After crowning Samsung as Apple's heir, analysts now rethinking their math

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  • Reply 21 of 137
    garamondgaramond Posts: 107member

    Quote:

    Originally Posted by Zinthar View Post



    This is actually worrying news for Apple as well, IMO. Pretty much every premium smartphone released in the past year has failed to live up to the sales expectations of Wall Street. In the case of Apple, the surprising story has been how much the iPhone 4 and 4S at lower price points have cannibalized sales that likely would otherwise have been iPhone 5 sales -- for many customers, having an iOS smartphone with excellent build quality is all they needed; the extra speed and features of the iPhone 5 weren't enough fro them to spend more for it.



    I suspect that Samsung is finding that many of its customers are opting for the price-reduced Galaxy S3 instead. Or the market for high-end Android will no longer accept cheap build quality and has opted for the HTC One.



    Or, perhaps most likely, many smartphone customers aren't bothering to upgrade when their contracts are up because their current phone works well enough and they're waiting until the day that they drop their phone in the toilet to use the upgrade pricing.



    Although most people on this site, including myself, would never trade away LTE or the speed and extra screen size of the iPhone 5 for a $100-200 discount on an older model, we're the minority of consumers.



    When the 5S and cheap plastic iPhone are released, I think Apple will discontinue the iPhone 4, 4S, & 5 altogether and force consumers to choose either the premium build of the 5S, or a plastic iPhone if they want the free with subsidy option.


    Look, another freshman out to talk negative. Good for you, we're used to the doomsayers since the 90's.


     

  • Reply 22 of 137
    stniukstniuk Posts: 90member
    Jeez iPad mini sized phones not selling so well. Who'd have thought......
  • Reply 23 of 137
    mhiklmhikl Posts: 471member


    DED, you make my day every time I find any article by you. Wishy washy I cannot stand. Straight up I like, both my information and my Scotch. 

  • Reply 24 of 137
    radster360radster360 Posts: 540member
    Another proof how Samsung cheats and lies and all the analyst that covers them are no different. I would like to see Samsung stocks to be punished so that all the analyst feel a real pain.
  • Reply 25 of 137
    uraharaurahara Posts: 241member
    @zeromeus,
    >Apple's definition of SHIPPED means SOLD.

    Ha-ha, and in which dictionary have you looked it up, dude?

    And you have been just tricked by clever marketing.

    Shipment does not equal sold, not by any definition.

    SHIPPED DOES MEAN SOLD unless returns are made.

    (e.g. sold new hardware includes new software, but Apple is not receiving any money for the software - it is simply shipped, but not sold)
  • Reply 26 of 137
    krabbelenkrabbelen Posts: 243member

    Quote:

    Originally Posted by wakefinance View Post


     


    I don't need to learn any facts.  What I'm pointing out is that SHIPPED DOES MEAN SOLD unless returns are made.



    No, not necessarily.


     


    SHIPPED does not mean SOLD, UNLESS there is strong SELL THROUGH to back it up. Apple is pretty unique here:


     


    With Apple, you know the situation...


    1) Apple reports Inventory, and thus Sell Through, every quarter. They typically keep a few weeks on hand, "in the channel". Changes are documented.


    2) When Apple Ships, it typically IS shipping to the end customer, more so than to Best Buys or whatever. A Best Buy has, what, an inventory of maybe a dozen given Mac products at one time?


    3) If a product is not "in the hands of an end user", then with Apple "in the channel" means it is on the UPS truck on route to the end user; or, it may sit in a store for a few days. Apple has incredible turnover: apparently they turn over their ENTIRE stock (at least in Apple Stores) every five days! That would be good news in the food business, it is unheard of in tech or other consumer businesses.


     


    With Samsung, MS, et al...


    1) You get a huge number one quarter or one month (ie. 10,000,000).


    Then, oops, those didn't SELL THROUGH to the end user, so, let's make only 1,000,000 next quarter.


    2) They start disposing of those surplus products at fire-sale prices or BOGOF offers.


     


    So, it's not necessarily a question of RETURN rates. It's just a question of continued, consistent sales without the need to dump them at some point. It's a matter of holding their price, which Apple products uniquely do.

  • Reply 27 of 137

    Quote:

    Originally Posted by krabbelen View Post


    So, it's not necessarily a question of RETURN rates. It's just a question of continued consistent sales.



     


    Can't argue there.  If sales (shipments since that is what is usually reported) slump in future quarters, then the phones were over-shipped in the first quarter.

  • Reply 28 of 137
    kpomkpom Posts: 617member
    I don't need to learn any facts.  What I'm pointing out is that SHIPPED DOES MEAN SOLD unless returns are made.
    Not always. At launch date of a physical product there could be a big discrepancy. I agree that over time it evens out and that some Apple fans make more of the shipped vs sold distinction (over a year it won't make much difference since if it isn't selling retailers will stop taking shipments) but over short periods of time, such as launch month it does make a difference.
  • Reply 29 of 137
    emrulemrul Posts: 26member
    "Apple's significant new redesign of iOS 7 will also force Samsung to either come up with its own parallel refresh or end up looking dated with a variety of features and app designs and its an overall appearance taken directly from previous versions of Apple's iOS."

