Not Buying It: Sanford Analyst Toni Sacconaghi's iPhone Hit Job 58 comments
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Disclosure: The author is long AAPL.
Sanford Bernstein analyst Toni Sacconaghi published the results of a May survey of 105 U.S. and European CIOs concerning their purchasing plans of high profile products like iPhones and Vista. The results, according to the survey, don’t bode well for enterprise adoption of the iPhone.
I have two problems with this study. First of all it was conducted in May, well ahead of Apple’s World Wide Developers Conference [WWDC], from which details were released that would undoubtedly sway many of these CIO’s opinions. Secondly, Toni Sacconaghi was behind the survey. He's a well known Apple (AAPL) antagonist who seems bent on dissing everything Apple by manipulating statistics and warping his analysis.
The problem with this report is not the content, but the message it’s trying to deliver. Apparently, Bernstein wants you to believe that the iPhone has no place in the corporate arena. Anyone with an ounce of sensibility knows that the iPhone is not just a smart phone, it’s a revolutionary mobile computing platform. It’s by all accounts disruptive technology, the black swan, that’s taking the world by storm. Evidenced by the fact that it will be soon shipping in virtually every industrialized country in the world.
Toni is trying to single handedly position the iPhone as a consumer-only device, as he was quoted saying, “I think most investors are looking to the iPhone as being principally a consumer device.” You think? Or do you know, Mr. Sacconaghi? We’re interested in what you “know,” not what you think, because we all know where your thinking has gotten you with past blunders, like the case of the 1.4 million missing iPhones. Another firestorm started by Toni, with obvious malicious intent.
How about this quote, and inane conclusion, that can only be described as a logical fallacy know as a non-sequitur, where the conclusion does not follow the premise.
Our CIO survey suggests that corporate iPhone use will be driven by employees purchasing their own iPhones, rather than company-wide deployments… If this persists, it may ultimately limit iPhone penetration into the corporate space.
Did Toni ever hear of the Trojan Horse effect of Apple’s design aesthetic? Did he even bother to survey the 35 percent of the Fortune 500 companies working with Apple to evaluate business software for the iPhone? I’m sure they weren’t on Toni’s short list of survey takers. Did he even bother to talk to Apple’s principle customer, small businesses with 200 or fewer employees? These users far outnumber those at Fortune 500 companies by many orders of magnitude.
And what about institutes of higher education like Abeline Christian University, or Vanderbilt University, that plan on making the iPhone integral with virtually every student activity? The fact is, Toni has always been known to manipulate the facts to suit some hidden agenda. Either that, or he’s simply out of touch with the rest of the world.
Check out the following video, and tell me that the iPhone and iPod Touch are not going to break new ground in the way we do everything. A new era is upon us Toni, come on in - we’re a very forgiving bunch and we don’t want anyone left behind.
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This article has 58 comments:
bullcross.blogspot.com...
I also nailed her before Apple reported its earning in my earnings estimates. Can you believe that she estimated that Apple would only sell 1 million iPhones despite the fact that Jobs said that Apple had already sold 300,000 in the quarter by the second week of january! She jumped on the Toni bandwagon with her faulty analysis and paid for it with the worst estimates on Wall Street. And now she back peddles when Apple does well. People like that should just lose their jobs.
If you read Savitz's execrable blog (especially on Apple matters) you can see a trend of a.) misleading negative headlines, b.) entirely unfounded negative conclusions drawn by the blogger, and c.) crappily presented and interpreted pseudo-analysis, often quoting Toni S, who is clearly the Jerry Lewis of analysts (the french probably love him), and a notorious nemesis of Apple shareholders.
Whether it's some spurious health rumor or some alleged hidden iPhones, or insinuations that Apple is 'lying' regarding its projections, the aim is the same: find any means of harming the company's reputation and/or stock valuation.
Eric opines that he's evenhanded, but a quick reading of the response to his posts will quickly reveal that many readers feel otherwise and have no reservations about letting him know.
Perhaps the SEC would care to grow some teeth and look into this pattern of fomenting and collusion.
Toni has never corrected his erroneous report of the "missing iPhones" nor has he ever updated his horribly incorrect forecast of iPhone sales for 2008. Different opinions are expected, but grossly erroneous forecasts should be corrected and updated.
Investors should be rightfully concerned about investing with recommendations from Sanford Bernstein.
Mark my words, Apple is just starting the HUGE Fire!
I am a CIO, for a global company, which our CEO demands everything on Macs. (Yes, everything is 100% Macintosh). And he wants iPhone 3G for everyone in the company since it would be a small bonus for everyone. We are on T-Mobile, and he wants one to test over in China, UAE, Middle East and if the overseas companies pass his approval. I will be purchasing iPhones 3G for everyone.
