in case you didn't notice, _everyone_ had discount on Apple products over the holidays. It may not mean anything. No point singling eBay out.
Apple also sell reburbished products over eBay for the deal hunters. That's a smart/reasonable move too.
The one's on eBay aren't refurbished. They're brand new 4s and 5c models, obviously leftovers after they were discontinued. In the case of the 5c's they were originally built for ATT. And I already said Apple wasn't channel stuffing so you're arguing with yourself.
eBay has both new and reburbished products depending on when you look.
and I am not arguing about channel stuffing. I am explaining it. ^_^
Wow! Do clients actually pay for this much insight in Apples business and real time earnings updates. If so, they should just watch CNBC for free. I mean we already know what the outcome will be when Apple reports from the around the clock updates on channel checks. But....where was this coverage a year ago when Apple handily beat estimates. These guys are so convincing on the downside but in 2015 none of them had a clue. Why weren't they screaming Apple will grow 30-40% because channel checks are showing increased orders....
Wow! Do clients actually pay for this much insight in Apples business and real time earnings updates. If so, they should just watch CNBC for free. I mean we already know what the outcome will be when Apple reports from the around the clock updates on channel checks. But....where was this coverage a year ago when Apple handily beat estimates. These guys are so convincing on the downside but in 2015 none of them had a clue. Why weren't they screaming Apple will grow 30-40% because channel checks are showing increased orders....
Yes, that would have been usefull info wouldn't it.. But no, those asswipes had no clue, not even close... And they expect us to respect their "expertise" now.
If their right, it would be accidentally, not some so called knowledge.
The one's on eBay aren't refurbished. They're brand new 4s and 5c models, obviously leftovers after they were discontinued. In the case of the 5c's they were originally built for ATT. And I already said Apple wasn't channel stuffing so you're arguing with yourself.
eBay has both new and reburbished products depending on when you look.
and I am not arguing about channel stuffing. I am explaining it. ^_^
Well I may have used the term stuffing incorrectly. I mean that they didn't want supply side shortages this year and therefore they ramped up production and sales to channels to meet anticipated demand which might not have fully materialised. Which doesn't mean those phones in channel won't sell or be returned but that channel inventory levels will be high exiting the Q, hence the reported reduction in this next quarter's supplier contracts.
If I'm right then the last Q will be a record, but iPhone inventory will be high exiting it and guidance fairly low. Cook will point out that sell through will be as high as last year but the headline reports will be reduced revenue yoy.
All all of which is a buying opportunity as the 6C, the 7 and hopefully the new watch will restart growth in subsequent quarters.
If Apple has decided to release the iPhone 7 in June instead of October, then they would only be selling the iPhone 6s (as their flagship) for 9 months. It would make sense to me that if this rumour were true, Apple would have to reduce the number of iPhone 6s orders by about 25% over what they would have needed for a full year of sales. Add in the cannibilization caused by a 4" phone (6c or 7c) and that could easily reduce the number of 6s phones required by another 5% or more.
If those 2 rumors are true, it completely explains the supply chain data that is being reported.
i hope Apple has been extremely aggressive with its share repurchase program with the stock price being as low as it is.
Does anyone know how and when the number of outstanding shares gets updated? When Apple buys back the shares, they cancel them, right? So...does that get reflected immediately to the stock exchanges - or does it get updated on a quarterly basis from data on the 10Q? Basically - is there any way we could tell now, from publicly available data, how many shares Apple themselves have repurchased recently?
Apple probably did stuff the channel. That could mean that they beat guidance last Q and guide low this Q.
The market will react to the second one.
Apple doesn't report numbers of "shipped" products. They report on "sales". What possible benefit would they get from stuffing the channel?
I thought Apple did report shipped numbers. Every quarter on the earnings call they talk about channel inventory. Last year there were shortages after launch. Perhaps this year Apple wanted to make damn sure there were no shortages again so production was ramped up more at the beginning which would result in more product in the channel. When all these asshats talk about cuts we have zero context. 30% of what? If Apple over produced in the holiday quarter and had more product in the channel that could result in production for the March quarter but that doesn't mean March quarter sales are going to be 30% less than last year. Of course Cook is known for not being a fan of inventory (I think he once called it "evil") so who knows what all this noise means, if it really exists.