    Really how long will it take for Samscum to get access to the beta and strip it of its design elements? I reckon they'll be ready in time for when iOS7 gets final release.
  • Reply 30 of 137
    relicrelic Posts: 4,735member

    Quote:

    Originally Posted by radster360 View Post



    Another proof how Samsung cheats and lies and all the analyst that covers them are no different. I would like to see Samsung stocks to be punished so that all the analyst feel a real pain.


     


    Their stock has been slowly falling in the last weeks, I shorted 100 shares last week and I've already made 3,195. So far this year I've made a little over 24,000 from Samsung. Apple is my biggest winner though, I shorted 200 shares last year in September at 691, its now at 430, I'm up 52,000. I think it's going to drop below 420 like it did in April so I have a buy order in for 400 and 440 in case it rises. Then I'll wait for the release of the new 5S to buy again.


     


    A good stock buy is Tesla Motors, there at 100 a share.

  • Reply 31 of 137
    stuffestuffe Posts: 391member

    Quote:

    Originally Posted by Zinthar View Post



    This is actually worrying news for Apple as well, IMO. Pretty much every premium smartphone released in the past year has failed to live up to the sales expectations of Wall Street. In the case of Apple, the surprising story has been how much the iPhone 4 and 4S at lower price points have cannibalized sales that likely would otherwise have been iPhone 5 sales


     


    Except to quote (my emphasis) the article, the iPhone 5 seems to be the exception, regardless of cannibalisation (and of course noting that it's better be cannibalised by your own products than a competitors)


     


    "In contrast, Apple sold 37.4 million iPhones in the most recent Q2 ending in March, beating Wall Street's institutional consensus of 35.86 million"

  • Reply 32 of 137
    sessamoidsessamoid Posts: 182member

    Quote:

    Originally Posted by wakefinance View Post


     


    Can't argue there.  If sales (shipments since that is what is usually reported) slump in future quarters, then the phones were over-shipped in the first quarter.



    Except Apple is the only major cellphone manufacturer that consistently reports sales numbers. They do so in their SEC filings, so they are legally obliged to give accurate numbers.


     


    Samsung only trumpets their shipment numbers in introduction months, and they never report those sales numbers to the SEC or any other financial body that forces truth in reporting. Samsung could have completely lied about that 10 million number, and nobody outside high level Samsung execs would know any different.

  • Reply 33 of 137
    stuffestuffe Posts: 391member

    Quote:

    Originally Posted by wakefinance View Post


     


    Speaking of shipped versus sold, did anyone else notice that Tim Cook announced SHIPMENTS of Mountain Lion in the keynote?  It's at 16:20 if anyone wants to go look.  I take it that most of those copies weren't sales. /s


     



     


    OS X is a digital product.  Every shipment is a sale.  They don't download copies in-store to burn to a disc and sell later...

  • Reply 34 of 137
    xflarexflare Posts: 199member
    stupid analysts
  • Reply 35 of 137
    emrulemrul Posts: 26member
    Jesus, there was a /s after that sentence.  It was sarcastic.  Shipped equals sold for any company any time anywhere.  Shipped only means something different when returns are made.

    When talking about channel sales it gets murky. Listen to an ER call, analysts tend to ask rather specific questions about channel sales/inventories. 'Shipped' to a carrier or a retailer does not mean sold in this day and age. Most carriers or retailers will have clauses to return units that they can't shift onto customers and this is especially true in the world of smartphones.

    Unfortunately, when it comes to smartphones, the manufacturers have to put up a LOT of the risk in shipping goods out to carriers and retailers. They get a hefty subsidy if the phone sells but if it doesn't they typically have to accept their stock back and have to front costs themselves. If there's a lot of inventory clogging up the channel the manufacturer may agree to discount their goods further (look at the Facebook phone).
  • Reply 36 of 137
    stuffestuffe Posts: 391member

    Quote:

    Originally Posted by wakefinance View Post


     


    Jesus, there was a /s after that sentence.  It was sarcastic.  Shipped equals sold for any company any time anywhere.  Shipped only means something different when returns are made.



     


    Shipped does not mean sold.


     


    Let's try to work this through via (made up) example.  Samsung Ship/Sell (by your definition) 10 million phones a month, so say 3 months running.  30 million sales.  None are returned to Samsung as "unsold".


     


    But these sales are to channel, not direct to customers.  At a new estimate of 7 million a month actually being required by end users, then after 3 months, they have sold 21 million, and have 9 million in stock, and even if they don't ship any phones for a month, will still have 2 million left.


     


    So which is more accurate, they sold 10 million a month for 3 months, and then none in the 4th month?  Or they sold 7 million a month, and still have stock on shelves?  This is the difference between shipping and sales - inventory.  They may well sell all the inventory eventually, but this will be at the cost of lowering future shipments, they can't over ship forever and claim is all as sales.  At some point there has to be a recalculation.