On another note, we have started to move everyone away from the last CIO, whom installed Entourage which is aweful MIcrosoft product to 10.5 and Apple Mail.
Apple stock will get a BIG HUGE Boost this July - September. Not only will Apple get the back to school sales, but our company is expanding into 6 locations and needs at least 1 Million in Apple Sales during the summer.
Stay long and see you at $650 in 2009-2010!
Apple vs RIMM
Price: 180.90 vs 147.55
PE: 37.31 vs 65.32
EPS: 4.85 vs 2.26
and
Apple has 0 debt and $20 Billion in the bank!
RIMM has $7 Billion Debt!
Additionally, there are some mighty comparable phones out there for almost nothing! And honestly, companies want employees to be accessible at their every whim. That's what the Blackberry does, and does it well. Why would companies want to pay for extra bells and whistles, particularly in this economy? They all have financial managers who would protest mightily.
There is only a small percentage of corporate execs who get the top bennies, like a company car that's NOT a Ford Escort, or stays at the Ritz-Carlton, or private jets. These folks may have an iPhone provided for them, but don't count on the rest.
That being said, KEEP BUYING THEM!! I love this stock.
First, Toni, Eric and others simply write the stories they write to generate content for their sites. The more all of you continue to mention their names, the more they like it since they just create more buzz. Thus, please simply stop responding to their articles, don't read their blogs, don't visit their sites, etc. and they will ultimately fade away....wishful thinking, I know.
Second, I work in a PC based company, but every senior executive has purchased the iphone (or are planning on purchasing the new iphone when it comes out July 11th.) Our IT organization has committed to supporting the iphone simply because everyone wants it. People are happy with their blackberrys here, but it's simply not enough of an all around device to satisfy us.
Also, this is not the first phone capable of being a mobile platform in the sense of people writing applications for it.
Well done my man. It's about time someomne put this clown in his place!
Mark my words, Apple is just starting the HUGE Fire!"
You won't be around when the time will come.
However, don't put too much hope in the iPhone programs at the universities. We have seen many of these programs come and go with laptops. When the endowment or grant that allows the purchase runs out, that is usually the end of it. Many Colleges have a policy of not distributing lectures and class materials in ways that encourage fewer students attending class.
I personally know millionaires who refuse to pay $400 for a cell phone. Then again, I know someone who makes $40k who owns 2. The price is just too high for smart buyers.
A lot of phones are in this price range so I don't understand your reasoning that an iPhone user needs to be a millionaire to afford one. In this economy people need to make choices, like eating out, or the top cable package or how much they drive or the latest electronic gadget.
I think most people, i.e. you, don't understand that the iPhone is revolutionary, it's changing the mobile market, it's not a flash in the pan. Do your research, visit an Apple store and play w/ an iPnone for an hour and maybe you will understand.
Watch the video, use your imagination.
I find it rather ironic that you claim that the iPhone is too expensive, yet years ago you paid $750 for a GPS that does not do half of what an iPhone does.
I do NOT own any cell phone - do not see need to throw away money every month. Yet the fact is that people will spend the money if they think it gives them value. Yeah, 400 clams is a car payment. But on the other hand it is ONLY 1 car payment. If you have a cell phone anyway, the data is only $30 more, that is like three trips to Starbucks if you get a munchie with your latte.
Oh BTW - have you heard? The price will now only be 200 clams. You can go to dinner for 2 and pay that much for a few drinks and a plate of clams.
One - the iPhone is a GIZMO, a gadget, a widget, just a machine.
So what? The Asians churn those out by the gazillion, for pennies too, I might add.
ANYONE, I repeat, anyone can order up a gizmo, and that includes Apple. Thank goodness, the GIZMO ain't the ballgame here.
When the iPod came out, I was using other Mp3 players, and I resisted being sucked into the "Apple Quagmire' of pay for everything, at the time I was so assured how "smart" I was, that I considered iPodders to be the equivalent of rap music likers, moron's and losers.
Then my broker, Ameritrade offered a free iPod for some extra business, I took it, thinking, "hey, it's FREE, so what do I have to lose, I'm just going to give it to the 17 year old son, and he can look cool with the other morons in the iPod world."
