“Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline." [emphasis ours] “
However Apple weren’t guiding that they would be even with last year but that revenues would be from $1B to $5B higher. However revenue is in fact $4B lower. The real question is not the difference between this year and last, but these results and guidance only 60 days ago. China accounted for the vast majority of a $4B fall from last year but not the majority of the difference from guidance ($5B - $9B).
History will not recall guidance for a single quarter. It’s the overall health of the business through time that’s of interest to actual investors. Apple has a very strong and healthy business, which at the moment is being negatively impacted by political events in some markets. The fact its business remains solid, even if not growing, in markets not greatly affected by these political events tells the tale far better than the sturm und drang associated with markets at the center of the current political climate.
Here's some more "oxymorons" I've noticed from the iKnockoff crowd:
"Apple is too expensive" But criticizes Apple for not adding more to the XR. Like how it needs a 1080p screen(for some reason), OLED etc. which would drive the price much higher.
Ostrich and sand??? With the benefit of hindsight, it is now easy to figure out that Apple got it wrong with respect to features and pricing of Xr. Xr is supposed to be the successor to iPhone 8 plus, but it was a side grade (design and SoC upgraded, display and camera downgraded), not a proper upgrade. It still would have been fine if Apple had priced it accordingly. But that didn't happen, hence Apple trying hard with promotional offers to increase sales. And revenue shortage purely due to lack of iphone sales. To even deny these basic facts is to keep the head firmly in the sand like an ostrich.
Hmm, the iPhone N+ models (6+, 6S+, 7+, and 8+) were ALL the large-screen flagships of their model years. Yes, even the 8+, which sported the largest screen in the year it was released along side the 8 and the X. So the true successor to the + models is the dual-camera XS Max, not the single-camera Xr. Clearly, the Xr is the successor to the non-plus 8 (the non-plus models were the entry level new model each year since the 6 series, as is the Xr this year).
In fairness, DED, we’ve seen a ~40% drop (from $232 to $142 in price per share) in the market cap of the most successful company in the world, the first one to hit a trillion dollar mark. Nearly $475B is market value has been wiped out.
Surely, some of the hyperventilation is justified?
I find this whole article hilarious because DED did not predict the collapse in revenue before it was disclosed. I think it would be great if AppleInsider hired a writer based in HongKong to Cover China and Asia. Might have provided clues that this was coming. It’s called getting a scoop something that DED has never done because he’s too busy attacking other writers. For what it’s worth I’m predicting Apple shipped 65 million phones for $52 Billion in revenue out of the 84 Billion in revenue stated by Tim Cook. I don’t believe the entire down turn in Phones is due to China - probably two-thirds. But if people aren’t buying phones many are buying watches, AirPods, and HomePods.
Are HomePods a success? On one hand there were a ton of $100 off sales for the HomePod , a product still in its first year. On the other hand most of those people picking up HP probably have Apple Music and this will turn into continuing services revenue. I await the DED article?
In fairness, DED, we’ve seen a ~40% drop (from $232 to $142 in price per share) in the market cap of the most successful company in the world, the first one to hit a trillion dollar mark. Nearly $475B is market value has been wiped out.
Surely, some of the hyperventilation is justified?
I find this whole article hilarious because DED did not predict the collapse in revenue before it was disclosed. I think it would be great if AppleInsider hired a writer based in HongKong to Cover China and Asia. Might have provided clues that this was coming. It’s called getting a scoop something that DED has never done because he’s too busy attacking other writers. For what it’s worth I’m predicting Apple shipped 65 million phones for $52 Billion in revenue out of the 84 Billion in revenue stated by Tim Cook. I don’t believe the entire down turn in Phones is due to China - probably two-thirds. But if people aren’t buying phones many are buying watches, AirPods, and HomePods.
Are HomePods a success? On one hand there were a ton of $100 off sales for the HomePod , a product still in its first year. On the other hand most of those people picking up HP probably have Apple Music and this will turn into continuing services revenue. I await the DED article?
A 5-9% retraction in revenue guidance is not a collapse in revenue. A > 5% drop in revenue YoY is not a collapse in revenue.
