Seeking Alpha

Apple closes lower as analysts argue over early orders, production

  • Apple (AAPL -1.6%) closed lower following Peter Misek's downbeat note and concerns about the fact delivery times for the iPhone 5C remain unchanged (pre-orders started today). Shares are down 8% from where they traded going into Tuesday's iPhone event.
  • Two of Apple's staunchest sell-side defenders, Brian White and Gene Munster, sprung into action again today. Echoing Misek's comments about 5S fingerprint sensor production issues - Digitimes and KGI reported about this in August - White admitted the "complexity" of the 5S is hampering production. But he added the unchanged 5C delivery times are simply due to healthy supply (the result of a "relatively straightforward" manufacturing process).
  • Munster's analysis of "U.S. consumer sentiment" for Apple's latest iPhones, as measured by Twitter commentary, indicates 69% and 67% of comments were respectively positive for the 5S and 5C two days after the launch event. That compares with 67% for the iPhone 5 last year. Of course, a major gap has opened up between the iPhone's market share in the U.S. and many other big markets.
  • Also: U.K. retailer Phones 4u says it has "seen double digit growth in [5S/5C] pre-registrations compared to the same period for iPhone 5 last year." Upgrades from the iPhone users responsible for the blowout iPhone 4S sales seen in late 2011 stand to bolster this fall's sales.
Comments (46)
  • This is still the best stock to hold. $150B in cash or equiv., dividends, Demand for product, sales, and future.

     

    I bought more today.

     

    I note that put and call plays are dominating the market and making opportunity for those who still invest in value.
    13 Sep 2013, 06:23 PM Reply Like
  • I'm long Apple and hope you're right. However, Tim Cook is starting to worry me with his consistently demonstrated ineptitude for managing these release expectations. The fact that Cook called 2013 the year of "exciting product releases" and all we've basically seen is a bunch of phones with pretty colors. Only three months left and if that is all we are going to see, even Apple bulls have to admit they are disappointed, right?

     

    Any more outings like this September and the proceeding 12 months of basically saying "what? me worry!" from Cook and I'll be joining the throng of people asking for Cook's scalp. Frankly, I'm getting close to that point now.
    13 Sep 2013, 06:38 PM Reply Like
  • I agree (AAPL) is the best company in the world at the moment but unfortunately in the wacky world of stock investing that doesn't always equate to the best performing stock, as the last 12 months has shown!

     

    My personal opinion is that the best time to ease into a position would be in December/early January in time for the January 2014 earnings report. There is a good chance that it could be as explosive as the January 2012 earnings.

     

    Until then the stock will probably be treading water. There are better trading opportunities out there for the next few months!
    13 Sep 2013, 06:48 PM Reply Like
  • You've hit the nail on the head for me, WisPokerGuy.

     

    Presentation and expectations are in no small measure a factor of a stock's price path. Cook has over promised and it's come home to roost.

     

    He's setting his own bar too high, then failing to meet it. "Exciting product releases," are not phone in new colors, poly-carbonate casings, and fingerprint security.

     

    It's a reasonable refresh cycle for an existing set of products.
    13 Sep 2013, 10:36 PM Reply Like
  • @WisPokerGuy: I do not see any ineptitude here... The 5S is the right step into the future, it brings 64-bit processing (which, once developers have embraced it, which is quite easy, will open up new form factors like iOS driven laptops - ideal for education and many functions where x86 power and cost is not required), biometrics (which, once Apple opens up the API, will be the best two-factor authentication approach on any phone in existence) and comes in more variations (especially "gold", even if it is not my taste, will do very well in various geographies) and they demonstrated their immense capabilities in chip design (both, the A7 and the M7, chips will allow Apple to differentiate in a way that is extremely hard to copy).

     

    The 5C is last year's model in a cheaper casing. They really could have cut another $50 off the price (but maybe they use that as manoeuvring room for subsidy negotiations). The price is high, but not out of the world. People who actually hold the device were quite impressed, so, I guess, this will work out just fine.

