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Tuesday, October 30, 2012
Monday, October 29, 2012
$VRNG $GOOG Steve Kim Update October 29th
Steve Kim Update October 29th
"Where are we in the trial process?
"Where are we in the trial process?
Vringo has completed its case in chief, and we are in Google's side of the case. When Court recessed on Friday, October 26, Google's damages expert, Dr. Ugone, was on the stand. Vringo will have an opportunity to cross-examine him on Monday morning. It appears that Dr. Ugone will be Google's final witness, and that they will rest their case on Monday. After that, Vringo will call its final witness, Dr. Jaime Carbonell, as a rebuttal witness, on the issue of invalidity.
When will trial end?
My best guess is that the evidence will be closed on Monday. If this plays out, then I would guess that Judge Jackson would schedule closing arguments for Tuesday morning, following which Judge Jackson will instruct the jury as to the law to be applied in this case. Deliberations would then begin as early as Tuesday morning or afternoon. Nobody knows how long the jury will deliberate, but in any event, I would think we will get a verdict before the end of next week.
Does the jury verdict have to be unanimous?
Yes. The jurors need to reach unanimous verdict.
What are the burdens of proof?
There are two different burdens of proof at issue in this case.
1. Preponderance of the Evidence. Vringo bears the burden of proving infringement, and the amount of damages to be awarded, by a preponderance of the evidence. Google and the other Defendants bear the burden of proving their affirmative defenses (such as laches) by a preponderance of the evidence. "Preponderance of the evidence" means that the party who bears the burden of proof must demonstrate to the jury that their version of the facts is more likely than not. Lawyers commonly explain to juries that this is not a high burden, such that even if there is a lot o evidence on both sides, if 51% of the evidence favors the plaintiff, and 49% favors the defendant, then this constitutes a preponderance of the evidence.
2. Clear and Convincing Evidence. Google bears the burden of proving its claim that the patents are invalid by clear and convincing evidence. Clear and convincing evidence is the most stringent burden of proof that is applied in civil cases. To meet the requirement for clear and convincing evidence requirement, the jury must have a "firm belief or conviction" after hearing the evidence, that the patents are invalid.
If Vringo Wins, Can the Judge Award Treble Damages?
I see a lot of "hope" out there that this could still turn into a treble damage case, but I think the handwriting is pretty objectively on the wall on this one. Enhanced damages (which can include treble damages) become available in an infringement where the plaintiff proves that the defendant willful infringed on its patent claims.
Consider that Vringo did not even allege willful infringement or ask for treble damages in its complaint, which should tell you what they really feel about that issue. Moreover, Judge Jackson issued a pretrial order excluding any evidence of willful infringement in this case, based on the fact that Vringo never claimed it.
If Vringo Wins, Can They Get an Injunction Against Google?
Highly unlikely. Here again, Vringo has not asked for injunctive relief in their Complaint. This means that Vringo has not even asserted a claim in this case for an injunction to stop Google from infringing on their patents. There are two reasons for this: (1) As a non-practicing entity, there is very little chance that a Court would grant an injunction to stop Google from using patented technology that Vringo is not using; and (2) Vringo does not want Google to stop using the technology, they would like them to continue using it, but under a license/royalty agreement that would allow Vringo to be paid for such use.
What Can Vringo Recover In This Case?
Vringo has requested an award of past royalties in the sum of $493 million. If the jury finds that Google infringed, it can award a reasonable sum of damages, but not less than a reasonable royalty amount. In addition to past royalties, it would then fall to Judge Jackson to determine and award a reasonable future royalty amount. Vringo can also ask Judge Jackson to award it prejudgment interest on the past sums, as well as all or a portion of its attorney's fees and costs incurred in this enforcement action.
Can the Losing Party File an Appeal?
Yes, the losing party can file an appeal. An appeal must generally be filed within 30 days of the entry of Judge Jackson's entry of judgment. Judgment for the prevailing party will be entered at a later date after the jury verdict is announced.
My guess is that win or lose, the stock will make a brisk move regardless of any party's announcement of an intent to appeal."
$vrng zte lawsuit is to test the waters against bigger fish like $jnpr $csco #huawei & others.
