Just a few days ago, maybe a week, there was a couple of reports of Apple iPhone sales for the whole year. Not even Ming-Chi-Kuo mentioned any additional softness in the June quarter, being a "supply-chain insider." Even if he was really bearish on iPhone sales, but he blamed for it to the iPhone 7 not being innovative enough to help drive growth. And the Nikkei record is not as good as Ming-Chi-Kuo, notting that Ming-.Chi-Kuo is not stellar in sales forecasts, but well connected in the supply chain to notice by now the cut. He was the first to alert about the march quarter orders cut.
High price could be justified by real innovation (not by gimmicky 3d touch)
3D Touch is the very definition of real innovation. Just because you don't like it doesn't mean it isn't innovation. If any thing the 6S series of cell phones have been a massive step forward support a lot of true innovation.
Too bad the market doesn't really seem to care ...
And SOG will be along in about 5 to discredit any such notion, citing all those supply chain rumours that were wrong about declining sales before Apple announced its results. Whoops, those rumours were actually correct, looks like I accidentally made an error.
Another load of crap from you-know-who.
Declining sales from supply chains have been claimed with regularity for years now. And how many of those turned out to be true? Zero. Zilch. Nada.
Although you are right about what you said, eventually there will be. It's impossible to keep going up.
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iPhone unit volumes, revenues and profits do not exist in a vacuum, as the only revenue/profit stream the company has. Apple is well aware that there will be a plateau in iPhone sales, and is working to build out software and services to offset that slowdown. But folks seem too myopic to give credit to that aspect of the business.
Second point, which would you rather own, a coffee shop that grows its customer base, and profits, slowly and steadily over 15 years, eventually reaching a level that makes you, the proprietor, a comfortable living? Or a coffee shop whose customer base ramps up quickly to the same level of profits after just five years, and then levels off. I'd rather own the second coffee shop, as it will provide me a comfortable living after only five years and will earn a larger total profit over the entire 15 year run. That's what is so frustrating about the way the market values Apple; it will reward the slow but steady grower while castigating Apple already earning the vast majority of profits in each of its markets, for its failure to continue to grow. But ask those same analysts why, exactly, Apple needs to continue to grow, only to add the additional profits on top of an already oversized pile that the market values at exactly zero. In fact, the cash pile is often seen as a liability.
3D Touch is the very definition of real innovation. Just because you don't like it doesn't mean it isn't innovation. If any thing the 6S series of cell phones have been a massive step forward support a lot of true innovation.
Too bad the market doesn't really seem to care ...
I remember an Apple salesperson in an store in a store inside a department store here in Spain last holidays shopping season, signaling the differences between the 6 and the 6s, the guy got to a bad start, saying they where tiny, they are not. But never said probably the most important one, the much more powerful processor in the 6s. He speak to them about the 7000 grade aluminium but not the A9 processor. Really bad. The guy not even mentioned 3D Touch. And my sister show me her 6s a couple weeks ago and she didn't even know there was 3D Touch, but when I show her she thought it was very cool. I show her in a realistic way, using it to watch the e-amil content without opening it.
And today I was in a reseller and I have been more effective convincing a guy to buy an iPad Pro 9,7 then the salesman, because I have simply been honest and signaled the guy the real differences between the two, I started with the most important question, What you want it for? But the real problem is that the guy wanted to test the Apple Pencil and there wasn't anyone. If the deal maker of the Pro vs the Air is the Pencil and the keyboard, you must have both with it to let people test them. My only answer has been "If you go to Madrid or Barcelona go to an Apple Store, there must be one...I hope"
Apple feeling the Android pinch. First Apple made them bigger, then smaller, then plastic. They don't know whether there coming or going. It's tough going up against a superior OS. With Android market share still on the rise, and Google coming out on top as the most profitable company, its no doubt Apple is feeling the hurt.
Coming or going? They're going....straight to the bank!
Apple feeling the Android pinch. First Apple made them bigger, then smaller, then plastic. They don't know whether there coming or going. It's tough going up against a superior OS. With Android market share still on the rise, and Google coming out on top as the most profitable company, its no doubt Apple is feeling the hurt.
