Skip to main content

Asymco

See All Stories
Site default logo image

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

aapl

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.”

On average, analysts expect iPad sales to be flat, but no consensus

Site default logo image

ipad

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
Expanding
Close

Site default logo image

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

curve

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.

Analyst forecasts suggest iPad sales have peaked, expect YOY decline this quarter despite 13% holiday growth

Site default logo image

screen-shot-2014-04-18-at-11-37-01-am

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.


Expand
Expanding
Close

Two-thirds of Americans will own an iPhone by 2017, calculates analyst

Site default logo image

2017

Smartphones will reach saturation point in the U.S. by 2017, and by that time two-thirds of all Americans will own an iPhone – the conclusions Asymco’s Horace Dediu reaches through a series of calculations.

Dediu bases his calculation on three factors. First, that the rate of growth seen in the smartphone market so far will continue at the same pace. Second, saturation point for smartphones will be 90 percent (no technology ever achieves 100 percent). Third, that Apple’s market share will remain roughly constant, Dediu pointing out that iPhone growth has pretty much exactly mirrored the smartphone market as a whole … 
Expand
Expanding
Close

Site default logo image

Apple adds around a million new store accounts (most with credit cards) every two days

Apple-accounts-575m

Asymco’s Horace Dediu points out with the graph above that Apple has been adding about a million new store accounts every couple of days. The numbers seem to be based on Tim Cook’s announcement at WWDC that Apple now has 575,000,000 million store accounts (which we assume includes all App Store, iTunes, and Apple Online Store accounts). That means most of them have credit cards on file and as Cook noted, that’s “more accounts with credit cards than any other store on the internet.”

Report: Drops in Apple’s share price historically followed by surge in earnings growth

Site default logo image

In October, Apple stock dropped below 600 for the first time since July. Since then, following a number of new product launches, AAPL has continued to fall and now only sits slightly higher than last week at roughly 550 per share and a market cap of $518 billion. While many have pointed to uncertainty regarding new product launches and executive level changes as the cause of Apple’s falling share price, no one quite has a definitive answer for why AAPL has hit a nearly six-month low. In a report today, titled “A dramatic reading of Apple’s share price”, Asymco analyst Horace Dediu might have the answer.

Dediu studied 13 bear AAPL markets starting with the October 2001 launch of the iPod. As noted in the report, Apple’s stock had just fallen 70 percent year-over-year and continued to drop another 20 percent following the iPod launch. However, since the iPhone launch, Dediu found “every dramatic drop in share price was followed by a surge in earnings growth.” The graph above maps earnings growth following bear Apple markets since the 2007 iPhone introduction.

So, why exactly does this happen? Dediu explained his theory:


Expand
Expanding
Close