Apple shifting its guidance to stop being blamed for "missing" analyst expectations

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Comments

  • Reply 21 of 75
    jungmarkjungmark Posts: 6,801member

    Quote:

    Originally Posted by lkrupp View Post



    In my opinion they need to start refuting the bullshit rumors that seem to come out of nowhere. A simple "that's not correct" from Cook would do nicely when one of these outrageous rumors gets started.




    because they'll keep on having to respond. If they don't respond, it's then implied as a confirmation.

  • Reply 22 of 75
    realisticrealistic Posts: 1,153member

    Quote:

    Originally Posted by lkrupp View Post



    In my opinion they need to start refuting the bullshit rumors that seem to come out of nowhere. A simple "that's not correct" from Cook would do nicely when one of these outrageous rumors gets started.




    Apple would then be answering all the BS rumors and these 'people' who have a friend that knows 'someone' or who heard 'something' would keep coming up with more and more outlandish rumors. Apple couldn't respond to every rumor if they tried. If Apple were stupid enough to try and missed or ignored one rumor then the media would it take that rumor as 'fact' and hold Apple accountable because Apple didn't deny it. It would be a 'no win' scenario for  Apple.

  • Reply 23 of 75

    Tallest Skil wrote:
    Because as hard as everyone else is failing, Apple can't make 100.0000001% of the profits of the mobile industry. But Wall Street analysts can claim they will.

    Really?? Geez I could have swore I saw Samsung up 73%. I could be wrong though.
  • Reply 24 of 75
    cash907cash907 Posts: 893member

    Quote:

    Originally Posted by ascii View Post



    Instead of Apple offering a prediction and a hundred analysts offering a prediction, why don't we all just wait and see what the sales actually were. It would save a lot of effort by a lot of smart people that could be put to better use.


     


    Good luck with that. The market rises or falls based on those predictions. Hell, the Futures Market is based on predictions.

  • Reply 25 of 75
    rayzrayz Posts: 814member

    Quote:

    Originally Posted by ifij775 View Post



    Apple used to blow away the rosiest of expectations; how about returning to that?


     


    Oh dear ...


    Quote:

    Originally Posted by ifij775 View Post


    Analysts have no idea how to predict the sales for new products, how about more of those? This would give Apple the opportunity to under promise and over deliver. 



     


    Oh my ...


     


     


    The problem with getting your information from sites like this is that what is written is not always based in reality. Remember that AppleInsider is not actually a news site (it used to be something close to a news site and it is very sad to see how far it's fallen); it is an aggregation engine for other articles that are in turn aggregation engines for other articles and the uneducated ramblings of analysts.


     


    AppleInsider, MacRumors etc are really nothing more than a series of Chinese whispers designed to make money from ads. 


     


    New products do not just appear overnight. They take time to design, build, test, scrap, redesign, build and test. Did you know that the iPad was conceived before the iPhone? In many cases, Apple may sit on a idea for years until the technology is available for them to actually make a decent stab at building it.


     


    Having mugged the mobile tech industry of profits for the past six years then it is inevitable that growth will  slow down. That's just the way life works. I watched a report on the  BBC last night that was gushing over Samsung's profits, completely glossing over the fact that despite the fact they cover all mobile devices and price ranges; that they make and sell TV sets, fridges, laptops, desktops, bits of cars and whole aircraft engines and God knows what else, they still didn't make anywhere near the amount of money that Apple did.


     


    Apple, who have to rely on a rather meagre range of widgets, phones and PCs. I find that most odd.


     


    But growth is slowing down, and this is what Cook is looking to fix. He could throw lots of products into the market and see what happens. Samsung does this and, as I said, they're not making as much money as Apple. He could look to other markets, and he does appear to be doing this: there's a lot of Apple in China at the moment.


     


    Or he could do what Steve Jobs suggested: Milk the market for all it's worth and then move on to the next big thing.


     


    Rather that regurgitated news, what's needed is opinions based on facts and analysis, rather than hit-whoring hysteria.


     


    Here's a good starting place:


     


    http://www.slate.com/articles/technology/technology/2013/01/apple_earnings_report_don_t_let_its_stock_slump_fool_you_the_company_is.html


     


    And I'm amazed more people don't read MacObserver.


