Analyst claims iPhone demand slowing but 3G model in cards

[AppleInsider]

In a roller-coaster of a research report issued Tuesday, analysts for CIBC World Markets said they are picking up a significant decline in demand for Apple Inc.'s iPhone this month, but added that a second-generation of the handset could arrive much sooner than expected.

"Based on our store checks, we believe that demand for the iPhone has seen a significant decline in the past 10 days," analyst Ittai Kidron told clients. "We have noticed decent inventories at stores, and thin demand at best. In fact, most Apple store visitors were not looking at the device and only a very small subset bought it."

Kidron's comments, combined with disappointing first weekend iPhone activation numbers, were credited Tuesday with sending shares of Apple on an early morning skid.

Given the weakness in demand, the analyst said he wouldn't be surprised to see AT&T and Apple step up their marketing efforts around iPhone in the near future. He added that "checks suggest Apple is actually looking to introduce a 3G version of the iPhone for the U.S. market in November, ahead of the holiday season and earlier than currently expected."

Kidron cited a recent in-house survey of iPhone buyers that suggested the key shortcoming of the current iPhone model is its poor data connectivity through AT&T's yesteryear EDGE network. "This isn't a surprise," he explained, "and Apple's CEO Steve Jobs admitted the iPhone's cellular connectivity can use an improvement. We now believe the 'improvement' could come soon."

Offering one last data point to his clients, the CIBC analyst said while many in the industry had expected iPhone to hit BlackBerry maker RIM in the ribs, the emergence of the Apple handset appears to be having the opposite effect.

"Based on our checks, it seems that the iPhone has significantly increased awareness for email devices," he wrote. "A positive mainly for RIM -- the brand of choice for email devices."

CIBC World Markets, which does not hold a rating on Apple shares, notes in a disclaimer that it "does and seeks to do business with companies covered in its research reports."

As a result, the firm says, investors should be aware that CIBC may have a conflict of interest that could affect the objectivity of its reports.

[ View this article at AppleInsider.com ]

[SpamSandwich]

I'd like some more 'color' from this report. Betcha Ittai Ittai Kidron only visited one store near CIBC, and only for an hour at lunchtime.

The Apple Store I visited had a steady stream of people leaving with an iPhone or an iPod... and I was there only for 20 minutes!

[anantksundaram]

Originally Posted by AppleInsider

CIBC World Markets, which does not hold a rating on Apple shares, notes in a disclaimer that it "does and seeks to do business with companies covered in its research reports."

As a result, the firm says, investors should be aware that CIBC may have a conflict of interest that could affect the objectivity of its reports.

[ View this article at AppleInsider.com ]

This is just boiler-plate disclaimer.

Looks like the negative news on the iPhone is beginning to pile on..... it will have to go thru this inevitable cycle so that the nay-sayers and second-guessers can get it out of their systems.

[SpamSandwich]

Originally Posted by anantksundaram

This is just boiler-plate disclaimer.

Looks like the negative news on the iPhone is beginning to pile on..... it will have to go thru this inevitable cycle so that the nay-sayers and second-guessers can get it out of their systems.

It looks like the stock is already gaining back a little... I'm sure they don't want to be caught short when the numbers come in tomorrow (higher than expected)...

[backtomac]

I think iPhone sales over the next 90 days will be the most telling. If the iPhone has 'legs', sales over the next 90 days will need to be steady and improving.

[SpamSandwich]

It will also be telling if they try to broaden the line quickly with lower-priced fewer features iPhone models.

[MacSuperiority]

Their is no fucking way they will introduce a 3G model this year. If it was technologicly possible they would have done it with this model. There is not some huge jump in battery performance or a better 3G receiver that would make it possible. Not only that, if they came out with a 3G model right now it would seriously piss off alot of people who just droped 600 bucks for their iPhones. Those people who wanted an iPhone bought one and adding 3G is not going to have a huge impact on sales.

I would say they would come out with a lower priced version with just a phone and music player way before they would come out with a new 3G enabled model.

[backtomac]

Originally Posted by SpamSandwich

It will also be telling if they try to broaden the line quickly with lower-priced fewer features iPhone models.

