Piper Jaffray tells investors not to fret over vague iPhone supplier cuts

Posted:
in AAPL Investors
Apple investors showed concern this week after iPhone supplier Dialog Semiconductor warned revenue will fall short of expectations, but Piper Jaffray took the opportunity to remind Wall Street that it's unwise to read into supplier data.




Dialog Semiconductor this week cut its December quarter guidance by 11 percent compared to prior guidance. That led some investors to speculate that the cuts could be related to lower-than-expected iPhone sales.

Analyst Gene Munster of Piper Jaffray doesn't share those concerns, however. He issued a note to investors saying that he sees little risk to Apple's own December quarter.

"Apple has previously said, and we would agree, that individual component suppliers are not indicative of the health of the overall iPhone business," Munster wrote.

Munster was referring to comments made by Apple Chief Executive Tim Cook in 2013, in which he warned investors not to read too much into supply chain data. Apple frequently uses multiple suppliers for the same components, and will skew orders towards different companies for a variety of internal reasons, such as pricing, yield rates, technology and otherwise.

"The supply chain is very complex, and we obviously have multiple sources for things," Cook said. "Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant for our business."




Regardless of any current supplier maneuvering, the performance of the iPhone 6s product cycle may not mean as much for Apple on Wall Street in the long run, Munster said. Feedback he's heard from investors appears focused on whether the iPhone can continue to grow with an anticipated redesign in 2016.

For the so-called "iPhone 7," Munster said this week that he remains confident. His forecast calls for the next-generation iPhone to see 4 percent growth.

In the shorter term, Cook himself gave investors a number of reasons to expect continued iPhone growth with the current iPhone 6s product cycle. Specifically, he said that Apple has seen historic rates of switchers from Android devices, plus a low percentage of the current install base having upgraded to the larger iPhone 6 and iPhone 6 Plus models.

Cook also expects further growth from emerging markets like China. Based on his bullishness, Munster believes iPhone sales will post year-over-year growth of 2 percent in the March 2016 quarter.

Piper Jaffray has maintained its price target of $179 for shares of AAPL with an "overweight" rating.
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Comments

  • Reply 1 of 60
    Individual component suppliers are indicative of the arrival of a new Apple television. /s
    nostrathomas
  • Reply 2 of 60
    hope they continue to grow....BUT...even if sales were to stabilize...they would continue to profit at an unheard of rate....and as long as they either hold the cash or buy back shares...their share values should continue to increase substantially from the very low current PE ratio.
  • Reply 3 of 60
    bobschlobbobschlob Posts: 1,074member
    2012 - 2013 all over again.

    They like to say, "Wall St hates this stock".
    Ha!  Wall St loves this stock.
  • Reply 4 of 60
    sog35 said:h
    Tim Cook should be saying this.
    I thought you were leaving.

    Anyway I agree that the company, and especially Tim Cook needs to do a better job driving the narrative. At some point you have to hold the company responsible for the sentiment about it. 
    edited December 2015
  • Reply 5 of 60
    sog35 said:
    Tim Cook is a joke of CEO.

    He takes the time to trump up gay rights, minority rights, and coding for 10 year olds.

    Yet he does not have 5 minutes to go on an interview on CNBC and say holiday sales are going great and confirming guidance?  If he just did that the stock would be solidly at $120 right now.

    I so sick of this pathetic CEO.  So many reasons why he sucks.  But it gets masked because of the power of the Apple brand.  Let me name you the ways:

    1. Not bringing an bigger iPhone in 2013. No excuse for not bringing out the 4.7 inch iPhone along with the 5s. This allowed Samsung to make massive inroads. It took almost 2 years to reverse that bad move.

    2. Waiting too long to get into streaming music.  If they were ahead of the curve they would have been dominating streaming music. 

    3. Pathetic iPad lineup.  Intentionally hamstringing the iPad Mini.  Then refusing to release an updated Air in 2015.  WTF is that about.  iPad sales shrinking 20%.  Not pushing for iPad specific Apps.  He totally botched the iPad the last 2 years. Things such as the Pencil and type cover should have been out TWO YEARS AGO.  Yet his arrogance refused him to believe that the Surface had something right.

    4. Watch software failure. The software is too hard to use.  Too much emphasis on the $20k watches. Apps are way too slow. Prices are way too expensive.

    5. Refusal to sacrifice some short-term profits for long-term success.  Keeping the 16GB iPhone. Being stingy on RAM.  Releasing half baked iOS updates with a ton of bugs. 

    6. Crappy jobs controlling the narrative. Wall street spews bullshit and Cook does nothing.  Some flyby night media in China is seen as more crediable than Cook.  Pathetic.