     


    Oh, and it's very easy to 'under promise and over deliver'. You come up with a figure and you halve it. Done. The trouble is that when faced with this constant under-promising, analysts then feel the need to over-promise on your behalf, which brings us to where we are today.

  • Reply 26 of 75


    The truth is this site still cries and posts pictures of how people copied.  Though the pictures might be right and Apple might have won a disputed patent, its not helping.  The average consumer doesn't care or know about these lawsuits.  You know and I know Android is getting better, while iOS has been stagnant.  Apple's litigation and stale innovation for the future is the reason for the big tank in the market.  Samsung is trying to hit every niche in in the market whether it be size, OS, or form. Tallest Skil will obviously still cry and post more pictures of copying, but now its just laughable.  This is just great for the tech market that Apple is provoked by competitors.  Glad Apple is failing to innovate, makes it interesting to see them follow the market. Good for Samsung and Android pushing Apple to "Think Differently"

  • Reply 27 of 75


    "Samsung you better stop copying us!!" 'Otherwise, we will sue you, make a bigger iPhone with iPhone 3 specs by LG, and we will show you!" And by doing that we'll cannibalize our most high tech product with lower profits!! Sadly that's the Apple today.

     

  • Reply 28 of 75
    adamcadamc Posts: 582member

    Quote:

    Originally Posted by acslater017 View Post



    This never made sense to me. As profits and revenue increase, and new products are rolled out, stock price dives.



    I think most new Apple followers don't realize that a gap of a few years is perfectly normal between flagship product releases. That its been 3 years since the iPad is in line with past Apple performance.


    Take Amazon as an example they sell very thing under the sun with very low margins but the analysts guess they have a big future and promises humongous rewards because they guess it will be like Walmart in 20 years's time and so in the mean while they dream on.


     


    One more thing to these analysts promises are more important than hard cash.


     


    Just wondering how much do Amazon and google have in their cash reserves.

  • Reply 29 of 75


    Originally Posted by SolipsismX View Post

    As someone in the comments pointed out the dot on the graph represents when Steve Jobs passed away yet the stock claimed quite quickly under Cook. Additionally, when Cook took over during JObs previous hiatus the stock rose drastically. It's simply amazing that people are claiming that Apple can't survive without Jobs despite breaking records and coming out with amazing products like the new Retina MBPs.



     


    think about what you post before posting… History says that when iCon isn't at Apple then Apple fails. Even when on sick leave he was still really there as the guiding mind. He's gone now..for good. Recent successes can be attributed to products he had a major hand in, but that pipeline is now wearing out and it's up to TC,JI etc. to come up with new stuff…or do what iCon did and steal the best ideas. Market is saying that they won't/can't. I agree. Major flaws in all the main products plus much better competition is the reason. The VFM in Apple products, which was always on a knife edge has been busted by Nexus 4/7 and Kindle. You don't NEED to spend THAT much anymore. Tablet is moving to 7" form factor which squeezes Apple's margins. iPhone demand is weakening..especially in the latest model. The computers are priced ridiculously and the OS has been going backwards since Leopard. None of this is rocket science. To give context, my household contains 2 iPhones, an iPod touch and an iPad….none of which we will replace with iOS devices next time. we used to have a ATV, a mac and another iPhone but we are moving away from it because there are better products out there for less money.

  • Reply 30 of 75
    This whole thing is totally F'd. A company offering guidance is never a guarantee. The market is talking as if Apple is being deceptive, as if they somehow know they'll beat their guidance via crystal ball soothsaying. Analysts habitual inflating of expectations strictly off Apple's numbers is a set-up.

    So now the market expects Apple to inflate its own expectations in order to join the ranks of idiot analysts who don't know how to put their own accurate numbers together. Then they'll miss their own numbers and what - everyone will be happy and buy? Bullshit.

    This whole thing sticks of an ambush, and lots of people are getting rich off it.
  • Reply 31 of 75
    ifij775ifij775 Posts: 470member
    jungmark wrote: »
    So basically Apple has to intro and sell new products every qtr to surprise Wall Street.
    No, it's just that a company sitting on $137B can take more risks. I believe even Steve Jobs marveled at what a SMALL team of people can accomplish. I realize innovation takes time, but they could buy it, too. They bought Siri, LaLa, and many others I forget
  • Reply 32 of 75
    rogifanrogifan Posts: 10,669member
    ifij775 wrote: »
    Apple used to blow away the rosiest of expectations; how about returning to that?
    When you get as big as Apple is how do you do that? Law of large numbers come into play.
  • Reply 33 of 75
    ifij775ifij775 Posts: 470member
    rayz wrote: »
    Oh dear ...

