yoyoYO
Loading...
Symbols:
Loading...
Symbols:
Hedge Fund Jobs
Job Seekers: Search jobs by category, get job alerts by email or live feed, apply online See full list of jobs »
Employers: See all recruitment options, get applications online or by email Post a job »
Trading Center
- Free E-Newsletters
- About Seeking Alpha
- About Us
- Contact Us
- What's New
- Readers Feedback
- Advertise With Us
- Contributors
- Contribute an Article
- Feature Your Book
- Our Contributors
- Anonymous Contributions
- Dispute an Article?
- Legal
- Terms of Use
- Privacy
- Copyright
Latest Comments34 Comments
6 Things Apple's Not Doing Right
as was said above, a list of AAPL's real negatives would surely be a much longer list than what you've captured above...the issue isn't "whether" AAPL's doing everything "right."
...it's whether the volume and magnitude of its successes outpaces or minimizes its shortcomings.
on this front, i'd have to say absolutely...
- its computing hardware platform receives tremendous reviews not only for its capabilities but for its cutting-edge design
- the operating system platform is head and shoulders above its peers from both a usability and functionality standpoint
- from an application standpoint, you can't argue with the success of products like iTunes...a tool with no relevant comparison anywhere in technology today
- the iphone is quite literally the most revolutionary technology product since the intro of the ipod in 2001...and the app store only extends the reach and capability of the product in such an organic fashion that it's nearly impossible for competitors to reproduce
- companies have been chasing the mythical dream of the digital hub for years now...and despite the fact that it's been "toying" with an admitted "hobby" in this space, it's clear that there isn't another company that's better poised to dominate the living room than AAPL over the next 5 years...the appleTV is a fantastic concept that exists purely as the result of the popularity of the ipod and the capability of ecosystem components like iTunes and critical content deals with big media partners
- and let's face it, AAPL entered the retail space with little fanfare and extremely low expectations in 2001...but has quickly become a juggernaut in the space. few chains, despite many more years (if not decades) of retail experience, can approximate AAPL's retail success from an operating or execution standpoint
...so, in the grand scheme, i won't drone on about "how wrong" you are on the points you make...i just take issue with how you made them...the negatives you cite are real but don't come close to counterbalancing AAPL's dominance of the marketplace on so many other fronts.
...methinks this was an opportunity to attract some eyeballs to an article/POV that really wasn't as much "news" as it was "entertainment&qu... or "discussion fodder."
Citi: Sirius XM Is “Massively Undervalued”
nope, look for them to partner with solid content providers to deliver a differentiated experience to continue the growth of the ipod juggernaut...SIRI may yet be a part of that, but it won't be on an ipod with a satellite receiver in it...more likely exclusive podcasts, etc as SIRI expands its distribution beyond the satellite infrastructure.
What the Sirius XM Radio Future May Hold
in the end, you have to make the case to the OEM that satellite radio is something that pushes a purchaser more towards one label or trim level more than another...otherwise, why inflate the costs? "if it doesn't increase the propensity to purchase, then i'll just keep the lower costs and maintain the conversion model we have today, thank you..."
to date, the auto mfrs aren't any different than anyone else...always looking for something for nothing. the game's changed a little...with SIRI acquiring a little more muscle at the negotiating table post merge. they might now be more interested in entertaining higher bundled pricing, but we're still a ways away from bundles being the predominant subscription method in the automotive space.
A Satellite Radio Giant's Surprising Small Audience
the fact that they could get someone to sell them debt speaks volumes. you think any old business is having money handed to it, even at these rates?
btw, you know what rate mel got on the debt he took out when he started infiniti? take a guess...ah forget it, i'll let you in...it was 21%.
when you put it in context it's not that big a deal...sure, would you have LOVED for it to be cheaper? who wouldn't...but when faced with NOT finalizing the merge because you couldn't even find bookmaker's rates, then i'd take this any day & twice on sundays.
the size of this subscriber base and the very low churn rates speak volumes about the potential of the business...now you wipe out duplicative costs, play hardball at the negotiating table with the talent/content owners, continue to drive automotive penetration rates higher and drill down on marketing this new tiered pricing to historical fence sitters and you're talking about a much improved business model, no?