40% drop in share price is a "collapse." Clearly, that is an irrational overreaction in the stock market.
Reports of supply chain issues or production cuts did not correctly predict a slight change in Apple's expected revenue. There was no scoop to make. Also, getting a scoop and attacking other writers are not mutually exclusive.
Here's some more "oxymorons" I've noticed from the iKnockoff crowd:
"Apple is too expensive" But criticizes Apple for not adding more to the XR. Like how it needs a 1080p screen(for some reason), OLED etc. which would drive the price much higher.
Ostrich and sand??? With the benefit of hindsight, it is now easy to figure out that Apple got it wrong with respect to features and pricing of Xr. Xr is supposed to be the successor to iPhone 8 plus, but it was a side grade (design and SoC upgraded, display and camera downgraded), not a proper upgrade. It still would have been fine if Apple had priced it accordingly. But that didn't happen, hence Apple trying hard with promotional offers to increase sales. And revenue shortage purely due to lack of iphone sales. To even deny these basic facts is to keep the head firmly in the sand like an ostrich.
While I do think that the display was down graded(the display on th 8plus was 401 ppi while the XR display is 326 ppi) and the intel modem is a cheaper alternative to the Qualcomm modems, the Camera in the XR is a significant upgrade with a sensor which is 30% bigger than last years. It’s considered better than the camera in last years IphoneX . I was listening to a John Gruber Talk Show podcast from last year with Nilay Patel and they raved about how much better it was for photos and the Best for Video. I love the colors and If it had the 401 ppi screen would have upgraded to it. Hopefully they will add more colors to the XS and XSMax successors.
In fairness, DED, we’ve seen a ~40% drop (from $232 to $142 in price per share) in the market cap of the most successful company in the world, the first one to hit a trillion dollar mark. Nearly $475B is market value has been wiped out.
Surely, some of the hyperventilation is justified?
I find this whole article hilarious because DED did not predict the collapse in revenue before it was disclosed. I think it would be great if AppleInsider hired a writer based in HongKong to Cover China and Asia. Might have provided clues that this was coming. It’s called getting a scoop something that DED has never done because he’s too busy attacking other writers. For what it’s worth I’m predicting Apple shipped 65 million phones for $52 Billion in revenue out of the 84 Billion in revenue stated by Tim Cook. I don’t believe the entire down turn in Phones is due to China - probably two-thirds. But if people aren’t buying phones many are buying watches, AirPods, and HomePods.
Are HomePods a success? On one hand there were a ton of $100 off sales for the HomePod , a product still in its first year. On the other hand most of those people picking up HP probably have Apple Music and this will turn into continuing services revenue. I await the DED article?
Now that’s rich. You think predicting Apples future is as simple as “hiring a writer”?
This year's iPhone new machine price is significantly higher than the past, but the revenue dropped significantly, showing that the new machine sales are really poor. The Chinese market often represents a changing trend, and Apple should be wary.
“Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline." [emphasis ours] “
However Apple weren’t guiding that they would be even with last year but that revenues would be from $1B to $5B higher. However revenue is in fact $4B lower. The real question is not the difference between this year and last, but these results and guidance only 60 days ago. China accounted for the vast majority of a $4B fall from last year but not the majority of the difference from guidance ($5B - $9B).
History will not recall guidance for a single quarter. It’s the overall health of the business through time that’s of interest to actual investors. Apple has a very strong and healthy business, which at the moment is being negatively impacted by political events in some markets. The fact its business remains solid, even if not growing, in markets not greatly affected by these political events tells the tale far better than the sturm und drang associated with markets at the center of the current political climate.
I was not talking about history. I was explaining the market reaction now, and differentiating between the revenue drop from last year vs the revenue drop from guidance. The latter is why they warned.
Investors do care about the long term but unless you discount everybody who has sold stock in the last few months as non-investors that’s already priced in.
Bad news is China’s nationalist antipathy to Apple. The arrest of the huawei cfo is still an ongoing event. (And why is China subject to US sanctions?). That’s a long term issue. If this woman is extradited or jailed the saga continues.