If Apple has decided to release the iPhone 7 in June instead of October, then they would only be selling the iPhone 6s (as their flagship) for 9 months. It would make sense to me that if this rumour were true, Apple would have to reduce the number of iPhone 6s orders by about 25% over what they would have needed for a full year of sales. Add in the cannibilization caused by a 4" phone (6c or 7c) and that could easily reduce the number of 6s phones required by another 5% or more.
If those 2 rumors are true, it completely explains the supply chain data that is being reported.
i hope Apple has been extremely aggressive with its share repurchase program with the stock price being as low as it is.
Does anyone know how and when the number of outstanding shares gets updated? When Apple buys back the shares, they cancel them, right? So...does that get reflected immediately to the stock exchanges - or does it get updated on a quarterly basis from data on the 10Q? Basically - is there any way we could tell now, from publicly available data, how many shares Apple themselves have repurchased recently?
Why do people still see stock repurchase as being a good thing. It's either not helped the stock price, or if it has then the underlying stock price would have been a lot lower.
I doubt your ideas are correct. These drops in orders are for this Q we are in not next and relative to last year.
Apple doesn't report numbers of "shipped" products. They report on "sales". What possible benefit would they get from stuffing the channel?
I thought Apple did report shipped numbers. Every quarter on the earnings call they talk about channel inventory. Last year there were shortages after launch. Perhaps this year Apple wanted to make damn sure there were no shortages again so production was ramped up more at the beginning which would result in more product in the channel. When all these asshats talk about cuts we have zero context. 30% of what? If Apple over produced in the holiday quarter and had more product in the channel that could result in production for the March quarter but that doesn't mean March quarter sales are going to be 30% less than last year. Of course Cook is known for not being a fan of inventory (I think he once called it "evil") so who knows what all this noise means, if it really exists.
The 30% would be a reduction in, if it's true, sales to channel.
Last year, Apple asked for less phones initially and then had to pump up the machine, this year they were asked to produce more in advance : result=less work in december.
20% less is exactly the level that Q2 was last year (-22% from Q1) (a record year).
Also, doesn't Foxconn have OTHER CLIENTS than Apple. Yes they do.
Your first paragraph nails it. In fact, production of iPhone 6 didn't meet demand until mid January. Cook had all hands on deck until at least mid January. This year he was prepared with greater production, and possibly a little less demand.
The "tough comp" is really fiscal Q2 '16. Last year sales spilled into Q2 because supply wasn't able to meet demand in Q1.
I thought Apple did report shipped numbers. Every quarter on the earnings call they talk about channel inventory. Last year there were shortages after launch. Perhaps this year Apple wanted to make damn sure there were no shortages again so production was ramped up more at the beginning which would result in more product in the channel. When all these asshats talk about cuts we have zero context. 30% of what? If Apple over produced in the holiday quarter and had more product in the channel that could result in production for the March quarter but that doesn't mean March quarter sales are going to be 30% less than last year. Of course Cook is known for not being a fan of inventory (I think he once called it "evil") so who knows what all this noise means, if it really exists.
The 30% would be a reduction in, if it's true, sales to channel.
Companies typically report sales-in (shipped) numbers because that's when they get the payment.
Sales-through (to consumers) numbers are captured via assorted means.
Depending on the industry, it is very difficult or impossible to get accurate sales-through data from international partners (US is more open in this aspect).
Apple probably did stuff the channel. That could mean that they beat guidance last Q and guide low this Q.
The market will react to the second one.
Apple doesn't report numbers of "shipped" products. They report on "sales". What possible benefit would they get from stuffing the channel?
As a rule shipped=sales. It's typical for US companies to count product sales the same way Apple does, it's not shipped until it's paid for, or at least payment arrangements have been made.
