Nomura's Stuart Jeffrey's decision to start Apple (AAPL -1.9%) at Neutral has two parts: he...

Nomura's Stuart Jeffrey's decision to start Apple (AAPL -1.9%) at Neutral has two parts: he thinks iPhone/iPad Mini supply constraints will limit Dec. quarter sales, and he thinks growth will decelerate from 2014 onwards. Developed markets growth is seen falling into the single digits, and while emerging markets are expected to be stronger, Jeffrey thinks Apple will need to sacrifice iPhone margins, as it goes after cost-sensitive customers receiving lower subsidies. Apple is now down 11% from its Sep. 21 high.

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Comments (12)
  • Wall Street Smart
    , contributor
    Comments (472) | Send Message
    Decelerate by how much? Apple is trading at 12 times earning less cash. Even if it grows at halves and halves for the next 2 years, we will see high single digit growth rates. Ipads are by no means saturdated and 2013 is a year of 100 mn Ipads sold at the least. They are selling Iphones as fast as they can make one and demand has been staggering. I think December will be a supply constrained quarter but we will still do at least 18 bucks in earnings which will be about 50% more than last year.
    9 Oct 2012, 11:26 AM Reply Like
  • chopchop0
    , contributor
    Comments (5215) | Send Message
    IPad is getting eaten alive at the low-end 7" market That's why AAPL is rushing out the Mini as fast as it can


    9 Oct 2012, 11:50 AM Reply Like
  • Feierdrake
    , contributor
    Comments (21) | Send Message
    Eaten alive... - all the 7" tablets together make up a small fraction of apple's iPad sales. "Apple nabbed 69.6 percent of the tablet market in the second quarter on 17 million shipments worldwide. Samsung, its arch-nemesis, came in second place with 9.2 percent share on 2.3 million tablet shipments. Amazon and Asus took the third and fourth spots with 4.2 percent and 2.8 percent share, respectively." In conclusion, the Nexus 7 will only have about 1/5, at best and 1/8 the sales of the combined iPads. If there's no iPad mini, then figure 21-23 million iPads. Even at that number for Q4, the Nexus 7 will have most likely 1/4 the units sales of the iPad.
    That makes it a serious product, but "eating their lunch?" The only real question is what the iPad mini vs. Nexus 7 numbers will look like in Q1 of 2013, when there are no supply/productioin limitations to speak of. I'll guess - iPad Mini by 2:1 minimum over Nexus 7.


    But back to the Nexus 7 - from a detailed supply chain analysis I found on "Conclusion - Based on these data points, the estimate for the current sales volume of the Nexus 7 is over one million units. In total, we can expect about 3 million units to be sold in Q3 2012 and another 3-5 million units to be sold in Q4 2012."
    Now I do have the numbers for Q2 - Apple sold 17 million. Forecasts for Q4 with the holidays, are all over the place, but (assuming an iPad Mini launch, 30 million units. Apple likely will likely no longer have 50% market share in another 2-3 years. You can't maintain marketshare, when you only troll on the higher end price wise and have basically 2 models, competing against at least 15 big brands and dozens of lower cost brand-x tablets (especially overseas).
    10 Oct 2012, 12:11 AM Reply Like
  • pjsburk
    , contributor
    Comments (16) | Send Message
    Credit Suisse reaffirmed their outperform rating on shares of Apple (NASDAQ: AAPL) in a report issued on Tuesday. They currently have a $750.00 target price
    9 Oct 2012, 11:37 AM Reply Like
  • tigersam
    , contributor
    Comments (1707) | Send Message
    Kick in the stomach when somebody is down. Wha is Nomura telling is nothing new.


    But here is the bottom line.


    Trading at PE 12. Cash in the bank 120B. Growing 66%. 140B in bank at end of 2013. S&P is trading with higher PE.


    Only drawback is market value of Apple is very high and everybody scared of the market cap.
    9 Oct 2012, 11:45 AM Reply Like
  • IncomeYield
    , contributor
    Comments (3707) | Send Message
    As I have said before, the "Beauty Contest" theme applies here. You gotta judge the judges on this one to get it right. What will the BIG MONEY do in a relatively very over-owned stock? When will they decide the growth story is over and what valuation will they assign?


