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US iPhone, iPad demand more than 40% stronger than expected

post #1 of 22
Thread Starter 
An Alphawise survey of American purchasing intentions indicates that US iPhone and iPad demand are stronger than expected; sales will continue to outperform expectations into 2012 and should enable Apple to beat estimates next year.

The survey results, reported by Morgan Stanley analyst Katy Huberty, noted that "survey results and recent comments by AT&T indicate Apple iPhone shipments could reach 31-36 million in the calendar Q4 2011 compared to our model of 30 million."

Huberty also stated that purchase intentions indicate a sequential uptick in demand for the first quarter of 2012, for which the firm had previously modeled a sequential decline of 7 percent. Morgan Stanley had estimated 28 million iPhones in the first calendar quarter of next year, while the survey estimates sales of 41 million.



Apple's share gains, combined with broader smartphone penetration data points to strong, long term iPhone growth, the report stated, indicating that 30 percent of handset owners plan to buy an iPhone, nearly double the 16 percent who are existing owners.

Huberty also noted that the tablet market will "continue to enjoy strong growth," with purchasing intentions (27 percent) triple that of the installed base (8 percent of respondents).

The firm models sales of 52 million iPads and 134 million iPhones in 2012, while it notes that latest survey indicates demand for 82 million iPads and 190 million iPhones next year, an increase of 42 to 56 percent above its internal estimates.

The report notes that the introduction of a cheaper iPad would significantly increase demand, particularly from new adopters. At a price point of $399, Apple could gain 22 million additional buyers.

Apple is expected to introduce a new high resolution iPad 3 alongside a discounted iPad 2 model, similar to its discounted iPhone 3GS and iPhone 4 models that sell alongside the latest iPhone 4S.
post #2 of 22
And this is barely getting started.
post #3 of 22
LOL, this is Katy Huberty we're talking about. She has consistently one of the worst track records of any professional analyst in predicting Apple's performance.

Toss this report into the circular file.
post #4 of 22
Well I hope there is some truth in this because I just bought lots of stocks at 381 today. I still have some $$ on the side in case it gets lower.

I think the price of the stock is greatly undervalue considering growth potential.
post #5 of 22
Quote:
Originally Posted by herbapou View Post

Well I hope there is some truth in this because I just bought lots of stocks at 381 today. I still have some $$ on the side in case it gets lower.

I think the price of the stock is greatly undervalue considering growth potential.

Good move. It is ludicrously undervalued.
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post #6 of 22
Quote:
Originally Posted by cvaldes1831 View Post

LOL, this is Katy Huberty we're talking about. She has consistently one of the worst track records of any professional analyst in predicting Apple's performance.

Toss this report into the circular file.

Unfortunately, it will just feed the frenzy of analysts to see who can come up with the largest numbers. And then, if Apple misses the highest analyst guess, the stock will plummet - even if they're 30% above their guidance.

That's just the way it works......
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"I'm way over my head when it comes to technical issues like this"
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post #7 of 22
Quote:
Originally Posted by herbapou View Post

I think the price of the stock is greatly undervalue considering growth potential.

AAPL's forward P/E is 9.76. It is crushingly undervalued.

Apple gets little respect from the Street.
post #8 of 22
Quote:
Originally Posted by cvaldes1831 View Post

AAPL's forward P/E is 9.76. It is crushingly undervalued.

Apple gets little respect from the Street.

Has there ever been a precedent for so much undervaluation of any company of significance based on the actual facts let alone potential? Do you think at some point there will be an explosion or can this really last?
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post #9 of 22
I'm not an economist so I'm the wrong person to answer.

That said, based on the prediction results of various professional financial analysts, I'm not sure if they know much more than I do.

Within my lifetime, there is never been the same amount of day-to-day market volatility that we're seeing now. As far as I can tell, we are headed into uncharted territory and previous prediction models aren't applicable. That said, Apple does not control the world economy. Regardless of the soundness of their business strategy, there are factors that they can't control (e.g., Tohoku earthquake, Thai flooding, Euro issues).

It is foolish to believe that any large multinational company on this planet is in control of its fiscal destiny.

Nobel Prize winners and the people who actually assert a lot of influence (Fed chair, IMF head) don't reliably predict the world economy, why should you expect me to?
post #10 of 22
Quote:
Originally Posted by cvaldes1831 View Post

AAPL's forward P/E is 9.76. It is crushingly undervalued.

