You Better Duck - Apple's Unit Profits Are Falling [View article]
Stephen, you are and were correct. Congrats on pointing it out early. I thought it was a result of all of the new products rolling out at once, but this qtr has confirmed that wasn't it. What is much worse is to project the amounts for next qtr based on the guidance they gave....roughly $7/sh plus or minus the variables in their guidance. Last year they earned $9.32! Units increasing and profits dropping like a rock...not good. The next two quarters look to be abysmal on your chart.
Apple Investors Are Missing The Big Picture [View article]
I didn't say sales were imploding. I said market share. Total international (ex-America) iPhone sales are about flat to slightly lower. Total smartphone sales are booming. That means Apple's market share is imploding. If there is rapid growth and Apple isn't part of it, Android and other types are winning share. I love the iP5 and notice I didn't say it was a dud. The sales numbers are what is wrong. For whatever the reason, the iP5 appears to be the first iPhone that won't outsell all previous generations. It may not even outsell iP4S! So, Apple is planning a 5S--basically a rewarmed 5 for the Fall? What makes us think it will sell any better than the 5? If Apple earns $36 a share this year and the trend continues, we may be looking at $30 next year. It looked undervalued back in December, but the problem is that the story keeps changing and getting worse. $7 a share compared to $9.32 is horrendous, and the next qtr may be much worse. I'm with you on a rebound, but what if the story continues to deteriorate?
Apple's Earnings Projections Continue To Irritate Wall Street [View article]
I disagree. Apple has boasted (rightfully) that each iPhone generation has outsold all previous generations--combined. That was all while they had the same sales model for price and prior generations. The iP5 has broken this trajectory in a huge way, and that is why Apple has cancelled all of the orders. They expected far higher sales of the iP5.
Apple Investors Are Missing The Big Picture [View article]
Aparo, the reason you back out VZ and T is that you are getting a good picture of iPhone growth ex-America. It is shrinking, not growing. This is a very bad indicator. Smartphone sales are booming worldwide. Iphone sales are shrinking. Apple market share ex-America is imploding. The iP5 is a sales dud compared to all previous iPhones! The buyback has successfully diverted attention away from the next six months...for now, but look at what they guided! You work the math, and you are looking at $7 a share, plus or minus a bit. They made >$9 a share last year in this qtr. TC said new products coming in the Fall. Fall doesn't start until the very end of the 4th qtr! Apple earnings are imploding. The soonest they may have more new products is basically 1Q of next year (FY). All very bad. Yhoo still shows almost $44/share for this year. With $7 a share this qtr, they are at ~$30 a share going into their 4th qtr! With no new products and a million new Android phones and tablets, how much do you think they will make? $5? So, Apple would be about $35 a share for this year, before the buyback. All bad, and we may see a $350 price in the coming months.
Apple's Earnings Projections Continue To Irritate Wall Street [View article]
I am surprised it isn't at $350 anyway! Assuming about $7/share this qtr, plus or minus a bit, we are looking at $30 a share going into the July/4thFY Qtr. If they are not rolling products until Fall, as TC indicated, then the 4th Qtr will be terrible! But, even assuming another $7 performance we are looking at about $37/share for the year. Very rough, but if they do worse in the 4th, we could be looking at a YOY profit drop of about 20%. The Yahoo finance page still shows analysts expect 43.66 this year! Apple's numbers are dropping like a lead balloon.
Apple Investors Are Missing The Big Picture [View article]
Guru, I think you are forgetting that Wall Street valued Apple at $700 very recently. Why has the stock dropped? Is it manipulation, or are there reasons. I pointed out at least six issues longs need to be concerned about: (1) This last qtr's iPhone sales, worldwide, were down YOY, when you simply back out Verizon and ATT. Down! Consider that China Telecom wasn't even added until a few weeks left in the qtr last year, and that a number of small carriers were added since, and international iPhone sales were not good last qtr. (2) The iPhone 5 isn't selling well. The mix has shifted more towards the 4 and 4S, but what isn't being reported is that the 5 is the first iPhone that isn't outselling all previous generations combined; in fact, it very well may not be outselling last year's 4S sales!! Cupertino is crushed over the performance, regardless of what they say publicly, and it is way below projections, and that is what is causing the angst among suppliers--they were planning for much higher sales. (3) Next qtr's numbers are awful--revs are flat to down, margins are down, and projected profits are down sharply. (4) Tim Cook basically said we will see new products in the Fall. That is almost five months away, so it isn't just this qtr we should be worried about, but next qtr will likely be worse. (5) The price looks cheap now, but if they only make $12-$15/share in the next two quarters combined, it is going to look reasonable in the 300s. (6) Finally, the Galaxy SIV and HTC 1 are getting pretty good reviews. I suspect they will take share in Apple's remaining strongholds.
A lot of companies can make semis, and many can make phones, tablets, and software, but only one can produce 22nm finfet with its inherent advantages. They have spent the money, bought the equipment, and done the research, and the soonest that any company is even *talking* about having a competitive product commercially available is sometime next year. Intel hasn't said how much trouble they have had going to Trigate/Finfet, but they have hinted it is very, very difficult. That is one reason I suspect Ivy Bridge has suffered--because the difficulty demanded taking less risk in the design. It is just a matter of time till they have the tablet and phone Atoms ready, with their hard won expertise. Everything else is on schedule. I think you want to be in Intel before WS realizes this--could go much higher. Bay Trail is going to be a great Windows and Android tablet chip, I suspect.