XM’s Quarter: Analyzing the Mixed Bag
that xm didn't see more defections as americans increase their scrutiny on their monthly expenditures speaks pretty loudly about how loyal its subscriber base actually is.
is your argument really that there haven't been enough subs added from the newer OEM deals to determine whether a spike in xm's churn is imminent..?
Where’s the Bottom for Satellite Radio Stocks?
there's a tremendous amount of pressure pushing both these stocks down & theyr'e not driven by fundamentals.
vicar...while i understand and agree with your larger point that someone <<should>> have a clear idea of what a stock is worth when they buy it (i.e. where you expect to get out), you have to agree that the analysis you're putting into it is just as flawed as any of the other methods mentioned used to justify any of the rest of the group's decisions.
further discussion of the point is only going to devolve into opinions about why DCF is/isn't more appropriate than top-line growth, SAC, net add momentum, etc...which, BTW, isn't the point.
you did an analysis that generated a risk profile that you weren't comfortable with. i did another analysis and arrived at a different conclusion. i'm long XMSR since Q4 2006 & am looking for an exit with a small profit in the $20 range (standalone, not merge adjusted)...on the way up, if the business appears to be on more solid footing, i may adjust my perspective...but am sitting on the sidelines and expecting mel to perform as he has in the past...knowing XM should benefit greatly from his stewardship.
make no mistake, missteps by both companies has contributed to the drop in share prices for each...but both have been knocked around MUCH more severely by negative PR and political delays that tend to create the kind of informational vacuum that gives articles like Wienke's MUCH more resonance than it deserves.
Sirius/XM Merger: What Happens if It Doesn’t Happen?
Sirius/XM Merger: What Happens if It Doesn’t Happen?
...as i said above, tough to nail it with assumptions in the mix, but that's pretty good for govt work...what is that? off by 2-ish percent? think it directionally shows the soundness of my argument.
tks for clarifying the fam plan question. now, get a new abacus.
Sirius/XM Merger: What Happens if It Doesn’t Happen?
but let's let a 3rd party settle the argument...anybody on the board want to weigh in? if not, why don't you give a call to XM's investor relations team and ask them if the % of fam plan subs in their 10-Q is somehow NOT just fam plan subs (like it's labeled), but instead includes some portion of $12.95 subscribers?
you won't have to tell us how long they chuckled at the stupidity of the question, but please inform us when they set you straight that it IS only $6.99 subs.
what you describe isn't an unvaluable metric...but it's an ACCOUNT-LEVEL view of ARPU...which is structurally and directionally different than a straight ARPU calc across the entire base.
also, sorry i didn't give you the d-d-decimal level of detail. i didn't realize you would hang on to your point no matter how dead it was or how friggin apparent it was that it was taking you into the abyss of idiocy...
now, as silly as it seems...let's take it to three (count 'em) decimal places to see if that softens up the stone inside your head...
basic svc - $12.95 - 26.687% (plug)
myp svc - $10.32 - 45.100%
fam svc - $6.99 - 23.500%
oem promo - $5.60 - 4.000% (mix is an assumption)
rental svc - $6.27 - 0.500% (mix is an assumption)
data svc - $35.34 - 0.033% (mix is an assumption)
believe THAT'S 100%, partner. don't think the rounding i used in the previous post was unreasonable. still gets the point across...but, guess what? that mix generates a $10.04 ARPU...<<sigh>... sorry about that.
no discrepancy. no errors. just the facts coupled with some sound assumptions.
btw, it's not that i don't believe nate...i'm not taking a position on that. you want to scrabble to protect your argument using one flimsy point made on the conf call that i suggest you took out of context.
i've shown at least 3 different ways how the numbers jive. but you don't stop.
just let it go. please. it's becoming more apparent that you're not at the intellectual level to understand you've been bested.
Sirius/XM Merger: What Happens if It Doesn’t Happen?
basic svc - $12.95 - 26% (plug)
myp svc - $10.32 - 45%
fam svc - $6.99 - 24%
oem promo - $5.60 - 4% (mix is an assumption)
rental svc - $6.27 - 0.5% (mix is an assumption)
data svc - $35.34 - 0.033% (mix is an assumption)
...generates an average of $10.04 in subscription revenue.
if you ham-handedly multiply that avg across 9.33M subs for the quarter (which they didn't have for the entire quarter...only at the end), you come up with $281M in subscription revenue...
in general, that's substantially close to the $275M reported in XM's 10-Q...or a "reasonable conclusion" for anyone that's finished an elementary math class above the 5th grade.