$vrng zte lawsuit is to test the waters against bigger fish like $jnpr $csco #huawei & others.
$vrng norfolk was a good venue choice. mark cuban studying the farmers almanac?
$vrng $goog norfolk was a good venue choice. mark cuban studying the farmers almanac?
Sunday, October 28, 2012
RT Maybe $NYX and $NDAQ should think more about redundancy. Crazy that world markets hostage to a storm or regional event
Saturday, October 27, 2012
Hurricane Sandy's punch may be felt from Norfolk, Va., to Boston $VRNG $GOOG
Hurricane Sandy's punch may be felt from Norfolk, Va., to Boston $VRNG $GOOG
“Closer to the center, there could be some hurricane-force gusts,” says Bob Smerbeck, a senior meteorologist at AccuWeather.com in State College, Pa.
Once the storm hits land, it will lose its tropical characteristics and "have the same effects as a nor’easter, even worse,” he says. "We are looking at total devastation – tremendous power outages, flooding, a storm surge. And someone," Mr. Smerbeck adds, "is going to get several feet of tree-snapping snow.”
By the time Sandy is off the East Coast, it will combine with a developing nor’easter into a massive and potentially destructive storm, meteorologists suggest. Some in the media have dubbed it “Frankenstorm,” because it will be a hybrid storm arriving just before Halloween.
If this unusual meteorological mix occurs, it would form a storm similar to one in 1991 dubbed the “perfect storm,” which resulted in 13 deaths. A movie of the same name dramatized the unsuccessful efforts of the Andrea Gail, a fishing boat out of Gloucester, Mass., to ride out the huge waves. A US Coast Guard helicopter, on a rescue mission, also crashed at sea during that storm, killing a rescue swimmer.
Forecasters expect that most of the East Coast will be affected by the winds, heavy rain, beach erosion, and possibly some heavy snow in the Appalachian mountains. Rivers are expected to flood, with the storm dumping as much as a foot of rain in some areas.
Sandy, the 18th named storm this year, is so far responsible for 22 deaths in the Caribbean. The storm crossed Jamaica, Cuba, and the Bahamas.
Some computer models show that, once the storm comes ashore, it will travel west, eventually dumping heavy rain on parts of Pennsylvania, Ohio, and western Maryland.
Friday, October 26, 2012
$VRNG $GOOG Steve Kim Quote on Carbonell & Ungar & prior art
"Actually, it doesn't matter how many readers can explain it, it only matters whether Carbonell does a better job than Ungar in distinguishing the prior art. The proof will obviously be in the pudding, but if you check their credentials, you will see that Ungar is not really in the same league as Carbonell. Add to that the overlay of having the jury watch firsthand as Judge Jackson strikes a portion of Google's cross-exam, and you have a situation where the upstart Continentals may yet rout the established Brits. You may not be aware, but Judge Jackson is also mulling whether to give the jury an instruction advising them of Google's failure to provide discovery responses on the issue of damages."
$VRNG $GOOG Steve Kim Quote on Current State of Case
"Yes, it would surprise me. At this point, I think Google has made the decision to see what the jury does. Bear in mind that a great result for Vringo is still like a mosquito bite to Google. To the mosquito, the bite means it gets to fly away engorged, but to the guy who got bitten, it's not even a nuisance that just gets scratched without a second thought."
Vringo Vs. Google: Vringo Executes A Pincer Movement
Vringo Vs. Google: Vringo Executes A Pincer Movement
In 1781, the Continental Army won a decisive battle in the War of Independence by employing a daring pincer movement, in which the Continental forces were tactically divided so as to attack the advancing British from two flanks.
The same tactic is being employed as we speak in the ongoing Vringo (VRNG) vs. Google (GOOG) patent infringement trial. As the trial has unfolded, it has become clear that Vringo's legal team has decided upon a pincer movement of sorts by deploying its liability expert, Dr. Frieder, to attack Google on one flank, while reserving its validity expert, Dr. Carbonell, to attack Google from an opposite flank after Google rests its case.
