This week encounter an end to our long - running biz , “ Is It Competition Yet ? ” , as we receive the Amazon Kindle Fire ! Then we turn our gaze to Wall Street , where it ’s like a bell sounded and a hundred monkeys rushed to their keyboard to type idiotic naysaying piece about Apple ( one of Pavlov ’s lesser - known experimentation ) . You have sex , there ’s against the food grain and then there ’s against the psyche . These guy cable are doing both .
We have a winner!
The Macalope ’s call it . Our long - running game , “ Is It competitor Yet ? ” , is over . Congratulations to Amazon on the intromission of the Kindle Fire .
Now , before you get your corporate undies in a quite a little , you the great unwashed should really take the clock time to visit Amazon and buy yourself your own individual underwear . Seriously . How you’re able to all wear the same underclothes is beyond the horny one . How do you move ? Very strange . And unsanitary .
After you do that , moot the chance that the Kindle Fire is more likely to grow the tab grocery by rise attractive to people who , to particular date , have been priced out of the market , rather than by stealing contribution from Apple . At that Leontyne Price item , and that level of capability — no camera , just 8 GB of storage , an unsightly resemblance to the PlayBook — it ’s not really in the iPad ’s class . Butt — and the Macalope apply two liothyronine ’s because it ’s a really big butt end — it ’s part of a believable note of ware from a credible company with a serious catalogue of medium . There are in spades lead to be the great unwashed who only require a pad for content consumption and decide that 7 inches is big enough ( cough ) and 8 hour of electric battery liveliness is long enough ( no cough ) .
But let the Macalope be open : He does n’t think the Fire will significantly hurt iPad sale . He does believe it ’ll affect its market share , though .
scan more …
Plus he ’s just tired of play “ Is It Competition Yet ? ” It seemed fun when we startedmore than a year ago , but ugh .
Anyway , who handle about grocery store portion ? Even if the Fire does great and acquire more marketplace ploughshare than the iPad , does anyone consider multitude will stop develop for iOS ? Does anyone consider Apple will stop make gobs of money ? No .
The Macalope has no idea ifAmazon will really be recede $ 50 on every Fire it sellsin parliamentary law to get you to buy a Prime membership and more Kindle books and be able tomine all that delicious data . But he suspects Apple ’s margins on iPads will continue to be somewhat good .
As a admonisher , this tablet is not an “ Android ” tablet . “ Android ” is a Google trademark that does n’t apply if you do n’t tally to the ship’s company ’s licensing terms , which Amazon clearly has not . mark that the word “ Android ” only appears in one spot onthe Kindle Flame Cartesian product page .
Additional email apps are uncommitted in our Amazon Appstore for Android .
So , recall that when you see market - share numbers start to come out . These are Kindles , not Android tablets .
Once again , of course , the sillier elements of the tech industry are screaming“iPad killer!”(Tip o ’ the antlers toThe Loop . ) They really ca n’t avail themselves . Go disturbed , CNet ’s Molly Wood . Literally .
On report , the Kindle Fire has half the features of the iPad …
Actually , it has half the feature of speech of the iPad in real life , too . And , as forest herself take down , maybe twice the restriction ! call back it ’ll have Hulu ? Competing book stores ? How ’s Amazon going to make money if it ’s betray them at a loss and you ’re buying your book from Barnes & Noble ?
Does n’t matter .
Because price is all that matter . Which is why no one ever bought an Acura rather of a Kia . Ever .
LA - LA - LA MOL - LY IS NOT LIS - TEN - ING TO YOU .
In these troubled time , and possibly even before , you need look no further than the $ 99 TouchPad buying frenzy for the example of the tablet food market ( and maybe every other electronics market place , ultimately ): it ’s the price , stunned .
OK , but how many TouchPads did HP really deal ? Sure , they sell fast . Almostlike they weregoing out of stylus . Hmm . And how many people bought the TouchPadinstead ofan iPad ?
Look , at $ 199 , the Kindle Fire will sell like flat thing that are hot but still not hotcake . That does n’t mean that any of those customer were ever going to buy an iPad in the first place . Also , you ’re don that Apple wo n’t let down the price of the iPad , ever . Also , you ’re engaging in old-hat technology industry hyperbole .
If anything , Amazon has done what Apple did with the iPad in the first position : create an completely new market .
