AAPL: How high will it go?

[red-beard]

Originally Posted by jyl

So US tax policy incents companies to keep jobs in the US (on shore)? Interesting.

Only to the extent that you use up most of the profits. Look at the Gawker is organized. They keep most profits form sales overseas and only keep enough profit in the US to pay minimal taxes.

Originally Posted by jyl

The tax strategy actually has more to do with transfer pricing. Overseas subsidiary spends $1.00 to build the widget and transfers it to the onshore company at $2.00, the onshore company sells it for $2.50 and spends $0.25 on G&A and R&D, that is $1.00 of profit offshore and $0.25 onshore. If your offshore operations are in a low tax jurisdiction, you have successfully lowered your tax bill.

Agreed. You have nailed the mechanism. I was "schooled" in this by the plant manager in Romania. Everyone talks about worker pay, etc. The tax situation is much more important. What kills me is these taxes go to another country!

Originally Posted by jyl

The number of low tax jurisdictions where major operations can be carried out is, however, shrinking.

China doesn't have low taxes, except when they want your business there. Then they put you in a different tier. If I remember correctly, 25% is "standard" but 10% is more normal. It is a country of "men" not laws. You befriend the right people, your tax rate goes down.

Apple has a ton of overseas cash because it does this. If we changed our taxing methods, a lot of this offshoring would go away.

[Neilk]

Originally Posted by slakjaw

Does anyone else here think that the publicity over the Samsung vs apple stuff has actually strengthened samsungs brand image?

I don't think apple is going anywhere. Just sayin'

I am not quite sure how Samsung's image was strengthened. Samsung execs all but admitted copying Apple's features during their "design crisis". I think this picture says it all-



They revealed themselves as phone copiers, not innovators.

That said, I like their TVs.

[krystar]

yea that picture is wholy misleading. it should read "samsung before android" "samsung after android"

[red-beard]

Originally Posted by Neilk

I am not quite sure how Samsung's image was strengthened. Samsung execs all but admitted copying Apple's features during their "design crisis". I think this picture says it all-



They revealed themselves as phone copiers, not innovators.

That said, I like their TVs.

To which I say: So what?

Apple copied its interface for the MAC from XEROX. MS copied the Windows GUI from the MAC. It looked similar, but executed differently and had different code.

Look at cars today. Many look similar, but they are very very different. Is looks alone enough for patent infringement?

Palm had a keyboardless device out for many years before the iPhone. And Apple copied the Palm icon filled interface. To which I say again: So What!

[JavaBrewer]

Originally Posted by Neilk

I am not quite sure how Samsung's image was strengthened. Samsung execs all but admitted copying Apple's features during their "design crisis". I think this picture says it all-



They revealed themselves as phone copiers, not innovators.

That said, I like their TVs.

Samsung makes the hardware - Android provides the OS. What that picture also says (to me) is how Android took a good idea and enhanced it. Notice how the 4 Android phones on the right have a different look and feel. Infinitely customizable to accomodate end user individuality and function. iOS...not so much.

[techweenie]

Back to how high AAPL will go... we have a rumored 9/12 iPhone 5 launch and a rumored Oct. Mini iPad launch. We know there's pent-up demand for both. We know the used gen 1 through 4 iPhones expand the iOS market through secondary sales. We assume the price point could be under $300 for a 7.85" iPad. Both of these factors bode well for iTunes and App Store sales.

This is all good for AAPL.

There's one thing that is not ideal. The recent rumor that the iPhone 5 will not incorporate NFC. That will keep some Android players (and RIM) alive a bit longer.

[enzo1]

iPhone 5: No room for NFC? Well, maybe there is... - NFC World

[Ronbo]

Originally Posted by red-beard

To which I say: So what?

Apple copied its interface for the MAC from XEROX...

This is not true. Xerox SOLD their GUI, mouse, etc. to Apple. Apple then took the Xerox concept of GUI and significantly changed it for their OS.

I used the Xerox system in the early '80s when I was conducting an audit of a program at PARC. It was truly revolutionary, but Xerox management didn't have a clue and sold it to Apple who did.