     

    Between now and November we will at least see: new iMacs, the new MacPro, new MacBook Pros, a new iPad and a new iPad Mini. An updated Mac Mini and Apple TV are also rumoured, and there should be some iPod updates (even if they are likely very minor) as well. Several pundits with good connections have also hinted at an additional iOS device (not a watch or TV set), which could be a bigger iPad, or some new form factor.

     

    No reason to be disappointed. Apple, even under Jobs, did never allow one product to steal another product's thunder. They would never release multiple important products in one keynote, they never did. No need to panic.
    13 Sep 2013, 11:44 PM Reply Like
  • Is that you Carl? Loading up on the dips.
    14 Sep 2013, 01:21 AM Reply Like
  • The only "not clueless" and high needed solution of Apple now is to use the spare money that they have to subsidize the Iphone price so they can sell quality product with lower price to combat the Android/Samsung dominancy in China.
    Now is the time not for higher buyback or devidend.
    Otherwise none devidend at all!
    14 Sep 2013, 06:31 AM Reply Like
  • I think the new processor for 64bit and the fingerprint sensor bring to the table future benefits critics are missing. In fact, did you notice that both Microsoft AND Samsung immediately after the announcement claimed to be working on the same thing. Also, the flop of the Samsung watch give Apple another year to improve on its watch. Finally, the high price of the 5C is a blessing in disguise. There will be no products out there from Apple that are "cheap". The feeling is still that "if you can afford it, you buy Apple".

     

    Automotive is also a big future driver and any self respecting auto manufacturer rather than the cheap ones will want anything but Apple for their brand.
    14 Sep 2013, 02:04 PM Reply Like
  • Reply WisPokerGuy Comment 473

     

    Why don't you sling your hook now then ?!!
    You say;-
    "and all we've basically seen is a bunch of phones with pretty colors."
    What?!! Apple have produced some pretty amazing new software and hardware and YOU DON't SEE IT !!
    JUST SELL YOUR SHARES NOW THEN - full stop.They will soon be bought up by people with vision.
    If a short sighted person like you is after Tim's scalp I will be in front of you defending him. What do guys like yo use for a brain or are you waring Google googles that distort your brain waves?
    Anyway 2013 is not over yet, is it? and there's the whole of 2014.
    If you looked further than your nose you would realise that this is an excellent strategic move by Apple and there is more stuff clearly to come.
    14 Sep 2013, 04:47 PM Reply Like
  • RE Ray Merola Comment1996

     

    Rubbish, you just do not get it!
    There is so much innovative design and though gone into this strategic move of Apples it is not Apples fault if those that perceive it can not see further than then end of their nose. This stuff is cool and what's more important is that the cool and functional iOS is connected to a great ecosystem that works- unlike other operating systems.
    Fortunately,many, many consumers and lovers of brilliant design and relevant technology will buy Apples offerings by the millions world wide. AND with the very clever finger print technology will feel secure to purchase music,books, FILMS/TV AND MORE.
    And there is still plenty more innovation to come from Apple in the next 12 months.
    14 Sep 2013, 05:03 PM Reply Like
  • Ladies and gentlemen... I give you Mr. Tim Cook alias "Fat Banker"

     

    Just for the record, I am long Apple with $188 cost basis. I currently have no intention of trimming my position. However, I'm not - repeat NOT - a lemming.
    14 Sep 2013, 05:29 PM Reply Like
  • Re WisPoker Guy comment 474
    "Ladies and gentlemen... I give you Mr. Tim Cook alias "Fat Banker"

     

    Sir, you flatter me !

     

    No, if you and I had just half of Tim's intellect you would not need to waste your time on Poker and I would be designing brilliant technology and earning billions a year in reward.
    14 Sep 2013, 10:27 PM Reply Like
  • Fat Banker

     

    My issue isn't what Apple may do in the future, or what they are capable of innovating. Very simply, it's that Cook doesn't practice "under promise, over deliver." It's the mantra of good growth stock CEOs.

     

    Not practicing it produces the kind of reactive selloffs that AAPL stock experienced after September 10.

     

    Cook sets the expectations. The Wall Street and the tech community do not. If he builds up expectations for exciting product releases, then he's got to deliver. If there are none, indicating a general refresh cycle; that's fine. Then set the bar lower.

