Wall Street wowed by iPhone X performance, but cools off on expectations of an Apple 'supe...

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  • Reply 21 of 32
    jungmark said:
    Can the analysts that spread FUD about the X lose their jobs? They should explain to their unfortunate clients how wrong they've been  
    I suspect what some of them are telling the public isn't what they're telling their clients.
    watto_cobraanton zuykov
  • Reply 22 of 32
    FolioFolio Posts: 504member
    US markets are way overdue for a correction, actually will help prolong this aging bull run. You should be able to sleep okay holding AAPL, unlike some others, even if you bought higher.  :)
  • Reply 23 of 32
    zoetmbzoetmb Posts: 2,422member
    k2kw said:
    78Bandit said:
    I think Ives' unit sales are going to be a little optimistic.  With 77.3M actual  in Q1 and 52M - 55M estimated in Q2 Apple would need at least 103M sales in Q3 & Q4 to meet even his bottom end.  Apple has averaged just under 90M for the last two quarters over the past three years.  Highest ever was 95M in the iPhone 6 super year.

    Unless Apple releases next year's models early and you have a couple more weeks of new model sales in the last quarter I think unit sales are going to be between 220M and 225M.
    Does anyone have an numbers on how many android switchers Apple is getting vs Apple users switching to Android?

    It doesn't seem to be that Apple is growing unitwise the way they used to up until the 6.


    Well how can it?  The market has matured.   The early phones each had major technology leaps that made the experience a lot different.  While the X also has tech leaps, it doesn't make using the phone (once unlocked) much different.   When the 6 was released the phone companies were still subsidizing phones.  They mostly don't do that today and the combination of a mature technology combined with high pricing and no subsidies means that Apple will sell fewer units, although by the time the 9 comes out, all those 6 years might be ready to upgrade again if they haven't already.

    Meanwhile, while iPhone units were down 1.2%, record $ sales revenue and record net income.   $88 freaking billion in sales in one quarter and the Wall Street idiots still complain.   Apple Services alone is now large enough to be a Fortune 100 company all by itself and all Wall Street is obsessed with is how many iPhone units Apple is shipping.  Apple's net income in the first quarter was higher than their annual net sales in 2006 and Apple's fiscal 2017 annual sales was more than double what it was in 2011.  What other company of any size can make that claim?   None AFAIK.    With first quarter sales 13% over previous year, Apple has a good chance to beat fiscal 2015's record year.   Having said that, they do need a major new product line and I don't think HomePod is going to be it. 
    mmatz
  • Reply 24 of 32
    chasmchasm Posts: 1,271member
    78Bandit said:
    Adjusting for the extra week both revenue sales would have been down 3% instead of being a new record
    I believe this is incorrect. Had there been a 14th week of sales, Apple would have kept on selling iPhones at their average rate, so that's another $6B in the till and another 6M iPhones that would have been reported this quarter (83M iPhones and $94B revenue). Instead, that money will now go to helping bolster the fiscal Q2 numbers, which Apple has guided to be around $10B higher than last year. Apple's unit sales per week is up, Apple's ASP is up, and Apple's weekly revenue is up (AI did a great breakdown on this in a separate article. Under no scenario other than Apple sold zero additional phones in that bonus week would your claim of revenue down three percent y/y be true, unless I'm misunderstanding something.
    fastasleepSpamSandwich
  • Reply 25 of 32
    foggyhillfoggyhill Posts: 4,767member


    Why else would the stock price drop like it did today (-4.33 at the time of writing this).
    The whole market is taking a beating today. It's not just Apple. Dow down 660 points.
    Amazon was up nearly 3% today. 
    Who the fuck cares, their PE is in imaginary land already. It has no relations to even planet earth's total sales. At that level, it's more shuffling paper (buys it because it goes up, not because of fundamentals, a bit like bitcoin when it went up, except not as bad of course cause they do have something to back them).
    edited February 2018
  • Reply 26 of 32
    ksecksec Posts: 1,551member
    Stock is down almost 5% today. Everyone long on Apple why do you think Wall Street sentiment on the company is going to change? Services revenues are up, other revenues from accessories are up. iPhone ASP is the highest it’s ever been and yet the stock is down nearly 5%. What is going to ever make them bullish on Apple?
    Possibly Never.