Vringo's strategy of "bookending" its experts is highly appropriate under the circumstances. During Vringo's case in chief, it bears the burden of proving Google's infringement, and so calling Dr. Frieder to testify as to this issue was necessary in order to establish its prima facie liability case. During Google's case in chief (which is proceeding as we speak), it has two objectives: 1) defend against Vringo's infringement claims, and 2) prove that the Lang patents are invalid due to the prior art. Google has placed all of its eggs in one basket, choosing to use Dr. Ungar as its expert on both issues. Once Google rests its case, Vringo will "have the last word," so to speak, by presenting Dr. Carbonell -- who will testify after Google's presentation has already been completed.
$VRNG $GOOG Dr. Ungar Does Poorly in 'expert testimony' (edvacourt update) Fri Oct 26th
"After the court opened to the public at 10:30 Attorney Frank Cimino Jr. cross examined Dr. Ungar. Let me start by saying that Google may have lost their case on his "expert" testimony under cross. Counsel asked Dr. Ungar whether he had read all the documents, gone through the data base, etc. Ungar said he did not do so because he did not get as much into the high level stuff. He said essentially that he presented the breakdown of the high level information that Google had given him. He said he met with Google approximately 100 times to discuss this. He said that only 2-3 of those meetings were with actual engineers and that he essentially took what they had given him about their system at face value. At one point Ungar literally turns to the jury clearly anxious and say's "its too much information, I was trying to simplify it to make it easily understandable. He is asked whether he actually looked at the code by Cimino and he says that he looked at the code a little bit and a little of the high level documents. Counsel appears to trap Ungar by saying that on one hand he claims that these high level documents should not be regarded and on the other that he was handed high level documents by Google Engineers which describe the system and they too should be disregarded. Cimino adds that Ungar is additionally saying Google's internal documents on the system should be disregarded. Should it all be disregarded suggests Cimino? Ungar does not answer this and instead starts to define what he thinks of the technology again. Cimino has clearly left an impression with the jury, with Ungar's help, that what is being presented by the defense was completely crafted by Google's attorneys and is divorced from their own detailed and specific high level documentation as well as other internal and external publications on the system. At this point the jury is very alert. One terrible thing for Google here is that it was established under direct exam that Ungar is an associate professor with no under graduate degrees in computer science or computer engineering. Google objected and said Vringo had already qualified Ungar as an expert and Cimino basically said sure, we have no problem with him as an expert...especially since Cimino had just established that Ungar basically had zero credibility. Cimino goes on to ask Ungar whether he had ever taught courses on databases, search, etc. and Ungar said no but that he was very familiar with them. The jury at this point may be wondering what kind of expert Dr. Ungar is. It is further established that Dr. Ungar took his sabbatical at Google for 9 months and was on their payroll. It is established that he is making $600/hr. for his testimony. This adds to the perspective that Ungar is simply regurgitating what Google is giving him. At one point Cimino asks about Ungar's previous testimony that runs contrary to the established claim terms of the Markman ruling. Ungar replies yeah "but the court could reasonably infer"...and then Cimino cuts him off and say the court has already determined this terms in its ruling. Ungar is asked whether he has done his own prior art search and he admits that he hasn't and that prior art was supplied entirely by Google. He is then asked to look at elements of his own testimony and is visibly flummoxed on the stand as he cannot remember his own testimony in several instances. Instead of saying he can't recall he argues with Cimino which looks very bad. Perhaps the morning topper is when Cimino does the exact search on Google referenced in Ungar's earlier testimony and comes out with a completely different result then the one Ungar states would result. Cimino actually puts Google slides up for jurors and the judge to see. Cimino shows that Google provides relevant data and does not interrupt the irrelevant data because someone bought more. This evidence is damning for Google's case. Ungar looks decidedly not credible. Since Ungar was Google's firewall against infringement it appears likely at this hour that Google will be found to have infringed."
$C Citigroup's Star Tech Analyst Mark Mahaney Fired Over Leaks To TechCrunch
$C Citigroup's Star Tech Analyst Mark Mahaney Fired Over Leaks To TechCrunch
"Mark Mahaney, a star tech analyst at Citigroup, was just fired.
"Mark Mahaney, a star tech analyst at Citigroup, was just fired.
He got canned because one of Mahaney's junior associates leaked information about the bank's views on the FacebookIPO to TechCrunch writers Josh Constine and Kim-Mai Cutler, and that led to the state of Massachusetts fining his firm $2 million.
