Notoriously bearish Apple analyst predicts doom because of 'iPhone 8' production delays

Posted:
in AAPL Investors edited May 2017
An analyst with historically off-target guesses about Apple's hardware intentions and supply chain machinations is claiming that the "iPhone 8" will not only ship later than expected because of Touch ID supply problems, but also claims that full manufacturing won't fully ramp up until the first calendar quarter of 2018.




Jun Zhang from Rosenblatt Securities issued a note to investors on Friday, alleging that the fingerprint sensor behind the screen of the "iPhone 8" has so many problems, that there won't be enough component inventory until late in the holiday quarter to produce the device in any quantity. Correspondingly, Zhang believes that production orders have been trimmed down from between 100 million and 110 million to around 85 million iPhones for shortly after launch.

Notably, Rosenblatt Securities has maintained a $120 price target for shares of AAPL since September 6, 2016, despite the fact that the company has been trading above the $120 mark since January, and currently sits north of $150.

As a result of the supposed "delay" for the "iPhone 8," the analyst believes devices like the Huawei Mate 9 and smartphones by other unspecified Chinese manufacturers will take advantage of the situation. Zhang suggested that will lead to a situation where Apple's phone could "lose its competitiveness when the market fills up with high screen-to-body ratio smartphones and 3D glasses."

In the analyst's note, seen by AppleInsider, there appears to be little awareness of differentiation between the "iPhone 8" and the also-rumored "iPhone 7s" family device. That, or the analyst is assuming that the latter will have OLED screens and Touch ID embedded behind the glass as well -- which hasn't been said to be the case so far.




Historically, in April 2016, the same analyst said that if the iPhone 7 didn't have a "panel upgrade," then there was no other feature upgrade possible to drive demand, even though it acknowledged "camera upgrades, speaker upgrades, a home-button upgrade, and some software upgrades" were probable for the device. At the time, it had a $105 Apple stock price target, and the stock was actually priced at $104.35.

Apple saw sales of 78.3 million units in the holiday quarter -- the company's first quarter of fiscal 2017. That was an increase from the previous record, 74.8 million iPhones the company sold in the same quarter a year prior, and not a decline as predicted by Rosenblatt.

Rosenblatt continues to retain its "neutral" rating on the stock, which means that it believes the stock will be in line with the average return of others in its industry over the next 12 months.

In actuality, Apple stock has out-performed the rest of the NASDAQ. In the last year, the NASDAQ has climbed 22 percent to Friday's mid-day value of 5,787, while Apple has climbed over 50 percent in the same timeframe.
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Comments

  • Reply 1 of 31
    technotechno Posts: 661member
    hmmmm. Looks like someone is trying to drive the stock price down.
    anton zuykovmejsricnetmage
  • Reply 2 of 31
    plovellplovell Posts: 768member
    Yeah - I remember that from a few years ago when the "analysts" drove the price from +$700 in October to exactly $500 at year-end. Interestingly, the $500 was the option strike price for that period.
    longpathanton zuykov
  • Reply 3 of 31
    rob53rob53 Posts: 1,834member
    I don't care when Apple gets the next iPhone out, just as long as it works. The only people who really care about slipped production dates are the stock market gamblers who work their hardest to manipulate everything they can to their benefit. Not a great way to run the world. 
    TomEnetmage
  • Reply 4 of 31
    MacProMacPro Posts: 17,169member
    "analyst predicts doom because of 'iPhone 8' production delays"


    Wow I never expected that ... /s
    chiapscooter63lukeibb-15
  • Reply 5 of 31
    How many times does he need to get things so wrong before he is fired?
    Just asking.

    longpathTomEnetmage
  • Reply 6 of 31
    ben20ben20 Posts: 119member
    Look at Zhangs performace record - fake news!
  • Reply 7 of 31
    george ligeorge li Posts: 30member
    Just an observation as an long time AAPL shareholder, Jun Zhang is one of quite a few analysts who I have strong suspicion that were paid by clients (hedge funds etc) on Wall Street, in the illegal scheme of manipulating AAPL stock, creating predictable volatility for quick profit for his clients esp. on AAPL options... one of the reason that most of these hit pieces/analyses are released on Fridays.
    longpathTomE
  • Reply 8 of 31
    SpamSandwichSpamSandwich Posts: 29,068member
    BREAKING NEWS:  Previously wrong analyst still wrong.
    edited May 2017 emig647Metriacanthosauruslongpathpscooter63TomEnetmage
  • Reply 9 of 31
    Mike WuertheleMike Wuerthele Posts: 2,530administrator
    BREAKING NEWS:  Previously wrong analyst still wrong.
    I believe that's what the headline and text says, yes.
    longpathpscooter63SpamSandwichbb-15
  • Reply 10 of 31
    radarthekatradarthekat Posts: 2,298moderator
    plovell said:
    Yeah - I remember that from a few years ago when the "analysts" drove the price from +$700 in October to exactly $500 at year-end. Interestingly, the $500 was the option strike price for that period.
    The option strike price for that period?  Care to explain that?  
  • Reply 11 of 31
    It's amusing how iPhone production delays undermine Apple but Tesla vehicle delivery delays do nothing to undermine Tesla. I would think that when Tesla takes advance payment and gives a delivery date it should certainly be met. Apple hasn't given any delivery date for the iPhone 8 so why should Apple be accused in any way of the iPhone being "late."  I have never heard anyone say that Tesla's share price will fall due to late deliveries and late deliveries happen fairly often.