    I am not sure how I could possibly better explain this and get the point across. People has been pointing fingers and calling me bull shit.

    You must separate yourself from an Apple Fan boy ( like AI is ) to actual investing and sentiment, or there is a combined word for it, the "market".

    Before anything else, Apple is doing great, flipping great. There is no other way to put it. But, when people say Apple is doomed, some actually mean Apple "is" doomed, like hard core Android fans, some actually means Apple is not doing as well as they expected. Or According to AI those has reading comprehension problems.

    Let's define what super cycle is, and also referred a few times in Bloomberg and other financial media. They were expecting a iPhone 6 Plus cycle, where everyone was rushing to buy it, and it was by and large the majority of iPhone sold during its initial launch, mostly helped by China.  The iPhone 6 Plus cycle, sold 135M Unit combined  in Q1 and Q2, staggering number.

    Wall Street / Market kind of expect / want this to happen, people will rush to buy iPhone X, more new user to iPhone ecosystem, more users upgrade, and it will be the sold in vast majority of it, bringing up ASP and Unit Sales.

    Remember this is iPhone X here, not iPhone 8 or else.

    This is high expectation, or ridiculous in numbers. So from that point of view, iPhone X failed. So when Nikkei posted news about 40M unit in Q1 and 20M in Q2, it wasn't that bad at all. Yes AI and other dont like the word production cut in half, which is likely true in seasonal sales. Market was secretly expecting Apple to even beat the 80M unit number, and wanting like 50M+ iPhone X.   

    So while iPhone X did not create a super cycle, it was Ok when the results came along. iPhone X is leading iPhone sold every week, ASP is nearly $800. And one reason why Ming from KGI is already hyping the super cycle is still to come next year when Apple has even more new iPhone next year.

    Problem is all these expectation is already priced in*, one reason why Apple is trading at P/E 17x now instead of its usual 15 in the past three to four years.

    (*Actually that is not entirely true, Berkshire Hathaway buying was the main causes of (slight ) spike, lots of traders, even on twitter was seeing / guessing someone buying lots of AAPL stocks, and it later became clear it was Berkshire Hathaway )

    So why is AAPL so undervalued, even at a P/E 17 is very low, compared to the current S&P average of 26, or Tech stocks from Google and the like of close or above 30.

    Investor generally view Facebook, Microsoft, Amazon and Google as monopoly. And that is very much true.

    Social Network? If you view the world Top 6 social and instant messenger network, five of them are from Facebook, one is WeChat.

    Microsoft? The world is still running on Excel. Business is still on Windows, growing lock in ( Actually it is not but that is how they view it ) in Azure , Services and Office.  

    Google? Android and Search ( Ads ) Literally Zero direct competition. 

    Amazon? You want to place your bet against Jeff Bezos?

    Apple? Apple doesn't have a monopoly. Or it does, it is called customer loyalty. But it is hard to quantify loyalty, or not quantify it, but price or value it. It is much easier for investor to understand Microsoft and Facebook lock in, especially when both dont have its competitor in its field. iOS has Android, macOS has Windows. Apple Music has spotify etc. Each and every major Apple product or services has a major market share competitor.

    There is also, always the fear that the current pricing of iPhone and Unit sold, with its margin is not sustainable. I have seen this asked a few times already, and there is yet an answer. No other company in the history of man kind has created a product that is as widely popular as the iPhone, at such a price range, being used now and still growing slightly, and has such a NET margin. None. Zero. ( The closest thing is oil from Saudi where cost is zero and they keep bumping. )

    So it may be forgiveable one does not know how to value such company that man kind never seen before.

    You asked: What? AAPL is down not because of its report, but Wall Street as a whole is looking for safety from raising interest rate.

    Well yes, and that Safety was established long ago, AAPL at around P/E 15.
       


    edited February 2018 Foliommatz
  • Reply 27 of 32
    FolioFolio Posts: 504member
    Nice post Ksec. Another way to view the loyalty aspect, for those of less ardent faith, is switching costs, which change each cycle. If you store photos on google rather than in apple or if you buy a Homepod that afffects stickiness. 

    I'd argue apples getting more sticky via air pods, home pods, iCloud etc. 
    also takes a while for perception to change. 15 P/E doesn't recognize greater service component. 

