No company is an island; even the most integrated manufacturer or service provider relies upon a cooperative ecosystem of other companies. In the case of Apple (Nasdaq:AAPL) and its multi-billion dollar successes, the iPhone and the iPad, there is a long list of companies that are involved in the process. Consider the fact that Apple logged over $16 billion in costs of goods sold for the December quarter - an amount that on an annualized basis is larger than the GDP of Ecuador. (We look at a retailer's inventory turnaround times, its receivables as well as its collection period. See Measuring Company Efficiency.)
That is a large amount of money by any measure, and a sign of the value of being tapped as a supplier to Apple. As Apple shows no sign of slowing down anytime soon, it is worth examining who else directly benefits from Apple's successes. Here is a quick rundown of the Apple ecosystem.
Readers should note, though, that Apple's ecosystem is not static - the company sources certain components from multiple suppliers and will occasionally replace suppliers when price and performance dictate a change. Once such change has taken place relatively recently, as Linear Technology (Nasdaq:LLTC) no longer supplies the DC/DC converter or USB controller for the iPad2.
Please read the full piece here:
http://financialedge.investopedia.com/financial-edge/0211/The-Apple-Ecosystem.aspx
Showing posts with label iPad. Show all posts
Showing posts with label iPad. Show all posts
Thursday, February 10, 2011
Thursday, January 20, 2011
Investopedia: Linear's Ups And Downs
For long-term shareholders, Linear Technology (Nasdaq:LLTC) is anything but linear. Although this company has a phenomenal record of producing top-notch margins, returns on capital and free cash flow, the reality is that the analog semiconductor business is cyclical and even a top operator cannot do anything about that. With disappointing (albeit not completely surprising) fiscal third quarter guidance, semiconductor investors are left wondering what 2011 will hold for the sector.
The Quarter That Was
While it will likely be overshadowed by the guidance, Linear's reported second quarter results were actually quite good. Revenue fell 1% sequentially (and rose 50% annually) and beat the average estimate on the Street. Strong Apple (Nasdaq:AAPL) iPad sales no doubt helped, but the ongoing recovery in the industrial and automotive markets were more significant.
The company also did a solid job (as it almost always does) on profitability. Gross margin was flat sequentially at 78.5%, but up about 250 basis points from the year-ago level. Operating income did drop 2% sequentially (and jump 74% annually), but this was better than expected. At the bottom line, the company beat estimates, even after excluding a boost from lower taxes. (For more, see The Bottom Line On Margins.)
The Rocky Road Ahead
Although Linear's second quarter was solid, its is likely that guidance for the third quarter will dominate the story. While the Street had been expecting a 1-2% sequential decline, the company announced that revenue would fall 6-10% instead. There appear to be two primary causes for this negative outlook.
Please follow this link to the full article:
http://stocks.investopedia.
The Quarter That Was
While it will likely be overshadowed by the guidance, Linear's reported second quarter results were actually quite good. Revenue fell 1% sequentially (and rose 50% annually) and beat the average estimate on the Street. Strong Apple (Nasdaq:AAPL) iPad sales no doubt helped, but the ongoing recovery in the industrial and automotive markets were more significant.
The company also did a solid job (as it almost always does) on profitability. Gross margin was flat sequentially at 78.5%, but up about 250 basis points from the year-ago level. Operating income did drop 2% sequentially (and jump 74% annually), but this was better than expected. At the bottom line, the company beat estimates, even after excluding a boost from lower taxes. (For more, see The Bottom Line On Margins.)
The Rocky Road Ahead
Although Linear's second quarter was solid, its is likely that guidance for the third quarter will dominate the story. While the Street had been expecting a 1-2% sequential decline, the company announced that revenue would fall 6-10% instead. There appear to be two primary causes for this negative outlook.
Please follow this link to the full article:
http://stocks.investopedia.
Wednesday, July 21, 2010
Linear Technology - Rodney Dangerfield In Semiconductor Form
I used to own Linear Technology (Nasdaq: LLTC) and today is sort of a microcosm as to why I eventually sold at a small profit (much smaller than it should have been) - the company just cannot catch a break.
Revenue was up 18% sequentially due in part to strong "iX" demand at Apple (Nasdaq: AAPL), as LLTC provides AAPL with battery charge chips and DC converters for the iPhone and iPad. Gross margins climbed 50bp to 78.4%, operating margins also rose, and operating profits jumped almost 26% sequentially. On top of all that, the company raised its guidance for the back half of the year.
And yet, the stock is still down.
Linear has always been hounded over the "certainty" that their high margins will eventually dissolve under competition. Never mind the fact that they are an innovative leader in the high-performance analog market, have a small army of researchers, and almost always manage to stay ahead of the game. Never mind the fact that Linear has always been smart about balancing the trade-offs of growth and profitability. Nope, apparently less innovative growth-at-any-cost companies are going to beat them.
I mean, honestly, it gets a little depressing. Even Craig Berger, an analyst I respect a lot at FBR, has them at an Underperform ... even while praising them as an exceptionally well-run company.