    Apparently, certain companies are expected to meet certain standards and others aren't. Apple is not being given a free pass like Tesla is being given. As an Apple shareholder, it doesn't matter to me if the iPhone actually does take longer to produce as long as the finished product is working properly to Apple's higher standards. The quality of the finished product is most important to me as both a shareholder and consumer. Rushing an unfinished product to market is just too risky and the consequences are much higher than shipping a merely "late" product. We're only talking about an iPhone and not some actual life-saving device.

    Anyway, it doesn't change my opinion that too many analysts are just downright crooks and never have to take any responsibility for their lies and deceptions.  I honestly don't pay any attention to them but I think too many potential Apple investors do.
    edited May 2017 radarthekatflaneur
  • Reply 12 of 31
    So, he predicts that Apple will sell only 85 million iPhone 8s. Apple is surely doomed!
  • Reply 13 of 31
    maestro64maestro64 Posts: 4,071member
    How many times does he need to get things so wrong before he is fired?
    Just asking.


    Here is what you do not get, he is wrong but for the right reasons, if it creates FUD, and the market and investors react, and his clients can short the stock and make money going down and then jump in and buy it before the truth comes out he has done his job.

    The wild part of this story is his claim that Apple had orders in for 110M units when apple has never done more than 78M it not like Apple was planning for 40% growth in one quarter. I think his attempt here was to also drive down Apple suppliers stocks as well. That would be a big hit them.

    brucemcanton zuykovbb-15
  • Reply 14 of 31
    jungmarkjungmark Posts: 6,529member
    How is this idiot still employed? 

    Says something about the firm. 
  • Reply 15 of 31
    512ke512ke Posts: 763member
    Patience, analyst paduan. Wait three months. Then sales will explode, and stock price will rise. I see it in the stars.
  • Reply 16 of 31
    boltsfan17boltsfan17 Posts: 1,873member
    This is copied from another site. Says enough really about this Jun Zhang clown.

    "According to TipRanks.com, analyst Jun Zhang is ranked #3,991 out of 4,274 analysts. Zhang has a 25% success rate and forfeits 18% in annual returns. When suggesting AAPL, Zhang loses 8.1% in average profits on the stock."

    ben20pscooter63SpamSandwichteejay2012netmage
  • Reply 17 of 31
    Mike WuertheleMike Wuerthele Posts: 2,530administrator
    This is copied from another site. Says enough really about this Jun Zhang clown.

    "According to TipRanks.com, analyst Jun Zhang is ranked #3,991 out of 4,274 analysts. Zhang has a 25% success rate and forfeits 18% in annual returns. When suggesting AAPL, Zhang loses 8.1% in average profits on the stock."

    I thought a target price of $120 with the stock price sitting at $154 was sufficient.
  • Reply 18 of 31
    techno said:
    hmmmm. Looks like someone is trying to drive the stock price down.
    AAPL ain't gonna drop by itself, you know... and since he probably wants to buy himself some, what else could he do?

    edt: stock name
    edited May 2017
  • Reply 19 of 31
    brucemcbrucemc Posts: 1,384member
    It's amusing how iPhone production delays undermine Apple but Tesla vehicle delivery delays do nothing to undermine Tesla. I would think that when Tesla takes advance payment and gives a delivery date it should certainly be met. Apple hasn't given any delivery date for the iPhone 8 so why should Apple be accused in any way of the iPhone being "late."  I have never heard anyone say that Tesla's share price will fall due to late deliveries and late deliveries happen fairly often.

    Apparently, certain companies are expected to meet certain standards and others aren't. Apple is not being given a free pass like Tesla is being given. As an Apple shareholder, it doesn't matter to me if the iPhone actually does take longer to produce as long as the finished product is working properly to Apple's higher standards. The quality of the finished product is most important to me as both a shareholder and consumer. Rushing an unfinished product to market is just too risky and the consequences are much higher than shipping a merely "late" product. We're only talking about an iPhone and not some actual life-saving device.

    Anyway, it doesn't change my opinion that too many analysts are just downright crooks and never have to take any responsibility for their lies and deceptions.  I honestly don't pay any attention to them but I think too many potential Apple investors do.
    While there is an "Apple effect", where every potential risk is magnified many times over by the press, it is certainly true that companies which "make real money" are much more highly scrutinized than companies which "claim they will dominate the industry in the future".  

    Tesla has never been profitable, has no clear plan for profitability, and have only rarely hit their publicly state production goals, but they have a very high market valuation (greater than most existing auto manufacturers).  Most issues do not seem to be greatly scrutinized, valuation is not greatly affected, because this is a growth stock where it is all about riding the stock as it is rising, and working the timing on when to get out.

    Apple is extremely profitable, has consistently been so, while almost never missing their own guidance over last two decades.  They are valued less than the broader S&P 500 market, and any rumour of issues causes the stock to drop.  

    Perhaps it is the curse of being successful...
  • Reply 20 of 31
    How many times does he need to get things so wrong before he is fired?
    Just asking.

    Depends on what his real role/goals are. If his job is to add to the FUD factor, so that someone else could benefit from that, then he won't get fired. And the fact that he is at the bottom of the ranks while still retaining his job, should tell you that the assumption is likely correct.
    edited May 2017 netmage
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