Pessimistic, questionable iPhone supplier rumor sends shares of Apple further downward

Posted:
in AAPL Investors edited October 2015
Shares of Apple stock fell more than 2 percent in early trading Thursday, following a highly questionable report from the Far East claiming that Apple's integrated circuit suppliers are concerned over the prospect of fewer iPhone-related chip orders.




Apple is alleged to have reduced iPhone parts forecasts at an undisclosed "major" analog integrated circuit firm, DigiTimes reported on Thursday. Market watchers attributed the negative report from the unreliable supply chain-focused publication for losses seen by Apple at the outset of trading, though shares have recovered slightly as the day has progressed.

Confusingly, the report in question specifically claimed that overall shipments of the iPhone 6s are expected to reach as many as 80 million units in the third quarter of 2015, which concluded on Wednesday -- less than a week after the iPhone 6s launched.

Apple sold 13 million units in the iPhone 6s launch weekend, during which some models were severely constrained with new orders shipping in weeks. Given that Apple only keeps a few weeks' worth of channel inventory for its products, it's implausible that the company's tightly run supply chain somehow built another 67 million iPhone 6s units within the three days following last weekend's launch.

While the publication does occasionally correctly predict Apple's future product plans, DigiTimes is notorious for playing fast and loose with supply chain rumors. For example, earlier this year it erroneously claimed that Apple planned to launch a new 4-inch handset this fall alongside the iPhone 6s and iPhone 6s Plus. And last fall, it gave an exceptionally vague 15-month launch window for the then-widely-anticipated 12-inch MacBook with Retina display.

Years ago, Apple Chief Executive Tim Cook warned investors not to read too much into supply chain rumors.

"The supply chain is very complex, and we obviously have multiple sources for things," Cook said in 2013. "Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant for our business."

Apple frequently uses multiple suppliers for the same part -- the A9 chip in the new iPhones, for instance, is built by both Samsung and TSMC. The company will skew orders towards one firm or another based on a manufacturer's technology, capacity, and pricing.
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Comments

  • Reply 1 of 105

    If Apple is looking to buy back stock, now is a good opportunity. I'm not saying that Apple had anything to do with this rumor, but it certainly isn't in their best interest to respond to it right away.

  • Reply 2 of 105
    sog35sog35 Posts: 12,396member

    "Overall shipments of the iPhone 6s series are expected to reach 75-80 million units in third-quartet 2015, but the estimated volume for fourth-quarter 2015 has been reduced to 65-70 million, the sources cited the IC supplier as saying."

     

    80+70 = 150 million phones for Q3 and Q4 combined.

    75+65 = 140 million phones for Q3 and Q4 combined.

     

    WTF is the problem?  Thats way more than the 115 million sold last year.

  • Reply 3 of 105
    tmaytmay Posts: 1,722member
    Quote:

    Originally Posted by sog35 View Post

     

    "Overall shipments of the iPhone 6s series are expected to reach 75-80 million units in third-quartet 2015, but the estimated volume for fourth-quarter 2015 has been reduced to 65-70 million, the sources cited the IC supplier as saying."

     

    80+70 = 150 million phones for Q3 and Q4 combined.

    75+65 = 140 million phones for Q3 and Q4 combined.

     

    WTF is the problem?  Thats way more than the 115 million sold last year.


    Expectations; always the expectations.

  • Reply 4 of 105
    Sometimes I think that AAPL will never have a meaningful break out. Anytime good news is announced it is tempered with negative spin and FUD. This cycle could really just repeat over and over. It makes being long AAPL seem like running in place.
  • Reply 5 of 105
    fallenjtfallenjt Posts: 3,265member
    Quote:

    Originally Posted by sog35 View Post

     

    "Overall shipments of the iPhone 6s series are expected to reach 75-80 million units in third-quartet 2015, but the estimated volume for fourth-quarter 2015 has been reduced to 65-70 million, the sources cited the IC supplier as saying."80+70 = 150 million phones for Q3 and Q4 combined.