Good news is the increases in services and installed base. Note that he said a 100M increase in active devices, which might include AirPods or whatnot. So it’s not active users. Still fairly impressive.
In fairness, DED, we’ve seen a ~40% drop (from $232 to $142 in price per share) in the market cap of the most successful company in the world, the first one to hit a trillion dollar mark. Nearly $475B is market value has been wiped out.
Surely, some of the hyperventilation is justified?
I find this whole article hilarious because DED did not predict the collapse in revenue before it was disclosed. I think it would be great if AppleInsider hired a writer based in HongKong to Cover China and Asia. Might have provided clues that this was coming. It’s called getting a scoop something that DED has never done because he’s too busy attacking other writers. For what it’s worth I’m predicting Apple shipped 65 million phones for $52 Billion in revenue out of the 84 Billion in revenue stated by Tim Cook. I don’t believe the entire down turn in Phones is due to China - probably two-thirds. But if people aren’t buying phones many are buying watches, AirPods, and HomePods.
Are HomePods a success? On one hand there were a ton of $100 off sales for the HomePod , a product still in its first year. On the other hand most of those people picking up HP probably have Apple Music and this will turn into continuing services revenue. I await the DED article?
Now that’s rich. You think predicting Apples future is as simple as “hiring a writer”?
The thing that was different this time, as opposed to all the other times the naysayers were crying wolf, was that Apple's behaviour itself changed.
Firstly, there were push notifications flogging new phones, then the upgraded trade in program, and the change in language on its web presence to promote actual features of the phone rather than some byline like, "All the power. All the time".
If this wasn't enough to pique interest.... but then those like DED simply dismissed this change in behaviour in favour of the rolling Apple juggernaut narrative, rather than trying to understand why this was happening.
Bad news is China’s nationalist antipathy to Apple. The arrest of the huawei cfo is still an ongoing event. (And why is China subject to US sanctions?). That’s a long term issue. If this woman is extradited or jailed the saga continues.
Good news is the increases in services and installed base. Note that he said a 100M increase in active devices, which might include AirPods or whatnot. So it’s not active users. Still fairly impressive.
China's nationalist antipathy to Apple is an invented media narrative. There is no evidence being presented that Chinese nationals (and note that "Greater China" includes non-PRC markets such as Hong Kong, which has antipathy for China, not Apple) are rushing to buy Huawei over iPhones. Rather Huawei is simply trampling the former domestic "market share" leaders in China and in emerging region exports. We know this because the overall market is going down and has been for a while now.
We also know the Chinese market is dragging down other American companies and that domestic Chinese goods and services are being delayed/deferred by consumers tightening their belts. It has little or nothing to do with state Chinese propaganda supporting Huawei.
"And why is China subject to US sanctions?" Because the U.S. sanctions U.S. technology exports to countries including Iran and North Korea. These are enforced as part of trade pacts, so a Chinese company fraudulently flouting sanctions has broken U.S. law and is subject to arrest, trial and punishment. Did you notice that this previously occurred with ZTE? The company paid a huge fine and agreed to stop skirting sanctions. Huawei will do the same. The U.S. wouldn't have had this executive arrested if there were not prosecutable evidence of wrongdoing. It's not like Trump woke up and decided to arrest a Chinese executive.
Now that’s rich. You think predicting Apples future is as simple as “hiring a writer”?
The thing that was different this time, as opposed to all the other times the naysayers were crying wolf, was that Apple's behaviour itself changed.
Firstly, there were push notifications flogging new phones, then the upgraded trade in program, and the change in language on its web presence to promote actual features of the phone rather than some byline like, "All the power. All the time".
If this wasn't enough to pique interest.... but then those like DED simply dismissed this change in behaviour in favour of the rolling Apple juggernaut narrative, rather than trying to understand why this was happening.
There is no "Apple juggernaut narrative." It's an observable fact that Apple has been making virtually all of the profits in the industries it participates in. Nobody is baselessly making up a story that isn't true about Apple's success. In suggesting that this is the case, you're simply inventing a lie. That's bad for discourse and makes the world a stupider place. So shame on you.