However, he was off at camp when it came in, so for two weeks I "messed around" with the gizmo...darn, it was SO easy to use, it did look cool, something I had never given any thought to, and the EASE of use when I hooked it up to the iTunes store astounded me. I love PODCASTS, for my bible studies, news, and commentaries...and one or two clicks, and all my PODCASTS were there daily, and that was neat. And I saw the store had movies, so I purchased a few, COOL, I could see them on the computer { that was before I got really into things and bought another one for me, a video iPod that allowed me to port them over to my big screen and watch them there }
So...time passed. I got me an iPod video, another FUN product, then I started looking at Apple seriously, being an old timer, who owned an Apple II ages ago, but exclusively WindOZE since....and I took a leap and got the HUGE 24" Apple iMac, and DARN that was easy, I was up and running within 15 minutes of opening the box, NO configurations...shees... where is the "fun" in spending hours getting your new computer to work on a network, print, and hook into this and that? Everything just worked!
Then the MacBook Air, I thought, that might be cool too, and I ordered one on day one, and I adore it.
Then the AUTOMATIC backups, I tried, honestly before, but that was such a hassle before, and the day the new Time Capsule, combo router with "N" { super fast } wireless and 500G storage, that would automatically back up the desktop AND air laptop, without me even remembering anything.
So the stores? Can't even get IN one around here, they are jammed from morning to evening.
So, here we are, two years later, and I'm the owner now of THREE iPods, one desktop, two laptops, two routers, tons of FANTASTIC easy to use software for video, productivity, and presentations, all from Apple.
And it STARTED with one FREE iPod.
I've spent $10,000 and would do it all again in a heartbeat. AND...I've talked most of the family, most of my friends, into dabbling with Apple too, and one by one, they too are becoming fanatics.
So...
It IS NOT about the GIZMO, it IS about the SYSTEM, from the delivery and ordering, to free shipping, to georgeous packaging, to EASE of use, POWER to get things done, backup with the GENIUS BAR at the local stores, and the GREATLY expanding ECOSYSTEM they call Apple today.
When the ANAL-ists, "get that" and STOP wetting their beds over this or that GIZMO, and how other companies GIZMO's compete, they might finally see what is going on. But given the near OBSESSION they have with trashing everything apple, and the endless speculation about Job's health...you would think the company would fold instantly if he took a week off for vacation.
This is now a JUGGERNAUGHT, daily ripping into WinDOZE and VISTA crap, and getting stronger and stronger and now the WORLD is going to get a taste of the ecosystem called Apple.
Think for a second. How many CRACKBERRY heads have you seen standing in LINE ALL NIGHT to buy the newest? And that is the NORM over in the Apple world, they have a LOVE for the company, they are ADDICTED to the products.
And THAT is the story that never seems to make it to anything connected with the Street and it's affiliates.
Toni, Toni, Toni?
Capper is a troll. 1) the iPhone is a highly functional device 2) Even if it weren't, corporations are unbelievably profligate with money. Consider how many (better than 95%) use Windows as their main OS. Do you have any IDEA how expensive it is to support Windows? It requires a veritable army of IT drones, 3) If the iPhone is NOT targetted towards Enterprise, why would Apple have added Exchange support? Exchange is such a weak product it doesn't even EXIST in the consumer space; it's basically Enterprise-only.
RIMM seems to be going way up and ahead of earnings I feel way overvalued at 63.91 PE. Yesterday, I just sold RIMM short (100 shares @ $147.81) I'm not familiar with shorting stocks but I'd be happy if I get 10 per share by next week... or maybe there's a chance it could even go lower than $137?
One of the most clever and fun advertising campaigns ever done was the "HELLO, I'M A PC" series, where you have two guys and a whitescreen and they interact. One is "Mr. PC" who is all business, or wants to be, he distains "cool" and everything has to be all business. The other guy "Mr. Mac" is laid back, iconic, and gets to play the straight man, in this series, the real hero is Mr. PC, as he struggles for respect, for coolness, and agonizes about the frustrations of being on a PC platform, especially with VISTA, the crapware that Microsoft spent seven years creating.
Now, APPLE pay attention here, EXPAND the concept. Do another series where you have "Mr. MiniKeyboard" VS "Mr. iPhone" and you can play off that interaction, the PC guy is struggling with thumbs and the like, the cool Apple guy is surfing the net, setting up a date with a hot number, and running all the neat programs that are here now, and will EXPAND exponentially!
This IS A GOOD IDEA Steve, get someone to flesh it all out.
In case you want to see the entire series of INCREDIBLY CLEVER ads that feature the interaction between Mr. PC and Mr. Mac, the link below will take you to a listing where you can view them all right now.
www.youtube.com/watch?...