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Apple is gaining Andriod switchers at the highest rate in its history. Android is, as aptly described by Cook, an on ramp to the iPhone. Many people buy an Android phone as their first smartphone, because the price of entry is low. But after gaining some smartphone experience many switch to an iPhone, for any number of reasons. The pinch is not being felt by Apple, which takes the vast majority of profits in the smartphone market.
You've got the order mixed up. First Apple made the biggest, then were copied by others who eventually made larger screen phones, then Apple made slightly larger iPhones, then plastic, then larger again, and finally smaller. Seems you are the one not knowing whether you're coming or going.
It is tough, indeed, going up against a superior OS. iOS being the superior OS that Android is finding it tough going up against.
Android wins its market share from customers switching from feature phones or from no phone, as indicated above (new-to-smartphone users). The number of such people is still quite large, and the world is moving away from feature phones very quickly, so it makes sense that Android would be on boarding new users at a rapid clip. But that's dead-end market growth, as many of those new smartphone users will move through the Android market and end up in the Apple market. And there they will remain, buying iPhone after iPhone as they replace an aging model with a new model. So Andriod gets these folks for one handset or two, and Apple gets them for many replacement cycles. Plus, iPhones produce profit for Apple. Android phones provide scant profit for the Android vendors. So it doesn't much matter that they have more users, as they aren't profiting significantly from them and they are always under threat of losing them.
Google doesn't generate anywhere near the $53 billion in profit Apple generated last year. The most recent quarter saw Apple generate $18.4 billion in profit, the most by any company in U.S. History. In fact, of the top 10 most profitable financial quarters on record, four belong to Apple, the rest belong to oil majors. Google isn't in the list. Not even in the top 20.
Too bad the market doesn't really seem to care ...
I remember an Apple salesperson in an store in a store inside a department store here in Spain last holidays shopping season, signaling the differences between the 6 and the 6s, the guy got to a bad start, saying they where tiny, they are not. But never said probably the most important one, the much more powerful processor in the 6s. He speak to them about the 7000 grade aluminium but not the A9 processor. Really bad. The guy not even mentioned 3D Touch. And my sister show me her 6s a couple weeks ago and she didn't even know there was 3D Touch, but when I show her she thought it was very cool. I show her in a realistic way, using it to watch the e-amil content without opening it.
And today I was in a reseller and I have been more effective convincing a guy to buy an iPad Pro 9,7 then the salesman, because I have simply been honest and signaled the guy the real differences between the two, I started with the most important question, What you want it for? But the real problem is that the guy wanted to test the Apple Pencil and there wasn't anyone. If the deal maker of the Pro vs the Air is the Pencil and the keyboard, you must have both with it to let people test them. My only answer has been "If you go to Madrid or Barcelona go to an Apple Store, there must be one...I hope"
I'm not even sure that will help. I was in an Apple Store in LA with a friend, and she wanted to see the pencil work, picked it up and nothing happened. We couldn't find a single app that it would work with, and I'm pretty sure we were using the native Apple apps that had support. This was around lunchtime, but all I could conclude was that it had run out of power. She basically is turned off on that pencil for now, at least until I get one, and she sees what you can actually do with it.
Apple feeling the Android pinch. First Apple made them bigger, then smaller, then plastic. They don't know whether there coming or going. It's tough going up against a superior OS. With Android market share still on the rise, and Google coming out on top as the most profitable company, its no doubt Apple is feeling the hurt.
Coming or going? They're going....straight to the bank!
Did that fandroid really call a cheap knockoff OS superior? He's probably just trolling.
A look at the $110 call strike will tell you everything you need to know about while this 'news' came out this afternoon. That's a huge wall of calls sitting there at the $110, a juicy target for those who would benefit if they were to expire worthless. The stock has run too far since those calls were sold short. So here we are, close enough to earnings that Apple won't, or can't respond, and so they come and whack the stock on the big monthly option expiration.
Break it down for those of us whose head spins when trying to figure out calls, shorts, etc and how it applies in this case.
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When Apple was lower, back down below $100, traders looked out to the April option expiration. Some decided to buy calls, option contracts that would give them the right to buy Apple at $110. Those calls were likely very cheap, perhaps pennies per share at that time. These folks were betting a small amount of money that Apple might perhaps rise above $110.
