreements that Peter talked about in his opening comments. These payments consist of both pre-payments and capital for process equipment and tooling. And similar to the flash agreement, they’re focused in an area that we feel is very strategic. And so I’d prefer not to go into more detail about what specific area it’s in, but it’s the same kind of thinking that led us to those deals.

Apple has over $50 billion in cash. If they use this to get good longterm contracts on supplies that that  pre-empt competitors, then that may explain why it has taken so long for others to get out a 10-inch tablet. Apple may have swallowed up the entire market.

And now, when competitors may finally be getting caught up in size – well maybe by the Fall – Apple may be coming out with  iPad displays that no one else will be able to replicate for quite some time.

Finally,

Then you have the Android tablets, and the variety that are out shipping today, the operating system wasn’t really designed for a tablet, and Google has said this. This is not just an Apple view by any means. And so you wind up having a size of tablet that is less than what we believe is reasonable or even one that would provide what we feel is a “real tablet experience.” So basically you wind up with a scaled-up smartphone, which is a bizarre product, in our view.

So those are the two that are shipping today, and frankly speaking, it’s hard for me to understand, if somebody does a side-by-side with an iPad, I think some enormous percentage of people are going to select an iPad there. Those are not tablets that we have any concern on.

A year later, and still no ‘real tablet experience.’ Could be a few more months too.


All the King’s horses and all the King’s men …

humpty dumptyby Jim, the Photographer

On the White House Scientific Integrity guidelines – Part 1: OMB’s Secret ‘Openness’ Policy
[Via ClimateScienceWatch]

Scientific integrity guidelines for federal agencies issued December 17, 2010, by John Holdren, director of the White House Office of Science and Technology Policy, ostensibly endorse open communication between journalists and scientists. But the available documentary evidence, including disclosures forced by a Freedom of Information Act lawsuit, strongly suggests that the White House Office of Management and Budget has impeded the drive for scientific integrity and openness.  Has OMB dictated a policy that will allow agencies to keep scientists from talking freely with reporters and to continue keeping politically inconvenient scientific findings in the shadows?

[More]

OMB has been doing this for much of the last decade. It is an office where politics is used to trump science. It controls the budgets of all the agencies in the Executive Branch, It is not something anyone wants to tick off.

It appears that its political purpose, at least in some cases. continues. It asks for the science to be reframed; it delays publication of science; it makes sure that handlers are present during interviews.

The latter is the one that seems wrong for an open society.

The administration’s guidelines may be better than before but they are still a long way from transparent. My worry is that the system may already be so broken and corrupted that it can no longer be fixed. Both sides will simply abuse the system to their own benefit, not ours.

No putting Humpty back together again.

Read the whole series. Essentially, while making wonderful statements, the policy still leaves each agency with way too much say in how they implement these policies, meaning that they can still be used for political purposes.

Pretty amazing that public research paid for by public funds and done by public scientists can not be disseminated to the public directly but has to be vetted first by political appointees and press officers. That was the cause of much of the problems in the last Administration. The current one, while it espouses a loftier goal, does not seem to be a whole different on the ground.

The last paragraphs of the series were the most depressing because they really do show how some important things do not change, whether there is a Republican or a Democrat in the White House:

In 2002-3, when UN inspectors were looking for nuclear weapons in Saddam Hussein’s Iraq, that nation’s nuclear scientists could not talk to inspectors without a Baath Party “minder” as chaperone. Nor could reporters wander Iraq’s streets without a minder.This, the wisest satraps and shrewdest nabobs of U.S. Intelligence concluded, was prima facie evidence that Saddam was hiding something and could not be trusted. On the strength of this conviction, war ensued. Then the Bush administration began requiring “minders” for news media interviews with its own scientists, whose findings were often inconveniently at odds with the administration’s pre-formed policy positions.

When scientific facts and ideology differed, under Bush, the facts had to be hidden, discredited, or disposed of. Thus it was that a pioneering climate scientist with a towering research reputation, NASA lab director James Hansen, was forbidden to do press interviews by  24-year old press officer George Deutsch, whose sole qualifications were that he had worked on the 2004 Bush-Cheney campaign and had lied about having a nonexistent B.A. degree. The Bush administration had finally adopted and internalized the methods of Saddam — minders and permissions — for combating truths they found politically inconvenient for the public to know about.

The big surprise, however, was that many federal agencies under President Obama continued the “minders” press policy. But an even bigger surprise, perhaps, was that on December 17, the Obama White House issued scientific integrity guidelines that could be used by federal agencies to require – one might say ‘Saddam-style’ – that government scientists have minders when giving interviews — and now refuses to be transparent about the process that produced these late and inadequate guidelines.


NASA can’t build the rockets we need without more money/time

apolloby NASA Goddard Photo and Video

NASA Lacks Budget for Next Generation Rockets
[Via Discovery News - Top Stories]

The heavy-lift vehicle required to send astronauts to an asteroid and Mars cannot be constructed by the current 2016 deadline.

[More]

Obama killed the Constellation project because it was wasting money. Congress, however, mandated that we keep spending money on the project, even though it was scrapped. So, added to the $12 billion lost in a project started under Bush, we can now add another $215 million that Congress is making NASA spend on a dead project. We can thank Richard SHelby, an Alabama Republican, for the language mandating that expenditure..

It took us seven years from Kennedy’s speech  in 1961 until we got a heavy lift spacecraft into space in 1968. And that was from an almost standing start with regard to development of the technology. We now have a program that could not put a man on the moon again if it wanted to. It certainly does not seem capable of creating another heavy-lift vehicle in a similar time frame as Apollo.

Now NASA says that the heavy lift project Congress did mandate can not be done in the time specified unless a lot more money is provided. How, with all the improved technology we have today, can it take longer to create a new heavy-lift vehicle than it did to create the Saturn V? We’ve been working on this for 5 years and now NASA says another 4 will not be long enough.

This whole thing makes me sad. At one time, when people talked of American technocracy, they thought of a man on the moon. Now, apparently, that sort of thing is just a pipe dream.

I think part of the problem is there is no realistic stated goal for NASA now. Instead we just have funding to replace the shuttle with something just in case private companies fail. Not a good longterm, sustainable mission.


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