ABC, WSJ bloggers explain Apple's record iPhone launch numbers are bad news
The same day that Apple reported a record 9 million iPhone sales for its launch weekend, a Blackberry enthusiast writing for ABC News spun the numbers as "a cause for concern," while a Wall Street Journal blogger followed up with a warning not to read too much into it.
Source: Android-maker News
Cannold wrote, "it seems like Apple is now trying to squeeze every last bit of profit it can out of an aging, shall we call it, iStone." This, because the iPhone is not an entirely new product category, but merely "an upgrade, a refresh, dare I say a sequel."
Particularly upsetting, Cannold writes, is the fact that seven years into the iPhone still being a phone, there are still long lines of people who "wait in line, sleep outside the store and ham it up for the cameras once they got their hands on their shiny new device."
Cannold worries, "hasn?t Apple seen how the competition makes fun of these events in commercials?"
Samsung has in fact run ads mocking Apple's blockbuster iPhone launches for at least three years in a row. Yet this year, the Korean conglomerate had film crews interviewing those waiting in line, collecting notes on what keeps customers that excited about Apple's products as part of a research project into copying the part Samsung still doesn't know how to clone: Apple's profitable allure.
"This is no longer the Apple of Steve Jobs," Cannold wrote. "The Apple that seemingly every couple of years rocked the consumer electronics world with a product so innovative that it changed industries forever."
Since Jobs' return in 1996, Apple launched industry changing new products in the 1998 iMac, 2001 iPod, 2007 iPhone and 2010 iPad. Everything else has been a "sequel" of sorts. That works out to one big new thing about every four years.
Of course, not every world changing thing Apple has introduced has been hardware. From iTunes to the App Store and from FaceTime to iMessages and iCloud, Apple has also been busy pushing out innovative software and integrated features and services, including several new releases just this year: iWork for iCloud, Touch ID and iTunes Radio all just landed in the last quarter alone.
And then there's the world's most popular mobile app development and device operating system: iOS 7. That just came out too, certainly a "game changer" of the sort Cannold pines for Apple's chief executive Tim Cook to deliver.
Perhaps Cannold isn't aware of iOS 7 because he still uses a Blackberry. The day that Apple's new iPhones went on sale, Cannold tweeted, "I will be so sad if blackberry doesn't survive.. I can't type on a device without a keyboard.. Fat fingers & digital keyboard don't mix.."
Blackberry delivered one "industry changing new product" since its founding in 1984.
While noting that Apple's 9 million unit launch "is far higher than previous launches. The last three opening weekends?for the iPhone 5, iPhone 4S and iPhone 4?were 'over five million,' 'over four million,' and 1.7 million, respectively," Winkler points out that Apple has two new models this year. This is important to note because in previous years, there wasn't mass interest in the last year's model at the launch of the new one.
Perhaps Apple is cheating by expanding its offerings? Winkler and Cannold should collaborate. Too many new products selling, not enough new products! Not enough selling!
Winkler also exposes that Apple is launching this year's new models on more carriers in more countries, including "Japan's largest wireless carrier by subscribers, NTT DoCoMo," and China, which last year had its own launch record of two million iPhones three months later last December.
"Including China sales could account for at least half of the increase in this year's opening weekend," Winkler warned those investors who hadn't heard about this carrier expansion. "Back those out, and the debut would have been closer to six million units" he astutely calculates.
"Apple will have to do more to boost sales than put its device in front of new potential customers," Winkler advises, while also retreating to the notion that iPhone 5c is too expensive while ignoring that Apple now sells two additional models that are even cheaper in China, as well as a variety of other markets with price sensitive buyers.
Source: Apple China
Citing massive global demand for iOS 7, Winker further warns, "Apple can depend on committed users who won't be quick to leave it. It is just that their numbers may not grow as quickly as investors have come to expect, or the opening-weekend figures suggest."
Winkler is on Twitter too, explaining that "Morgan Stanley and Jefferies est. that 2m-2.5m of the 9m opening weekend sales figure was "sell-in" to retailers. Previously opening weekend iPhone inventory was totally sold-out to customers says Jefferies. Including 'sell-in' may overstate demand."