     

    16 Sep 2013, 09:09 AM Reply Like
  • Cook doesn't worry Icahn, at least not for the next few months. No worries.
    13 Sep 2013, 06:41 PM Reply Like
  • Anybody else is left to downgrade Apple, or this is it?
    13 Sep 2013, 07:05 PM Reply Like
  • I couldn't be more tired from hearing from sell side analysts!! They set the misconceptions and unfulfilled expectations, and then criticize when their comments don't become a reality. These people are shills, the hawk stock for living, they don't cast a light on anything. They are simple minded shallow tools, who assist in the manipulation of stocks, and Apple is their favorite and most profitable target because it's so easy. It's unfortunate we can't get any input from these people that is meaningful, but its beyond their ability and not consistent with their objectives. I believe this is commonly know as "yelling fire in a crowed theater".
    13 Sep 2013, 07:47 PM Reply Like
  • This is exactly what has been happening to BBRY the last year.
    14 Sep 2013, 01:48 PM Reply Like
  • I was going long on NOK when the analysts were crying 'Bankrupcy looming!' Those same analysts last week upgraded NOK, even the disgraceful Bernstein. It's a dark murky world in analyst land, and they have their own agendas, which are not the agenda of the small investor. They do drive the price, but will jump sides in a flash, and forget their previous flawed analysis. I'm long AAPL, which took the shine off my NOK last week, but I'm comfortable that they are undervalued.
    Not sure about you guys, but for us it's been total wall to wall aapl marketing this weekend. very impressive, including the Jessica Alba 'voice of windows phones' taking a selfie on her iphone.
    15 Sep 2013, 11:11 AM Reply Like
  • @milehr and @krichard.. It's almost as if they are all worried they won't be heard or have their minute in the spotlight.

     

    All the huff and puff about analyst ratings.. So why is it that NOT ONE analyst covering Apple has a "SELL" rating. According to information on NASDAQ's site:

     

    http://bit.ly/14SbFkA

     

    Of 38 total analysts making recommendations, 24 say STRONG BUY, 4 say BUY, and 10 say HOLD...

     

    24 STRONG BUY
    4 BUY
    10 HOLD...

     

    If AAPL is so doomed to fail, where are the "UNDERPERFORM" and "SELLS" hiding? They keep moving price targets faster than I see the ticker changing, yet no "SELL" ratings coming from them as they downgrade.. Not from what I see on NASDAQ's site?

     

    This link: http://bit.ly/17xbVsG

     

    includes the ratings and the names of all analysts NASDAQ claims to be covering the stock.

     

    Of them, I hope William Blair is no relation to the (anti-AAPL) SA writer, Michael Blair. But either way, there are no "SELL" ratings for AAPL according to NASDAQ.
    13 Sep 2013, 07:51 PM Reply Like
  • Let's not forget the previously announced 65 Billion in stock buy backs...the largest in corporate history. This will have a major impact on EPS growth. They may also announce another one.
    Additionally, IMO they will do a China Mobile deal, the CM network just got government approval this week for the IPhone. This is HUGE. I agree with market share, but Apple does not have to sell a phone to every human on earth to be an excellent investment. Remember, it's also about software and the internal's. Tim Cook was the Op's VP they will work any difficulties out.

     

    I agree to hold expectations low and do what you do best. There are premium products in the world which do command a premium. Apple can always lower the price later, if necessary.
    13 Sep 2013, 07:59 PM Reply Like
  • I hate to say it but if AAPL doesn't sell a boatload of new phones in the first 3 days out of the gate I think you can count on a 30 point plunge and a chorus of sell side analysts singing "I told you so." Then the vicious cycle will start all over again.
    13 Sep 2013, 08:08 PM Reply Like
  • More like 100 points.
    13 Sep 2013, 10:28 PM Reply Like
  • RE cshoxie Commment 149

     