Perhaps, but if they bring out a new model they've probably planned this months in advance and are doing it regardless of iPhone sales.

[SpamSandwich]

Originally Posted by backtomac

Perhaps, but if they bring out a new model they've probably planned this months in advance and are doing it regardless of iPhone sales.

Well, that's certainly the spin I would want to have on it if I were Apple... we'll have a better handle on things tomorrow...

[esqwuared]

Originally Posted by backtomac

I think iPhone sales over the next 90 days will be the most telling. If the iPhone has 'legs', sales over the next 90 days will need to be steady and improving.

This is true to a certain extent, but lets not forget that a large percentage of individuals are currently locked into contracts, myself included. It's quite likely that those who were willing to shell out the bucks to swap carriers already have their iPhones, and the rest are waiting patiently.

I would expect the adoption curve to differ a good deal from iPods and other consumer devices which aren't affected by such factors. I think your evaluation is correct in principle, but I would lengthen the period over which I'd expect to see significant growth substantially.

[newmaq]

There are many out there that are waiting for one of a few things to happen before they take the plunge:

Their current mobile plan to expire so they don't take a hit.
A few extra bucks to hit the budget to justify.
Birthday so their wife will get them one...(I hope she reads this)
Bugs to be worked out of current system.
Don't want to be seen as the weenie that had to have the newest gadget.
Or they quite simply have not held one in their hands or watched someone play with it.

Like myself, many have to justify purchases. Suckers pay retail right? Some are just waiting for the first promotion so they can brag they got a good deal. Anyone who bought right away paid retail...

[nagromme]

Initial hopes by "analysts" were for 100k sales Fri-Sun. It seems Apple beat that by nearly 50% even WITHOUT Sunday--and Friday was a partial day starting at 6.

Of course, wild speculation since then makes the actual good news into bad news

Demand is of course "slowing" after the initial, unbeatable pent-up rush. No numbers needed to tell us that. But most users going into the Apple Store NOT looking at the iPhones? I am highly skeptical.

And 3G is coming--Apple said so directly--but I doubt it will come very soon, since we now know (by comparing the internal electronics against other devices) that Apple's claims about size and battery life with 3G were true..

[SpamSandwich]

Originally Posted by nagromme

Initial hopes by "analysts" were for 100k sales Fri-Sun. It seems Apple beat that by nearly 50% even WITHOUT Sunday--and Friday was a partial day starting at 6.

Of course, wild speculation since then makes the actual good news into bad news

Demand is of course "slowing" after the initial, unbeatable pent-up rush. No numbers needed to tell us that. But most users going into the Apple Store NOT looking at the iPhones? I am highly skeptical.

And 3G is coming--Apple said so directly--but I doubt it will come very soon, since we now know (by comparing the internal electronics against other devices) that Apple's claims about size and battery life with 3G were true..

But that's 3G for Europe, not for the US.

[TenoBell]

I think the entire report is bogus. He didn't mention which store he went into where people were not interested. I've seen stores in both NY and LA where the iPhone displays are crowded with people wanting to touch them. Everyone I know marvels at my iPhone.

I so far haven't heard anyone with an iPhone say they wish it had 3G. Anandtech did tests where he found 3G to be a significant drain on the battery while real world speed was not much better.

[Rolo]

I can't believe AI posted this inane story. CIBC? Are you nucking futs? The same Canadian bank dude that said the iPhone would be delayed? That stupid gem sent AAPL down then, too.

Apple shares fall; CIBC sees iPhone release pushed back

That iPhone demand has dropped somewhat from what it was opening weekend is a no-brainer. Just another idiotic report designed to get the stock price down ahead of earnings. It does present a good opportunity to buy the stock or buy some cheaper calls. It's also not bad having the stock be lower before earnings and have lowered expectations. It's a good setup for a post-earnings rally. That's all fine as long as we know this is all a bunch of carp.

[OriginalMacRat]

Originally Posted by TenoBell

I so far haven't heard anyone with an iPhone say they wish it had 3G

That's because those of us who want 3G haven't bought an iPhone yet and are still waiting.