He's pointing out that analysts are guessing that Apple's reported "sales" might actually be retail inventory instead. But Apple's global channel is much larger than two million units. Apple reports that it aims to maintain 4 to 5 weeks of inventory.
Given that the company sold 31 million iPhones in the July quarter, a full nine months after having introduced its last new iPhone, that indicates that even in the middle of the year, Apple's sales channel is holding inventory levels of at least ten million devices. If Apple wanted to fudge numbers Samsung-style, it could report "shipments" of ten million iPhones without selling a single device. Apple's iPhone channel is really that large.
Samsung's channel is even larger, but Samsung doesn't just sell high end, iPhone-class smartphones like its Galaxy S4. Most of its "shipments" are loss leader, low end devices that don't make any money and run outdated versions of Android that can't be upgraded.
Last year, Piper Jaffray's Gene Munster appeared to expect similar hot air numbers from Apple for its iPhone 5 launch (he incorrectly pegged 10 million weekend shipments), helping to destroy the company's valuation after it out-sold Samsung but didn't out-announce it in shipments in order to meet analysts' guesswork.
Gene Munster, Piper Jaffray
This year, Munster predicted 5 to 6 million in global weekend launch sales, nearly half of what Apple actually sold. Rather than admitting he was gravely in error, Munster turned around and reported that Apple must not have actually sold as many as it said, but merely shipped them as "sell in."
However, this weekend, Apple reported "sales," not Samsung-style shipments, and noted that "demand for iPhone 5s has exceeded the initial supply, and many online orders are scheduled to be shipped in the coming weeks."
"Sell in," shorthand for shipping products that haven't yet sold, is only important when supplies are exceeding demand. If you sell out of your available stock, there is no distinction between your "sell in" and "sell through."
False reporting and consistently terrible market analysis has singlehandedly destroyed Apple's valuation over the last year, despite the company's record sales and industry leading profitability and the past year of sustained sales growth even as its primary competitor scales back shipments and sales estimates of both its flagship smartphones and tablets.
Source: Android-maker News
Apple's record sales "rotten"
Today's top Apple headline in Google News is a piece by Sandy Cannold, an "executive producer and senior business editor" for ABC News, who states that Apple's record breaking launch weekend "could actually be cause for concern."Cannold wrote, "it seems like Apple is now trying to squeeze every last bit of profit it can out of an aging, shall we call it, iStone." This, because the iPhone is not an entirely new product category, but merely "an upgrade, a refresh, dare I say a sequel."
Particularly upsetting, Cannold writes, is the fact that seven years into the iPhone still being a phone, there are still long lines of people who "wait in line, sleep outside the store and ham it up for the cameras once they got their hands on their shiny new device."
Cannold worries, "hasn?t Apple seen how the competition makes fun of these events in commercials?"
Samsung has in fact run ads mocking Apple's blockbuster iPhone launches for at least three years in a row. Yet this year, the Korean conglomerate had film crews interviewing those waiting in line, collecting notes on what keeps customers that excited about Apple's products as part of a research project into copying the part Samsung still doesn't know how to clone: Apple's profitable allure.
"This is no longer the Apple of Steve Jobs," Cannold wrote. "The Apple that seemingly every couple of years rocked the consumer electronics world with a product so innovative that it changed industries forever."
Since Jobs' return in 1996, Apple launched industry changing new products in the 1998 iMac, 2001 iPod, 2007 iPhone and 2010 iPad. Everything else has been a "sequel" of sorts. That works out to one big new thing about every four years.
Of course, not every world changing thing Apple has introduced has been hardware. From iTunes to the App Store and from FaceTime to iMessages and iCloud, Apple has also been busy pushing out innovative software and integrated features and services, including several new releases just this year: iWork for iCloud, Touch ID and iTunes Radio all just landed in the last quarter alone.
And then there's the world's most popular mobile app development and device operating system: iOS 7. That just came out too, certainly a "game changer" of the sort Cannold pines for Apple's chief executive Tim Cook to deliver.
Perhaps Cannold isn't aware of iOS 7 because he still uses a Blackberry. The day that Apple's new iPhones went on sale, Cannold tweeted, "I will be so sad if blackberry doesn't survive.. I can't type on a device without a keyboard.. Fat fingers & digital keyboard don't mix.."