Market makers, professional traders, etc, who understand the statistics (that 90% of options expire worthless) would have looked at the newsflow surrounding Apple back then (remember how bad the news was when Apple dropped to $92 a couple months back?) and they likely figured that buying those calls was a sucker's bet, so they happily sold calls to anyone who wanted to buy them. Selling a call is not selling something you possess; it's equivalent to entering into a contract wherein you promise to deliver a stock at a certain price on a certain date. These pros would have made this promise even though they didn't hold shares of the stock. That's called selling a call naked. Looking at the April 15th option expiration, there were a larger number of call contracts at the $100 strike, another large number at the $105 strike, and another larger number at the $110 strike. Whomever sold the $100s and $105s either had to deliver stock at those prices, or had to pay the difference between the stock price and the strike price. At $112/share, that would mean $12 per share owed to close out their obligations on the $100 calls, and $7 per share to close out obligations for the $105 calls. And finally, $2 per share to close out obligations for the $110 calls. It's not fun to get caught short calls, especially naked.
There were some 100,000 contracts at the $110 strike. Each contract is for 100 shares. That's 10,000,000 shares worth of obligations for the side of each contract where someone was short. At $2 each, that's an aggregate $20,000,000 obligation. For calls that they might have originally gotten pennies per share for, and for which they were confident they would have no obligation. If Apple were sitting below $110, a contract to buy it at $110 is worth nothing, as you would not exercise that contract, but just buy on the open market for the lower price. But at $112, the call contracts are worth $2/share. So... what to do? Hmmm, lets regurgitate that old story about Apple reducing supply chain orders. That will create fear in the market. And let's not do it on Thursday, but let's wait until Friday, when there will be no time for market participants to dig into and investigate its validity. There will be time only to decide to hold or sell, and many, on a Friday, facing the type of news that has moved Apple in the past, will simply sell, driving the price lower. The $110 contract will expire worthless, screwing over those who originally bought them for pennies. They won't get their huge multi-bagger payday. Tough for them, us pros will be off the hook would be the thinking. And any $100s we got caught short on and $105s, well, those will still cost us something to close out, but they will cost us $2+ less per share, so we'll be a bit better off there too.
That's the scenario. Up to each person to decide whether such news on Friday afternoon in the face of a huge wall of calls at $110 was a coincidence, or manufactured to manipulate the price of the most easily manipulated stock on the exchange, to the benefit of the pros (the ones sophisticated enough to practice option shorting).
The problem is most trader in Wall Street do not believe in Apple. Mathematically, statistically speaking it would be hard for Apple to even get another YoY iPhone growth, even if they could magically put another 2 year growth, it wont be sustainable, running into the laws of big numbers. Therefore if Apple stated a decline in sales it wont be worth a PE of 20.
This mentality has been priced in for a very long time. Especially since SJ passed away as no one from Apple could do RDF. Wall Street since then has been VERY conservative on Apple. More and more Apple stocks are now owned by Individual investors, which makes moving up the trend line a lot harder.
I think one of the reason why iPhone SE has been facing delay isn't a production issue, but rather Apple balancing their Target sales per quarter, so again Apple hit their estimate again.
A look at the $110 call strike will tell you everything you need to know about while this 'news' came out this afternoon. That's a huge wall of calls sitting there at the $110, a juicy target for those who would benefit if they were to expire worthless. The stock has run too far since those calls were sold short. So here we are, close enough to earnings that Apple won't, or can't respond, and so they come and whack the stock on the big monthly option expiration.
Yep. The timing of this along with the stock price drop isn't accidental. Of course now CNBC and others will run with this all the way up to earnings release so I wouldn't be surprised if the stock fell back below $100 in the next week or so. Only news we'll get from Apple before earnings is probably WWDC dates.