    AND,what if APPLE sells a boat load followed by a container ship load ?
    14 Sep 2013, 05:36 PM Reply Like
  • A nice 30 point plunge from the lemmings would present a good opportunity to buy.
    13 Sep 2013, 08:12 PM Reply Like
  • Cook was right on the pricing of the new phones.apple has always been a premium brand. Investors want that profit margin intact.what distinguished apple phones was the innovation they got for the price. Colors.plastic.and gimmicks are things company's use when they are out of ideas.At this price level the camera could be better and the screen must be bigger.these are things other manufacturers have already established as the norm. Since all the goodies were leaked far in advance, this event had the glitz of a dud firework.
    13 Sep 2013, 08:19 PM Reply Like
  • In all my years in business and sales I never had so many uninformed experts try to come off as informed experts with knowledge that no one else has. Their opinion is like a like a butt,
    everyone has one.
    13 Sep 2013, 08:22 PM Reply Like
  • Methinks you think too much. Buy on weakness and ignore the noise.
    This stock is going to make me very happy in retirement.
    13 Sep 2013, 08:48 PM Reply Like
  • I think Apple will have a very good result the next two quarters - should something really innovative happen, who knows. TC concerns me though in these shows - he shouldn't do the talking. The Samsung guy is worse though.
    13 Sep 2013, 09:25 PM Reply Like
  • MSFT 2.0
    13 Sep 2013, 10:29 PM Reply Like
  • It's gotten ridiculous, every little bit of information is classified and reanalyzed. Pretty soon we're going to start getting hourly upgrades/ downgrades based on the direction of the wind.
    13 Sep 2013, 11:41 PM Reply Like
  • "Pretty soon we're going to start getting hourly upgrades/ downgrades based on the direction of the wind." - I think we are there already :)
    14 Sep 2013, 04:42 AM Reply Like
  • Remember
    Problems with antenna
    Problems with Map
    Etc etc

     

    Danish media are very eager to recite
    "Security xperts" for informing that the new fingerprint system on the 5s is a BIG security risk as hackers can read all contents like passwords,accounts etc
    Apple has given all accountinfo to USA who have copy of all fingerprints of people entering
    This will hurt sales in Europe even if statement is wrong
    14 Sep 2013, 03:11 AM Reply Like
  • Apple claims the fingerprint data is stored inside a chip in each individual iPhone (and not a picture or data that can be used to recreate a picture). The fingerprint data is not sent to the cloud or anywhere outside the individual phone. This seems different from the "account info" you speak of that could be more susceptible to hacking or government snooping. No scheme is 100% free of risk but this sounds better than most existing authentication schemes.
    14 Sep 2013, 11:34 AM Reply Like
  • "Apple claims the fingerprint data is stored inside a chip" and you believe this is not accessible by some hacker or NSA program?

     

    Technology will be man's undoing at some point as the ignorant masses adopt devices and services that they have no understanding of.
    14 Sep 2013, 06:54 PM Reply Like
  • There is nothing wrong with a company with these assets. The cash and the products continue to make money hand over fist. The investors are too caught up in product launches when they should be looking at the Apple ecosystem that they are building. I do not see anyone I know switching from Apple to another brand. There is great value in building brand loyalty. The high prices give Apple great flexibility to compete.
    The real important part of Cook's announcement was the iworks transition onto the iphone. The low cost of this software is going to cause the public to switch out of windows which now sells their software with a one year license. Apple's biggest market is the installed windows base.
    14 Sep 2013, 10:56 AM Reply Like
  • If you are long AAPL, relax! The release of the 5s & 5c will be absolutely huge and the stock price will follow. Do not let Apple haters and Samsung paid trolls sway you. Soon enough, we all will recognize Cook and his team's technical and consumer oriented brilliance. 64 bit technology is a game changer and leaving all scurrying to address. APPL is the absolute innovation leader, hands down.
    Get ready!
    14 Sep 2013, 01:07 PM Reply Like
  • 1 billion in cash every week. That is about $1.10 a share. It would have been around $1.03 a share 6 months ago but they have bought back around 6.5% of the company. This means you are effectively getting around 18% return on your investment at current stock prices. Where else can u get 18% return ?