    But this should not be a surprise. Cook is a bean counter not a visionary.  He has not VISION.  All he cares about is trying to meet the profit goals for the next quarter.  He spends $120 billion on a buyback to appease Wall Street yet does not have 5 minutes to shut down bullshit Wall Street rumors.  
    Someone needs to put down the crack pipe.
    IanMC2magman1979nolamacguyredgeminipa
  • Reply 6 of 60
    bobschlobbobschlob Posts: 1,074member
    There's a real messed up conflict where Apple (just like anybody else) wants to buy the stock at cheapest price they can get it.. So... uhhhh..
    IanMC2nostrathomas
  • Reply 7 of 60
    As a stock holder, I haven't seen any benefit to the stock buy backs (yet). In theory, fewer shares would mean more value per share and therefore a higher price. But that hasn't happened. Also, fewer shares could mean a higher dividend per share; I don't think we've seen that. If the stock price is determined by the manipulations of the market makers, then why bother buying shares?

    For the long-term faithful, I think $110 represents a good buying opportunity.
  • Reply 8 of 60
    eightzeroeightzero Posts: 2,241member
    This is troubling. Gene "Often Wrong" Munster is one of those individuals you do the opposite of.
  • Reply 9 of 60
    lkrupplkrupp Posts: 6,691member
    Pump and Dump! Pump and Dump! Pump and Dump!
  • Reply 10 of 60
    lkrupplkrupp Posts: 6,691member
    sog35 said:
    Tim Cook should be saying this.

    The last time he did something like that he was accused of an SEC violation and there was speculation as to whether he would be charged. That happened when he called in to Jim Cramer’s show to defend some other nonsense analysts had puked out.
    edited December 2015 brucemcnolamacguy
  • Reply 11 of 60
    maestro64maestro64 Posts: 4,453member
    Maybe the reason this company put out an earning warn,(they did not say volume was down) was the fact Apple negotiated kick ass deal on pricing and company took it instead of loosing all of the business. But Wall Street know this, they just using the FUD to drive the stock down so they can make money on the churn.
  • Reply 12 of 60
    lkrupp said:
    sog35 said:
    fuking Tim Cook should be saying this.

    Where the FUC is Tim Cook.
    How hard is it for fuking Tim cook to say these supplier checks are WRONG.

    He has time to yap about gay rights, minority rights, ect..yet he does not have time to do a short interview to say sales are going great?  fuking hate this shiit.

    The last time he did something like that he was accused of an SEC violation and there was speculation as to whether he would be charged. That happened when he called in to Jim Cramer’s show to defend some other nonsense analysts had puked out.
    I think it was an email Cramer sent to him that he responded to. I suppose Apple could put out a press release reaffirming guidance but that might raise more questions than do any good. Maybe if Apple was a typical company that held investor conferences and stuff but they're not. The stock is down again today because another firm cut their iPhone sales estimates. As long as Apple is iPhone, Inc. and lives and dies by iPhone sales not much can be done about the stock. Right now all the iPhone chatter is negative  and that's bringing the stock down.
    edited December 2015
  • Reply 13 of 60
    sog35 said:
    lkrupp said:
    sog35 said:
    Tim Cook should be saying this.

    The last time he did something like that he was accused of an SEC violation and there was speculation as to whether he would be charged. That happened when he called in to Jim Cramer’s show to defend some other nonsense analysts had puked out.
    All Cook needs to do is do a public press release to reiterate guidance.  Then he can go on CNBC and say what the press release said.

    Those accusations about he Cramer email was total BS
    That assuming Apple is going to meet guidance. How do any of us know that?
    edited December 2015
  • Reply 14 of 60
    sog35 said:

    That assuming Apple is going to meet guidance. How do any of us know that?
    If they are not going to meet guidance they would have released a warning by now
    OK what void does reaffirming guidance do then? We all know Wall Street doesn't give a shit about meeting guidance. They'll find some other iPhone metric to be doomed about, YOY unit growth compared to last years YOY growth, March guidance, margins etc. Again as long as Apple is viewed as iPhone, Inc. and Wall Street considers the smartphone market to be slowing AAPL will do nothing.
  • Reply 15 of 60
    sog35 said:
    Tim Cook is a joke of CEO.

    He takes the time to trump up gay rights, minority rights, and coding for 10 year olds.

    Yet he does not have 5 minutes to go on an interview on CNBC and say holiday sales are going great and confirming guidance?  If he just did that the stock would be solidly at $120 right now.

    I so sick of this pathetic CEO.  So many reasons why he sucks.  But it gets masked because of the power of the Apple brand.  Let me name you the ways:

    1. Not bringing an bigger iPhone in 2013. No excuse for not bringing out the 4.7 inch iPhone along with the 5s. This allowed Samsung to make massive inroads. It took almost 2 years to reverse that bad move.