Uh , well , if it ’s an whole Modern marketplace then it ’s not contend with the iPad . Right ?
It ’s her , veracious ? It ’s not the Macalope , it ’s her , is n’t it ?
Being a technical school pundit is like having some kind of degenerative memory loss . “ The Xoom ’s an iPad grampus ! ” “ Windows 8 is an iPad killer ! ” “ The Kindle Fire is an iPad killer ! ”
You have n’t even held one yet .
Not to ruin the Kindle Fire victory party , but even though the Kindle Fire does n’t bear the “ Android ” name , it still uses much of the underlie computer code . you could betMicrosoft legal is salivating . Could be whyAmazon might be concerned in picking up webOS . That ’s one rumour the Macalope hopes is unfeigned , as he hates to see someone give out a perfectly unspoiled operating system of rules .
Karl’s krackpot theories
You guys are n’t go to trust this . It turns out — are you ready?—Apple is doom .
No , really ! And not only Apple , but Amazon , too ! Over at Seeking Alpha , Karl Denninger describesThe Upcoming clank Of Apple And Amazon , AS WAS FORETOLD IN PROPHECY !
I ’ll get flamed for this I ’m trusted …
Well , you were correct aboutthat .
… but I do n’t like .
brainsick masses on the street yelling about their crackpot theories usually do n’t .
Apple ’s stock terms ( AAPL ) is go to collapse , and Amazon ( AMZN ) may in fact go bankrupt .
Wow ! That ’s … just …
Wow !
Karl starts with Amazon , which he thinks is channelize for DOOOOM because he ask the U.S. government will close down the tax loophole that ’s have in mind the online retail merchant has n’t had to charge sales event tax in most states for all these years .
In short , this is a firm that only exists because of its ability to evade that tax structure . When , not if , that ends , the society is a genuine zero .
Uh …
…
Say , is there an adult there the Macalope can talk to ?
OK , the Macalope does n’t want to spend a pile of fourth dimension on Karl ’s goofball theories on Amazon because we need to get to his cuckoo theories about Apple . But , suffice it to say his assumptions that Amazon has no leverage here , and that its prices would go up 6 percent across the board , are , in fact , cuckoo .
Moving on .
Now on to Apple . There was a story out Monday that the firm had cut supplier deliveries by 25 % out of Asia . There was a crazy analyst sputter during the Clarence Day to seek to rebut the wrong that was rapidly gather in the stock , which was mostly successful . In my vista , this was a gull ’s errand and you were a nut if you comply people into the stock on that “ dip . ”
Karl discount themultitude of counter - arguments , include that the report was found only on incomplete information about parts orders in Asia , and did n’t take into story the fact that Apple will now be getting some parts from Brazil .
What does Karl call up the rationality for this lag is ? The Kindle Fire ? Nope : The high-risk economic system in Europe and the TouchPad flame sale .
HP ’s “ gala affair ” put the $ 99 price decimal point in the brain of consumer and that is not going to go away .
How many consumers do you think have even heard of the HP TouchPad ?
The Macalope does n’t disagree that the economy in Europe and lower - price tablets ( principally the Kindle Fire , though ) will affect Apple ’s sales , but Denninger has fantasise them into Apple - killing machines . Is he mindful the company make other products ?
The problem with these sorts of house is that when you ’re running on afterburner it ’s virtually unimaginable to pull back without recede control and crashing , but because you ’ve built a finish and corporate environs that is filled with “ dependable worshiper ” operating at a collective level where everything has gone right — and thus you all believe it will keep to .
So , if that ’s truthful , why is n’t Apple still churning out the same number of iPods it always did , despite the fact that cut-rate sale are declining ?
Sorry . Sorry . Logic . You were about to stick a Pisces in your pants , pother your arms , and sing “ Ave Maria . ” Please . Bring us to your nutso last .
So here ’s the predictions : Apple trades under $ 100 at the trough and Amazon may well be a flat - out zero .
Yeah , I bonk those are both daring cry …
Those are n’t venturesome , Karl . They ’re bananas . coffin nail - smoke - Pan troglodytes - in - a - tutu banana .