{ disclosure, VERY long with 2600 shrs AAPL }
Tell me this isn't the PERFECT way to take on RIMM?
www.youtube.com/watch?...;feature=related
Good catch! But my first GPS was a gift... from a relative with irresponsible buying habits. She was one of those living in CA when the housing prices soared and cashed out. She put her $300k in gains in the bank, didn't invest and sent most of her money back to her family members in the Phillipines. During her short stint as her family's cash cow, she decided I needed to have a GPS like hers, so hence the gift.
After using it for a few years, I accidentally fried it by charging it with the wrong charger. No longer was owning a GPS a luxury, now I had grown used to owning one. So I bought the new one for $150.
And I reiterate, owning an iphone is a perceived status icon more than a necessity. Lucky me, like all the other shareholders, many Americans are very wrapped up in perceptions.
iPhone is a very functional device. So is a Blackberry. What justifies the difference in price... before it slashed it by 50%? I'm not bashing the phone. I'm just saying, I think many of you are living in some dream world when you claim your companies will be buying every employee one anytime soon.
Right now, I'm just as happy with the iphones as I am with all the little nuggets of coal I own. No technology at all in coal, but they are just the rave!!! Everybody's "must have".
And, I though I had read it all.
This person is NOT famiiar with shorting, but just sold RIMM short anyway.
This made my day !!
Both have their faults, unfortunately.
It's true that Toni's analysis was conducted in May, however, by that time the market already knew that the iPhone would have MS Exchange support, an app store and 3G was likely. The GPS and lower initial cost - but actually higher TCO - wouldn't really change the CIO's opinions if we're being honest here. We can't therefore say that this invalidates the research.
The iPhone is a mobile computer but then again so what? So are Symbians, WinMos and even Blackberries to a degree. All have processing capacity, all have applications, all have corporate e-mail so what new stuff of substance is Apple actually bringing to the party? Nothing much apparently.
I think the iPhone will get some corporate market share, but displace the 800 lb gorilla that is RIM? Not a chance in hell. Entrenchment is a powerful blocker, especially when the competition doesn't bring anything new to the table.
The sad thing is that Zach then goes onto some tedious attacks on Toni's missed estimates without then comparing to some of the missed estimates on the positive side. These attacks just diminish his own credibility.
Top Ten Things in My Life Apple Has Not, and Will Not, Improve
10. Having to jiggle the toilet handle.
9. Needing to lose 10 pounds. Okay, 15 pounds.
8. Lack of sleep.
7. Thunderstorms interfering with satellites during the 18th hole of the US Open playoff.
6. Bad beats on Pokerstars.
5. Samsung DLP television that doesn't always turn on.
4. Fear of death.
3. The Washington Nationals.
2. Gas prices.
1. Poopy diapers.
From what I have read, Toni and one other analyst are downbeat and every other analysts (20+) are upbeat along with Zach Bass
-zach
If price is what drives iPhone and BB users then Apple is the clear winner! The apple data plan is $30 and the BB plan is $45 (minimum), both on AT&T. My trusty calculator tells me thats and extra $360 for a two year contract. So in a way, your saying the iPhone is a better deal than BB, right?
Why on EARTH would you look at historic prices (i.e. "Before it was slashed 50%)-- just to support your (weak) argument? As an AAPL holder, I am GLAD they made sure they recapped their R&D costs.
Also, read tbb558 (above) on the cost of RIMM plans.
Also, the iPhone is MUCH more sophisticated as a platform than software development than ANY other phone product.
Also, if you are willing to spend $150 on a GPS, you can't spend $200 on an MP3 player/phone/GPS/"game boy"/portable Email and web device? Are you NUTS? Don't like ATT-- unlock it!
Try Apples to Apples (no pun intended): iPhone's business plan, with Outlook integration, is $45 - same as with a BB. On the consumer side, Apple's data plan is $30 - same as with a BB.
Seriously - why do you think AT&T would undercut its other product line with a device that will be sold out for months?
He's the short kind of long.
"Also, if you are willing to spend $150 on a GPS, you can't spend $200 on an MP3 player/phone/GPS/&... boy"/portable Email and web device? Are you NUTS? Don't like ATT-- unlock it!"
And pay the termination fee, which I'm guessing will be higher than with any other device they sell, as I think the subsidy they're paying Apple will be higher than on any other device they sell. Or don't, and pay another $1,680+ over two years. Either way, there goes your argument that it's just $50 more than a GPS.
Don't get me wrong. I'll be getting one eventually, but I won't be waiting for hours in a store to do it. I sure hope they can figure out how to activate online orders. Shouldn't be hard, since I did it with another carrier a couple of years ago.
No Joke.
