Citing supply chain checks, Jefferies cuts Apple price target to $420 - Page 3

If you understand a little about technology, you will realize that samsung has nothing of substance. I can tell 5 or 6 phones that are better than the galaxy s3 on every single metric (better phones), especially the iPhone, and Apples beats them on every other product/software.

Those aren't lies.  The lack of innovation is routinely discussed, so I was discussing perception.  Of course I think they are innovating.  Whether that innovation leads to a commercial product that can move the needle for a $40+ billion bottom line company remains to be seen.

 

I guess it depends what the 5S has.  Lets hope the fingerprint and NFC rumors are true.  Roll out same phone with a new camera and it will get ugly.

 

I don't think i said they will miss, but maybe I did.  They have missed 3 of the last 4 quarters so not exactly a stretch to assume it happens again.

 

Tim knows the buyback is a mirage and not particularly beneficial to shareholders as it simply offsets dilution, so why say we are returning $45 billion?  Shareholders will get the divvies in that number, they get none of the buyback, its smoke and mirrors.

 

Are you naive enough to believe Tim when he insinuated they aren't going to come out with a large screen phone.  C'mon!  Of course they will

Judged by your swagger and your second-rate jargon, yep, you're (were) an analyst, alright.

 

A completely clueless one at that (although, that is perhaps a bit of redundancy).

 

Phil.

 

Jony. Though he hates the limelight. 

 

Tim, Jony, Bob, and Phil.

 

I would like to see Craig step up his game, but we all know Apple doesn't care about OS X.

the interesting part in the original article on Business Insider is that this analyst is saying Apple iPhone is going the way of the Blackberry and RAZR, that when they fell they fell father than expected.  And Apple is heading the same direction.  Once the lead has been taken, it's impossible to regain it.  The one handset mindset, one form factor, with a screen only big enough for your thumb is the reason Apple is going to lose the smart phone market.  Unless they pull off a miracle with the new phones coming out (if in fact they are coming. who really knows.)

 

I honestly don't get the personal attacks here.  I get it, i'm an outsider, people here are valued based on the number of posts they have (which sadly you see on many forums) and I have few posts.

 

I am still an analyst, don't feel the need to defend myself.  Very easy to attack a profession when you haven't been involved in it or don't know truly what it entails.  Trust me, on the buyside/hf world, you put up or are gone.  You lose money, get below your high water mark and the doors shut.  

 

I won't stoop to your level and call you names.  Its quite boorish, but I hope you feel like a bigger man for doing it.

 

Trying to have an intelligent discussion about what ails the stock, which is disconnected a bit from reality from what is happening at company.  Everyone here just want to say everything is fine and its those mean analysts that are gaming the system, which I find quite funny.

To some degree this is the iPod model in reverse. Apple didn't invent the digital mp3 player they reinvented it. Back then many people said Apple stole this idea or copied it. But it really didn't matter if it was true or not. The iPod was just a far superior product. I still have my 2nd generation 20GB firewire iPod which I now use as an emergency boot up and repair external drive. That is quality. 

 

Now you have people saying that Samsung is just copying Apple. If you look at their phones before the iPhone compared to now, you have a very strong case to make. But at the end of the day it really doesn't matter anymore than it did when people said the same thing about the iPods. The courts have had their say more or less and like or hate the decisions we have to accept them. What gets lost in all this Samsung vs. Apple discussion is the fact that much of their growth are coming from former customers of Blackberry, Nokia, HTC, and other companies. They are the companies really hurting as these two giants just continue their dominance. Can a third company emerge to be a viable alternative? 

 

Samsung is doing well but so is Apple. It is a big world and there is plenty of room for both companies to make massive profits. It is not a zero sum game when you have billions and billions of potential customers. Other MP3 players also tried to copy from Apple but failed miserably. Samsung is a far bigger challenge than the likes of the Zune though. The S4 looks to be a very impressive bit of kit that will have great appeal to their customer base. It will also be out several months before Apple can answer and when they do Samsung will probably release their Note 3. Apple will need to step up their game a bit to continue growth. Apple is no HTC or Blackberry, they have the products and the people to ensure they will not get steamrolled. I just hope they step a bit out of their comfort zone and release a larger iPhone. Large displays are no longer a niche or a fad. They are here to stay and that is a massive gap in their lineup. Take the fight to Samsung and release a big beautiful iPhone and watch these same analysts start saying Samsung is the one in trouble for a change. 

 

If they are really selling, why wouldn't such a vocal company report actual sales. Weren't the sales they reported during the trial was much lower than the estimates provided.  They were shipping 20 and 30 million units per quarter but stopped reporting actual sales in mid 2011.  When they court forced them to release sales they only sold 21 million between 2010 and June of  2012.  Apple "sold" 85 million during the same period.  Odd that the media continues to sell their lies.  

Fair enough.

 

Since you're the one that brought up your 'model' for AAPL, plus claimed that you were a buy-side analyst, and appear to have a fairly strongly-held view on Apple's value, tell us:

 

1) What is your earnings estimate for 2013-14?