    Oh my ...


    The problem with getting your information from sites like this is that what is written is not always based in reality. Remember that AppleInsider is not actually a news site (it used to be something close to a news site and it is very sad to see how far it's fallen); it is an aggregation engine for other articles that are in turn aggregation engines for other articles and the uneducated ramblings of analysts.

    AppleInsider, MacRumors etc are really nothing more than a series of Chinese whispers designed to make money from ads. 

    New products do not just appear overnight. They take time to design, build, test, scrap, redesign, build and test. Did you know that the iPad was conceived before the iPhone? In many cases, Apple may sit on a idea for years until the technology is available for them to actually make a decent stab at building it.

    Having mugged the mobile tech industry of profits for the past six years then it is inevitable that growth will  slow down. That's just the way life works. I watched a report on the  BBC last night that was gushing over Samsung's profits, completely glossing over the fact that despite the fact they cover all mobile devices and price ranges; that they make and sell TV sets, fridges, laptops, desktops, bits of cars and whole aircraft engines and God knows what else, they still didn't make anywhere near the amount of money that Apple did.

    Apple, who have to rely on a rather meagre range of widgets, phones and PCs. I find that most odd.

    But growth is slowing down, and this is what Cook is looking to fix. He could throw lots of products into the market and see what happens. Samsung does this and, as I said, they're not making as much money as Apple. He could look to other markets, and he does appear to be doing this: there's a lot of Apple in China at the moment.

    Or he could do what Steve Jobs suggested: Milk the market for all it's worth and then move on to the next big thing.

    Rather that regurgitated news, what's needed is opinions based on facts and analysis, rather than hit-whoring hysteria.

    Here's a good starting place:

    http://www.slate.com/articles/technology/technology/2013/01/apple_earnings_report_don_t_let_its_stock_slump_fool_you_the_company_is.html

    And I'm amazed more people don't read MacObserver.

    Oh, and it's very easy to 'under promise and over deliver'. You come up with a figure and you halve it. Done. The trouble is that when faced with this constant under-promising, analysts then feel the need to over-promise on your behalf, which brings us to where we are today.
    I am in no way suggesting Samsung's version of "innovation" or even Google's throw crap against the wall and see what sticks. I don't think Apple needs 12 different phones. I think they need to go after new markets. Dare I suggest an enterprise strategy? Companies can appreciate paying more for a better product. How does Apple ignore this segment? FaceTime is not an enterprise video conferencing solution. No screen sharing, note taking, recording, etc. How about the fact that probably about 50% of all meetings (WAG) are ruined by people being unable to hook their computer to a projector instantly. Could AppleTV solve this? Absolutely. Is this a risky bet? Sure, Microsoft dominates enterprise sales, but people are craving computers that make them more productive.

    Steve Jobs ran a PC business and went after mobile. He even renamed the company from "Apple Computers". Apple needs to do this again, but that's probably not what you wanted to hear.
  • Reply 34 of 75
    ifij775ifij775 Posts: 470member
    rogifan wrote: »
    When you get as big as Apple is how do you do that? Law of large numbers come into play.
    You go after a bigger market. I have one word for you...no, not plastics...enterprise.
  • Reply 35 of 75
    stelligentstelligent Posts: 2,680member

    Quote:

    Originally Posted by ifij775 View Post





    I am in no way suggesting Samsung's version of "innovation" or even Google's throw crap against the wall and see what sticks. I don't think Apple needs 12 different phones. I think they need to go after new markets. Dare I suggest an enterprise strategy? Companies can appreciate paying more for a better product. How does Apple ignore this segment? FaceTime is not an enterprise video conferencing solution. No screen sharing, note taking, recording, etc. How about the fact that probably about 50% of all meetings (WAG) are ruined by people being unable to hook their computer to a projector instantly. Could AppleTV solve this? Absolutely. Is this a risky bet? Sure, Microsoft dominates enterprise sales, but people are craving computers that make them more productive.