Apple's Earnings Projections Continue To Irritate Wall Street [View article]
Nice analysis. Everybody, especially the financial press, is missing the real story, thanks to the buyback and divvy increase--the iPhone 5 isn't selling nearly as well as previous phones compared to previous gens! That is why the supplier orders collapsed. Apple was planning typical growth, and the phone isn't selling. If you back Verizon and ATT out of 12 2Q(FY), and 132Q(FY), iPhone sales are shrinking. When you consider that the 4 and 4S are taking a much higher % than previous gens to the newest phone, you get one conclusion--the iPhone 5 is a sales dud. If the 5S is a rewarmed 5, what does that mean for the next 15 months? I am surprised the shares are holding up. If Apple makes $12-$15/ share over the next two quarters, it could easily see the low $300s. Good luck.
Apple: Complete Reset Of Expectations Could Mark The Bottom [View article]
It could be the bottom, but I am seeing terrible news that isn't being covered--maybe that marks the bottom, when Apple gets pumped by the press, instead of pummeled. I am a long term bull, but I see at least six areas of serious concern: (1) This last qtr's iPhone sales, worldwide, were down YOY, when you simply back out Verizon and ATT. Down! Consider that China Telecom wasn't even added until a few weeks left in the qtr last year, and that a number of small carriers were added since, and international iPhone sales were not good last qtr. (2) The iPhone 5 isn't selling well. The mix has shifted more towards the 4 and 4S, but what isn't being reported is that the 5 is the first iPhone that isn't outselling all previous generations combined; in fact, it very well may not be outselling last year's 4S sales!! Cupertino is crushed over the performance, regardless of what they say publicly, and it is way below projections, and that is what is causing the angst among suppliers--they were planning for much higher sales. (3) Next qtr's numbers are awful--revs are flat to down, margins are down, and projected profits are down sharply. (4) Tim Cook basically said we will see new products in the Fall. That is almost five months away, so it isn't just this qtr we should be worried about, but next qtr will likely be worse. (5) The price looks cheap now, but if they only make $15/share in the next two quarters, it is going to look reasonable in the 300s. (6) Finally, the Galaxy SIV and HTC 1 are getting pretty good reviews. I suspect they will take share in Apple's remaining strongholds. We could bottom here, but it might be a few months more, and next quarter's earnings report could take us down a good bit. The most worrisome part of this to me is that the iPhone 5 isn't selling well compared to previous gens, and all they are likely planning is the 5S. Is that going to restart the growth?
Apple (AAPL +1.6%) roundup: 1) Take this one with a big spoonful of salt: "Some Wall Street sources close to some Apple executives" tell Forbes contributor Gene Marcial some at the company are looking for a replacement for Tim Cook. 2) CIRP estimates the iPhone 5 made up 53% of Q1 U.S. iPhone sales, up slightly from Q4's 50%. Meanwhile, citing Verizon's Q1 iPhone mix, BMO (Outperform) now sees Apple's latest iPhone accounting for 55% of Sep. quarter iPhone sales, down from a prior 70%. 3) A Foxconn worker speaking to China Business claims Apple returned 5M-8M iPhones "due to appearance of substandard or dysfunctional problems." (Citi) (BGC/Avondale) [View news story]
I'm getting skeptical on a lot of these rumors, especially the Digitimes version. Digi said recently that *total* iPad screen orders (mini+ full) for next qtr were below 10mm! Oh, and also that Mac orders have stopped indefinitely...all due to dead demand?? Assuming Apple is the ultimate source for this negative PR static, I would say they are trying to lower analyst/investor expectations, then a crummy number won't seem nearly as bad. Returning 5-8mm iP5s is crazy high, and I can't imagine who would be motivated to start it. Cook got 1mm shares for taking the helm. The Board is going to look dumber than dirt if they fire him....this rumor looks cooked by a call holder trying to push Cook into announcing something big for a bounce. Like I said, I'm getting skeptical....
Good points. I think there is going to be a rebound in PC sales, too. AIO/small footprint desktops hit a new awakening with the capabilities of Haswell R, and laptops will get a tremendous pop in graphics and battery life. People still use PCs; tablets merely supplement for many. Tablets and phones are definitely where the big growth is headed, but 300 million PCs/ a year is a lot of revenue.
Apple Q2 Results Are Not The Story, But Guidance Will Be [View article]
One story I found odd and interesting this AM was Apple returning 5-8mm iP5s to Foxconn. If true, and Apple had to eat all or part of that number, it could hit margins hard. If Foxconn has to eat it all, then good luck. An extra charge would be a big surprise. Good discussion. 40mm iPhones would be an outstanding qtr imho.
