John Legere @ Geekwire

John Legere, the outspoken, humorous, cocky, intelligent, empathetic and, thus far, successful CEO of T-Mobile US. It’s natural, then, that his bravado and antics put people into two camps, one believing him to be a farce, inappropriate to run a Fortune 500 company, the other looking to him to continue to shake up the stagnant wireless telecom industry, forcing progressive changes by example.

Here’s a recent 45 minute interview at the Geekwire conference, where he shares his view of M&A rumors, competing with the other major carriers, and how he listens to customers. Beware that lots of swearing ensues.

Personally, I find his attitude refreshing, and while he is cocky, he’s also manages to be down to earth. He listens (almost to a fault) to customers, he rejects the idea of old-style business-making, and confronts and verbalizes things that we often either avoid thinking about or have the balls to say. I particularly like his comment that the higher up the corporate ladder you find yourself, the less candid and factual feedback you get from your directs (too much sugar-coating; I see this too often).

Apple iPad a Low-Margin Product? Nah.

I’m not certain where news sites have gotten the idea that the lower-end iPads will ship with razor thin margins (or as a loss-leader) for Apple. Let’s do a quick analysis.

Based on what we know about the iPhone 3GS’ components, we can extrapolate a significant portion of the iPad’s hardware cost. ISuppli’s analysis shows that the 16GB iPhone 3GS costs Apple around $178 to source and manufacture. Based on the specifications and feature-set of the iPad, it’s not a giant leap to assume that many of components are shared between the iPad and the iPhone/iPod Touch, such as the NAND and controller, BlueTooth, audio decoder, and more.

Now, the entry-level iPad doesn’t have a camera (-$9.55) or 3G module (-($13+2.80+1.35)). That brings the cost down to close to $150.

Clearly, there are elements which add significant cost to the iPad. The much larger display, touch panel and the chassis material will cost more than their equivalent on the iPhone/iPod Touch.

The display + touch module on the smaller devices cost approximately $35. Looking at area and resolution, the new panel is around 6-7x the size. Yields of panels decrease with increasing sizes, but at the same time, the cost of the display controller doesn’t scale linearly with panel size. Plus, the panel itself probably has pretty high yields, considering there’s a plethora of ~10″ panels out there. The touch overlay may be another story, with its thousand-point multi-touch sensors. Let’s assume overall cost is just about linear with area, which brings us to around $200. That estimate is likely quite high, assuming worst case scenario.

That brings the cost of the iPad to approximately $320. Now, factor in the added cost of the larger battery and casing, plus some additional licensing cost for the ARM A9 core, if that is indeed what the Apple A4 processor is based on, and $350 is a reasonable estimate.

That means Apple is pulling in around 30% margins on the entry-level iPad. Upselling to the 3G models or more storage only increases that number. Most hardware manufacturers would harm small animals for that sort of pricing power.

Of course, this is all a rough back-of-the-envelope calculation, and in particular, my estimation for the panel may be off by quite a bit. However, an analyst at BroadPoint AmTech seems to think along the same lines. Apple is not going to take a huge margin cut on the iPad, even the entry-level model. His $100 estimate for the 9.7″ panel and touch overlay is also far more aggressive than mine.

We’ll see what the component list for the iPad looks like for certain, come late-March. I doubt Apple’s pushing its first loss-leader piece of hardware.

Ford’s Turnaround and Future Opportunity

I’m nominating Ford’s turnaround as the feel-good story of 2009. Just goes to show that some fantastic insights into the market by the executive team and a real focus on quality vehicles completely negates this don’t-buy-domestic-cars mentality.

In the wake of Toyota’s massive recall and subsequent production halt for faulty accelerator pedals around the world, I think more people realize that foreign vehicles don’t have some God-given right to be more reliable. This is the domestics’ chance to capitalize with some psychological warfare.

Go Ford!

Intel and AMD Settle for $1.25B

Intel settles the AMD antitrust and patent lawsuits, with a $1.25 billion payment, stemming from all the way back in 2005. I’m interested to hear how both sides spin this during their conference call this morning, and whether Intel actually takes the blame, or simply decides not to pursue some of the business practices they’ve used in the past, but still deems them legitimate.

That bit is very important, as this settlement doesn’t make the ongoing investigations by the EU as well as the New York Attorney’s Office go away.