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Wall Street adjusts Apple's earnings estimate higher

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Chris Jacek
Wall Street adjusts Apple's earnings estimate higher
on Jul 13, 2011 at 7:58:30 pm

http://www.macrumors.com/2011/07/13/analysts-increasing-estimates-ahead-of-...

For those of us wondering how that FCP-X debacle would affect Apple's stock price, it appears the answer is: not even a blip on the radar. Despite the relative chaos it has forced on the pro editing world, it seems unlikely that it will affect Apple's bottom line at at. To me, this is more reason to believe that Apple absolutely will abandon its pro users. I think 2011 will be the year that most of us are forced to re-evaluate what our tools will be going forward. It's also probably a good wake-up call for any of us who got too invested in any one workflow. Hedging your bets by knowing multiple workflows and platforms is never a bad idea.

Professor, Producer, Editor
and former Apple Employee


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Noah Kadner
Re: Wall Street adjusts Apple's earnings estimate higher
on Jul 13, 2011 at 9:16:19 pm

Well it's such a small market segment for Apple I don't think anyone really thought this would affect the stock price. As much as say a new iPad or what have you.

Noah

Unlock the secrets of 24p, HD and Final Cut Studio with Call Box Training. Featuring the Panasonic GH2 and GoPro HD Hero.


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Ray Wang
Re: Wall Street adjusts Apple's earnings estimate higher
on Jul 13, 2011 at 9:51:48 pm

I think Apple may have made more money than if they just released FCP8.

The upgrade price from FCP2 to FCP3 was USD$300 (if my memory serves me right) vs. USD$400 (FCP X + Motion + Compressor).

Population buying new FCP is assumed bigger (basically your FCP Express guys + imovie guys + pros trying it out). It sounded like most pros on the COW forum have one copy to play with.

Conclusion is that money wise, FCP X is going to in fact increase revenue. The mass exodus of pro may or may not hit the bottom line after a few quarters.

---
Ray


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Robert Brown
Re: Wall Street adjusts Apple's earnings estimate higher
on Jul 14, 2011 at 12:35:46 am

After reading that Ron Brinkman interview I came to the conclusion that all Apple cares about is their stock price. The thing that makes no sense is why does it hurt them to have a Pro division? It works for Sony and Panasonic etc. The entire reason I get into Macs in the first place was because of Walter Murch and all of the promo pieces on FCP he was doing back around 2004. I'd be really interested to know what he thinks about this whole mess. But I just don't see the need to kill the old "Pro"ish product for a very non "Pro" product. I guess bottom line, they don't care, but I don't really either and am happy to be moving on.



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Marvin Holdman
Re: Wall Street adjusts Apple's earnings estimate higher
on Jul 14, 2011 at 1:30:50 am

I noticed today on the app store that the highest grossing app is FCPX. Afraid it's another nail in the coffin of the "professional market". If you haven't gotten the message by now, this should help you understand a bit clearer.... Apple is a "consumer appliance" company. Sad really, end of an era.

Marvin Holdman
Production Manager
Tourist Network
8317 Front Beach Rd, Suite 23
Panama City Beach, Fl
phone 850-234-2773 ext. 128
cell 850-585-9667
skype username - vidmarv


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Chris Jacek
Re: Wall Street adjusts Apple's earnings estimate higher
on Jul 14, 2011 at 3:11:18 am

[Robert Brown] "The thing that makes no sense is why does it hurt them to have a Pro division?"

My guess is that it is a matter of cost to maintain a sophisticated product like FCP (the REAL one). When I worked there in 2000-2001, we had about 20 QA Testers for FCP, and at least that many engineers. That was a much simpler software at the time, so my guess it would take quite a few more people to keep up with FCS. That's alot of salaries, most of them probably quite good, plus benefits, plus office space in a very expensive real estate area, and all the other costs of maintaining such a department.

At the end of the day, I think it's just a cost/benefit calculation. It's sad, but at the end of the day, I've always like Adobe, and I'm happy to see them and Avid pick up the baton. If either of those companies had made billions from the iPod, iPhone, and iPad, they'd probably drop their products that only make millions too.

Professor, Producer, Editor
and former Apple Employee


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Tim Kolb
Re: Wall Street adjusts Apple's earnings estimate higher
on Jul 14, 2011 at 9:43:14 am

[Chris Jacek] " It's sad, but at the end of the day, I've always like Adobe, and I'm happy to see them and Avid pick up the baton. If either of those companies had made billions from the iPod, iPhone, and iPad, they'd probably drop their products that only make millions too."

I came to be a Mac user because of Adobe software.

Macintosh became the go-to creative workstation in good part because of Adobe...particularly when you throw the net wider than just video production. Adobe's primary business has been rooted in professional tools for a very long time (they make "consumer" products, but they often hadn't achieved the apparent success of many competitors who are more focused on those consumer markets). Avid obviously started the company in the professional space, and while they do have a consumer product line these days (largely spawning from their purchase of Pinnacle), Avid still seems to consider the pro market a priority.