     


    A sale is indicative of money changing hands.  Many (most?) channel based products are provided on a sale or return basis by retailers.  Your average enormous phone carrier isn't buying x million phones, selling what it can, and then asking for a refund on the ones it can't sell It's merely being *provided* with inventory *to try and sell*, being charged for the ones it gets out of the door and then simply returning the unsold ones.


     


    This is why Shipments and Sales are 2 different things.  And to go back to your original point, I would say Cook simply used a wrong word for his slide (not unheard of, Federighi called Mavericks Mountain Lion at one point when talking about Safari, and Schiller told us the new Mac Pro has 6 Firewire ports on the back, not Thunderbolt 2 - mistakes happen)

  • Reply 37 of 137
    dasanman69dasanman69 Posts: 12,980member
    urahara wrote: »
    @zeromeus,
    >Apple's definition of SHIPPED means SOLD.

    Ha-ha, and in which dictionary have you looked it up, dude?

    And you have been just tricked by clever marketing.

    Shipment does not equal sold, not by any definition.

    SHIPPED DOES MEAN SOLD unless returns are made.

    Sure it does. What manufacturer ships something to someone if they haven't purchased it. Samsung sold it, but it's on the reseller to sell it to the end user(which is much harder for Samsung to keep track of than Apple)
  • Reply 38 of 137
    rednivalrednival Posts: 331member

    Quote:

    Originally Posted by Zinthar View Post



    This is actually worrying news for Apple as well, IMO. Pretty much every premium smartphone released in the past year has failed to live up to the sales expectations of Wall Street. 


     


    With S3, people were trying something new.  The tech press handed Samsung a giant payday with a pretty little bow.  The press was in love with the S3 and wanted it to father their children. The words "iPhone Killer" were posted on blogs everywhere.  People upgrading smartphones around that time got the S3 because that's what their favorite tech blog told them was the next big thing and many reviews said it beat the iPhone 5.  So consumers went out a bought the phone the tech press told them to get.


     


    Fast forward to this point and the news is much different.  The S4 launched to good reviews, but often the lead stories had to do with the rumors of iOS 7 and its massive overhaul.  Everyone knew it was going to look very different.  The S4 was overshadowed by the fact that Apple was working on something big, and people haven't bought the phone as quickly.


     


    I think this is exactly the opposite of bad news for Apple. In the shadow of major changes coming to iPhone, people held out on buying S4.  That shows Apple still has the attention of smartphone customers and mere rumors of its next iOS or iPhone can cannibalize a competitor's sales.  The reaction to iOS7 in the press has been very positive overall.  I don't see Samsung bouncing back in sales since all the buzz is pointing towards Apple.  I see a big day coming in Apple's future.  Record breaking?  Maybe not, but I certainly don't predict black clouds or consider S4 sales "worrying" for anyone but Samsung.

  • Reply 39 of 137
    rogifanrogifan Posts: 10,669member
    And Samsung announces another variation of the S4. I wonder if people who just bought the S4 will be able to trade it in for this "faster version"?

    http://finance.yahoo.com/news/samsung-launch-faster-galaxy-s4-092755669.html
  • Reply 40 of 137
    rogifanrogifan Posts: 10,669member
    rednival wrote: »
    With S3, were people trying something new.  The tech industry sounded like a it was in love with the thing. The words "iPhone Killer" were posted on blogs everywhere.  People upgrading smartphones around that time got the S3 because that's what their favorite tech blog told them was the next big thing and many reviews said it beat the iPhone 5.  So consumers went out a bought the phone the tech press told them to get.

    Fast forward to this point and the news is much different.  The S4 launched to good reviews, but often the lead stories had to do with iOS 7 and its massive overhaul.  Everyone knew it was going to look very different.  The S4 was overshadowed by the fact that Apple was working on something big, and people haven't bought the phone as quickly.

    I think this is exactly the opposite of bad news for Apple. In the shadow of major changes coming to iPhone, people held out on buying S4.  That shows Apple still has the attention of smartphone customers.  The reaction to iOS7 in the press has been very positive overall.  I don't see Samsung bouncing back in sales since all the buzz is pointing towards Apple.  I see a big day coming in Apple's future.  Record breaking?  Maybe not, but I certainly don't predict black clouds or consider S4 sales "worrying" for anyone but Samsung.
    Samsung's problem is I don't think people really have an emotional attachment to them. For some people, they just hate all things Apple and since Samsung is Apple's biggest competitor they go with Samsung. But I don't think the brand loyalty is there. And for a lot of people the S4 probably wasn't different enough to justify the upgrade. This is why I'm glad Apple seems to be moving in the direction of having the software really utilize the power of the hardware, so having more powerful hardware actually does matter. People are so focused on the unfinished UI but the little we can glean from those under NDA suggest developers are really stoked about iOS 7. Apple has a lot more cards to play and this fall should very be interesting.
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