[red-beard]

Apple did not BUY the GUI from Xerox.

TW: is this right? You were there about that time

[foxpaws]

Originally Posted by JavaBrewer

Samsung makes the hardware - Android provides the OS. What that picture also says (to me) is how Android took a good idea and enhanced it. Notice how the 4 Android phones on the right have a different look and feel. Infinitely customizable to accomodate end user individuality and function. iOS...not so much.

You need to be introduced to jailbreaking your iPhone...

I have widgets and everything! As 'infinitely customizable' as your android.



Oh, and those Samsung phones on the right are physically almost identical to the iPhone, don't just look at the 'pretty screen'....

[techweenie]

Originally Posted by red-beard

Apple did not BUY the GUI from Xerox.

TW: is this right? You were there about that time

Thanks for asking. It was after my time with Apple, but the story is well-documented. Apple gave Xerox $1 million in Apple stock (circa 1979/80) for the rights to use aspects of the Xerox PARC-developed interface. So, they licensed the technology. If you want to run the numbers on what $1 million in Apple stock from that era is worth today, the number is staggering.

[pitargue]

Originally Posted by red-beard

You don't know things work.

The model works this way: You keep enough jobs onshore to minimize profits generated in the high tax location. You build the product elsewhere and keep the profits in the low tax location.

We will never get low tech manufacturing back here. But high tech manufacturing should be here. It isn't because of the very high taxes. We can "onshore" a lot of this manufacuring if we change our taxation model to sales tax and stop taxing all forms of income.

Are you saying that this is how Apple operates?

[techweenie]

Apple did manufacture the Mac in California, initially. Steve wanted to vertically integrate the process code-named "sand" in which raw materials (like sand) would come into the factory and completed products would roll out.

In his conversation with the president over a year ago, he said 'these jobs will never come back to the US' and proceeded to give an example of a production change that needed to be done urgently, and the Chinese supplier was able to get a full staff in overnight to manage the change. He said that could never happen with the US work ethic.

[red-beard]

Do you really think that is true? We have lots of production and assembly jobs here. Not everyone is college material.

[jyl]

But in China, the electronics assembly jobs at Foxconn are the most desirable sort of manufacturing jobs. They attract the cream of the crop of unskilled/less educated but still bright, energetic, ambitious young people from the inland rural areas, who compete to get those jobs. The wages are considered good, compared to what they can make at home. They move into the Foxconn dormitories, work very hard, after four or five years they can save up enough to go back to their villages and start a business or something. It is a genuine career move.

(At least, this is the way it was when I was last at a Foxconn facility, several years ago. Maybe the economics have changed.)

If you moved Foxconn to the US, to make the economics work out even barely, the wages would have to be awful, poverty-level pay - for work that is actually pretty demanding. If you could get anyone to do the work, it would be the dregs of the labor force - to put it bluntly. I don't think that is a moral indictment of the American labor force, just reality. Offer minimum wage for intense, high-concentration, quite exacting assembly work? You'll get people who can't find any other employment - i.e. the dregs. That isn't a recipe for quality products.

[biosurfer1]

[QUOTE=jyl;6945110They move into the Foxconn dormitories, work very hard, after four or five years they can save up enough to go back to their villages and start a business or something. It is a genuine career move.
[/QUOTE]

That is of course, if they don't try to commit suicide while living in those dorms first

Inside Apple's Foxconn Factories: 'Serious and Pressing' Violations - Bloomberg

http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?pagewanted=all

[enzo1]

it is..... China

[enzo1]

[jyl]

Life's tough for the average Joe in China. In all respects, not just in electronics assembly factories. Doesn't mean conditions shouldn't be improved, they should, just that they are coming from a different place than we are in now.

Originally Posted by biosurfer1

That is of course, if they don't try to commit suicide while living in those dorms first

Inside Apple's Foxconn Factories: 'Serious and Pressing' Violations - Bloomberg

http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?pagewanted=all

[motion]

I'm not sure what the point of a larger form factor for a phone would be, but I am assuming Apple has a trick on their sleeve on this one. I long for a rounded, thinner, iPad Touch shape. Not a fan of the sharp edges on the iPhone.