I checked data plans from AT&T, and the minimum cost for a BB is $45 and can go way, way up. The minimum for the iPhone is $30. That is comparing apples to apples. I'm a consumer and that's why I compared the basic rate plans. Seriously, don't read more it to what I post.
And what product will be sold out for months?
points nicely made, perhaps an article on the buffoon cramer next ?
its embarassing what otherwise passes for news these days
are you high, do you know how much a blackberry curve cost when it first came out. It was 399 or more. The only reason it was less was due to their discount of you signing a 2 year contract. The cost of the blackberry curve and iphone was pretty much the same if you take out the subsidy and contract part. Why do people keep overlooking that. iphone had not subsidy untill now and that's why it was 399 which is comparable to nokia and blackberry phone with those features and without subsidy. One more thing, people made such a big deal of apple not having 3g before. Do you know that blackberry curve is still not 3G on GSM network, why isn't that a knock against RIM.
Apple price target: $1,000,000
You need to check a little closer then - you compared the BB business plan with the iPhone personal plan. www.wireless.att.com/c... clearly shows that a personal BB data plan is $30 when purchased with a voice plan.
"Seriously, don't read more it to what I post."
Huh? Not sure what you're trying to communicate here, but I was just correcting your faulty data.
"And what product will be sold out for months?"
I expect the iPhone to be in limited supply for months. I guess we'll see.
I was so convinced.
"The content of the survey is irrelevant,"
Well, no it isn't. It seems that a survey has indicated that the majority of CIOs in this sample do not see the iPhone as a viable corporate device. I can't comment if the CIOs were cherry picked or what the distribution of Fortune 500 and other companies was, however the message remains the same. You can't ignore this and then go on to claim that 35% of Fortune 500 companies are working with Apple - and actually, they're not - 35% have tested the SDK, this isn't the same thing as 'working with Apple'.
Perhaps you'd care to comment on what percentage of Fortune 500 companies actually use rather than 'are testing' Blackberries as a comparison?
"Toni has a history of twisting the facts to suit some underlying agenda, this is clear, the whole industry knows it."
Undoubtedly. That's why I say his survey has its flaws.
"Secondly, the iPhone isn't about it's individual features and how they stack up against other gadgets. No sir! The iPhone is about the ecosphere that Apple has built around it."
Really? Is that the same 'ecosphere' that has no significant corporate presence? Because I believe we are talking about the corporate sector are we not?
"There is NO other device or manufacturer that stacks up. Apple and iPhone are THE standard, RIMM is very, very nervous about their long-term prospects in this light."
Nonsense. The iPhone is a very good phone but there are other very good phones out there and due for release. Perhaps it's because I'm European but we tend to be a little fussier over our devices. I'm sure the iPhone will do well but it's not a world beater, at least not outside the US anyway which, it seems, is the story for most Apple products with the exception of the iconic iPod.
Optimism, whilst nice, is no substitute for reality.
No, the data plans have not come down. They've been that price at least two years.
I have no idea whether RIM has a 3G Blackberry.
"and if not will they incur additional cost like the iphone users?
I doubt it, but I'm no swami.
You're right. I guess Coke's the only decent company in the DJIA, since it's the only one that wasn't down today.
When people become aware of all the iPhone can do it seems reasonable that the "survey" results will be different. Just wait until the CEO of one company starts talking with the CEO of another company about the custom apps they are running to increase sales yield, increase inventory turns or track employee productivity in the field via GPS.
A closed mind is a dangerous thing...
I investigated the cost of a BB Curve in Jan and when I saw the data rates I balked and began to way my options. Then I looked at the iPhone and realized it would suit my needs better plus the data cost $20. Once I decided on the iPhone I realized the 3G was coming out this summer, so here I wait.
Seriously, check your facts on the cost of BB data plans 6 mo's ago.
Er, how am I to do that? I can tell you from personal knowledge tat T-Mobile had a $20/month consumer BB rate more than 2 years ago. While they're certainly a second-tier provider likely to undercut the competition, I seriously doubt it would have been by 55%.
But, by all means, if you can find a source for 6-month-old rates, post it.
"I investigated the cost of a BB Curve in Jan and when I saw the data rates I balked and began to way my options."
Since today you looked into it and couldn't find the consumer rates, perrhaps you were unable to find them six months ago?
There's a key difference in the two plans: BB Enterprise Server. You can't hook into Outlook with the consumer version, hence the lower price.
And, I though I had read it all.
This person is NOT famiiar with shorting, but just sold RIMM short anyway.
This made my day !!"
WooHOO!!!
RIMM a week later @ 124.41 LOLOL
$2,340... not bad for a first time short :P