    Kinda crazy Proctor & Gamble in 'safe' consumer staples sector has 24P/E when the barrier of entry of new brands is low in digital age
    Within five years that may change. Who knows? Apple may be seen as a staple. 
    mmatz
  • Reply 28 of 32
    chasm said:

    I believe this is incorrect. Had there been a 14th week of sales, Apple would have kept on selling iPhones at their average rate, so that's another $6B in the till and another 6M iPhones that would have been reported this quarter (83M iPhones and $94B revenue). Instead, that money will now go to helping bolster the fiscal Q2 numbers, which Apple has guided to be around $10B higher than last year. Apple's unit sales per week is up, Apple's ASP is up, and Apple's weekly revenue is up (AI did a great breakdown on this in a separate article. Under no scenario other than Apple sold zero additional phones in that bonus week would your claim of revenue down three percent y/y be true, unless I'm misunderstanding something. 
    78Bandit said:
    Adjusting for the extra week both revenue sales would have been down 3% instead of being a new record

    I was referring to last year's earnings report (Q1 2017) when there was 14 weeks and everyone was claiming what a super, blowout quarter it was compared to the 13 week Q1 2016.  Last year there were $78.4B revenue and 78.3 million phones sold in 14 weeks which would have been adjusted to 13/14 of that amount ($72.8B and 72.7 million) to be comparable to Q1 2016's $75.9B and 74.8 million units sold.  Put another way, there were 5.75M phones sold per week in Q1-16 versus 5.59M per seek in Q1-17.  That is where I got my 3% decline number from.

    I was pointing out the hypocrisy of insisting the numbers be adjusted this year to compare weekly sales when last year almost every website (including this one, see the previously linked article) was directly comparing the artificially high results of a 14 week quarter to the previous 13 week quarter with no disclaimer.  Last year we get an article proclaiming the iPhone 7 was a blowout success and Apple has achieved new records in both revenue and sales.  Now we have an entirely new article (the one you referenced) specifically for the purpose of pointing out last year's numbers were artificially high, can't be used for comparability, and need to be looked at on a weekly basis.

    You can't have it both ways.  To borrow from the article you referenced, "What a difference a week makes" and there are "Lies, damn lies, and statistics."  I wonder why this was only pointed out in a major way this year when it distorts results negatively and not last year when it distorted results positively?
  • Reply 29 of 32
    robjnrobjn Posts: 203member
    This obsession with a ‘super cycle’ is not healthy. Such a cycle only benefits traders looking to make a quick profit, and ultimately leads to fears of doom when when the next years sales decline. It’s simply better business for Apple to maintain steady revenue growth. The increased price of the X is enabling large growth in revenue with smaller growth in unit sales, this means that not everyone is upgrading all at once and the potential remains for steady growth over coming years. At the same time Apple has taken market share from competitors so the high price of X is not causing Apple users to switch to another platform, those that didn’t upgrade yet are waiting.
  • Reply 30 of 32
    foggyhillfoggyhill Posts: 4,767member
    robjn said:
    This obsession with a ‘super cycle’ is not healthy. Such a cycle only benefits traders looking to make a quick profit, and ultimately leads to fears of doom when when the next years sales decline. It’s simply better business for Apple to maintain steady revenue growth. The increased price of the X is enabling large growth in revenue with smaller growth in unit sales, this means that not everyone is upgrading all at once and the potential remains for steady growth over coming years. At the same time Apple has taken market share from competitors so the high price of X is not causing Apple users to switch to another platform, those that didn’t upgrade yet are waiting.
    Well, Apple realises that upgrade cycles are increasing and likely will increase even more.
    That also means people will have their devices longer and thus will likely think of spending a bit more than they used on their device they keep 3 years than on their devices they keep 2 years.
    Being stuck with a crappy device they use constantly every day to save a few bucks is not someone who makes decent money wants to.

    radarthekat
  • Reply 31 of 32
    ksec said:
    Stock is down almost 5% today. Everyone long on Apple why do you think Wall Street sentiment on the company is going to change? Services revenues are up, other revenues from accessories are up. iPhone ASP is the highest it’s ever been and yet the stock is down nearly 5%. What is going to ever make them bullish on Apple?
    Possibly Never.