Apple gets little respect from the Street.

Full disclosure: I'm long AAPL.

I agree. Apple is trading at utility P/E ratios right now. "Analysts" are tough to figure out. On the one hand, they all seem to think that Apple is prime for a fall (hence the 9.76 forward P/E). On the other hand, they keep on ratcheting up expectations and putting out higher and higher guidance on the iPhone and iPad.

At the end of the day, it comes down to this. Do you think that the management team and board that Steve Jobs left behind can keep the company innovating and keep the hits coming. If yes, then the stock appears grossly undervalued. If you think that Apple was Steve Jobs, and that they are bound to lose their edge to Google, Microsoft, Amazon or some company we've never heard of, then the next 10 years are likely to be the same for Apple as the last 10 years were for Microsoft.

My view is the first one.
post #11 of 22
Quote:
Originally Posted by KPOM View Post

Full disclosure: I'm long AAPL.

I agree. Apple is trading at utility P/E ratios right now. "Analysts" are tough to figure out. On the one hand, they all seem to think that Apple is prime for a fall (hence the 9.76 forward P/E). On the other hand, they keep on ratcheting up expectations and putting out higher and higher guidance on the iPhone and iPad..

you've misplaced your anger. Analysts don't set a PE. They give their expectations. Right now analyst expectations are quite bullish. The self interested actors in the market are collectively deciding when to buy and sell. If enough people agree with you it will cause the stock to rise. Right now the balance between buyers and sellers says that the current price is correct. If apple does better than expected then some of those bears will turn into bulls and buy. Thus the contradiction you see is false.
post #12 of 22
Quote:
Originally Posted by cvaldes1831 View Post

Within my lifetime, there is never been the same amount of day-to-day market volatility that we're seeing now. As far as I can tell, we are headed into uncharted territory and previous prediction models aren't applicable.

Actually, volatility was far worse at the end of 2008/early 2009, when the implied standard deviation of the market, as measured by the VIX (http://finance.yahoo.com/q?s=%5EVIX) was over 80%.

While it went as high as 40% a few weeks ago, it is now back in the 25% range, not too far off from the long-run historical average of 20% - 22%.

I agree that Apple is perhaps seriously undervalued at its current (forward) P/E, but I don't think there's anything to suggest that ".....previous prediction models aren't applicable."

Perhaps it's just our patience not being what it used to be.......
post #13 of 22
Quote:
Originally Posted by jragosta View Post

Unfortunately, it will just feed the frenzy of analysts to see who can come up with the largest numbers. And then, if Apple misses the highest analyst guess, the stock will plummet - even if they're 30% above their guidance.

That's just the way it works......


Relax, holding AAPL will work out just fine...

AAPL is up 17.7% YTD (even with today's miserable performance).
AAPL is up 18.7% over the past year.
AAPL is up 80% since 1/1/10.
AAPL is up 343% since 1/1/09.

I'd say you're doing pretty darn well if you're holding AAPL.

Disclosure: I bought more long AAPL today.
post #14 of 22
Quote:
Originally Posted by KPOM View Post

At the end of the day, it comes down to this. Do you think that the management team and board that Steve Jobs left behind can keep the company innovating and keep the hits coming. If yes, then the stock appears grossly undervalued. If you think that Apple was Steve Jobs, and that they are bound to lose their edge to Google, Microsoft, Amazon or some company we've never heard of, then the next 10 years are likely to be the same for Apple as the last 10 years were for Microsoft.

My view is the first one.

And I.

I trust Apple's management team more than professional analysts. After all, AAPL consistently outperforms the S&P 500, meaning their senior execs are better at improving shareholder value than most professional finance analysts and fund managers.

Full disclosure: I am long on AAPL as well.
post #15 of 22
Quote:
Originally Posted by digitalclips View Post

Has there ever been a precedent for so much undervaluation of any company of significance based on the actual facts let alone potential? Do you think at some point there will be an explosion or can this really last?