I will be so sad if blackberry doesn't survive.. I can't type on a device without a keyboard.. Fat fingers & digital keyboard don't mix..
? sandy cannold (@SandyCannold)
Blackberry delivered one "industry changing new product" since its founding in 1984.
Apple's record launch sales growth not necessarily growth nor sales
Not to be outdone, Rolfe Winkler, writing for the Wall Street Journal, outlined logic explaining that investors shouldn't be fooled into thinking that Apple's record weekend has anything to do with growth or perhaps even sales.While noting that Apple's 9 million unit launch "is far higher than previous launches. The last three opening weekends?for the iPhone 5, iPhone 4S and iPhone 4?were 'over five million,' 'over four million,' and 1.7 million, respectively," Winkler points out that Apple has two new models this year. This is important to note because in previous years, there wasn't mass interest in the last year's model at the launch of the new one.
Perhaps Apple is cheating by expanding its offerings? Winkler and Cannold should collaborate. Too many new products selling, not enough new products! Not enough selling!
Winkler also exposes that Apple is launching this year's new models on more carriers in more countries, including "Japan's largest wireless carrier by subscribers, NTT DoCoMo," and China, which last year had its own launch record of two million iPhones three months later last December.
"Including China sales could account for at least half of the increase in this year's opening weekend," Winkler warned those investors who hadn't heard about this carrier expansion. "Back those out, and the debut would have been closer to six million units" he astutely calculates.
"Apple will have to do more to boost sales than put its device in front of new potential customers," Winkler advises, while also retreating to the notion that iPhone 5c is too expensive while ignoring that Apple now sells two additional models that are even cheaper in China, as well as a variety of other markets with price sensitive buyers.
Source: Apple China
Citing massive global demand for iOS 7, Winker further warns, "Apple can depend on committed users who won't be quick to leave it. It is just that their numbers may not grow as quickly as investors have come to expect, or the opening-weekend figures suggest."
Winkler is on Twitter too, explaining that "Morgan Stanley and Jefferies est. that 2m-2.5m of the 9m opening weekend sales figure was "sell-in" to retailers. Previously opening weekend iPhone inventory was totally sold-out to customers says Jefferies. Including 'sell-in' may overstate demand."
He's pointing out that analysts are guessing that Apple's reported "sales" might actually be retail inventory instead. But Apple's global channel is much larger than two million units. Apple reports that it aims to maintain 4 to 5 weeks of inventory.
Given that the company sold 31 million iPhones in the July quarter, a full nine months after having introduced its last new iPhone, that indicates that even in the middle of the year, Apple's sales channel is holding inventory levels of at least ten million devices. If Apple wanted to fudge numbers Samsung-style, it could report "shipments" of ten million iPhones without selling a single device. Apple's iPhone channel is really that large.
Samsung's channel is even larger, but Samsung doesn't just sell high end, iPhone-class smartphones like its Galaxy S4. Most of its "shipments" are loss leader, low end devices that don't make any money and run outdated versions of Android that can't be upgraded.
Last year, Piper Jaffray's Gene Munster appeared to expect similar hot air numbers from Apple for its iPhone 5 launch (he incorrectly pegged 10 million weekend shipments), helping to destroy the company's valuation after it out-sold Samsung but didn't out-announce it in shipments in order to meet analysts' guesswork.
Gene Munster, Piper Jaffray
This year, Munster predicted 5 to 6 million in global weekend launch sales, nearly half of what Apple actually sold. Rather than admitting he was gravely in error, Munster turned around and reported that Apple must not have actually sold as many as it said, but merely shipped them as "sell in."
However, this weekend, Apple reported "sales," not Samsung-style shipments, and noted that "demand for iPhone 5s has exceeded the initial supply, and many online orders are scheduled to be shipped in the coming weeks."
"Sell in," shorthand for shipping products that haven't yet sold, is only important when supplies are exceeding demand. If you sell out of your available stock, there is no distinction between your "sell in" and "sell through."
False reporting and consistently terrible market analysis has singlehandedly destroyed Apple's valuation over the last year, despite the company's record sales and industry leading profitability and the past year of sustained sales growth even as its primary competitor scales back shipments and sales estimates of both its flagship smartphones and tablets.