I wouldn't expect Apple to refute the "sluggish sales" story as being bogus. It's an advantage to Apple and shareholders for outsiders to drive the stock down. It allows Apple to buy back shares at a lower price and that makes sense for Apple to say nothing about sales. It probably doesn't matter whether lies are being told or not. Apple will sell as many iPhones as they can and no matter how many iPhones Apple sells it won't be enough to satisfy those greedy Wall Street big investors. I've given up on Apple as far as seeing the share price rise any significant amount. All those high price targets are way beyond what any investors will be willing to pay for a company that's such an easy target for manipulation. The FANG stocks are going to make Apple look stupid for another year. The best I can hope for is continued increases in dividends every year. It's tough for Apple to give increased dividends without taking on additional debt due to all of their main cash being trapped overseas for an indefinite period of time. I hope I'll live long enough to see an overseas tax repatriation day for Apple but it doesn't seem likely to happen in this decade.
really nothing to worry about- apple will still make more money than any other handset maker but will still be considered stock unworthy. nothing wrong with laughing your way to the bank
Apple feeling the Android pinch. First Apple made them bigger, then smaller, then plastic. They don't know whether there coming or going. It's tough going up against a superior OS. With Android market share still on the rise, and Google coming out on top as the most profitable company, its no doubt Apple is feeling the hurt.
hahaha, does google or android handset makers know whether they are coming or going? big phones or small phones, updates or no updates, metal phones or plastic phones, lcd screen or amoled screen, secure or not secure, removable battery or non removable battery, good camera or poor camera, 64 bit or 32 bit, modular design or not.
talks bout throwing something against the wall to see what sticks
The iPhone 7 had better be a real upgrade, both cosmetically and internally. My friend recently showed me his new Galaxy S7 and it is stunning. And the battery life....
I remember an Apple salesperson in an store in a store inside a department store here in Spain last holidays shopping season, signaling the differences between the 6 and the 6s, the guy got to a bad start, saying they where tiny, they are not. But never said probably the most important one, the much more powerful processor in the 6s. He speak to them about the 7000 grade aluminium but not the A9 processor. Really bad. The guy not even mentioned 3D Touch. And my sister show me her 6s a couple weeks ago and she didn't even know there was 3D Touch, but when I show her she thought it was very cool. I show her in a realistic way, using it to watch the e-amil content without opening it.
And today I was in a reseller and I have been more effective convincing a guy to buy an iPad Pro 9,7 then the salesman, because I have simply been honest and signaled the guy the real differences between the two, I started with the most important question, What you want it for? But the real problem is that the guy wanted to test the Apple Pencil and there wasn't anyone. If the deal maker of the Pro vs the Air is the Pencil and the keyboard, you must have both with it to let people test them. My only answer has been "If you go to Madrid or Barcelona go to an Apple Store, there must be one...I hope"
I'm not even sure that will help. I was in an Apple Store in LA with a friend, and she wanted to see the pencil work, picked it up and nothing happened. We couldn't find a single app that it would work with, and I'm pretty sure we were using the native Apple apps that had support. This was around lunchtime, but all I could conclude was that it had run out of power. She basically is turned off on that pencil for now, at least until I get one, and she sees what you can actually do with it.
Thanks for the advice, but it will be useful only if I find other guy with the same problem, it was a random encounter with a total stranger. But as far as I know, for pairing you only have to connect it to the lightning port, and keep in it 30 seconds there you get a fair charge to the device to work. Notes works with the pencil.
Seriously, the guys insist in a 30% cut in iPhone orders the March quarter, something explicitly denied Tim Cook in the previous conference call. And is the first report of this cuts just ten days before the next conference call, by now last quarter there was a myriad reports about the cuts.
I'm not saying Nikkei is wrong, But take this with a grain of salt.
The problem is most trader in Wall Street do not believe in Apple. Mathematically, statistically speaking it would be hard for Apple to even get another YoY iPhone growth, even if they could magically put another 2 year growth, it wont be sustainable, running into the laws of big numbers. Therefore if Apple stated a decline in sales it wont be worth a PE of 20.
This mentality has been priced in for a very long time. Especially since SJ passed away as no one from Apple could do RDF. Wall Street since then has been VERY conservative on Apple. More and more Apple stocks are now owned by Individual investors, which makes moving up the trend line a lot harder.
You make a very good argument for Apple to go private and stick two fingers up to Wall St. I'd welcome it in a flash.
The iPhone 7 had better be a real upgrade, both cosmetically and internally. My friend recently showed me his new Galaxy S7 and it is stunning. And the battery life....