Apple doesn't report numbers of "shipped" products. They report on "sales". What possible benefit would they get from stuffing the channel?
As a rule shipped=sales. It's typical for US companies to count product sales the same way Apple does, it's not shipped until it's paid for, or at least payment arrangements have been made.
EDIT: Pipp'd by ASDASD
I am just remembering from 2-3 years ago (when Samsung was still relevant) that Samsung was reporting units SHIPPED and Apple was reporting units SOLD - which is why everyone was saying that it was an unfair comparison - and I definitely remember reading a statement reinforcing that the numbers from Apple indicated phones which - as you say - had been paid for. But having said that, I do also remember Tim Cook talking about channel health and sell-through in the quarterly conference calls.
As for the person who thinks that the stock buyback has been useless... I don't understand how to argue with him. It's pretty straight forward math! If Apple had 10 billion shares outstanding and I owned 1 billion of them, I'd own 10% of the company. Then if Apple were to go ahead and repurchase 1 billion shares, I would then own 11.1% of the company! If the company were worth a trillion dollars before the buyback, it should still be worth a trillion dollars after the buyback (independent of any other catalysts). Although if part of the company's valuation was derived from money in the bank, it's possible the total valuation would drop a little because that money has now been spent. But when it comes time to pay out dividends, they only have to pay out on 9 billion shares instead of 10 billion - so the dividends could be increased, or the savings could be put back in the bank to rebuild the reserve. While all of this is happening, there are dozens of not hundreds of other factors that can and will influence the stock price - positively and negatively - but at the end of the day - I don't think that a share repurchase initiative is EVER a bad thing for long-term investors when it is funded out of surplus funds! (Obviously the numbers I used in the example above are completely fabricated. They are not even close to real-world accurate but they did make the math easy to understand and hopefully the example helped to illustrate the point I was trying to make - that buyback are good and that there are so many other factors at play that it is impossible to evaluate the success of the buyback program by simply looking at the share price before and after.)
As a rule shipped=sales. It's typical for US companies to count product sales the same way Apple does, it's not shipped until it's paid for, or at least payment arrangements have been made.
EDIT: Pipp'd by ASDASD
I am just remembering from 2-3 years ago (when Samsung was still relevant) that Samsung was reporting units SHIPPED and Apple was reporting units SOLD - which is why everyone was saying that it was an unfair comparison - and I definitely remember reading a statement reinforcing that the numbers from Apple indicated phones which - as you say - had been paid for. But having said that, I do also remember Tim Cook talking about channel health and sell-through in the quarterly conference calls.
As for the person who thinks that the stock buyback has been useless... I don't understand how to argue with him. It's pretty straight forward math! If Apple had 10 billion shares outstanding and I owned 1 billion of them, I'd own 10% of the company. Then if Apple were to go ahead and repurchase 1 billion shares, I would then own 11.1% of the company! If the company were worth a trillion dollars before the buyback, it should still be worth a trillion dollars after the buyback (independent of any other catalysts). Although if part of the company's valuation was derived from money in the bank, it's possible the total valuation would drop a little because that money has now been spent. But when it comes time to pay out dividends, they only have to pay out on 9 billion shares instead of 10 billion - so the dividends could be increased, or the savings could be put back in the bank to rebuild the reserve. While all of this is happening, there are dozens of not hundreds of other factors that can and will influence the stock price - positively and negatively - but at the end of the day - I don't think that a share repurchase initiative is EVER a bad thing for long-term investors when it is funded out of surplus funds! (Obviously the numbers I used in the example above are completely fabricated. They are not even close to real-world accurate but they did make the math easy to understand and hopefully the example helped to illustrate the point I was trying to make - that buyback are good and that there are so many other factors at play that it is impossible to evaluate the success of the buyback program by simply looking at the share price before and after.)
Apple has always reported sales to channel.
What's forcing Apple to pay dividends anyway?Jobs didn't. There nothing there that answered why buybacks are good for investors except a supposed increase in per share dividends, which is at the discretion of the company.