Sirius/XM Merger: What Happens if It Doesn’t Happen?
i've backed into the number using the 10-Q...laid it bare for the world to see. you still can't say "uncle."
Sirius/XM Merger: What Happens if It Doesn’t Happen?
10-Q states 45% of subs on an MYP - $10.32 (est)
10-Q states 24% of subs on a fam plan - $6.99
...which leaves - 31% of subs at $12.95
the blended avg will get you to $10.36 -- which pp 39 of 10-Q states as the avg revenue of Retail, OEM and Other subscribers.
now, you take that average declines further because some portion of the paying subscriber base is at an effective rate of $5.60 (OEM trialers) and another portion of the subscriber base is at $6.27 (Rental cars) and yet another portion of the base at $35.34 (data services). the result would take you to $10.04 -- or the reported ARPU figure for Q1 2008.
now, be careful...don't be tempted to say that the difference btwn $5.60 and $12.95 = a rev share payment to GM or honda. $5.60's just what it appears to be: the revenue being received from GM & honda that allow XM to call these radios subscribers (as distinguished from SIRI's parking lot subs).
Sirius/XM Merger: What Happens if It Doesn’t Happen?
Sirius/XM Merger: What Happens if It Doesn’t Happen?
i brought up contra-revenue to highlight that it was THE ONLY way an auto mfr's revenue share deal could possible affect a carrier's ARPU calc.
i haven't seen anything in the 10-Q that leads me to believe XM calculates ARPU after taking away "costs" associated with the deals with its automotive partners (be it either as an expense - which wouldn't be ARPU, by definition or as a contra-revenue).
in fact, on pp 39 of the Q1 10-Q, XM lays out the components of revenue by subscriber type as well as ancillary revenue by paying subscriber.
"subscription revenue" tells me it's the total amount of $ received from paying users...it's not footnoted to say it's net of any contra-revenue movement in the period. as such, i have to assume that $ spent in rev share agreements with auto mfrs is not included in the metric. whether you're required to disclose it or not, using a term like 'subscription revenue' carries a certain denotation that would, i'd expect, require clarification if used in conjunction reductions from contra-revenue actions.
further, on pp 24 is the following statement: "The Company has relied upon certain related parties for technical, marketing and other services. The Company has incurred the following <<costs>> in transactions with the related parties described above (in thousands):..." (emphasis mine)
it then goes on to describe the rev share to GM and honda as $32.5M and $.70M, respectively in Q1 2008.
so, i think XM's being consistent in its representation of these costs...they're treated as such & not contra-revenue and not affective of its ARPU calc.
all that said, i agree with your second point, too...ARPU is a great operational metric but isn't designed to provide the full story on profitability. when you're operating a business, you have to turn a lot of dials and pull a lot of levers...revenue is an important one, but not the whole story.
Sirius/XM Merger: What Happens if It Doesn’t Happen?
...i'd say that quote's designed to describe the nature of the deal and the dependencies; what drives payments, for what and when.
the better, more practiced and significantly more reasonable explanation is that those charges are being booked as expenses...at which time they are not part of ARPU.
888 -- "He did not believe that XMSR was paying GM that much more then SIRI was to their OEMs."
i think this is a great example of why you and i can't get along...don't paint my words with such a broad brush. i was very clear in my argument that i wouldn't get into a discussion about the plusses and minuses on any of the operators' OEM deals because unless you have great inside information, it's all a bunch of supposition and conjecture.
as a matter of fact, i DON'T disagree with your point about XM's GM deal being "bad." to do so would mean that i had an opinion on the subject...which i don't because i don't know enough about it.
separately, your arguing that SIRI's ARPU's "degradation"... from $12.95 is explained by its parking lot subs (aside from family plan dilution, and multi-year plans)? and that XM's HAS to be at the same level because there's something diff in its calculus given it doesn't count parking lot subs?
think that's erroneous. suppose for a minute that the SIRI OEM deals are structured in such a way that the revenue they realize for a parking lot sub is at or near the revenue they receive from a new retail subscriber? THEN the transaction wouldn't dilute ARPU at all (maybe some but not much from the perspective of an outside investor) & you'd be neat & tidy on the GAAP compliance side.
isn't that at all possible?