Okay, I get that Linear's plays in markets that can be low-growth *and* volatile (autos, industrial). But c'mon ... they sell 7,000 products to 15,000+ customers and they were good enough to earn the blessing of St. Steven of Jobs.
Oh well, I should practice what I preach I suppose. I mean, I do not own LLTC anymore and my only semi holding is Microsemi (Nasdaq: MSCC), though I would happily add ON Semi (Nasdaq: ONNN) as well. I can also relate to people who would rather own Analog Devices (NYSE: ADI) or Marvel (Nasdaq: MRVL). But even still ... LLTC feels like a company and a stock that struggles to get its due.
Disclosure - I own shares of Microsemi
Revenue was up 18% sequentially due in part to strong "iX" demand at Apple (Nasdaq: AAPL), as LLTC provides AAPL with battery charge chips and DC converters for the iPhone and iPad. Gross margins climbed 50bp to 78.4%, operating margins also rose, and operating profits jumped almost 26% sequentially. On top of all that, the company raised its guidance for the back half of the year.
And yet, the stock is still down.
Linear has always been hounded over the "certainty" that their high margins will eventually dissolve under competition. Never mind the fact that they are an innovative leader in the high-performance analog market, have a small army of researchers, and almost always manage to stay ahead of the game. Never mind the fact that Linear has always been smart about balancing the trade-offs of growth and profitability. Nope, apparently less innovative growth-at-any-cost companies are going to beat them.
I mean, honestly, it gets a little depressing. Even Craig Berger, an analyst I respect a lot at FBR, has them at an Underperform ... even while praising them as an exceptionally well-run company.
Okay, I get that Linear's plays in markets that can be low-growth *and* volatile (autos, industrial). But c'mon ... they sell 7,000 products to 15,000+ customers and they were good enough to earn the blessing of St. Steven of Jobs.
Oh well, I should practice what I preach I suppose. I mean, I do not own LLTC anymore and my only semi holding is Microsemi (Nasdaq: MSCC), though I would happily add ON Semi (Nasdaq: ONNN) as well. I can also relate to people who would rather own Analog Devices (NYSE: ADI) or Marvel (Nasdaq: MRVL). But even still ... LLTC feels like a company and a stock that struggles to get its due.
Disclosure - I own shares of Microsemi
Wednesday, June 2, 2010
A New Dawn For Old Media?
The publishing world seems to be putting on an impromptu rendition of "Monty Python and the Holy Grail." First we had the scene with the Black Knight where the internet began dismembering old media and old media bravely told us "'tis but a scratch," as gouts of blood spurted out of the cash flow statement. Now, though, we may be to the scene with Eric Idle and John Young, in which Mr. Young bravely declares "I'm not dead yet!"
What's Old is New AgainIronically, it may be new media and technology that ultimately saves the day for old media. As consumers continue to buy up the Kindle from Amazon (Nasdaq:AMZN) and competing devices like Barnes & Noble's (NYSE:BKS) Nook, Sony's (NYSE:SNE) Reader, and Apple's (Nasdaq:AAPL) iPad, it looks like publishers may have finally accepted the reality that their future is digital.
For the full article, please go to:
http://stocks.investopedia.
What's Old is New AgainIronically, it may be new media and technology that ultimately saves the day for old media. As consumers continue to buy up the Kindle from Amazon (Nasdaq:AMZN) and competing devices like Barnes & Noble's (NYSE:BKS) Nook, Sony's (NYSE:SNE) Reader, and Apple's (Nasdaq:AAPL) iPad, it looks like publishers may have finally accepted the reality that their future is digital.
For the full article, please go to:
http://stocks.investopedia.
Wednesday, May 26, 2010
Can Apple Stay Fresh?
Me writing a positive story on Apple ... Folks, check your local farms to see whether there are any reports of flying pigs today.
I've recently read that Katy Huberty, an analyst at Morgan Stanley, has put a price target on shares of Apple (Nasdaq:AAPL) of between $310 and $400. For those of us who remember the tech bubble, there may be a shiver of remembrance at the $1,000 price target put on Qualcomm (Nasdaq:QCOM) by a PaineWebber analyst in late 1999. That pretty much marked the beginning of the end to that run. The question is, does this signal a similar high-water mark for Apple?
For the full article, please continue on to:
http://stocks.investopedia.com/stock-analysis/2010/Can-Apple-Stay-Fresh-AAPL-QCOM-NOK-DIS-AMZN-GOOG-HPQ0526.aspx
I've recently read that Katy Huberty, an analyst at Morgan Stanley, has put a price target on shares of Apple (Nasdaq:AAPL) of between $310 and $400. For those of us who remember the tech bubble, there may be a shiver of remembrance at the $1,000 price target put on Qualcomm (Nasdaq:QCOM) by a PaineWebber analyst in late 1999. That pretty much marked the beginning of the end to that run. The question is, does this signal a similar high-water mark for Apple?
For the full article, please continue on to:
http://stocks.investopedia.com/stock-analysis/2010/Can-Apple-Stay-Fresh-AAPL-QCOM-NOK-DIS-AMZN-GOOG-HPQ0526.aspx
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