You admit that - all things being equal - share prices and valuation should remain static.
From the point of view of the company itself, like buying any stock, if prices fall after you buy your own stock it's a bad investment.
I am just remembering from 2-3 years ago (when Samsung was still relevant) that Samsung was reporting units SHIPPED and Apple was reporting units SOLD - which is why everyone was saying that it was an unfair comparison - and I definitely remember reading a statement reinforcing that the numbers from Apple indicated phones which - as you say - had been paid for. But having said that, I do also remember Tim Cook talking about channel health and sell-through in the quarterly conference calls.
As for the person who thinks that the stock buyback has been useless... I don't understand how to argue with him. It's pretty straight forward math! If Apple had 10 billion shares outstanding and I owned 1 billion of them, I'd own 10% of the company. Then if Apple were to go ahead and repurchase 1 billion shares, I would then own 11.1% of the company! If the company were worth a trillion dollars before the buyback, it should still be worth a trillion dollars after the buyback (independent of any other catalysts). Although if part of the company's valuation was derived from money in the bank, it's possible the total valuation would drop a little because that money has now been spent. But when it comes time to pay out dividends, they only have to pay out on 9 billion shares instead of 10 billion - so the dividends could be increased, or the savings could be put back in the bank to rebuild the reserve. While all of this is happening, there are dozens of not hundreds of other factors that can and will influence the stock price - positively and negatively - but at the end of the day - I don't think that a share repurchase initiative is EVER a bad thing for long-term investors when it is funded out of surplus funds! (Obviously the numbers I used in the example above are completely fabricated. They are not even close to real-world accurate but they did make the math easy to understand and hopefully the example helped to illustrate the point I was trying to make - that buyback are good and that there are so many other factors at play that it is impossible to evaluate the success of the buyback program by simply looking at the share price before and after.)
Apple has always reported sales to channel.
What's forcing Apple to pay dividends anyway?Jobs didn't. There nothing there that answered why buybacks are good for investors except a supposed increase in per share dividends, which is at the discretion of the company.
You admit that - all things being equal - share prices and valuation should remain static.
From the point of view of the company itself, like buying any stock, if prices fall after you buy your own stock it's a bad investment.
But that wouldn't happen if all things were equal. If absolutely no other factors changed - then buying back stock would cause the stock price to go up.
The problem we have in evaluating the effect of the buyback is that all other things are NOT equal. As you know, there are many, many, many things that affect the price of the stock. I'm also not sure when the shares actually get cancelled/reported - but it mathematically must have a positive affect on the valuation of the stock. The stock will either go up - or it won't go down as much as it would have if there had been no buyback.
if my last example didn't work - consider this one. Apple decided to close up shop. They sell off all of their assets and pay off all of their debts. What they end up with is 110 billion dollars. Now let's say there are 11 billion shares outstanding because theres never been a buyback. Each share would be worth $10. now compare that to a second scenario where Apple had repurchased a billion shares leaving only 10 billion outstanding. Now each share becomes worth $11!
It may have been the buyback program that kept the price stable at 110-115 for so long - and perhaps they consumer all the funds allocated to the buyback program and have stopped buying now. That, coupled with all of the negativity from the analysts could be responsible for the current drops we're seeing. My point is that there are far too many variables in play to be able to say with any degree of certainty that the buyback program is a bad thing - especially when buybacks are nearly always a positive.
The other thing a buyback tells us is that management thinks their current share price is cheap and that it should be higher. It shows that management is bullish on themselves. I'll take that kind of endorsement over the opinions of ANY of the analysts out there that are spreading negativity to manipulate the stock price for financial gain for themselves, for their friends and for their families.
Off topic I know - but I believe that analysts should be licensed, evaluated and rated and they should have to maintain a prescribed degree of accuracy or lose their license. Their own personal finances should also be investigated at least twice per year to make it harder for these thieving bastards to profit from their li lies and manipulation. It really does make me sick to my stomach that they are able to lie so blatantly and that the system allows them to do so without any repercussions.