[fraklinc]

first they said apple stores only has about maybe 800 per store at lauch day, a seen the fedex truck arrive at the store with 3 pallets around launch time, now have you seen how small the iphone box is! i standed in line for 2 hours and they might have been 1000+ people there and they did not sell out untill the 3rd day, since then they have sold out a couple of times, apple is not giving out #s but come on dont tell me you can't fit more than 1000+ and a single pallet, i went this morning to buy the apple blu tooth headset which is available now and there still a bunch of people walikng out with iphones, apple likes suprising people, remember iphone when on sale at 6:00pm and the nextday was not a business day, i don't know how that works but those 145000.00 activations could have just been from launch night, my opinion is apple stores are not selling out of iphones because stores have way more than what people spec them to have, believed it or not most of these analyst look just at ebay, but remember no one is buying it there because they have toons at there local apple stores, but if you try to sell your smart phone and ebay you will see that the iphone has hurt the market alot because people as not willing to pay as much as before for smart phones

[trragan]

Originally Posted by OriginalMacRat

That's because those of us who want 3G haven't bought an iPhone yet and are still waiting.

I am an iPhone user and like it very much. Yes, I do wish the Edge were faster, but with the WiFi access it is blazing quick. The phone, calender and iPod are excellent however. I don't think that this first generation of melded technologies is terrible in any way. I think Apple did an excellent job. This is coming from a person who usually waits until the 2nd generation to buy any Apple product.

[GQB]

Originally Posted by fraklinc

first they said apple stores only has about maybe 800 per store at lauch day, a seen the fedex truck arrive at the store with 3 pallets around launch time...

fraklinc...
Have you ever heard of this thing called 'punctuation'?

[SpamSandwich]

Originally Posted by GQB

fraklinc...
Have you ever heard of this thing called 'punctuation'?

[Gee4orce]

Call me a cynic, but I suspect this is someone talking down the stock pre-earnings report so that they can step in tomorrow and make a quick killing....

[Bert25]

Originally Posted by Rolo

I can't believe AI posted this inane story. CIBC? Are you nucking futs? The same Canadian bank dude that said the iPhone would be delayed? That stupid gem sent AAPL down then, too.

Apple shares fall; CIBC sees iPhone release pushed back

That iPhone demand has dropped somewhat from what it was opening weekend is a no-brainer. Just another idiotic report designed to get the stock price down ahead of earnings. It does present a good opportunity to buy the stock or buy some cheaper calls. It's also not bad having the stock be lower before earnings and have lowered expectations. It's a good setup for a post-earnings rally. That's all fine as long as we know this is all a bunch of carp.

The FUDs before AAPL earnings arrives as expected As long as AAPL stays on it's course, AAPL longs should not be upset and take advantage of this phenomenon, I sold some but my timing was off and the stock went up some more before todays "news". You guys should watch Cramer at thestreet.com TV, he has some timing when he advised to sell some AAPL yesterday.

Here he is gloating on his call. BTW, he is APPL long.


edit: if the link doesn't work, copy/paste below:
Cramer's Apple Sell-Strategy <http://publish.vx.roo.com/thestreet/portal/?channel=Cramer%20On%20Demand&clipid=1373_10369502 >

Cramer's 'Sell Apple' Advice Pays Off for Investors <http://publish.vx.roo.com/thestreet/portal/?channel=Cramer%20On%20Demand&clipid=1373_10369806 >

[anantksundaram]

Originally Posted by GQB

fraklinc...
Have you ever heard of this thing called 'punctuation'?

He's been asked/told that before. Looks like he's just hardwired that way.

[melgross]

Originally Posted by SpamSandwich

It looks like the stock is already gaining back a little... I'm sure they don't want to be caught short when the numbers come in tomorrow (higher than expected)...

It was, but it's really dropped now. At this time it's 134.49.

All markets have been down for the day as well.

[melgross]

Originally Posted by nagromme

Initial hopes by "analysts" were for 100k sales Fri-Sun. It seems Apple beat that by nearly 50% even WITHOUT Sunday--and Friday was a partial day starting at 6.