    Steve Jobs ran a PC business and went after mobile. He even renamed the company from "Apple Computers". Apple needs to do this again, but that's probably not what you wanted to hear.




    It's happening already. All will be well, when the other shoe (patent) drops.

  • Reply 36 of 75
    froodfrood Posts: 771member

    Quote:

    Originally Posted by AppleInsider View Post



    This week, Apple announced plans to change the way it outlines guidance, an effort apparently intended to thwart excessively enthusiastic analyst expectations that have resulted in a series of "misses" ultimately blamed upon the company itself.


    Raising the bar too high






    On the contrary, Apple's consistent ability to exceed its stated guidance objectives has resulted in analysts setting their own expectations for the company, at a level significantly above what Apple has stated it is reasonably confident that it can achieve.







    Following the announcement, a research note by J.P. Morgan analyst Mark Moskowitz observed, "we think the new guidance commentary is not much of a change and could restore beat-and-raise potential to the model."






     


    While Apple certainly benefits from providing conservative guidance it can be fully confident about delivering, it would be absurd to suggest the company is attempting to hustle the market over the long term in a series of quarterly guidance "sandbagging," any more than card shark could repeatedly fool the same naive players to bet against it after a series of expert hands of card playing.



     


    Nice article, and pretty accurately describes the situation.  I think the new guidance by Apple is a good thing- but it really puts the burden on Apple to post realistic numbers instead of its past practice of posting fictitiously low numbers.


     


    Apple would historically post very low expectations.  That way they could get the 'TA-DA' effect and bask in the glory of 'Apple beats expetations again!' headlines.  If they were going to release a new product they knew was going to do tremendously, they would not build it into their expectations and instead just drop it on the market and grossly (and knowingly) exceed their own lowball expectations....  "Apple hits ANOTHER home run out of the blue!"


     


    Apple had no problem taking full credit and I didn't see alot of investors here complaining about analysts back then...  They were too busy jumping on the Apple is great, buy their shares, they are going to do great forever and ever and we're all going to get infinity rich by investing in them.


     


    That is usually a good sign that it is time to get out of a stock.


     


    The big kids (instutionals, hedges, etc) know this game and hate it.  They hire people and pay them a lot of dough to, 'analyse this stock and tell us what its *really* worth'  Well, we know Apple consistently lies on the low side under normal circumstances, and lies extremely when they release new products by not including them estimates conservatively.  Based on their past performance their real value should be $n.  n is much higher than Apple's 'best guess'  Apple hits $n.  Analysts: okay we've figured this out.  Next quarter Apple will be $y.   Apple jumps out of the woodwork and hits yet *another* unexpected home run.  Apple does have awesome products and great ideas =)  Analysts are off low again.  *$#&#@*# Apple, why can't they just post real numbers instead of fictitious ones.  They keep doing this over and over and over again. hmmmm....  I know, we should come to expect it and build it into the stock price!


     


    And there you have it.  With Apple growing as large as it has with its past products, building that next home run into their valuation was a killer.  Since the home run was now built into Apples value, they tanked by not hitting it.  Keep in mind that it is not 'analysts driving shares down!'  The problem is that they drove the stock price up far too high beyond Apples true value.  Apples real numbers did not support that valuation and its value plumetted.  Apple loves the glory on they way up, but is happy to 'blame analysts' on the way down. 


     


    The new guidance rules, could, in theory make Apples stock price more realistic and reduce fluctuations.  The key is going to be for Apple to post real expectations on both the high and low side.  If they *ever* beat their own 'high' guidance this cycle is just going to repeat as analysts will just be forced to 'guess high again, because we know Apple is lying to us'  I think 'no surprises' is going to be a tough challenge for Apple.  If they plan on releasing that watch, or TV, or super-secret-x, they will have market estimates and they will have to build that into their 'high end' expectations.  If they just dump it on the market and go for another 'ta da' stock jump, well, I guess the above suggestion of sandbagging will be proven true, Apple will be back to its 'beat-and-raise' model, and that will leave AI as having effectively called Apple investors as 'naive players getting hustled again'

  • Reply 37 of 75
    One thing I haven't seen mentioned lately is all the insider selling that occurred in November and December. There are many reasons to sell...taxes, need money for new house, belief stock price rose too far too fast and will sink when the company misses analysts' expectations at the next earnings call, etc. Most commenters on here assumed it was because of taxes. Perhaps that assumption was incorrect.
  • Reply 38 of 75
    jragostajragosta Posts: 10,473member
    robogobo wrote: »
    This whole thing is totally F'd. A company offering guidance is never a guarantee. The market is talking as if Apple is being deceptive, as if they somehow know they'll beat their guidance via crystal ball soothsaying. Analysts habitual inflating of expectations strictly off Apple's numbers is a set-up.