    2. Waiting too long to get into streaming music.  If they were ahead of the curve they would have been dominating streaming music. 

    3. Pathetic iPad lineup.  Intentionally hamstringing the iPad Mini.  Then refusing to release an updated Air in 2015.  WTF is that about.  iPad sales shrinking 20%.  Not pushing for iPad specific Apps.  He totally botched the iPad the last 2 years. Things such as the Pencil and type cover should have been out TWO YEARS AGO.  Yet his arrogance refused him to believe that the Surface had something right.

    4. Watch software failure. The software is too hard to use.  Too much emphasis on the $20k watches. Apps are way too slow. Prices are way too expensive.

    5. Refusal to sacrifice some short-term profits for long-term success.  Keeping the 16GB iPhone. Being stingy on RAM.  Releasing half baked iOS updates with a ton of bugs. 

    6. Crappy jobs controlling the narrative. Wall street spews bullshit and Cook does nothing.  Some flyby night media in China is seen as more crediable than Cook.  Pathetic.

    But this should not be a surprise. Cook is a bean counter not a visionary.  He has not VISION.  All he cares about is trying to meet the profit goals for the next quarter.  He spends $120 billion on a buyback to appease Wall Street yet does not have 5 minutes to shut down bullshit Wall Street rumors.  
    I hate to agree with you (only because I don't want to kick people in general) but every point is well taken and the people on here accusing you of "being high" or worse are doing exactly the same thing as Tim is doing/did that you pointed out. Ignore it and it's not true?

    Each point you made was well taken and I would like the people who are attacking your point of view to explain why you're wrong. For example waiting for 2 year for the larger phone which is now obviously their best seller to date TWICE!  Both with 6 and now with 6S too. And especially the messy and confusing late entry into music streaming. 

    Thank you you for taking the time to remind us that sitting back and resting on our laurels is just as bad as playing catchup and releasing a mess in the process. 

    I mentioned this same thing about Apple TV using Final Cut Pro X as an example of getting it wrong then taking 12 more months to get it right and I was blasted because FCPX was so incredible?  Well according to the AI article two days ago even Apple doesn't want to use it so my point was not only well made but on point as well 
    edited December 2015
  • Reply 16 of 60
    Has anyone called investor relations? I can imagine our collective voice can rattle a cage. I believe reaffirming guidance is the easiest and most subtle jab that can be thrown. If they have really good numbers then maybe even raise the guidance. To just let the stock constantly get pounded is just crazy. 
    palomine
  • Reply 17 of 60
    razormaid said:
    sog35 said:
    Tim Cook is a joke of CEO.

    He takes the time to trump up gay rights, minority rights, and coding for 10 year olds.

    Yet he does not have 5 minutes to go on an interview on CNBC and say holiday sales are going great and confirming guidance?  If he just did that the stock would be solidly at $120 right now.

    I so sick of this pathetic CEO.  So many reasons why he sucks.  But it gets masked because of the power of the Apple brand.  Let me name you the ways:

    1. Not bringing an bigger iPhone in 2013. No excuse for not bringing out the 4.7 inch iPhone along with the 5s. This allowed Samsung to make massive inroads. It took almost 2 years to reverse that bad move.

    2. Waiting too long to get into streaming music.  If they were ahead of the curve they would have been dominating streaming music. 

    3. Pathetic iPad lineup.  Intentionally hamstringing the iPad Mini.  Then refusing to release an updated Air in 2015.  WTF is that about.  iPad sales shrinking 20%.  Not pushing for iPad specific Apps.  He totally botched the iPad the last 2 years. Things such as the Pencil and type cover should have been out TWO YEARS AGO.  Yet his arrogance refused him to believe that the Surface had something right.

    4. Watch software failure. The software is too hard to use.  Too much emphasis on the $20k watches. Apps are way too slow. Prices are way too expensive.

    5. Refusal to sacrifice some short-term profits for long-term success.  Keeping the 16GB iPhone. Being stingy on RAM.  Releasing half baked iOS updates with a ton of bugs. 

    6. Crappy jobs controlling the narrative. Wall street spews bullshit and Cook does nothing.  Some flyby night media in China is seen as more crediable than Cook.  Pathetic.

    But this should not be a surprise. Cook is a bean counter not a visionary.  He has not VISION.  All he cares about is trying to meet the profit goals for the next quarter.  He spends $120 billion on a buyback to appease Wall Street yet does not have 5 minutes to shut down bullshit Wall Street rumors.  
    I hate to agree with you (only because I don't want to kick people in general) but every point is well taken and the people on here accusing you of "being high" or worse are doing exactly the same thing as Tim is doing/did that you pointed out. Ignore it and it's not true?