They need to bump storage up to 32 GB starting like the Galaxy S7. Also time to lower the price. iPhone 7 (32 GB $600), iPhone 7 (64 GB $650), iPhone 7 (128 GB $750), iPhone 7 (256 GB $850).
Apple feeling the Android pinch. First Apple made them bigger, then smaller, then plastic. They don't know whether there coming or going. It's tough going up against a superior OS. With Android market share still on the rise, and Google coming out on top as the most profitable company, its no doubt Apple is feeling the hurt.
Nothing shows the problems of Apple more than SIRI and iMAPS. 4 years ago SIRI was new and innovative and its short comings could be over looked. Now its just Pathetic. Cartana and Google now impress and perform. Tim Cook talks about Software and Services but its a LONG ways away. Apple should have bought HERE maps when the had their chance. Instead they trickle out minor upgrades to a few cities each year like its a new product announcement - hardly worth of mention.
Apple made their new 9.7 iPad pro announcement last month and showed that they want to keep it a small seller. Its over priced by $150. The 12.9 model likewise by $200. They should be pricing the iPad as an alternative to the typical Windows Home computer that has a new input option, Not a high end laptop alternative. Its about making iOS the OS of the home computer so that Apple has a garden to grow their software and services in.
Comments
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iPhone unit volumes, revenues and profits do not exist in a vacuum, as the only revenue/profit stream the company has. Apple is well aware that there will be a plateau in iPhone sales, and is working to build out software and services to offset that slowdown. But folks seem too myopic to give credit to that aspect of the business.
Second point, which would you rather own, a coffee shop that grows its customer base, and profits, slowly and steadily over 15 years, eventually reaching a level that makes you, the proprietor, a comfortable living? Or a coffee shop whose customer base ramps up quickly to the same level of profits after just five years, and then levels off. I'd rather own the second coffee shop, as it will provide me a comfortable living after only five years and will earn a larger total profit over the entire 15 year run. That's what is so frustrating about the way the market values Apple; it will reward the slow but steady grower while castigating Apple already earning the vast majority of profits in each of its markets, for its failure to continue to grow. But ask those same analysts why, exactly, Apple needs to continue to grow, only to add the additional profits on top of an already oversized pile that the market values at exactly zero. In fact, the cash pile is often seen as a liability.
And today I was in a reseller and I have been more effective convincing a guy to buy an iPad Pro 9,7 then the salesman, because I have simply been honest and signaled the guy the real differences between the two, I started with the most important question, What you want it for? But the real problem is that the guy wanted to test the Apple Pencil and there wasn't anyone. If the deal maker of the Pro vs the Air is the Pencil and the keyboard, you must have both with it to let people test them. My only answer has been "If you go to Madrid or Barcelona go to an Apple Store, there must be one...I hope"
They're going....straight to the bank!
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Apple is gaining Andriod switchers at the highest rate in its history. Android is, as aptly described by Cook, an on ramp to the iPhone. Many people buy an Android phone as their first smartphone, because the price of entry is low. But after gaining some smartphone experience many switch to an iPhone, for any number of reasons. The pinch is not being felt by Apple, which takes the vast majority of profits in the smartphone market.
You've got the order mixed up. First Apple made the biggest, then were copied by others who eventually made larger screen phones, then Apple made slightly larger iPhones, then plastic, then larger again, and finally smaller. Seems you are the one not knowing whether you're coming or going.
It is tough, indeed, going up against a superior OS. iOS being the superior OS that Android is finding it tough going up against.
Android wins its market share from customers switching from feature phones or from no phone, as indicated above (new-to-smartphone users). The number of such people is still quite large, and the world is moving away from feature phones very quickly, so it makes sense that Android would be on boarding new users at a rapid clip. But that's dead-end market growth, as many of those new smartphone users will move through the Android market and end up in the Apple market. And there they will remain, buying iPhone after iPhone as they replace an aging model with a new model. So Andriod gets these folks for one handset or two, and Apple gets them for many replacement cycles. Plus, iPhones produce profit for Apple. Android phones provide scant profit for the Android vendors. So it doesn't much matter that they have more users, as they aren't profiting significantly from them and they are always under threat of losing them.