    For my firm, Apple is now standard issue for smartphones and tablets and we waited for the iPad3 and iPhone5. That said, we're basically done though. Not sure what would compel us to upgrade.


    I see two camps, one small and one large. The Apple gadget lovers that are willing to pay almost any price and mark-up and simply like to play with their gadgets. And my camp, the total cost of ownership group that doesn't want to be tortured by the Rube Goldberg mess called Windows and Android. We also can't risk deploying devices and face the wrath of the Apple patent portfolio.


    Who is left to buy Apple devices that will move the % year over year growth stats upward at the same rate?
    9 Oct 2012, 11:57 PM Reply Like
  • bobbobwhite
    , contributor
    Comments (2150) | Send Message
    Specious article. Growth will decelerate? Sure, any product has a cycle, and a 2014 decline for iPhone and iPad as separates is close, but what about new products? Surely, Apple profits declining in one area will be supplanted by another, just as what happened with iPod.


    iTV, interactive programming, combo iPhone/iPad.........all are possible by 2014 and all would be blockbusters.
    9 Oct 2012, 11:48 AM Reply Like
  • Poloman
    , contributor
    Comments (29) | Send Message
    Bobwhite -- and don't forget there is mobile payments + enterprise + hundreds and hundreds of millions who hanker for aapl products but cannot buy with distribution in 100 countries -- there is still a lot of demand out there.
    9 Oct 2012, 02:50 PM Reply Like
  • bjnflicks
    , contributor
    Comments (4335) | Send Message
    Nomura is full of it. They are no doubt scooping up cheap shares right now helped out by their big lie. Apple is nowhere near margin compression or slowing growth. Their developing and emerging markets growth is huge because literally, they were not even in those markets a year ago. I know for a fact they just opened their first office in South America about nine months ago. And everyone in South America (where I go often) dreams about owning an Apple phone or computer. And many have money and will pay for it. Samsung has had the top end of these markets to itself for ahile but now you walk into any big Ktronix store in Colombia and Apple has a whole superbly designed aisle to uitself, like a Bauhaus religious shrine compared to everyone else looking just ordinary. Meanwhile, over in Asia, there is a sheer frenzy to get a new iPhone and people are willing to pay 50% above list price to get one from the grey marketers. One reason Apple sold out so fast is that grey marketers were buying up every single unit they could, 500 units per person because they know they can make a $200 profit on each one. That is HUGE DEMAND and gradual supply = top margins and huge cachet. Bling bling, ka-ching. Of course the true numbers won't be visible until January's earnings report, but we will get a first peek next week. And even two weeks of iPhone sales will be worth more than an entire quarter of earnings for Google or Amazon. Meanwhile, Apple is sitting at a pathetic low PE, as if there are no growth prospects left. And the mini iPad (10 million plus units by Christmas) is about to come into the picture. Add it all up and this is a crazy bargain price. I bought more today on margin and I urge everyone else to do the same. Nomura is pulling our chain. They know better than to poo-poo Apple right before the biggest earnings quarter in world history. Hey, mjaybe they are shoting the stock now, not buying, but if they are, they will be on the losing nd very soon, and in a fericious way. The biggest short squeeze in history is coming up any day now. Just watch.
    9 Oct 2012, 11:58 AM Reply Like
  • Robert Duval
    , contributor
    Comments (7852) | Send Message
    Bought more on margin.....hmmmmm. OK. I did cover my shorts, for the time being. Maybe reshort tommorrow? We will see.
    9 Oct 2012, 07:45 PM Reply Like
  • Poloman
    , contributor
    Comments (29) | Send Message
    I think nomura should go back to its origins of being a retail broker in Japan and I would not pay much attention to this analyst - he is forecasting 2014 -- while 2013 is likely to be a bumper year for aapl.
    9 Oct 2012, 02:55 PM Reply Like
  • tigersam
    , contributor
    Comments (1707) | Send Message
    Namura can not tell what will happen tomorrow. How they can predict what will happen in year and half.
    9 Oct 2012, 03:09 PM Reply Like
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