Phone unit results of this Q combined with lackluster projections for March quarter calls into question the "super cycle" thesis set up by many analysts.
Um ... Apple is guiding that they will bring in an additional $10 billion this next quarter compared to the year-ago quarter.
How exactly is that “lacklustre?”
Apple urgently needs to fund research into finding other Earth like planets to open up new markets, perhaps the spaceship campus is literally a spaceship, this would show Jobs' remarkable foresight.
I’ve a feeling the plan in Cupertino is already in place to convert all those Android owners here on Earth to iPhone owners. Android is a great smartphone training ground, as Cook said a few years ago.
Come on, how would Apple convert all those Android owners in Earth to iPhone owners? We all know that about 95% of them cost <$600, the low & mid-range segments which Apple does not release new devices (except for the SE, a tiny phone with no real takers in Android world for conversion to iOS). So Apple needs to find other planets (needless to say, impractical) or penetrate further into mid-range phones with different strategy. While it is too early to say this, the current strategy of selling 2+ years old devices at mid-range prices does not seem to have significant impact in fuelling the growth. At best, it has helped in retaining the current level of sales.
I see the after hours gain of 3% has been wiped and the stock will open basically flat. Markets overall look set to open down except of course golden child Amazon which is up 6%. Wouldn’t surprise me if it becomes the first company to get to 1T market valuation,
Phone unit results of this Q combined with lackluster projections for March quarter calls into question the "super cycle" thesis set up by many analysts.
Um ... Apple is guiding that they will bring in an additional $10 billion this next quarter compared to the year-ago quarter.
How exactly is that “lacklustre?”
Okay, admit poor word choice (another reader called out too). More accurate: "projections for March quarter that fell short of Wall Street expectations"
Here is an excerpt from Merrill Lynch AAPL report this morning. They are cutting revenue projections for AAPL to 2020, increasing EPS (probably due to buybacks, but still have to read), and keeping their bullish $220 price target:
"Key points to focus on post the quarter
We think the most significant questions will revolve around the sustainability of
demand for the iPhone X and the associated margins. We model total iPhone
units of 52mn for the Mar quarter which is lower than our prior/Street prior
estimate of 57mn/59mn units. Apple reports sell in into the channel. One
reason for the lower units in the Mar quarter is that Apple built inventory in the
channel during the Dec quarter (~4mn iPhone units), which it expects to sell out
of the channel in the Mar quarter.
Typically sell-in volume for iPhone in a Dec quarter is higher than sell-through.
This year, the difference was magnified because iPhone X shipped later (in Nov
vs. Sep).
We were a bit disappointed to hear that iPhone X had come into
supply/demand balance in Dec. However, the launch of the phone was delayed,
and commentary that iPhone X has been the most popular iPhone every week
since could suggest that demand could still pick up for the iPhone X over the
next quarter.
iPhone ASP came in at a strong $796 for the Dec quarter, which was even
slightly higher than our $790 estimate, and significantly higher than Street
estimate of $756. The ASP was helped by shipments of iPhone X into the
channel. In F2Q, as channel inventory of the new phones is reduced (higher
sell-through), Apple’s blended iPhone ASP will be lower given lower sales of the
higher priced phones into the channel.
Figure 1 parses the subcomponents of iPhone y/y unit growth for the Dec and
Mar quarters. While it may seem that iPhone units were down 2% y/y
(reported 77mn vs. prior year quarter of 78mn), we factor out 5.5mn units
which benefited from the year ago quarter due to the extra week in the quarter.
Additionally we factor out the channel inventory increase in the year ago
quarter and our estimated decline for the Mar 2018 quarter and derive a +2%
y/y growth for the base iPhone business. This is better than the y/y declines
seen in the prior quarters which we attribute to the launch of the new iPhones
8/8 Plus/X. We estimate 52mn iPhone units to ship in the Mar 2018 quarter,
which also implies 2% y/y growth for the base iPhone business. "
Unbelievable how wrong the analysts consistently are, yet they retain their jobs and influence the stock market week after week with more rumours based on nothing concrete at all.