Mahaney also went outside required protocol interacting with a French journalist.
Here's how the story goes,according to a filing in the case.
On May 2, Eric Jacobs, a juniorCiti analyst who went toStanford University with Constine, emailed Constine and Cutler from his work email address to say:
I am ramping up coverage on FB and thought you guys might like to see how the street is thinking about it (and our estimates). Any feedback on the investment prositives and risks would be super helpful. I want to make sure I'm thining about this the right way.
This, of course is confidential
The junior analyst also attached a document titled "Facebook One Pager," which Massachussetts says contained "confidential, nonpublic information" including Mahaney's Facebook investment risks and investment positives, estimate of the company's EBITDA, and valuation of Facebook.
Constine emailed Mahaney's junior analyst back: "There's no way I can publish this doc from an anonymous source, right?"
Jacobs replied: "My boss would eat me alive."
Constine wrote back: "Just to be clear this is what Citigroup wrote about FB?"
Jacobs answer: "That's just an outline that I put together—it wil eventually become our initiation report at 30-40 pages."
Later, the other TechCrunch writer, Kim-Mai Cutler, responded to Jacobs's first email to ask for a clarification on one of the metrics in the Citi report. Jacobs responded with more detail.
Massachussets got its hands on all these emails because it was investigating the Facebook IPO and had a subpoena for Citi's email records.
In its legal filing laying out the facts, Massachussets does not name Mahaney, Jacobs, Constine, or Cutler."
NYT Article: Winners from the Pandora #conflictofinterest #fail $P IPO
Winners from the Pandora $P IPO
Any of these underwriters upgrading it now to help sell more shares in an offering?
Any of these underwriters upgrading it now to help sell more shares in an offering?
Interesting Posts on Pandora $P and why it may fail soon.
"They don't need to buy Pandora when they can make there own version for MUCH LESS!
Pandora is nothing but a Shelf company that stocks product from other companies.
They own nothing. No hardware, no content. The only thing keeping them alive is their subscription base. and once Apple Free Music comes out that is the next thing to erode.
Apple is coming for Market Share. If you are long Pandora and you know Apple is going to copy your business and they have millions of devices out there and Billions of Dollars.... Shame on you then if you don't get out now."
"Have you looked at P's financials? It's a money pit....nothing but losses for 10+ years. It's cheaper and easier for APPL to build their own service, with better royalty rates negotiated directly with the labels that they already deal with via iTunes than to buy this POS company that pays more for each song it plays than it makes on advertising."
Pandora is nothing but a Shelf company that stocks product from other companies.
They own nothing. No hardware, no content. The only thing keeping them alive is their subscription base. and once Apple Free Music comes out that is the next thing to erode.
Apple is coming for Market Share. If you are long Pandora and you know Apple is going to copy your business and they have millions of devices out there and Billions of Dollars.... Shame on you then if you don't get out now."
"Have you looked at P's financials? It's a money pit....nothing but losses for 10+ years. It's cheaper and easier for APPL to build their own service, with better royalty rates negotiated directly with the labels that they already deal with via iTunes than to buy this POS company that pays more for each song it plays than it makes on advertising."
Thursday, October 25, 2012
Wednesday, October 24, 2012
$VRNG Big increase in short interest
Vringo, Inc. Common Stock
Shares short as of 10/15/2012
Shares short as of 10/15/2012
VRNG | 10,118,704 | 7,989,205 | 2,129,499 | 26.7 | 22.0 | 1 | 16,629,977 |
$VRNG V $GOOG - A Mid Trial Steve Kim Update
"
1. Vringo Has Established a Prima Facie Case for Liability
An important milestone in a trial is for the plaintiff to establish sufficient evidence to constitute a prima facie case. A prima facie case merely means that enough evidence has been established in order to support a jury verdict in the plaintiff's favor. This does not mean that the jury will return a verdict for Vringo, but rather, that there would be enough evidence in the record to support a favorable verdict if the jury is convinced by the evidence.
We have previously discussed the fact that this case presents a classic "battle of the experts." In this regard, Vringo's liability expert, Dr. Ophir Frieder, testified very clearly last week and early this week that his review of Google's own documents intended for public and internal use -- as well as his review of the Lang patents -- and Google employees' pretrial testimony leads him to conclude that Google's AdWords system infringes on Vringo's patents.