    Each point you made was well taken and I would like the people who are attacking your point of view to explain why you're wrong. For example waiting for 2 year for the larger phone which is now obviously their best seller to date TWICE!  Both with 6 and now with 6S too. And especially the messy and confusing late entry into music streaming. 

    Thank you you for taking the time to remind us that sitting back and resting on our laurels is just as bad as playing catchup and releasing a mess in the process. 

    I mentioned this sabe thing about Apple TV using Fibal Cut Pro X as an example of getting it wrong then taking 12 more months to get it right and I was blasted because FCPX was so incredible?  Well according to the AI article two days ago even Apple doesn't want to use it so my point was not only well made but on point as well 
    You do realize this is someone that only pushes out these rants when AAPL is going backwards. sog has argued against me many times when I've argued against 16GB storage or 1GB RAM. Then anyone who argues against 16GB is a cheap bastard that needs to go buy an Android. ;)
  • Reply 18 of 60

    I do now think Apple needs to take a more activist role in controlling the growth narrative with Wall Street. Apple has GREAT growth -- and additional growth potential -- but the passive approach of Apple execs is killing us stockholders. The time has come to take a more assertive position in the Wall Street relationship.
  • Reply 19 of 60
    sog35 said:
    Tim Cook is a joke of CEO.

    He takes the time to trump up gay rights, minority rights, and coding for 10 year olds.

    Yet he does not have 5 minutes to go on an interview on CNBC and say holiday sales are going great and confirming guidance?  If he just did that the stock would be solidly at $120 right now.

    I so sick of this pathetic CEO.  So many reasons why he sucks.  But it gets masked because of the power of the Apple brand.  Let me name you the ways:

    1. Not bringing an bigger iPhone in 2013. No excuse for not bringing out the 4.7 inch iPhone along with the 5s. This allowed Samsung to make massive inroads. It took almost 2 years to reverse that bad move.

    2. Waiting too long to get into streaming music.  If they were ahead of the curve they would have been dominating streaming music. 

    3. Pathetic iPad lineup.  Intentionally hamstringing the iPad Mini.  Then refusing to release an updated Air in 2015.  WTF is that about.  iPad sales shrinking 20%.  Not pushing for iPad specific Apps.  He totally botched the iPad the last 2 years. Things such as the Pencil and type cover should have been out TWO YEARS AGO.  Yet his arrogance refused him to believe that the Surface had something right.

    4. Watch software failure. The software is too hard to use.  Too much emphasis on the $20k watches. Apps are way too slow. Prices are way too expensive.

    5. Refusal to sacrifice some short-term profits for long-term success.  Keeping the 16GB iPhone. Being stingy on RAM.  Releasing half baked iOS updates with a ton of bugs. 

    6. Crappy jobs controlling the narrative. Wall street spews bullshit and Cook does nothing.  Some flyby night media in China is seen as more crediable than Cook.  Pathetic.

    But this should not be a surprise. Cook is a bean counter not a visionary.  He has not VISION.  All he cares about is trying to meet the profit goals for the next quarter.  He spends $120 billion on a buyback to appease Wall Street yet does not have 5 minutes to shut down bullshit Wall Street rumors.  
    They also were 2 years slow on making the Apple TV. There is almost nothing new that they couldn't do then! Subscription problems is BS. They could have easily bought Hulu or Netflix & had those rights. 
    Where's my MacBook Pro w/"Touch ID"? Enterprise really needs this.
    They wasted the iPad mini by not having or promoting forms as every Enterterprise small business needs for inventory & note taking. Oh, no pencil. That was a smart choice. I could go on and on. Look, Tim & Angela are doing a great job in Asia, but Tim isn't minding the store & unlike Steve, he isn't pushing his staff. Gay is not an issue. Playing at rich playboy saving the world isn't in his job description.  Bottom line, Apple has never cared about the average shareholder.
  • Reply 20 of 60

    I do now think Apple needs to take a more activist role in controlling the growth narrative with Wall Street. Apple has GREAT growth -- and additional growth potential -- but the passive approach of Apple execs is killing us stockholders. The time has come to take a more assertive position in the Wall Street relationship.
    Cook/Apple PR needs to do a better job controlling the narrative of the company, period. And most of all providing vision. That's where I think Cook falls short. I remember back in 2013 when there were rumors that the board was looking to replace Cook (which obviously were nonsense). If the stock falls below $100 I won't be surprised if some start putting the heat on Tim Cook and questioning his leadership. For the year Apple stock is down 1% whereas Microsoft is up 18%, Google 44%, Amazon 114% and Facebook 34%.
    edited December 2015
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