What's forcing Apple to pay dividends anyway?Jobs didn't. There nothing there that answered why buybacks are good for investors except a supposed increase in per share dividends, which is at the discretion of the company.
You admit that - all things being equal - share prices and valuation should remain static.
From the point of view of the company itself, like buying any stock, if prices fall after you buy your own stock it's a bad investment.
But that wouldn't happen if all things were equal. If absolutely no other factors changed - then buying back stock would cause the stock price to go up.
The problem we have in evaluating the effect of the buyback is that all other things are NOT equal. As you know, there are many, many, many things that affect the price of the stock. I'm also not sure when the shares actually get cancelled/reported - but it mathematically must have a positive affect on the valuation of the stock. The stock will either go up - or it won't go down as much as it would have if there had been no buyback.
if my last example didn't work - consider this one. Apple decided to close up shop. They sell off all of their assets and pay off all of their debts. What they end up with is 110 billion dollars. Now let's say there are 11 billion shares outstanding because theres never been a buyback. Each share would be worth $10. now compare that to a second scenario where Apple had repurchased a billion shares leaving only 10 billion outstanding. Now each share becomes worth $11!
It may have been the buyback program that kept the price stable at 110-115 for so long - and perhaps they consumer all the funds allocated to the buyback program and have stopped buying now. That, coupled with all of the negativity from the analysts could be responsible for the current drops we're seeing. My point is that there are far too many variables in play to be able to say with any degree of certainty that the buyback program is a bad thing - especially when buybacks are nearly always a positive.
The other thing a buyback tells us is that management thinks their current share price is cheap and that it should be higher. It shows that management is bullish on themselves. I'll take that kind of endorsement over the opinions of ANY of the analysts out there that are spreading negativity to manipulate the stock price for financial gain for themselves, for their friends and for their families.
Off topic I know - but I believe that analysts should be licensed, evaluated and rated and they should have to maintain a prescribed degree of accuracy or lose their license. Their own personal finances should also be investigated at least twice per year to make it harder for these thieving bastards to profit from their li lies and manipulation. It really does make me sick to my stomach that they are able to lie so blatantly and that the system allows them to do so without any repercussions.
In your argument you have a company with 110B and 11B in stock leading to a price of $10.
Then you say the company buys back 1B of stock leaving a price of $11.
Thats odd odd because the buy back would therefore be free. In reality the cost would be $10B, the company is left with $100B, has 10B stock outstanding leaving the price at $10.
The reasons stock might appreciate would be the sentiment generated by the repurchase.
In this case Apple has invested 150B or so in itself, rather than in other bonds or securities or stock. As it happened that wasn't the best use of the money.
Comments
and I am not arguing about channel stuffing. I am explaining it. ^_^
If their right, it would be accidentally, not some so called knowledge.
If I'm right then the last Q will be a record, but iPhone inventory will be high exiting it and guidance fairly low. Cook will point out that sell through will be as high as last year but the headline reports will be reduced revenue yoy.
All all of which is a buying opportunity as the 6C, the 7 and hopefully the new watch will restart growth in subsequent quarters.
If those 2 rumors are true, it completely explains the supply chain data that is being reported.
i hope Apple has been extremely aggressive with its share repurchase program with the stock price being as low as it is.
Does anyone know how and when the number of outstanding shares gets updated? When Apple buys back the shares, they cancel them, right? So...does that get reflected immediately to the stock exchanges - or does it get updated on a quarterly basis from data on the 10Q? Basically - is there any way we could tell now, from publicly available data, how many shares Apple themselves have repurchased recently?
I doubt your ideas are correct. These drops in orders are for this Q we are in not next and relative to last year.
The "tough comp" is really fiscal Q2 '16. Last year sales spilled into Q2 because supply wasn't able to meet demand in Q1.
Sales-through (to consumers) numbers are captured via assorted means.
Depending on the industry, it is very difficult or impossible to get accurate sales-through data from international partners (US is more open in this aspect).