Apple urgently needs to fund research into finding other Earth like planets to open up new markets, perhaps the spaceship campus is literally a spaceship, this would show Jobs' remarkable foresight.
I’ve a feeling the plan in Cupertino is already in place to convert all those Android owners here on Earth to iPhone owners. Android is a great smartphone training ground, as Cook said a few years ago.
Come on, how would Apple convert all those Android owners in Earth to iPhone owners? We all know that about 95% of them cost <$600, the low & mid-range segments which Apple does not release new devices (except for the SE, a tiny phone with no real takers in Android world for conversion to iOS). So Apple needs to find other planets (needless to say, impractical) or penetrate further into mid-range phones with different strategy. While it is too early to say this, the current strategy of selling 2+ years old devices at mid-range prices does not seem to have significant impact in fuelling the growth. At best, it has helped in retaining the current level of sales.
Well, they’ll keep absorbing a good chunk of the growing global middle class for starters. And maybe one day a larger screen SE will be introduced. Or the iPhone 6S+ and 7+ will come down sufficiently in price to reach a broad swath of aspiring Android owners. There’s still growth ahead for Apple, in any number of ways, if they should decide they want an even larger (than 1.3 billion) active devices installed base.
I see the after hours gain of 3% has been wiped and the stock will open basically flat. Markets overall look set to open down except of course golden child Amazon which is up 6%. Wouldn’t surprise me if it becomes the first company to get to 1T market valuation,
Screw what the folks at the Wall Street Casino think. These numbers are absolutely staggering. Unbelievable how many phones they are selling. Samsung would kill to have these kinds of numbers.
They're selling essentially the same number of phones they sold in 2015, 2016, and 2017. Almost zero growth in unit sales is quite believable and is in line with the overall smartphone market.
Comments
"Key points to focus on post the quarter
We think the most significant questions will revolve around the sustainability of demand for the iPhone X and the associated margins. We model total iPhone units of 52mn for the Mar quarter which is lower than our prior/Street prior estimate of 57mn/59mn units. Apple reports sell in into the channel. One reason for the lower units in the Mar quarter is that Apple built inventory in the channel during the Dec quarter (~4mn iPhone units), which it expects to sell out of the channel in the Mar quarter.
Typically sell-in volume for iPhone in a Dec quarter is higher than sell-through. This year, the difference was magnified because iPhone X shipped later (in Nov vs. Sep).
We were a bit disappointed to hear that iPhone X had come into supply/demand balance in Dec. However, the launch of the phone was delayed, and commentary that iPhone X has been the most popular iPhone every week since could suggest that demand could still pick up for the iPhone X over the next quarter.
iPhone ASP came in at a strong $796 for the Dec quarter, which was even slightly higher than our $790 estimate, and significantly higher than Street estimate of $756. The ASP was helped by shipments of iPhone X into the channel. In F2Q, as channel inventory of the new phones is reduced (higher sell-through), Apple’s blended iPhone ASP will be lower given lower sales of the higher priced phones into the channel.
Figure 1 parses the subcomponents of iPhone y/y unit growth for the Dec and Mar quarters. While it may seem that iPhone units were down 2% y/y (reported 77mn vs. prior year quarter of 78mn), we factor out 5.5mn units which benefited from the year ago quarter due to the extra week in the quarter. Additionally we factor out the channel inventory increase in the year ago quarter and our estimated decline for the Mar 2018 quarter and derive a +2% y/y growth for the base iPhone business. This is better than the y/y declines seen in the prior quarters which we attribute to the launch of the new iPhones 8/8 Plus/X. We estimate 52mn iPhone units to ship in the Mar 2018 quarter, which also implies 2% y/y growth for the base iPhone business. "
Perhaps the grand strategy for colonizing other planets is to tether said planet and pull it into our solar system.
iPhone 27 (XXVII?) sensors can find the new planet, through a crowd-sourced worldwide sensor-array ("hold phones up toward space....now!").
And iOS27 of course will have the "bring-my-planet" app.
Heh heh.
Enjoy the SuperBowl all.
E.
Yet here is Apple, yet again, leading in what looks like to be the follow up to that smartphone market; wearables.