    So now the market expects Apple to inflate its own expectations in order to join the ranks of idiot analysts who don't know how to put their own accurate numbers together. Then they'll miss their own numbers and what - everyone will be happy and buy? Bullshit.

    This whole thing sticks of an ambush, and lots of people are getting rich off it.

    I agree. In fact, people are even saying that Apple is lying when they post their conservative guidance (see below, for example).
    frood wrote: »
    Nice article, and pretty accurately describes the situation.  I think the new guidance by Apple is a good thing- but it really puts the burden on Apple to post realistic numbers instead of its past practice of posting fictitiously low numbers.

    Apple would historically post very low expectations.  That way they could get the 'TA-DA' effect and bask in the glory of 'Apple beats expetations again!' headlines.  If they were going to release a new product they knew was going to do tremendously, they would not build it into their expectations and instead just drop it on the market and grossly (and knowingly) exceed their own lowball expectations....  "Apple hits ANOTHER home run out of the blue!"

    Apple had no problem taking full credit and I didn't see alot of investors here complaining about analysts back then...  They were too busy jumping on the Apple is great, buy their shares, they are going to do great forever and ever and we're all going to get infinity rich by investing in them.

    That is usually a good sign that it is time to get out of a stock.

    The big kids (instutionals, hedges, etc) know this game and hate it.  They hire people and pay them a lot of dough to, 'analyse this stock and tell us what its *really* worth'  Well, we know Apple consistently lies on the low side under normal circumstances, and lies extremely when they release new products by not including them[/S] estimates conservatively.  Based on their past performance their real value should be $n.  n is much higher than Apple's 'best guess'  Apple hits $n.  Analysts: okay we've figured this out.  Next quarter Apple will be $y.   Apple jumps out of the woodwork and hits yet *another* unexpected home run.  Apple does have awesome products and great ideas =)  Analysts are off low again.  *$#&#@*# Apple, why can't they just post real numbers instead of fictitious ones.  They keep doing this over and over and over again. hmmmm....  I know, we should come to expect it and build it into the stock price!

    Frankly, you don't know what you're talking about. Offering conservative guidance is not a lie, nor is it misleading nor fictitiously low as you claim. Apple was clear what their numbers meant - they gave numbers that were numbers that they felt confident that they could meet. They were not expectations, nor were they meant to be Apple's maximum numbers. As stated, they were essentially the minimum numbers that Apple felt confident of.

    Did Apple consistently beat their numbers? Yes. But for a long stretch, Apple was consistently beating the numbers by 10-15% but the analysts were throwing out projections that were 30-40% above guidance. That is not Apple's fault, it is pure guesswork on the part of the analysts - and they are the ones who should be getting the blame.

    What happens if Apple switches their guidance numbers to "our most likely estimate of profit"? On average, they will beat it some quarters and fall short some quarters. And Wall Street hammers Apple so hard if they ever miss a target that Apple doesn't want that to happen. That's why they offer conservative guidance in the first place.
  • Reply 39 of 75


    Originally Posted by msuberly View Post

    Most commenters on here assumed it was because of taxes. Perhaps that assumption was incorrect.


     


    Nah, it was the taxes.

  • Reply 40 of 75
    What would happen if we banned analysts altogether. They don't do or know anything useful. Never have.

    The problem is gambling. The price of stocks have nothing to do with a company's fundamentals.

    The solution is investors have to hold stock for one year at least, they cannot take losses nor get capital gains favoritism. Then companies can at least plan one year out and not quarterly.

    Perhaps, we should simply ban quarterly reports and only allow reporting annually. That would also stabilize stock prices and remove the incentive for speculation.
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