Google doesn't generate anywhere near the $53 billion in profit Apple generated last year. The most recent quarter saw Apple generate $18.4 billion in profit, the most by any company in U.S. History. In fact, of the top 10 most profitable financial quarters on record, four belong to Apple, the rest belong to oil majors. Google isn't in the list. Not even in the top 20.
Welcome to the board and... Thanks for playing.
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When Apple was lower, back down below $100, traders looked out to the April option expiration. Some decided to buy calls, option contracts that would give them the right to buy Apple at $110. Those calls were likely very cheap, perhaps pennies per share at that time. These folks were betting a small amount of money that Apple might perhaps rise above $110.
Market makers, professional traders, etc, who understand the statistics (that 90% of options expire worthless) would have looked at the newsflow surrounding Apple back then (remember how bad the news was when Apple dropped to $92 a couple months back?) and they likely figured that buying those calls was a sucker's bet, so they happily sold calls to anyone who wanted to buy them. Selling a call is not selling something you possess; it's equivalent to entering into a contract wherein you promise to deliver a stock at a certain price on a certain date. These pros would have made this promise even though they didn't hold shares of the stock. That's called selling a call naked. Looking at the April 15th option expiration, there were a larger number of call contracts at the $100 strike, another large number at the $105 strike, and another larger number at the $110 strike. Whomever sold the $100s and $105s either had to deliver stock at those prices, or had to pay the difference between the stock price and the strike price. At $112/share, that would mean $12 per share owed to close out their obligations on the $100 calls, and $7 per share to close out obligations for the $105 calls. And finally, $2 per share to close out obligations for the $110 calls. It's not fun to get caught short calls, especially naked.
There were some 100,000 contracts at the $110 strike. Each contract is for 100 shares. That's 10,000,000 shares worth of obligations for the side of each contract where someone was short. At $2 each, that's an aggregate $20,000,000 obligation. For calls that they might have originally gotten pennies per share for, and for which they were confident they would have no obligation. If Apple were sitting below $110, a contract to buy it at $110 is worth nothing, as you would not exercise that contract, but just buy on the open market for the lower price. But at $112, the call contracts are worth $2/share. So... what to do? Hmmm, lets regurgitate that old story about Apple reducing supply chain orders. That will create fear in the market. And let's not do it on Thursday, but let's wait until Friday, when there will be no time for market participants to dig into and investigate its validity. There will be time only to decide to hold or sell, and many, on a Friday, facing the type of news that has moved Apple in the past, will simply sell, driving the price lower. The $110 contract will expire worthless, screwing over those who originally bought them for pennies. They won't get their huge multi-bagger payday. Tough for them, us pros will be off the hook would be the thinking. And any $100s we got caught short on and $105s, well, those will still cost us something to close out, but they will cost us $2+ less per share, so we'll be a bit better off there too.
That's the scenario. Up to each person to decide whether such news on Friday afternoon in the face of a huge wall of calls at $110 was a coincidence, or manufactured to manipulate the price of the most easily manipulated stock on the exchange, to the benefit of the pros (the ones sophisticated enough to practice option shorting).
This mentality has been priced in for a very long time. Especially since SJ passed away as no one from Apple could do RDF. Wall Street since then has been VERY conservative on Apple. More and more Apple stocks are now owned by Individual investors, which makes moving up the trend line a lot harder.
I think one of the reason why iPhone SE has been facing delay isn't a production issue, but rather Apple balancing their Target sales per quarter, so again Apple hit their estimate again.
talks bout throwing something against the wall to see what sticks
Notes works with the pencil.
I'm not saying Nikkei is wrong, But take this with a grain of salt.
Also time to lower the price.
iPhone 7 (32 GB $600), iPhone 7 (64 GB $650), iPhone 7 (128 GB $750), iPhone 7 (256 GB $850).
Apple made their new 9.7 iPad pro announcement last month and showed that they want to keep it a small seller. Its over priced by $150. The 12.9 model likewise by $200. They should be pricing the iPad as an alternative to the typical Windows Home computer that has a new input option, Not a high end laptop alternative. Its about making iOS the OS of the home computer so that Apple has a garden to grow their software and services in.