     

    Facts our if buy an apple share know with the existing 120 bill, or around $ 130 a share you will own the share in 5.5 years and also the company will have enough cash to pay back ur initial investment. That doesn't happen very often BUY NOW
    14 Sep 2013, 07:05 PM Reply Like
  • How much return did you get on AAPL last week?
    14 Sep 2013, 07:07 PM Reply Like
  • If your investment horizon is a week, you shouldn't be on this site, you should be on the trading floor.
    15 Sep 2013, 10:49 AM Reply Like
  • I wish SA and other investment sites only made public these upgrades/downgrades and reasons why if they are from credible sources with a strong history of correct predictions instead of these punters sitting in the pub.
    15 Sep 2013, 12:14 AM Reply Like
  • Nothing particularly wrong with Cook. I think the longs are just getting impatient, upset, and starting to look for reasons to believe the shorts as the price falls. The price falling doesn't make the shorts right. Give it time and remember good investors keep a cool head and don't get swept up in the crowd. That's actually why they get rich in the long run.
    15 Sep 2013, 10:50 AM Reply Like
  • I own everything Apple, several computers, 2 iPads, we have 3 iPhones. There has been a shift since Cook took over. Everything is leaked by the suppliers so there is no real bang at the announcements. Apple now plays follow the leader, by this I mean other companies have already innovated (Google smart TV, Samsung bigger screens, smart watch, etc.) and it seems like Apple is the last one to the party.
    I think it would benefit Apple to rid themselves of Cook and get a visionary. This would do more for the stock than anything, because the fundamentals are there but leadership is not.
    My hope was for a bigger screen with fingerprint at the announcement. I think this would have sprung the "I have to have it" in the market.
    Cook, I think would serve AAPL best by stepping aside
    15 Sep 2013, 11:48 AM Reply Like
  • The same kind of things leaked when Jobs was at the helm. For example before the iPhone 4S was leaked people knew it was going to be the same form factor as the 4. About the only thing that really leaked was case designs and the fingerprint button. Considering they are building 40 million of them and they have dozens of suppliers, each with tens of thousands of employees (many who aren't paid much), leakage is inevitable at this point.

     

    There were some rather big secrets that didn't leak. Few expected the huge performance jump and the move to 64 bits, no one expected the second CPU for motion tracking. Both have some pretty big implications on future devices and the direction Apple is going. In particular, based on the recent interview, it sounds like Samsung wasn't expecting 64 bits which means Apple is likely sourcing it elsewhere. In other words they are keeping their important secrets away from the people who they need to keep them from.
    15 Sep 2013, 02:08 PM Reply Like
  • I own everything Apple, several computers, 2 iPads, we have 3 iPhones. There has been a shift since Cook took over. Everything is leaked by the suppliers so there is no real bang at the announcements. Apple now plays follow the leader, by this I mean other companies have already innovated (Google smart TV, Samsung bigger screens, smart watch, etc.) and it seems like Apple is the last one to the party.
    I think it would benefit Apple to rid themselves of Cook and get a visionary. This would do more for the stock than anything, because the fundamentals are there but leadership is not.
    My hope was for a bigger screen with fingerprint at the announcement. I think this would have sprung the "I have to have it" in the market.
    Cook needs to go!
    15 Sep 2013, 12:28 PM Reply Like
  • There is NO doubt Jobs was a visionary, possibly one of the best and smartest ever. It is unfair to expect Cook to be the same. However, remember Jobs, with his smarts and vision picked Cook. I feel he is doing an excellent job. Apple is a much more mature co, with much more to manage. Apple does not have to have a game changer every quarter for their co, ecosystem or cash to grow. How important is their closed system vs. The android where malware, etc is commonplace. This closed system is just one reason to buy Apple. This will become even more evident with the fingerprint processor which Apple may eventually turn into a profit system by eliminating fees charged by Visa, Amex, etc to their 600 million customers. Can you say Cha Ching!! Lat the naysayer's continue to short the stock, promote useless bells and whistles, etc. Remember what the Big money does, they buy when the stock is on sale!
    15 Sep 2013, 07:38 PM Reply Like
  • Misek is endlessly, pathetically wrong so why will this time be any different?
    16 Sep 2013, 12:18 PM Reply Like
DJIA (DIA) S&P 500 (SPY)