What is a sustainable business?  There is no answer, but a common one may sound like a business which posts stable earnings which increase over time.  Sounds good, but how about a business who is continually prepared to maximize earnings under market conditions.  The former appears healthy, but there can be costs with keeping stable earnings.  The latter can focus on business models and then judge market conditions to earnings.

Think about financing debt, a sector recently compromised to greater risk in an effort for many companies to stabilize earnings.  As a business model financing debt works, market conditions should determine risk and then rates for financing assigned to customers.  Relying on market conditions can result in earnings flux, but flux doesn’t mean the business model is unsustainable.

A true price or one with no “noise” could be a judgment of the functionality of a business model over time and how a company has performed when compared to market conditions.

Now think about companies who function healthy business models, which are currently losing money because of these market conditions.

Is it time to sell Apple? I’m conflicted:

“Apple shipped 2,496,000 Macintosh® computers during the quarter, representing 41 percent unit growth and 43 percent revenue growth over the year-ago quarter. The Company sold 11,011,000 iPods during the quarter, representing 12 percent unit growth and seven percent revenue growth over the year-ago quarter. Quarterly iPhone™ units sold were 717,000 compared to 270,000 in the year-ago-quarter. ”

http://www.apple.com/pr/library/2008/07/21results.html

“Munster thinks Apple should easily sell 4.47 million iPhones this quarter, up 9% from his previous guess of 4.1 million, and up 299% from the 1.12 million it sold during the September quarter last year.”

http://www.alleyinsider.com/2008/8/apple-s-sept-quarter-iphone-sales-to-quadruple-to-4-5-million-says-piper

“With a current annual run rate of around $360 million, it’s not out of the question that App Store could eventually become a billion dollar business for Apple, according to Jobs.”

http://www.crn.com/software/210002313

So all in all. Apple is still kicking the snot out of it. What about this “slow down” due to the crunch. I’m calling your bluff there. When a product still has lines to get it a month after its launch (http://www.nashvilleistalking.com/node/58722), I think it is safe to say that demand isn’t going to slow down soon…. in fact:

“Apple is continuing to add countries – the iPhone is available in 23 countries today, and another 50 will be added this year” and “xconn, the Taiwanese electronics giant that produces the iPhone 3G for Apple, has ramped up production to 800,000 units per week”

http://www.techcrunch.com/2008/08/04/foxconn-building-800000-iphones-a-week/

Thats looks like a “slow down” that I can get behind. Now with all that being said this does concern me:

http://www.alleyinsider.com/2008/8/apple-now-worth-more-than-google-aapl-goog-

If you compare their financial histories, Google looks like it has a much more solid track record over the last few years so we may be getting some exuberance here:
http://finance.google.com/finance?fstype=ii&q=NASDAQ:GOOG
http://finance.google.com/finance?fstype=ii&q=NASDAQ:AAPL

Honestly I’m OK with a sale. We have made some cash on it, but I wouldn’t necessarily consider them down and out.

2nd quarter results for NETC are coming out July 22nd.

There are not many analysts tracking this company in the US, but expect to see much better numbers then 2Q 2007.  Being the leader cable & internet provider in Brazil doesn’t have to mean increases of earnings are on the horizon.  Their current plan is short term growth, which if accomplished translates to higher revenues and a broader region of services.  The Big TV acquisition won’t have much of an effect in Q2, however their purchase of Vivax in October of 2006 should be gaining maturity.  One thing to cheer for are operating and profit margins above 8% as their current deal with Big TV comes with a $200 Million loan at 7.875%.

Ultimately I like this stock because I want to believe NETC will focus on earnings per share once they attain the region and market share desired.  Till then expect frustration in stock price.

Excellent post over at Seeking Alpha right now discussing the rapid acceleration of Apple’s iTunes Music Store.  They chart the sales growth nicely for you, but the upshot of it is:

• first 100 million sales in 2004
• broke 1 billion sales in 2006
• broke 5 billion sales in 2008

Considering the fact that iTunes began life as a way of driving sales of Apple hardware, this looks like smashing success.  Now that Apple has a dominant position in the MP3 player market (they always have 3 or more positions in the top 5 players for sales) and iTunes is a household name, their new initiatives get to launch with enormous steam behind them from day one.

I’m talking about the IPhone primarily, but the AppleTV is also a really interesting device.  Both of these are video devices, and video is definitely a growth market.  Those of you who know me know that I’m bullish on web video.  It seems clear that as the world slowly transitions from traditional television to video on all of their new devices, Apple is going to be there in spades to soak up the growth.

We have AAPL in our portfolio, should you?