EDIT: Pipp'd by ASDASD
Yes, I remember now. Before the iPhone. Before the iPad. We used mouse and dialed up to AOL. It's coming back to me now.
As for the person who thinks that the stock buyback has been useless... I don't understand how to argue with him. It's pretty straight forward math! If Apple had 10 billion shares outstanding and I owned 1 billion of them, I'd own 10% of the company. Then if Apple were to go ahead and repurchase 1 billion shares, I would then own 11.1% of the company! If the company were worth a trillion dollars before the buyback, it should still be worth a trillion dollars after the buyback (independent of any other catalysts). Although if part of the company's valuation was derived from money in the bank, it's possible the total valuation would drop a little because that money has now been spent. But when it comes time to pay out dividends, they only have to pay out on 9 billion shares instead of 10 billion - so the dividends could be increased, or the savings could be put back in the bank to rebuild the reserve. While all of this is happening, there are dozens of not hundreds of other factors that can and will influence the stock price - positively and negatively - but at the end of the day - I don't think that a share repurchase initiative is EVER a bad thing for long-term investors when it is funded out of surplus funds! (Obviously the numbers I used in the example above are completely fabricated. They are not even close to real-world accurate but they did make the math easy to understand and hopefully the example helped to illustrate the point I was trying to make - that buyback are good and that there are so many other factors at play that it is impossible to evaluate the success of the buyback program by simply looking at the share price before and after.)
However there are also analysis and marketing type articles that talks about consumer demand (based on sales-through).
Some noobish writers may compare sales-in and sales-through between different companies, or countries. They would be dead wrong.
What's forcing Apple to pay dividends anyway?Jobs didn't. There nothing there that answered why buybacks are good for investors except a supposed increase in per share dividends, which is at the discretion of the company.
You admit that - all things being equal - share prices and valuation should remain static.
From the point of view of the company itself, like buying any stock, if prices fall after you buy your own stock it's a bad investment.
The problem we have in evaluating the effect of the buyback is that all other things are NOT equal. As you know, there are many, many, many things that affect the price of the stock. I'm also not sure when the shares actually get cancelled/reported - but it mathematically must have a positive affect on the valuation of the stock. The stock will either go up - or it won't go down as much as it would have if there had been no buyback.
if my last example didn't work - consider this one. Apple decided to close up shop. They sell off all of their assets and pay off all of their debts. What they end up with is 110 billion dollars. Now let's say there are 11 billion shares outstanding because theres never been a buyback. Each share would be worth $10. now compare that to a second scenario where Apple had repurchased a billion shares leaving only 10 billion outstanding. Now each share becomes worth $11!
It may have been the buyback program that kept the price stable at 110-115 for so long - and perhaps they consumer all the funds allocated to the buyback program and have stopped buying now. That, coupled with all of the negativity from the analysts could be responsible for the current drops we're seeing. My point is that there are far too many variables in play to be able to say with any degree of certainty that the buyback program is a bad thing - especially when buybacks are nearly always a positive.
The other thing a buyback tells us is that management thinks their current share price is cheap and that it should be higher. It shows that management is bullish on themselves. I'll take that kind of endorsement over the opinions of ANY of the analysts out there that are spreading negativity to manipulate the stock price for financial gain for themselves, for their friends and for their families.
Off topic I know - but I believe that analysts should be licensed, evaluated and rated and they should have to maintain a prescribed degree of accuracy or lose their license. Their own personal finances should also be investigated at least twice per year to make it harder for these thieving bastards to profit from their li lies and manipulation. It really does make me sick to my stomach that they are able to lie so blatantly and that the system allows them to do so without any repercussions.
Then you say the company buys back 1B of stock leaving a price of $11.
Thats odd odd because the buy back would therefore be free. In reality the cost would be $10B, the company is left with $100B, has 10B stock outstanding leaving the price at $10.
The reasons stock might appreciate would be the sentiment generated by the repurchase.
In this case Apple has invested 150B or so in itself, rather than in other bonds or securities or stock. As it happened that wasn't the best use of the money.