    I am not sure how I could possibly better explain this and get the point across. People has been pointing fingers and calling me bull shit.

    You must separate yourself from an Apple Fan boy ( like AI is ) to actual investing and sentiment, or there is a combined word for it, the "market".

    Before anything else, Apple is doing great, flipping great. There is no other way to put it. But, when people say Apple is doomed, some actually mean Apple "is" doomed, like hard core Android fans, some actually means Apple is not doing as well as they expected. Or According to AI those has reading comprehension problems.

    Let's define what super cycle is, and also referred a few times in Bloomberg and other financial media. They were expecting a iPhone 6 Plus cycle, where everyone was rushing to buy it, and it was by and large the majority of iPhone sold during its initial launch, mostly helped by China.  The iPhone 6 Plus cycle, sold 135M Unit combined  in Q1 and Q2, staggering number.

    Wall Street / Market kind of expect / want this to happen, people will rush to buy iPhone X, more new user to iPhone ecosystem, more users upgrade, and it will be the sold in vast majority of it, bringing up ASP and Unit Sales.

    Remember this is iPhone X here, not iPhone 8 or else.

    This is high expectation, or ridiculous in numbers. So from that point of view, iPhone X failed. So when Nikkei posted news about 40M unit in Q1 and 20M in Q2, it wasn't that bad at all. Yes AI and other dont like the word production cut in half, which is likely true in seasonal sales. Market was secretly expecting Apple to even beat the 80M unit number, and wanting like 50M+ iPhone X.   

    So while iPhone X did not create a super cycle, it was Ok when the results came along. iPhone X is leading iPhone sold every week, ASP is nearly $800. And one reason why Ming from KGI is already hyping the super cycle is still to come next year when Apple has even more new iPhone next year.

    Problem is all these expectation is already priced in*, one reason why Apple is trading at P/E 17x now instead of its usual 15 in the past three to four years.

    (*Actually that is not entirely true, Berkshire Hathaway buying was the main causes of (slight ) spike, lots of traders, even on twitter was seeing / guessing someone buying lots of AAPL stocks, and it later became clear it was Berkshire Hathaway )

    So why is AAPL so undervalued, even at a P/E 17 is very low, compared to the current S&P average of 26, or Tech stocks from Google and the like of close or above 30.

    Investor generally view Facebook, Microsoft, Amazon and Google as monopoly. And that is very much true.

    Social Network? If you view the world Top 6 social and instant messenger network, five of them are from Facebook, one is WeChat.

    Microsoft? The world is still running on Excel. Business is still on Windows, growing lock in ( Actually it is not but that is how they view it ) in Azure , Services and Office.  

    Google? Android and Search ( Ads ) Literally Zero direct competition. 

    Amazon? You want to place your bet against Jeff Bezos?

    Apple? Apple doesn't have a monopoly. Or it does, it is called customer loyalty. But it is hard to quantify loyalty, or not quantify it, but price or value it. It is much easier for investor to understand Microsoft and Facebook lock in, especially when both dont have its competitor in its field. iOS has Android, macOS has Windows. Apple Music has spotify etc. Each and every major Apple product or services has a major market share competitor.

    There is also, always the fear that the current pricing of iPhone and Unit sold, with its margin is not sustainable. I have seen this asked a few times already, and there is yet an answer. No other company in the history of man kind has created a product that is as widely popular as the iPhone, at such a price range, being used now and still growing slightly, and has such a NET margin. None. Zero. ( The closest thing is oil from Saudi where cost is zero and they keep bumping. )

    So it may be forgiveable one does not know how to value such company that man kind never seen before.

    You asked: What? AAPL is down not because of its report, but Wall Street as a whole is looking for safety from raising interest rate.

    Well yes, and that Safety was established long ago, AAPL at around P/E 15.
       


    So basically the CNBC Joe Kernan theory that Apple is just a gadget maker and someone else will come along and make a better gadget.
  • Reply 32 of 32
    radarthekatradarthekat Posts: 3,004moderator
    ksec said:
    Stock is down almost 5% today. Everyone long on Apple why do you think Wall Street sentiment on the company is going to change? Services revenues are up, other revenues from accessories are up. iPhone ASP is the highest it’s ever been and yet the stock is down nearly 5%. What is going to ever make them bullish on Apple?
    Possibly Never.