 

2) How are you estimating Apple's growth in earnings? For how many periods? What CAGR? Even focusing on just the existing business (and no new product lines), what are you building in, in terms of: (i) Overall market growth in PCs, smartphones, and tablets? (ii) Apple's share in each of these markets? (iii) Apple's average unit price in each of these markets?

 

3) Are you factoring in the likely growth in China (if China Mobile happens), as well as the wide open India market in the above?

 

4) What assumptions are you making about gross, operating, and profit margins? Do they stay the same? Fade over time?

 

5) What cost of equity (discount rate) are you using?

 

6) How are you calculating your terminal value -- by using a multiple, or the constant growth model (or its variant)? If the former, what is the implied cost of equity and 'g' in your multiple? If the latter, what are you assuming about long-run cost of equity and 'g'?

 

7) How model-consistent is your assumption of 'g' (explicit or implied) with the ROE and the reinvestment rate implied by your model?

 

There are just the main initial questions.

 

Depending on your answers, I will likely have more questions for you.

The SIII sales declined last quarter. Declined so that the year old 4s outsold it and the 5 sold double the SIII's numbers.

Because they compete in the low end range of phones and sell on about twice the carriers than Apple.

Last quarter the #1 selling smartphone was the iPhone 5 and the #2 selling smartphone was the iPhone 4.

You have to read things more carefully.

 

These figures are U.S. Sales only and do not include the Note, Note 2 nor the S3.

 

The original argument: People just have to try a Samsung phone and Samsung's sales will plummet.

 

My reply: Why are Samsung sales still increasing? [which they are, btw]

Which has nothing to do with the original argument.

In worldwide sales last quarter the SIII declined in numbers and was beaten by both the 4s and the far newer 5. If comparing comparable phones isn't appropriate (Flagship to Flagship as it were) you want to include Samsung's washer dryer combo's in the comparison?

 

I don't.

... and the Note and Note 2. They are increasing in numbers and I don't think you can wash or dry anything with them.

 

So... Samsung numbers are still increasing. I guess trying them out really hasn't discouraged people.

 

As far as the S3 goes... I'll use the old Apple argument... people are waiting for the S4.

As are Apple's numbers increasing..... but the breakdown of which portions of the model lioneup are increasing and how that effects the profitshare is what is a criticval element that tends to be overlooked when raw item numbers "marketshare" is all that is stated as if a very inexpensive, low profit or loss leader low end "smartphones" are equivalanet to the flagships.

 

Comparable offerings are more informative IMHO.  The Note II is an overly expensive LTE iPad mini (speaking of rapidly increasing numbers...) as I see it (that voice contract is a problem). but I guess adding in the numers for both (Note II and mini) would be interesting.... The Note II was reportedly around 5 million, the iPad mini 12 million...

Edited by jfc1138 - 3/12/13 at 10:49am

Tim was in fact asked by Steve to not run the company he did, he was even told to not ask himself 'what would Steve do?'.

This just in --- IDC is jumping into the fray with negative news about Apple :

[URL=http://************/2013/03/12/idc-estimates-android-will-pass-apple-for-worldwide-tablet-market-share-in-2013-on-the-back-of-smallercheaper-tablets/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+9To5Mac-MacAllDay+%289+to+5+Mac+-+Apple+Intelligence%29&utm_content=Google+Feedfetcher]IDC estimates Android will pass Apple for worldwide tablet market share in 2013 on the back of smaller/cheaper tablets[/URL]

What I want to know is where are all of these Android tablets and phones??? I see iOS devices at least 4:1 over anything else... and the "anything else" tends to be old feature phones like those from Nokia, which are still popular here in Germany.

 

I was being specific with how he relates / communicates with Wall Street.  That hasn't changed much, but Tim doesn't get the benefit of the doubt, like Steve did.

 

 

I see you are throwing out academic terms that don't get used often in the real world, but I can revert back to mba/cfa days and adjust my model to answer these. Give me a day.  Let me know if you have a bloomberg terminal, in addition to the model can build in some neat auto-updating charts to help track relative performance and would be more than willing to somehow share the entire thing.

Yes, Tim is a finance guy, but he's also an Operations guy.  VERY important to clarify that.

 

 

Bingo!  So yes, it's a double-edged sword.

My crystal ball says that the "long" edge is sharper...1000+.

Really.

 

Which of the terms above are 'academic'?

Sorry about my attack; that was uncalled for.

Steve got the benefit of the doubt? You mean like his RDF, and all that? Would that be an indicator for WS to rate the stock higher with Steve over Tim? I thought WS was giving the stock a value based on the outlook analysts make.

Wow, TS is on the roll on post deletions again.

Oddly enough, many are right here in these forums, citing the same analysts when their projections favor Apple.

 

In AI-space, the worthiness of an analyst is in direct proportion to the number of rosy things he says about Apple. ;)

THESE IDIOTS COULDN'T PREDICT THEIR WAY OUT OF A PAPER BAG. 