I tend to agree on the business assessment. If Avid or Adobe were selling an "iPad" device with "iPad" type success...nobody would question why they made a video editing application that is single-display without any "on board" support for hardware I/O, etc.

In a couple years, Apple shareholders will be praising the foresight and boldness of the move. The popularity of the iPad with a video camera and a more "pro" video editing system available for those whom can't get enough functionality from iMovie... Hmmm...first iPad film festival? Anybody?

I don't think that Apple would see the PR backlash they're getting (and frankly I still have trouble believing they are surprised or overly concerned) if they hadn't spent the last five years proclaiming the product's (FCP) legitimacy by pointing to, and featuring the exact users they kept waiting for meaningful upgrade for years...and whose needs they apparently thought represented too small a niche to target going forward.

TimK,
Director, Consultant
Kolb Productions,

Adobe Certified Instructor


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Mitch Ives
Re: Wall Street adjusts Apple's earnings estimate higher
on Jul 14, 2011 at 12:35:10 pm

It's the iPad2 that's driving the increase in revenues. Oh, hell now I've done it... that'll resurrect the whole "FCPX was made for the iPad" thread again...

Mitch Ives
Insight Productions Corp.
mitch@insightproductions.com
http://www.insightproductions.com


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Chris Jacek
Re: Wall Street adjusts Apple's earnings estimate higher
on Jul 14, 2011 at 2:07:49 pm

[Mitch Ives] "It's the iPad2 that's driving the increase in revenues. Oh, hell now I've done it... that'll resurrect the whole "FCPX was made for the iPad" thread again..."

Well, I think that's the point. Their bread is no longer buttered with FCP, or even their keyboard-based computers any more. I think you can argue that their handheld devices have given Apple more success than any of their "computers," even the Macintosh. So it only makes sense that the bulk of their R&D go to their biggest money-makers. FCP is probably more of a "hobby" to pull a Steve Jobs phrase from the past.

Of course, the follow-up question might be, "Why can't they do both?" As large and liquid as the company is, expansion does seem like a legitimate option. Just look at Microsoft. I wonder if you WILL start to see massive expansion once they get their new spaceship.... I mean campus.....built.

As far as "resurrecting" the "FCPX is made for iPad" thread, don't worry about that. It never died.

Professor, Producer, Editor
and former Apple Employee


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Andrew Richards
Re: Wall Street adjusts Apple's earnings estimate higher
on Jul 14, 2011 at 4:50:18 pm

[Chris Jacek] "Well, I think that's the point. Their bread is no longer buttered with FCP, or even their keyboard-based computers any more. I think you can argue that their handheld devices have given Apple more success than any of their "computers," even the Macintosh. So it only makes sense that the bulk of their R&D go to their biggest money-makers. FCP is probably more of a "hobby" to pull a Steve Jobs phrase from the past. "

FCP, like all OS X apps Apple produces, exists to sell Macs. Nothing else. And Apple is selling a lot of Macs. FCP and the rest of the Pro Apps products were never acquired/created/maintained for any other reason. To borrow your idiom, FCP is the butter, along with Aperture, iLife, etc. The Mac has always been the bread, and that hasn't changed.

Even in the good old days of FCP5/6 (2005-2008), the iPod was at least as big a business for Apple as the Mac.

Best,
Andy


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Tim Wilson
Re: Wall Street adjusts Apple's earnings estimate higher
on Jul 14, 2011 at 2:13:27 pm

[Mitch Ives] "It's the iPad2 that's driving the increase in revenues"

Apple's last earnings call was in April, and iPad 2 numbers were well under the prediction. Four million something on predictions of six million. I think that the street keeping the stock more or less flat was an understanding that this was an issue of capacity not keeping up with demand.

At the time, it was all about iPhone 4, which was had more than doubled YoY. From here, I think it's about Lion. Apple's OS sales are a much overlooked source of money joy. Even when price is incremental, or zero, the attention drives hardware sales. And that quarter ending in March (Apple's Q2) had the best Q2 Mac sales in history, driven largely by iMac.

Here's the irony - Apple said that iMac sales were largely driven by the halo effect from iPad 2! So rather than cannibalizing iMac sales, iPad is driving them. Not sure about laptops, though, but in the meantime, even missing iPad 2 expectations by a couple of million units is turning into gold for Apple.

Anyway, doubling iPhone 4 sales comes despite the most widely-reported misstep in Apple product history, and affected far more people than anything in pro software possibly could. It's unlikely that even FCP sales dropping to zero would have a major effect on the stock.

For now though, you should consider the many people (millions?) who were using FCP for free. It can't really happen with an app, so $299 represents a step UP in price for many people (the majority?) from free. Even at $299, this price could very well help cull the herd of scads of skater boiz, more than invite them in.


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