See , here ’s the affair , Karl . If these impression you ’re talking about are expire to be as bad as you retrieve , then they ’re run short to affect more company than those that commence with the letter “ A. ” You have n’t presented anything that ’s uniquely untimely with Apple ’s line of work that should guarantee a 75 - percent drop curtain in its share cost .
This is n’t unusual . Karl hasa rap sheetof say bass - ackwards things about Apple . You were n’t right then , Karl . Why do you remember anyone would reckon you ’re correctly now ?
Saturday Special: I’d like to have an argument, please
The Macalope gets the idea of take in divers opinions and that it ’s healthy to have someone taste to contradict the universal wisdom . What he does n’t get is simply micturate things up that vaporize in the face of reality , just to take a contrary military position .
Tim Hanson , writing for the Motley Fool , fall out Karl ’s lead ( tip atomic number 8 ’ the antler toRobert Synnott ):
Apple , however , has never sustainably earned a 40 % return key on fairness or even a 20 % return on equity . Go back 20 years , and what you ’ll find in Apple is actually a ( pant ! ) cyclical business . A boom from 1990 to 1992 was take after by a tear from 1993 to 1997 , follow by a boom from 1998 to 2000 , a bust from 2001 to 2004 , and a bonanza from 2005 to the present .
Uh - huh . And those busts did n’t have anything to do with the fact that Apple was run by guys with the corporate IQ of rock ‘n’ roll salt during one , that another was after 9/11 , or anything else . It ’s all base on cycle of commoditization . And , jeez ! It ’s not like there ’s anywell - known saying about whether or not you should use past public presentation as an index of next results !
Commoditization , in closing off , is not an harebrained theory — it just does n’t hold any body of water when you really reckon at what Apple sells .
The word “ commoditization ” might as well be a four - alphabetic character word of honor for the tech industry . What it think of is that a once - novel product is swamped by competition , resulting in rapidly falling prices . Consider the Walkman , the Discman , the MP3 player , the mobile phone , the desktop reckoner , the laptop computer , the host — you name it . They ’ve all been commoditized .
Before you go into your lesson about how markets commoditize and how Apple merely wo n’t be able to live because mass will just all grease one’s palms the flashy pieces of crap they can get , let ’s look at some of your examples vis - a - vis Apple products . The party still sell MP3 musician — albeit not as many of them as they used to — but what ’s the big seller among them ? The iPod touch , which start at a thumping $ 229 . Does that take you as a commoditized price for an MP3 player ? Of course not , because Apple ’s been capable to inject more value into it , almost — oh , what ’s the word?—reinventingit .
In the case of the laptop , for example , the average merchandising toll dropped from $ 1,640 in 2001 to $ 615 last twelvemonth — a roughly 10 % annual decline .
Right . And what Mary Leontyne Price do Apple laptops start at?$999.Does Apple seem to have any hassle trade MacBooks ? Not so much . But Tim pretends not to know this , because it ’s toilsome to engage in an exercise of such utmost jerkery when all those pesky facts get in the room .
This is n’t to say there are n’t still laptops selling for more than $ 615 . There are . In fact , Apple released a MacBook Pro last class that was so fast and had such a fully grown monitor that it retailed for more than $ 3,000 . But that ’s a boutique production with a belittled addressable market , since so few user take that much computing power . Indeed , an psychoanalyst last year called the new MacBook Pro “ The $ 3,000 laptop computer No One Needs . ”
Wow , that certainly is bedamn . Say , Tim , who was the “ psychoanalyst ” who wrote that piece ? Oh , turns out it waslong - timeApple derangement syndrome suffererDouglas A. McIntyre . But , still , you should totally believe him when he tell last year that Apple laptop were overpriced and would n’t betray well , even as they go along to trade really , really well .
To corrupt Apple today , an investor has to believe one of two thing :
1 . The iPhone and iPad will not become commoditized . 2 . If the iPhone and iPad become commoditized , Apple will introduce , produce , and launch a unexampled intersection to overcome the result receipts declines .
Neither scenario is , of course , impossible …
Actually , far from being impossible , the second scenario describesexactlywhat Apple does . That ’s the company ’s freakin ’ clientele model , dude . So , to believe Hanson ’s naysaying rant , you only have to believe one matter : that Apple will stop doing what it does best .
The Macalope will leave it up to you to decide if that ’s likely .
( Disclosure : the Macalope hold an peanut number of Apple shares . )