Comments
A "Blackberry enthusiast"?
How's it going with Blackberry nowadays?
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This is from the guy's twitter feed a few days ago. No wonder that he has an anti-Apple bias. He just doesn't get it, neither does Blackberry, Blackberry is soon dead and "Blackberry enthusiasts" are soon to be extinct.
I will be so sad if blackberry doesn't survive.. I can't type on a device without a keyboard.. Fat fingers & digital keyboard don't mix..
And this joke of a person is writing about Apple?
It's clear they have an agenda against Apple. Unfrickenbelievable that these a$$hats get paid for the garbage coming out of their mouths.
They are simply trying to come off as smart for Apple making them look like a bunch of monkeys after proving them all wrong on an epic level.
Lines of customers waiting to buy Apple's products is worrisome? Jeez... that's a new low.
What is great about free speech is that anyone is allowed to give their own opinion. Even if in the end it makes them out to be a fool.
Steve did not create every "world-changing" product all by himself. The rest of the Apple is still hard at work. On that note, what "world-changing" contribution has their competition done lately? Seriously, this negative fodder is ridiculous. NO company should be EXPECTED to create "world-changing" products every couple of years. Even still, I bet Apple have some very cool stuff cooking in the labs.
iStone? You don't need to change something up just for the sake of changing stuff up. Apple gets that, this guy doesn't. You improve and refine on an already solid foundation.
As for the line ups outside the stores, that's Apple's customers, NOT Apple. The competition would LOVE to have that kind of enthusiasm which is why they give stuff away and offer free concerts as incentive.
These morons should just shut up. Quit telling Apple what to invent, how to price it and how to run their business. Clearly Apple knows what they're doing.
People who don't understand Apple or how Apple works should just shut it.
I wish Apple would just cut off analysts like Gene Munster. I mean, cut him off the earnings calls and all interviews. It obviously can't happen, but if Apple is willing to give him their time during calls to answer his questions, then at the very least he should take Apple at it's word instead of trying to fit their statement as some poor excuse for his awful analysis of the sales numbers. You lost what integrity you had, instead of just saying 'I must have missed something, I'll update my analysis'.
I wonder if he put money where his mouth is and shorted Apple. Or if his clients are on his case for screwing up.
The competition makes fun of the lines? Let sales are up 50% which means the population could give an F about the competitions ads.
This guy is out of touch and a moron.
I said the analysts would work the China debut numbers into the equation. I didn't say good or bad; right or wrong. I just said they would harp on about it.
Some of our more astute members put all of their passion and angst into telling me that I wasn't using my brain.
You gotta love it.
It's pretty clear that these analysts are just saying whatever they need to, in order to meet their portfolio needs. So Gene Munster would big AAPL up while he was long Apple stock. Before this weekend's release, you can bet he went short on AAPL in a big way, and has been hurt by the surge in price on the better than expected numbers.
I work in Finance, in a huge broker/dealer, so I get it. But these guys are pariahs - Gene Munster is even more disappointing than the idiots at the WSJ, because for years he's been a strong advocate for both AAPL and Apple.
I'd rate AAPL at about $550 - $570 as a good target for the next 12 months.
Really? Really?? Really???
Mr. Cannold, do you not get that Apple DOESN'T CARE that their competitors make fun of them and, in fact, it's actually great advertising for them? Apple doesn't hire these people to sit outside of their stores all night long, they just do it - it's not like Apple can stop people from getting excited about their products. Samsung and Microsoft wish to God they could have the kind of allure Apple does. All of the parodies and fun-pokings can be summed up by these words: Jealous much?
They can say what they want. They can manipulate all they want. But this is a tidal wave of success for Apple. This is winning the Superbowl. This is winning the World Series. You can't stop a wave on the shore. These idiots are just going to make themselves look very stupid, that's all. The tsunami of sales is here, now. And that is even before China Mobile starts offering iPhones to its over 700 million customers.
No matter what Apple does, These @holes will remain and will keep on whining!
WallStreet sounds more like Yahoo message board posters who tries to bash Apple 24x7!