Frieder dotted all the i's and crossed all the t's during his testimony in order to establish an evidentiary record to support Vringo's various infringement claims. Immediately after Judge Jackson qualified him as an expert in the case, Frieder commenced his testimony with the very concise statement that "I am convinced that the defendants infringed." He then set about, through the use of charts and checklists, to prove Google's infringement, element by element.
It is impossible to evaluate the jury's response to Frieder's testimony, but it is an important milestone in the case for the plaintiff to know that it has established a legally sufficient prima facie case that can be handed to a jury for a decision.
2. Judge Jackson Refused to Grant Google's Motion for Judgment as a Matter of Law
Upon Vringo's announcement to the court today that it rests its side of the case, Google made a motion to the court for entry of judgment in its favor, as a matter of law. A Motion for Judgment as a Matter of Law is a procedural motion, in which Google asserts that Vringo has not presented sufficient proof to allow its case to go to a jury, and that Google should have immediate judgment. It is similar to a renewal of Google's earlier motion for summary judgment, but made after Vringo's case in chief has been concluded. Judge Jackson refused to grant Google's motion. While this was predictable, it suggests that Jackson is also of the view that Vringo has presented sufficient evidence to support a verdict in its favor. Again, this does not mean that the jury must return a verdict for Vringo; it just indicates that there would sufficient evidence to support such a verdict if the jury finds the evidence to be sufficiently convincing.
While Google can certainly revisit this motion sometime in the future, Jackson's refusal to grant it today means that Google is going to have to present its defense to the jury. It appears that the writing is very much on the wall that Google will not be able to avoid having this case put in the jury's hands for a decision. If Google chooses to raise this motion again in the future, I expect that it will be denied yet again.
3. Google's Damages Evidence Has Been Further Restricted
As you know from my previous articles concerning Judge Jackson's disposition of the MILs, much of Google's damages evidence concerning alleged comparable patent purchase/license agreements was excludedfrom trial on the basis that it was not comparable to the issues in this case. However, the court did not exclude evidence of two such agreements -- namely, Google's agreements with Disney and Carl Meyer. Google seeks to use these agreements to show that a fair royalty for use of the patents would be lower (much lower) than the award Vringo is seeking.
Yesterday, during the testimony of Vringo's damages expert Dr. Becker, Google cross-examined him on the issue of Google's patent purchase and sale agreement with Disney, as well as the pricing of that agreement. Vringo then made a motion to strike this cross-examination, because it appears that Google will not be able to show that the Disney agreement is comparable to the Lang patents, thus placing the Disney agreement in the same category as the other Google agreements that were excludedpursuant to Jackson's pretrial MIL orders. Jackson agreed, and instructed the jury that the evidence Google had presented on the Disney agreement during its cross examination of Becker is "stricken," and that "it is not proper testimony that you may consider in deliberations and trying to determine what the appropriate royalty should be in this case."
In my view, not only does this further restrict Google's efforts to present an alternative damage calculation, but it also enhances Vringo's and its experts' credibility, while it reduces Google's credibility with the jury.
4. Mid-Term Trial Report
If you are a Vringo bettor, you have to be encouraged by the trial proceedings so far. Vringo has not had any significant trial setbacks, and its evidence has come out well and in an understandable way. At the same time, the Vringo bettor needs to bear in mind that the trial is not at the point where Google gets to present the evidence it believes will sway the jury in its favor, and the trial is far from over. The main takeaway at this point is that Dr. Frieder appears to have risen to the occasion during his testimony, and he delivered the goods about as favorably as Vringo could have hoped. Vringo has made a prima facie case as to its claims, and Google's request for immediate judgment was refused today. This means the ball is now in Google's court and the onus is now upon Google's experts, Dr. Ungar and Dr. Ugone, to testify as well as Vringo's experts have.
Look for Google to conclude its side of the case as early as end of day Friday, but as late as early Tuesday. Leaving aside some time for short rebuttal presentations by Vringo, we can likely anticipate that the jury will begin deliberations by the middle of next week, with a very reasonable likelihood that a verdict will be returned by or before the end of next week."