George, the better question, imho, is why is Apple falling like a rock? Is it technicals? Herd mentality? Or, are there real reasons to be concerned? The latter gets my vote. Remember, Apple bragged in court (and rightfully so) that each generation of iPhones has sold more than the previous combined! iPhone 5 appears to have strongly broken that trend, and looking at VZ's numbers (~2 million 5s in q1), it is actually close to being flat from the 4S!!! That is huge. Apple's phones are either moving toward a lower price point, they aren't as appealing, or the competition is making it harder. Is this a sea change? Time will tell, but if this is a tidal change, these numbers could be the start of profit and growth stagnation/shrinkage. That is what has driven the price below $400 imho. There is intense concern among the bears that Apple has lost its way. Apple may answer with game changing products in the coming months, but the rumor is a 5s--the same phone with a better camera and processor. I doubt that can move the needle.
Apple $395: Time To Give Up And Abandon Ship? [View article]
I think the big problem is that people are afraid of guidance, not this qtr. The not so accurate, but sometimes on, Digitimes, has recently reported the following: Macbook component orders have completely stopped. Total iPad mini and full size panel orders are only 9.5mm for CY2Q. 3.5mm for April, and 3mm for May and June. If true, this implies a slow 1st qtr and a terrible 2nd(CY). Many had hoped the huge order cuts from Apple were related to new products, but most of the reliable sources are saying nothing till at least Q3. CRUS also hammers Apple with their outlook cut (Apple is their main customer by a huge margin). All of this leads to the possibility that Apple may guide less than 35Bn next qtr, which would mean Apple is now shrinking in revenues YOY. It is already shrinking in profits. Should they surprise, it is looking good for a pop, but if they are shrinking the financial press will rip them to pieces. "Samsung stops Apple growth cold..Apple growth is in the past...Jobs has passed and Apple is now shrinking."
Apple's Calendar Chaos Trade Of 2013 [View article]
Great contrarian thinking, but I think the bears are winning for a good reason. If the rollout rumors are true, that new products aren't coming until CY3rd qtr, the guide for next qtr could be horrendous. Apple's conservative approach might leave us below last year's 35Bn qtr, which will ignite the bearish financial news machine. I can see the headlines already: "Apple down $30, company is no longer growing." "Apple revenue imploding, and so is the stock price." "Jobs is gone, and now the growth is too." "Samsung has stopped Apple's growth cold." Using your column as a guide, though, it should produce a good buying opportunity if Apple can produce more blockbuster products, but even that is under serious debate. The argument is that Samsung, Mot, and HTC are much closer than they were in the past. Many feel they need a new category, like a CHL phone and a TV. Good luck to all, and good column.
You Better Duck - Apple's Unit Profits Are Falling [View article]
Apple Investors Are Missing The Big Picture [View article]
Apple's Earnings Projections Continue To Irritate Wall Street [View article]
Apple Investors Are Missing The Big Picture [View article]
the reason you back out VZ and T is that you are getting a good picture of iPhone growth ex-America. It is shrinking, not growing. This is a very bad indicator. Smartphone sales are booming worldwide. Iphone sales are shrinking. Apple market share ex-America is imploding. The iP5 is a sales dud compared to all previous iPhones! The buyback has successfully diverted attention away from the next six months...for now, but look at what they guided! You work the math, and you are looking at $7 a share, plus or minus a bit. They made >$9 a share last year in this qtr. TC said new products coming in the Fall. Fall doesn't start until the very end of the 4th qtr! Apple earnings are imploding. The soonest they may have more new products is basically 1Q of next year (FY). All very bad. Yhoo still shows almost $44/share for this year. With $7 a share this qtr, they are at ~$30 a share going into their 4th qtr! With no new products and a million new Android phones and tablets, how much do you think they will make? $5? So, Apple would be about $35 a share for this year, before the buyback. All bad, and we may see a $350 price in the coming months.
Apple's Earnings Projections Continue To Irritate Wall Street [View article]
Apple Investors Are Missing The Big Picture [View article]
Intel: Why The Bears Have It Wrong [View article]
Apple's Earnings Projections Continue To Irritate Wall Street [View article]
Apple: Complete Reset Of Expectations Could Mark The Bottom [View article]
Apple (AAPL +1.6%) roundup: 1) Take this one with a big spoonful of salt: "Some Wall Street sources close to some Apple executives" tell Forbes contributor Gene Marcial some at the company are looking for a replacement for Tim Cook. 2) CIRP estimates the iPhone 5 made up 53% of Q1 U.S. iPhone sales, up slightly from Q4's 50%. Meanwhile, citing Verizon's Q1 iPhone mix, BMO (Outperform) now sees Apple's latest iPhone accounting for 55% of Sep. quarter iPhone sales, down from a prior 70%. 3) A Foxconn worker speaking to China Business claims Apple returned 5M-8M iPhones "due to appearance of substandard or dysfunctional problems." (Citi) (BGC/Avondale) [View news story]
Intel: The Bears Are Out Of Ammo [View article]
Apple Q2 Results Are Not The Story, But Guidance Will Be [View article]
Apple: Desperately Seeking Capitulation (Part 2) [View article]
Apple $395: Time To Give Up And Abandon Ship? [View article]
Apple's Calendar Chaos Trade Of 2013 [View article]