Of course, wild speculation since then makes the actual good news into bad news

Demand is of course "slowing" after the initial, unbeatable pent-up rush. No numbers needed to tell us that. But most users going into the Apple Store NOT looking at the iPhones? I am highly skeptical.

And 3G is coming--Apple said so directly--but I doubt it will come very soon, since we now know (by comparing the internal electronics against other devices) that Apple's claims about size and battery life with 3G were true..

I think it was for 200k

[SDW2001]

Originally Posted by MacSuperiority

Their is no fucking way they will introduce a 3G model this year. If it was technologicly possible they would have done it with this model. There is not some huge jump in battery performance or a better 3G receiver that would make it possible. Not only that, if they came out with a 3G model right now it would seriously piss off alot of people who just droped 600 bucks for their iPhones. Those people who wanted an iPhone bought one and adding 3G is not going to have a huge impact on sales.

I would say they would come out with a lower priced version with just a phone and music player way before they would come out with a new 3G enabled model.

I like how people just make stuff up and talk out of their asses. Of course it's possible. Jesus christ.

Originally Posted by fraklinc

first they said apple stores only has about maybe 800 per store at lauch day, a seen the fedex truck arrive at the store with 3 pallets around launch time, now have you seen how small the iphone box is! i standed in line for 2 hours and they might have been 1000+ people there and they did not sell out untill the 3rd day, since then they have sold out a couple of times, apple is not giving out #s but come on dont tell me you can't fit more than 1000+ and a single pallet, i went this morning to buy the apple blu tooth headset which is available now and there still a bunch of people walikng out with iphones, apple likes suprising people, remember iphone when on sale at 6:00pm and the nextday was not a business day, i don't know how that works but those 145000.00 activations could have just been from launch night, my opinion is apple stores are not selling out of iphones because stores have way more than what people spec them to have, believed it or not most of these analyst look just at ebay, but remember no one is buying it there because they have toons at there local apple stores, but if you try to sell your smart phone and ebay you will see that the iphone has hurt the market alot because people as not willing to pay as much as before for smart phones

Originally Posted by GQB

fraklinc...
Have you ever heard of this thing called 'punctuation'?

Beat me to it. Reading that post was painful.

[bye bye baby]

I doubt Steve Jobs reads these web sites- but he should.

Of course demand is going to nose dive for the iphone and it has little to do with the product as a product.

It's not 3G that is the problem but the whole At&T world you have to buy into.

$600 is a lot of money to pay for a phone that is locked, to a network, locked into a contract and even after the contract you can still only use it on the AT&T network.

This is an example of Apple arrogance and greed. They thought that their product was so good that they wanted even a slice of the revenue from contract deals.

The iphone is a great product but most people won't pay a premium for paying a premium. Demand will slow as most people take stock of Apple's demands on the consumer.

Apple will kill the goose that laid the golden egg.

Bad

[NOFEER]

Originally Posted by SpamSandwich

I'd like some more 'color' from this report. Betcha Ittai Ittai Kidron only visited one store near CIBC, and only for an hour at lunchtime.

The Apple Store I visited had a steady stream of people leaving with an iPhone or an iPod... and I was there only for 20 minutes!

googlemaps streetlevel says he was really at a verizon store looking through a peephole

at this point i need voice dialing more than i need 3g, but 3g would be nice to protect my investment for 2-3 years. edge is coming up in speed in some markets. but i need voice dialing NOW

[SpamSandwich]

Originally Posted by Rolo

I can't believe AI posted this inane story. CIBC? Are you nucking futs? The same Canadian bank dude that said the iPhone would be delayed? That stupid gem sent AAPL down then, too.

Apple shares fall; CIBC sees iPhone release pushed back

That iPhone demand has dropped somewhat from what it was opening weekend is a no-brainer. Just another idiotic report designed to get the stock price down ahead of earnings. It does present a good opportunity to buy the stock or buy some cheaper calls. It's also not bad having the stock be lower before earnings and have lowered expectations. It's a good setup for a post-earnings rally. That's all fine as long as we know this is all a bunch of carp.

Naaaaah. The whole market took a dive today. It's just 'pile-on' Apple time. It'll pass.