$VRNG Modernist: You Need To Know About Digital Domain (Recommends company that is now bankrupt) #FAIL
Modernist: You Need To Know About Digital Domain
(DIGITAL DOMAIN IS NOW BANKRUPT) Do your due diligence.
Modernist price target on this now BANKRUPT company was 20$ per share, it is now at ZERO.
(DIGITAL DOMAIN IS NOW BANKRUPT) Do your due diligence.
Modernist price target on this now BANKRUPT company was 20$ per share, it is now at ZERO.
Digital Domain Media Group (DDMG) holds meaningful intellectual property for 2D-3D conversion. Meaningful enough that Samsung called them to protect itself against infringement liability.
We ourselves were contacted by Samsung over the summer, and we hadn't written a letter to them or threatened them, we didn't even know them, and they paid us $3.5 million to not sue them when we had never called them.
(quote from Q4 earnings, transcript available here)
But unlike some, Digital Domain is not using its IP to sue the leaders in their industry -- instead, they're partnering with leaders from several industries, and leading their own industry, which is digital visual effects. What "visuals" means for DDMG is the task of translating ideas into data, and data into images. Images can be manipulated as images, video, 3D imagery, or interactive media like games or robots.
The technical terms to describe this are "digital visual effects" (VFX) and computer-generated (CG) animation. I like to think of them as imaging engineers, analogous to software engineers, who not only create products, but develop the best practices for advancing the profession. The business model analogy to describe this company is: quants moving out of the back offices at hedge funds and starting up their own firms. Many saw the role of quants as purely technical, but quants knew better: they were creating value worthy of a creator's premium. DDMG is a pioneer in recognizing this in terms of visual modeling and effects.
The stock shot up yesterday, as Wall Street learned that DDMG helped bring Tupac back from the grave. This happened at a popular music/art festival called Coachella. It is a big deal. Musical/cultural thought leader Questlove had this to say:
I predicted this a couple weeks ago:
[...]we see a digital domain overlapping with physical. That's bullish for DDMG, whose private-placement investors paid more for shares prior to IPO in a bearish 2011 season than the current price.
If you didn't buy yet, don't flinch. The stock has retraced. And sub $21, there's still more than considerable immediate potential upside. Here's what you need to know:
- They're the best at what they do: Visuals in Titanic, Avatar, and 2013 hit "Ender's Game" which will be their first ownership project. (My editor asks "how can something due in 2013 be called a hit?" I, Modernist, am "calling" it.)
- They've very recently transitioned from a flat work-for-hire model into a diversified pipeline of ownership ventures; this was the earnings hiccup which is allowing the current discount.
- A comparable but inferior company (The Mill) was bought out for 190MM, implying a margin of safety.
- They've got their hands in military simulations, surgical simulations, for-profit education domestically and abroad, movies, television, advertising, video games, holograms, and who knows what else.
If you read through my prior articles, you'll see that I very rarely make an explicit prediction along the lines of a stock moving from $200MM to $1BB in a year. But for DDMG I made an exception several weeks ago. This is the kind of stock that will freak you out. In a good way.
I suggest to investors that they do not wait for a pullback in the stock because there is substantial upside and negligible downside. There could be a pullback, but now is the time to be greedy, not fearful. Investors should realize the market is unpredictable and may take some months to appreciate this stock. However, events such as the Tupac hologram will continue to illustrate to the unimaginative market what my readers already can see. Don't procrastinate; don't chase alpha.
The stock itself is suffering from a lack of coverage. Stocks at this level are too small for institutional investors to participate in and are thus neglected by financial media, because financial media is built around institutional investment. Also, this stock is volatile, so hedge fund managers with one-year watermarks are presented an additional barrier to entry beyond instrument size.
Frankly I think the stock does not have sufficient data to incorporate a fundamental analysis of the trading of shares themselves, and should instead be valued as a venture capitalist would value a maturing startup. Instagram, admittedly a social network but based on visual technology, sold to Facebook for $1BB. I am quite comfortable imagining that in the years ahead Digital Domain will generate a diverse stream of high-margin revenues from its leveraged status as an industry leader, so I am not shy in saying the current market cap should be $1BB. Each of these 4 businesses alone is worth 250MM: movies/TV/advertising, education/software, holograms/simulations, intellectual property.
