Michael Shulman

Apple Earnings: What to Expect (And Who Not to Believe)

Our (ChangeWave) surveys show Apple has reached a mature and increasingly positive place in the market - laptop and iPOD products now sell based on features and price and there is not buyer hesitation due to "newness." Apple is close to reaching this point with iPhones but as it reaches this level of customer maturity it will find more and more customers waiting until their current phone contract expires before buying an iPhone. This is all being said, Apple should beat estimates, especially in laptops.

Apple's guidance is clearly driven by lawyers or a smart CFO - they have no obligation to anyone to change the way they do guidance. Why should they? Companies like Apple should worry about long term financial and stock performance, not making an analysts or trader happy on a given Wednesday in October.

If and when you analyze Apple again, the key data point is money flows into tech or other mutual funds with a history of owning this sector. Apple's guidance will be much better than virtually any other tech company and money will flow out of other stocks into Apple as opposed to totally fresh money entering the market to play Apple. The stock does not have to fight Apple analysts - it has to fight continuing and massive withdrawals from mutual and hedge funds investing in tech.

One thing Apple could so is spread it IR wings and start working consumer spending/retail analysts, something it does not realyl do at this time (or so I have been told).

Bottom line: not a short (my specialty) and not a long based on investor concerns over the market. And we may not be at an appropriate entry point if the average multiple of an S+P stock continues to contract.