    75+65 = 140 million phones for Q3 and Q4 combined.

     

    WTF is the problem?  Thats way more than the 115 million sold last year.


    The problem is that WS got no clue how many suppliers Apple have and just based on a rumor from a single supplier, it estimated the % of one supplier as the whole % supply. It totally BS. What if Apple reduced order from TMSC supply but increase from Samsung? No one knows and WS just love to manipulate the stock just based on an unknown bs rumor from the East. 

  • Reply 6 of 105
    Maybe it was the news about Dunkin' Donuts planning to shut down 100 stores this year and next that has markets jittery today. ????

    "Wall Street logic"
  • Reply 7 of 105
    5150iii wrote: »
    Sometimes I think that AAPL will never have a meaningful break out. Anytime good news is announced it is tempered with negative spin and FUD. This cycle could really just repeat over and over. It makes being long AAPL seem like running in place.

    AAPL is wonderful toy for WS: easy to push down with rumors, and promptly push up by Apple with buyback. Hedge funds and speculators are having big fun and making a lot of money.
  • Reply 8 of 105
    sog35sog35 Posts: 12,396member
    Quote:

    Originally Posted by tmay View Post

     

    Expectations; always the expectations.


     

    Expectations are for iPhone units to be flat or slightly down for the December quarter.

     

    If what the digitimes reports is correct Apple would blow away expectations.

  • Reply 9 of 105
    sog35sog35 Posts: 12,396member
    Quote:

    Originally Posted by bradipao View Post





    AAPL is wonderful toy for WS: easy to push down with rumors, and promptly push up by Apple with buyback. Hedge funds and speculators are having big fun and making a lot of money.

     

    this won't stop until Apple at least THREATENS to go private.

     

    Why not float a rumor that Apple is making preliminary plans to go private?

  • Reply 10 of 105
    bradipao wrote: »
    AAPL is wonderful toy for WS: easy to push down with rumors, and promptly push up by Apple with buyback. Hedge funds and speculators are having big fun and making a lot of money.

    So my question is are they squeezing retails like us or are other firms dumb enough to dump these type of reports?
  • Reply 11 of 105

    This stock is a steaming deuce. And I say that being a not-small shareholder for numerous years. I'm not selling anytime soon, especially being pushed by irrational frustration. But it just kills me to see AMZN or FACE or GOOGL up for dumb name change reasons or despite P/E ratios that are sky high, all while AAPL prints money every damn quarter and then tanks 2% day-after-day.

  • Reply 12 of 105
    fallenjtfallenjt Posts: 3,265member
    Quote:

    Originally Posted by PotatoLeekSoup View Post

     

    This stock is a steaming deuce. And I say that being a not-small shareholder for numerous years. I'm not selling anytime soon, especially being pushed by irrational frustration. But it just kills me to see AMZN or FACE or GOOGL up for dumb name change reasons or despite P/E ratios that are sky high, all while AAPL prints money every damn quarter and then tanks 2% day-after-day.


    All of these motherfkers in WS should be in prison for AAPL manipulation.

  • Reply 13 of 105
    dysamoriadysamoria Posts: 1,206member
    This whole system is lousy. An entire economy can get pissed away by speculation. There's nothing behind it but opinion, often unfounded and manipulated.
  • Reply 14 of 105
    slurpyslurpy Posts: 4,698member

    Wallstreet treats Apple like a company that could go bankrupt any day now, or could be made irrelevant or obsolete by some random new product. Every shitty rumor gets the stock diving, while extremely good news..sends the stock diving a bit less. Meanwhile, Apple's future prospects, by any rationale measure, could NOT be more positive, going by every single metric and their gameplan. 

     

    Unbelievable. 

  • Reply 15 of 105
    This stock is a steaming deuce. And I say that being a not-small shareholder for numerous years. I'm not selling anytime soon, especially being pushed by irrational frustration. But it just kills me to see AMZN or FACE or GOOGL up for dumb name change reasons or despite P/E ratios that are sky high, all while AAPL prints money every damn quarter and then tanks 2% day-after-day.