I just meant very few sellside equity pieces discuss terminal value, constant growth model.  That's classic b-school stuff but you don't see it much in equity analysis, but rather just a 3-4 yr forecast and multiple approach.  I'm primarily a credit guy, but also do equities, cap structure arb, vol trading, etc.  I focus on cash flow much more than the income statement approach equity analysts take.  I would note cash flow margin (FFO/revenue) hasn't taken the hit gross margin has recently due to scale on the top line - meaning r&d and sg&a as % sales has decreased), but that offset will stall out without revenue growth. 

What's your goal here?

 

I'm a bit tired about lawsuits/analysts. I only care about products, and that's why I keep coming here, I'm curious, but most times I take "vacation" from sites like these, because they focus more and more on what I don't like.

 

What about you?

 

Just curious.

Anthropology.

Clearly recent history has shown anyone that attempts to target AAPL is doomed to fail. This stock was suppose to be on the way to 1000.00 a share, right now we are closer to 100.00.

 

This is an Apple enthusiast forum which means 98% of the posts here are based on emotion rather than logic, again a perfect setup for failure. Diversification not masturbation over one company is the way to a winning portfolio. I know many joke about "Apple is Doomed" but in some way that is turning out to be true. For many decades Apple was the underdog that has not been the case now for several years, so they will not catch a break on any level.

 

Everyone right now is waiting for the "next big thing" from Apple and the reality is there is a limit to the next big thing. When looking back at history which is what every investor should do, nearly every tech company has hit the same brick wall. Only history will tell if Apple has hit it's peak, the market is at an all time high and clearly it does not feel that way for anyone that only holds AAPL.

On AI?

You have an MBA yet you think shareholders get a piece of the net income? You might want to ask for your money back from whatever college you attended because shares rise and fall based on a large variety of factors and not some direct, 1:1 relationship between increased profits otherwise Apple's share price would be much higher and Amazon's much lower.

It is simple stuff and you continually ignore that Apple's profits have increased YoY, that their profits are projected to increase for fiscal 2013, and they far exceeding Samsung in both profits and profit margins which are now claiming is some gold standard despite ignoring it previously.

And many will buy into those estimates in the hope they are true or at least with the hope that enough lemmings will buy into it so they can make bank. That doesn't make it true and someone who claims to have an MBA should understand a basic concept of how markets can be manipulated without any actually living to their fabricated projections.

Your original comment had nothing to do with the stock price based on projections but instead claimed as fact thing you are merely wanting to come true, but don't take my word for it, let's examine what you wrote…


You're claiming that Apple is getting worse as a company. Now we might have been able to conclude that you were talking only about the stock price (which still wouldn't be accurate) but your next sentence followed up with a comment about about unreleased hardware and the pronoun "they" in regard to Apple needing to change how they conduct business.

You then restate your initial comment about the company getting worse — not the stock — by claiming they have had unsuccessful attempts on launching products, as well as being able to execute the products they do have, which you conclude as being proof that Apple is pathetic, piece of shit of a company that do nothing but falter in the wake of Steve Job's death despite breaking record after record. That about sum it up?


PS: This is the same ol' shit that has been spewing since before Steve Jobs came to Apple and while Steve Jobs was at all, yet they keep winning and everyone wishing for their death keeps failing. Keep it up, you may live long enough to eventually be right.

Anthropology can be studied anywhere there is at least one human being. I have no idea what MacRulez original comment means but I'm certainly up for an anthropological discussion.

They do that. The only thing you can count on is that being a technology company and having excessive mind share will result in bigger swings regardless of how well you are performing, or how wildly more successful you are than your next closest competitor.

It's an irrational set of expectations people have from Apple and no other company. Regardless of how successful they are they just keep asking "What else?" The Mac in 1984 and then the iPod in 2001. Then 6 years later for the iPhone, and 3 years later for the iPad, and yet people wanted something else right after the iPad was launched.

There was none of this attitude during the iPod's reign and it clearly had a much smaller window as only being a PMP. So why this irrational expectation for Apple to produce a brand new, revolutionary product category seemingly every month or else feel the wrath of analysts and their attached dingleberrists about the incontrovertible and presently occurring death of Apple?

I blame their excessive mindshare which makes any news about Apple better than substantial news about other companies, and negative news about Apple's demise even better for eyeballs.

Sell your Apple shares and fu*k off.

Indeed; a most fascinating, if isolated, subculture.

 

Nope. They spent miserable percentage on R&D. Apple was always greedy, this is Jobs legacy. There is nothing up the sleeve. THis talks about supply chain is side show, actually.

 

Problem is, that they should take out from the sleeve larger screen a year ago, they will take it 2014, when nobody will care any more. They have no iTV, especially not with bad SIri interface, iWatch is a funny little thing that means nothing and there is no next big thing. Believe me. If Apple stays at 5 P/E, it will be a big success. 

I hate blatant stock manipilation be it this way or that way.

But true enogh positive manipulation does in fact enrage me a bit less.

Edited by Rabbit_Coach - 3/12/13 at 12:22pm

I think the weather is going to be horrible tomorrow. I see trolls flying very low recently.

 

Your implication being that "percentage" means anything whatsoever.

 

Your implication being that this is the truth.

Your implication being that you know anything about the internals of the company.

 

Your implication being that Siri is bad.

 

Your implication being that you know anything at all about whatever product this is or is not.