    I am not sure how I could possibly better explain this and get the point across. People has been pointing fingers and calling me bull shit.

    You must separate yourself from an Apple Fan boy ( like AI is ) to actual investing and sentiment, or there is a combined word for it, the "market".

    Before anything else, Apple is doing great, flipping great. There is no other way to put it. But, when people say Apple is doomed, some actually mean Apple "is" doomed, like hard core Android fans, some actually means Apple is not doing as well as they expected. Or According to AI those has reading comprehension problems.

    Let's define what super cycle is, and also referred a few times in Bloomberg and other financial media. They were expecting a iPhone 6 Plus cycle, where everyone was rushing to buy it, and it was by and large the majority of iPhone sold during its initial launch, mostly helped by China.  The iPhone 6 Plus cycle, sold 135M Unit combined  in Q1 and Q2, staggering number.

    Wall Street / Market kind of expect / want this to happen, people will rush to buy iPhone X, more new user to iPhone ecosystem, more users upgrade, and it will be the sold in vast majority of it, bringing up ASP and Unit Sales.

    Remember this is iPhone X here, not iPhone 8 or else.

    This is high expectation, or ridiculous in numbers. So from that point of view, iPhone X failed. So when Nikkei posted news about 40M unit in Q1 and 20M in Q2, it wasn't that bad at all. Yes AI and other dont like the word production cut in half, which is likely true in seasonal sales. Market was secretly expecting Apple to even beat the 80M unit number, and wanting like 50M+ iPhone X.   

    So while iPhone X did not create a super cycle, it was Ok when the results came along. iPhone X is leading iPhone sold every week, ASP is nearly $800. And one reason why Ming from KGI is already hyping the super cycle is still to come next year when Apple has even more new iPhone next year.

    Problem is all these expectation is already priced in*, one reason why Apple is trading at P/E 17x now instead of its usual 15 in the past three to four years.

    (*Actually that is not entirely true, Berkshire Hathaway buying was the main causes of (slight ) spike, lots of traders, even on twitter was seeing / guessing someone buying lots of AAPL stocks, and it later became clear it was Berkshire Hathaway )

    So why is AAPL so undervalued, even at a P/E 17 is very low, compared to the current S&P average of 26, or Tech stocks from Google and the like of close or above 30.

    Investor generally view Facebook, Microsoft, Amazon and Google as monopoly. And that is very much true.

    Social Network? If you view the world Top 6 social and instant messenger network, five of them are from Facebook, one is WeChat.

    Microsoft? The world is still running on Excel. Business is still on Windows, growing lock in ( Actually it is not but that is how they view it ) in Azure , Services and Office.  

    Google? Android and Search ( Ads ) Literally Zero direct competition. 

    Amazon? You want to place your bet against Jeff Bezos?

    Apple? Apple doesn't have a monopoly. Or it does, it is called customer loyalty. But it is hard to quantify loyalty, or not quantify it, but price or value it. It is much easier for investor to understand Microsoft and Facebook lock in, especially when both dont have its competitor in its field. iOS has Android, macOS has Windows. Apple Music has spotify etc. Each and every major Apple product or services has a major market share competitor.

    There is also, always the fear that the current pricing of iPhone and Unit sold, with its margin is not sustainable. I have seen this asked a few times already, and there is yet an answer. No other company in the history of man kind has created a product that is as widely popular as the iPhone, at such a price range, being used now and still growing slightly, and has such a NET margin. None. Zero. ( The closest thing is oil from Saudi where cost is zero and they keep bumping. )

    So it may be forgiveable one does not know how to value such company that man kind never seen before.

    You asked: What? AAPL is down not because of its report, but Wall Street as a whole is looking for safety from raising interest rate.

    Well yes, and that Safety was established long ago, AAPL at around P/E 15.
       


    It’s much easier than all that.  Hardware businesses are typically valued at 3-4x revenues.  This is where Apple has resided for a long time.  Recurring revenue businesses are typically valued at 7x revenues.  Cook is building a recurring revenue stream in services and subscriptions.  It’ll reach an inflection point where it’ll start to affect the overall valuation.  That’s in process now, lifting the multiple in the last two years.  It’ll garner more attention as time goes on and the P/S ratio will begin to move toward 7. 
    mmatz
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