You didn't ask me, but I do think Apple has to be considered an exceptional case. If Apple were just a tech company with amazing, sustained growth and with great growth potential AND a rock bottom P/E, it would be one thing. But Apple is not just another tech company, it is the largest publicly traded tech company in the world BY FAR. People cannot wrap their heads around Apple because its size and trajectory make it unlike any company that ever existed.
Personally, I expect a big run up at some point, but then again, I have been expecting that for a while now...
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post #16 of 22
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Originally Posted by anantksundaram View Post

Actually, volatility was far worse at the end of 2008/early 2009, when the implied standard deviation of the market, as measured by the VIX (http://finance.yahoo.com/q?s=%5EVIX) was over 80%.

While it went as high as 40% a few weeks ago, it is now back in the 25% range, not too far off from the long-run historical average of 20% - 22%.

I agree that Apple is perhaps seriously undervalued at its current (forward) P/E, but I don't think there's anything to suggest that ".....previous prediction models aren't applicable."

Perhaps it's just our patience not being what it used to be.......

It's this whole Europe thing... or at least that's the excuse this time around... and it's the end of the year when some investment companies lock in gains.

Regarding the Europe thing... every day I wake up and somebody somewhere hints that it could get worse... and prices, of course, go down. One of these days, though, it's going to be time for a run and someone is going to hint that a decision has been made and the European financial problem has been solved... AAPL at $450 within 10 days after that news.
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post #17 of 22
Quote:
Originally Posted by digitalclips View Post

Has there ever been a precedent for so much undervaluation of any company of significance based on the actual facts let alone potential? Do you think at some point there will be an explosion or can this really last?

There's never been a precedent for a company making this much profit but still with so much headroom and brilliance for growth.

So you can't blame Wall Street for giving Apple a PE that is traditionally suited for mature steady state companies. The unprecedented performance of Apple is causing the unprecedented response of Wall Street.

But not to fear: the PE compression to a stodgy performer is nearly complete. So that just means that instead of anticipating growth in advance, Wall Street will soon have to reward it after it is reported. That presents a lovely opportunity for those of us with vision that Wall Street doesn't have: buy with both fists just before quarterly earnings announcements. It hasn't worked so well in the past, but then again, AAPL hasn't been this undervalued before in the past. Wall Street's tendency to be forward-looking is completely depleted when it comes to AAPL. Rejoice. Rejoice. Act, and then get your reward for knowing better.

Thompson
post #18 of 22
Quote:
Originally Posted by thompr View Post

There's never been a precedent for a company making this much profit but still with so much headroom and brilliance for growth.

So you can't blame Wall Street for giving Apple a PE that is traditionally suited for mature steady state companies. The unprecedented performance of Apple is causing the unprecedented response of Wall Street.

But not to fear: the PE compression to a stodgy performer is nearly complete. So that just means that instead of anticipating growth in advance, Wall Street will soon have to reward it after it is reported. That presents a lovely opportunity for those of us with vision that Wall Street doesn't have: buy with both fists just before quarterly earnings announcements. It hasn't worked so well in the past, but then again, AAPL hasn't been this undervalued before in the past. Wall Street's tendency to be forward-looking is completely depleted when it comes to AAPL. Rejoice. Rejoice. Act, and then get your reward for knowing better.

Thompson

Considering that apple is up 5x in the last four years, I'd say it didn't matter when you bought, before earnings, after, only on full moons, right before SJ announced some bad cancer news. Complainers on this board are myopic and don't understand that there is no such thing as a sure thing, and the market discounts a stock by its perceived risk. If the risk ends up being lower in fact, that risk discount turns into profit.

Only a fool (and there are many here) complains that their favorite stock is undervalued. An intelligent investor who believes his stock is undervalued keeps his mouth shut and accumulated more, hoping there is enough time before the stock rises to HIS idea of its value. He also understands that the people he buys the stock from have done their homework too, and think apple is going down. He hopes that his research is more correct when predicting the future than the other guys', but he understands that both are trying to predict the future and reasonable people can disagree about such things.

If this is not your outlook on the stock market, you will forever be a fish, abused by your trading partner and frustrated at the opacity and unfairness of it all. Many people never learn the lesson. Those who do get wealthy. Those who don't, don't.

The whining on this board reminds me very much of the noise coming from dell investors in the late 90s. Back then dell was considered the high end pc maker, having itself vowed, just as apple has, that it wouldn't sell a pc that was junk. Dell was the LAST big pc maker to sell a system for less than $1000!

Investors foolishly thought that growth from the past projects forever into the future without risk. There are thousands of very smart, motivated and educated people gunning for apple right now. Outsized profits do not last in a competitive market.