[SpamSandwich]

Originally Posted by melgross

It was, but it's really dropped now. At this time it's 134.49.

All markets have been down for the day as well.

Man, you must look at your portfolio on days like this and shudder a little.

[SpamSandwich]

Originally Posted by NOFEER

googlemaps streetlevel says he was really at a verizon store looking through a peephole

[melgross]

Originally Posted by SpamSandwich

Man, you must look at your portfolio on days like this and shudder a little.

What's a six figure loss?

It just shows why we shouldn't listen to those who come post here with rose covered fingers on their keyboards.

Losses always occur. This was unexpected, but they almost always are, until after they happen. Then some wit will tell how they expected it.

But, this does now put pressure on Apple to make their numbers very good tomorrow, even better than I had said they should be.

Apple really does have to show at least 200k sales for the iPhone those days, and a decent continuing sales.

That would mean doing well enough to sell perhaps 3 million by the end of the year, hopefully more.

[cameronj]

Originally Posted by nagromme

Initial hopes by "analysts" were for 100k sales Fri-Sun. It seems Apple beat that by nearly 50% even WITHOUT Sunday--and Friday was a partial day starting at 6.

Of course, wild speculation since then makes the actual good news into bad news

When people were speculating about those kind of numbers (early- mid- July) Apple stock jumped from 120 to 130. Speculation of 500,000+ sales is what pushed the stock to 145. Guess what happens when sales turn out to be 150,000?

Demand is of course "slowing" after the initial, unbeatable pent-up rush. No numbers needed to tell us that. But most users going into the Apple Store NOT looking at the iPhones? I am highly skeptical.

Then hold on to your shares and stop looking at message boards

[cameronj]

Originally Posted by TenoBell

I think the entire report is bogus. He didn't mention which store he went into where people were not interested. I've seen stores in both NY and LA where the iPhone displays are crowded with people wanting to touch them. Everyone I know marvels at my iPhone.

Well, I own a business as an all things IT repair person. My customers call me to pick out and set up new PCs, new networks, new cell phones, you name it. And I was amazed that I got my first call to set up a new iPhone YESTERDAY.

I so far haven't heard anyone with an iPhone say they wish it had 3G. Anandtech did tests where he found 3G to be a significant drain on the battery while real world speed was not much better.

I've told everyone who's asked me why I don't have one that it's because I'm waiting for 3G. So I guess now you can't say you never heard anyone say that, huh?

[melgross]

Originally Posted by cameronj

I've told everyone who's asked me why I don't have one that it's because I'm waiting for 3G. So I guess now you can't say you never heard anyone say that, huh?

Nah, a bunch of us have been saying it all along.

[cameronj]

Originally Posted by Gee4orce

Call me a cynic, but I suspect this is someone talking down the stock pre-earnings report so that they can step in tomorrow and make a quick killing....

Ever consider that the run-up from 120 to 145 was someone pumping the stock up so they could sell and leave all the suckers out there holding shares and looking for someone to blame?

[melgross]

Originally Posted by cameronj

Ever consider that the run-up from 120 to 145 was someone pumping the stock up so they could sell and leave all the suckers out there holding shares and looking for someone to blame?

Sigh!

Most likely, it was neither

[cameronj]

Originally Posted by melgross

Nah, a bunch of us have been saying it all along.

Tenobell never heard you!

Must have some sort of filter on

No wonder someone above just said that all losses are unexpected until they happen. He didn't notice all the people here saying it would happen. And it'll be lower on Thursday than it is today (quote me on that!)

[cameronj]

Originally Posted by melgross

Sigh!

Most likely, it was neither

I know - in fact it was just people buying the excitement and now selling the news. I was just trying to point out that one should be careful not to look through a biased filter. Anyone who thinks that the run to 145 was based on "real" things while the drop today was somehow concocted is totally missing the boat.

[aegisdesign]

Originally Posted by nagromme

And 3G is coming--Apple said so directly--but I doubt it will come very soon, since we now know (by comparing the internal electronics against other devices) that Apple's claims about size and battery life with 3G were true..

And Sony Ericsson's W880i says that's a load of bollocks.