    There is no way in the world Sog will escape from his 1-year self-ban at this point, because AAPL at $150 by the end of the year is an absolute impossibility.
  • Reply 16 of 105
    sog35sog35 Posts: 12,396member
    Quote:

    Originally Posted by PotatoLeekSoup View Post

     

    This stock is a steaming deuce. And I say that being a not-small shareholder for numerous years. I'm not selling anytime soon, especially being pushed by irrational frustration. But it just kills me to see AMZN or FACE or GOOGL up for dumb name change reasons or despite P/E ratios that are sky high, all while AAPL prints money every damn quarter and then tanks 2% day-after-day.


     

    I think the solution is for Apple to stop the buybacks and increase the dividend.

     

    I have been a strong supporter of the buyback but I think its a waste of money at this point. 

     

    At its peak in FY2012 Apple was over $100.  Today it's at $108.  That is a stock appreciation of less than 3% a year.  That is flatout ridiculous and criminal.  Since FY2013 Apple has grown EPS by 45% and sales by 50%.  Yet the stock is up only 8%.

     

    Wall street will continue to disrespect Apple.  It the same bullshiit cycle.  Apple blows out earnings.  But Wall Street says these earnings are not sustainable.  They have been saying this since 2012!  They keep pushing the goal post further and further.  Blow out a quarter and they just say next quarter won't be a blow out.  Its beyond frustrating.

     

    I think Apple needs to increase the dividend to 4%-5%.  Apple makes about $50 billion in free cash flows a year.  A 4% dividend will be about $25 billion a year.  I think that is a much better way to use the money instead of the $90 billion spent on buybacks that has had ZERO positive on the stock price (based on EPS growth vs price growth)

  • Reply 17 of 105
    sog35sog35 Posts: 12,396member
    Quote:

    Originally Posted by SpamSandwich View Post





    There is no way in the world Sog will escape from his 1-year self-ban at this point, because AAPL at $150 by the end of the year is an absolute impossibility.

     

    What the hell does that have to do with this subject?  Are you here just to taunt me? Reported.

  • Reply 18 of 105
    IDK Since AAPL is the biggest market cap all bets are off I suppose as this is new territory in some respects. I've mentioned this before but the stock has relatively low institutional ownership and it would make sense if that number climbed steadily in light of this volatility but it's not like firms are buying and holding just churning. AAPL is due for a pop but I do think about that never coming through the way it used to. It's got to be profitable to just play this game up 2 steps forward and then 2 back, etc.
  • Reply 19 of 105
    bobschlobbobschlob Posts: 1,074member

    Anybody here know when AAPLs buyback 'black-out' period starts / stops for this ER?

  • Reply 20 of 105
    sog35sog35 Posts: 12,396member

    Total Revenue Fiscal Year 2012 - $157 billion

    Total Revenue Fiscal Year 2015 - $233 billion (based on Apple's 4th Qtr guidance)

    Revenue growth = 48%

     

    Earnings Per share 2012 - $6.31

    Earnings Per share 2015 - $9.12

    EPS growth = 45%

     

    Market Cap peak 2012 - $658 billion

    Current Market Cap - $616 billion

    Market Cap = Negative 6%

     

    Total buybacks since 2012 - $90 billion

     

    Share price peak 2012 - $100.20

    Current share price - $108.00

    Stock appreciation - 8%

     

     

    In summary Apple has had tremendous growth.  Revenue was grown 48% and EPS by 45% since 2012.

    Yet the market cap of Apple is down $42,000,000,000 since 2012 peak.  Even more ridiculous is Apple paid out $90,000,000,000 in buybacks.

     

    Conclusion:  Buybacks are not working.

     

    Solutions:  Apple has to increase the dividend or declare regular special dividends that bring the yield between 4-5%

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