Ignore or dispute this at your own peril. No one can predict the future and no stock is a sure thing.

Disclosure: long apple with ~10% of my portfolio. But its JUST A STOCK. Dont fall in love. You get no bonus from apple in the mail to thank you for loyally holding its stock while it declines.
post #19 of 22
Estimates next year - otherwise known as next year's guesses.

I stopped taking these analysts seriously after iPad 1. The closest guess by one analyst was less than half of the total 14.8M sales by the end of the 9 month period.
Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #20 of 22
Quote:
Originally Posted by cameronj View Post

Considering that apple is up 5x in the last four years, I'd say it didn't matter when you bought, before earnings, after, only on full moons, right before SJ announced some bad cancer news. Complainers on this board are myopic and don't understand that there is no such thing as a sure thing, and the market discounts a stock by its perceived risk. If the risk ends up being lower in fact, that risk discount turns into profit.

Only a fool (and there are many here) complains that their favorite stock is undervalued. An intelligent investor who believes his stock is undervalued keeps his mouth shut and accumulated more, hoping there is enough time before the stock rises to HIS idea of its value. He also understands that the people he buys the stock from have done their homework too, and think apple is going down. He hopes that his research is more correct when predicting the future than the other guys', but he understands that both are trying to predict the future and reasonable people can disagree about such things.

If this is not your outlook on the stock market, you will forever be a fish, abused by your trading partner and frustrated at the opacity and unfairness of it all. Many people never learn the lesson. Those who do get wealthy. Those who don't, don't.

The whining on this board reminds me very much of the noise coming from dell investors in the late 90s. Back then dell was considered the high end pc maker, having itself vowed, just as apple has, that it wouldn't sell a pc that was junk. Dell was the LAST big pc maker to sell a system for less than $1000!

Investors foolishly thought that growth from the past projects forever into the future without risk. There are thousands of very smart, motivated and educated people gunning for apple right now. Outsized profits do not last in a competitive market.

Ignore or dispute this at your own peril. No one can predict the future and no stock is a sure thing.

Disclosure: long apple with ~10% of my portfolio. But its JUST A STOCK. Dont fall in love. You get no bonus from apple in the mail to thank you for loyally holding its stock while it declines.

This place is more a fan site than an investor site - although it is both. Hence the disquiet with the valuation, it means people are not assuming growth into the future.

Apple does like it's margins, this Q they are approaching 42%. The street is assuming this won't last, and it won't unless they do that trick of getting a new product with high > 60% margins.
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post #21 of 22
Quote:
Originally Posted by asdasd View Post

This place is more a fan site than an investor site - although it is both. Hence the disquiet with the valuation, it means people are not assuming growth into the future.

Apple does like it's margins, this Q they are approaching 42%. The street is assuming this won't last, and it won't unless they do that trick of getting a new product with high > 60% margins.

...and that's exactly why Andy Zaky made such a big deal out of focusing on the revenue growth, not the earnings growth. But frankly, the market is behind both! Yes, some of the P/E compression can be laid at the feet of skyrocketing EPS that eventually must come down to earth (although it might not happen for years, given the blue sky over the iPhone's growth prospects), but not all. The growth in Apple stock price seriously lagged the growth in Apple revenue over the last year, as it did the year before that, and that is far more telling.

Really, people aren't grousing about Apple's gain in value, they're just pointing out that there's a discrepancy developing between the stock's real value and its perceived value. That's a fair point to make.
post #22 of 22
Quote:
Originally Posted by Sacto Joe View Post

Really, people aren't grousing about Apple's gain in value, they're just pointing out that there's a discrepancy developing between the stock's real value and THAT POSTER'S perceived value. That's a fair point to make.

fixed that for you. The AVERAGE perceived value among all owners AND non owners of apple stock (that is to say the average for every human on earth) can be found down to the last decimal by going to yahoo finance.

Only a fool thinks his point of view is the only one, especially given contrary evidence from the greatest voting machine ever invented. Any a competent person who feels that was simply buys the stock, he doesn't whine on a message board to a bunch of people who have no impact on the stock price. Unless he wants someone to pat him on the back and make him feel better, but that's not a wise thing to do when considering making an investment. It's an echo chamber in here. If you want to make smart decisions you should be BEGGING for contrary opinions.
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