This is a leading media stock that should have a Facebook (FB) type of premium but instead has an old-media multiple. They've got their heads down generating value and they don't have time to cater to Wall Street accountants. See past the stock and look at the company. They have been involved in the most profitable visual media projects of all time, and have only recently decided to command ownership stakes. It really is a startup.
You can wait for the stock market's optimism to catch up with the company's strategic position, and do the fundamental analysis then, or you can buy now and profit from it.
If you like, you can print out the stock chart and draw some lines through it and imagine a predictable upswing. I prefer to connect the dots of the future, not of a chart.
Or maybe you can read the other financial media's opinion about this stock. You know, the other guys who predicted the hologram. Let me know when you find them.
One of my media colleagues at Seeking Alpha who also likes to look forward instead of backward is Chris Katje, who provides further details on DDMG general operations here with his price target of $14. Mine is closer to $20 and both are on a scale of one year.
The iPad Mini Is Not Overpriced, And $AAPL Sales Numbers Will Prove It
The iPad Mini Is Not Overpriced, And $AAPL Sales Numbers Will Prove It
"
"
So while a lot of similar headlines are popping up this time around, we now have the benefit of hindsight to add some clarity to the discussion. There’s also a fair number of logical reasons Apple has priced this tablet correctly, history lessons notwithstanding.
1. Brand cachet
Apple operates as, and is perceived as a premium brand. With some of their recent pricing accomplishments, including the MacBook Air starting at $999 and the iMac now beginning at $1299, it’s easy to see why people might think Apple is playing along with the rest of the market’s race to lower prices. But that’s not how Apple competes, and that’s not how it ships product.
Much of the value in Apple lies in its brand cachet, something which is especially powerful in emerging Asian markets, but also still very effective in established regions like North America. Apple is seen as a maker of premium goods, and they emphasized that amply with this iPad, bringing back a lot of the same rhetoric they used to portray the iPhone 5 as a precision instrument, on par with the finest mechanical watches.
2. Measured by quality
Apple’s identity as a luxury brand clearly has a strong marketing component, but it also arises naturally from making great products. The iPad mini is meant to compete on quality with others out there in the smaller tablet space, not price, just like the Mac does in the notebook and desktop market (where its growth outpaces the rest of the industry, by the way).
Almost all of Apple’s marketing around this device focuses on its ability to exceed the competition in terms of usability, design and quality of experience. That’s also how it has traditionally marketed the Mac. With the original iPad, it had a leg up in that it was forging a new market, but it’s coming late to the small tablet space. Still, by competing on its own terms, and delivering a product that definitely does feel more polished than other options out there, it’s saying the extra $129 you’ll pay versus others is money well spent.
And Apple’s right on that score. As I mentioned in a Branch discussion on the subject, the iPad displays approximately 49 percent more content when viewing web pages horizontally than the Nexus 7, according to Apple SVP Phil Schiller, and at $329 it’s around 49 percent more expensive than the Nexus 7
3. Apple is a hardware company
Apple sells hardware, and that’s its main concern. Amazon and Google are not hardware companies, and don’t pretend to be. They sell devices because it furthers their own primary agendas (e-commerce for Amazon, search and ad revenue for Google) and can accordingly do so at a loss.
For Apple to market a device it must be profitable. And not just profitable, but within their acceptable range of what defines profitability, which means significant gross margins made on every device. Otherwise, it’s not worth Apple’s time to make that product, and it won’t be made.
The iPad mini is priced where Apple can price it while still creating a quality product that doesn’t feel like a crippled device, while still satisfying their profitability requirements. If it was a 7-inch tablet with a single camera and a much thicker design, I’d say it was overpriced, but as it is, if you look at what it can do, it’s more than competitive and meets Apple’s business requirements for bringing a new product to market.
Those claiming this iPad is too expensive are either forgetting the past or forgetting what kind of company Apple is, but I don’t think consumers will be among that crowd. But you don’t have to take my word for it: pre-orders start Friday, and we’ll probably learn soon after just how much appetite there is out there for Apple’s latest innovation."
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