There is also no mystery why Apple is working overtime to try to push upgrades: it's a commercial business engaged in a profit-making exercise in a shrinking market--smartphones have been retracting. Of course Apple is pursuing new efforts to sell phones. That's what it does. It's not a conspiracy or evidence that the company is right around the corner from doom. That's your narrative. Every story suggesting that Apple just now invented promotion, advertising and incentives because it was on the brink of going out of business is the lie you're looking for. That's the false narrative presented without supporting facts.
Interesting read and I think fairly asks why Apple seems to be treated differently. With The Verge, didn’t they extort Jobs over a lost phone and come out on the losing end of it in terms of the public relations backlash? This would explain their bias. With regards to comparisons with Samsung though, the mobile suit is just one of many. As mentioned in the article, even when their mobile unit sales shrunk, their overall revenue went up as a company. This is very different to Apple where iPhones generate a disproportionately large portion of the revenues. There are no dishwashers, microwaves, fridges, TV’s and who knows what else to offset that drop in sales.
The article also fundamentally does not understand the current short term investor mindset many traders have. In this environment, they don’t care if Apple sold as many phone as last year. They don’t care about the forums of Apple faithful like us. They care about increasing profit (or the potential for increasing profit) and they want to see more phones sold over the same quarter last year and often, over the previous quarter. However logical the explaination about China sales, investors don’t care - they just sold. They are about trying to make money, not win upvote awards from the brand faithful. Besides if they sold on the news they could buy the dip they helped create (Jim Cramer over at CNBC is shilling $120) and profit again.
The author forgot to note that, if other products and services are skyrocketing, and phone prices are up, the real shrink in the iPhone business is much higher than 5-9%. Maybe 30%?
This year's iPhone new machine price is significantly higher than the past, but the revenue dropped significantly, showing that the new machine sales are really poor. The Chinese market often represents a changing trend, and Apple should be wary.
The author forgot to note that, if other products and services are skyrocketing, and phone prices are up, the real shrink in the iPhone business is much higher than 5-9%. Maybe 30%?
Which is great.
Apple succeeding in other categories further solidifies their future.
The article had a lot of good detail points -- but it missed the big picture that's driving this...
In other words, it talked about the trees but couldn't see the forest.
That became apparent when it said: "Apple has hung the moon for investors for so long now that the
idea of the company struggling sent the entire global stock market into a
paroxysm of fear and plunging indexes," Swisher wrote. That's colorful
language, but what does it mean?"
The fact is: for a decade now Apple has been seen as infallible. A juggernaut that can't lose, can't miss, and can't be beaten. But suddenly, when a soft spot or crack appears, that image blows up quickly.
In other words: It's not the current negative reporting that is at fault (although it is exaggerated), it was the prior reporting that assumed Apple's infallibility.
I believe that this may be the best thing could have happened to Apple - because Apple itself has gotten trapped by that image and has been terrified of putting out a less than stellar, less than perfect product. Now that we now that Apple is fallible and imperfect, we can get on dealing with reality.
(and, before anybody attacks me for being anti-Apple, nothing could be further from the truth. Apple may not be perfect, but it's still way far out in front of anybody else out there)
Bloomberg corners the market in economics and business talent. For one reason. Their competition is ideologically, editorially worse. All the time.
Being the best of a bad lot, a corrupt midden...means I watch Bloomberg TV a fair piece to acquire more direct knowledge of markets than I could elsewhere. They corner the market in talent often allowed free rein.
They also take the time and space to remind viewers who they hate. Notably, China, Apple. The staff knows this. So do their guests who often confront the party line with facts. When "expert" Martin What'sisname shows up on Bloomberg Technology I either hit MUTE on the remote or shift to CNN to see if they've accidentally wandered away from the omnipresent magazine format and fallen into offering a minute of news. Often a FAIL.
This is the mother of all buying opportunities. Back up the truck and load up on Apple stock while you still can.
I have a decent track record catching bottoms. Don't forget we have both the time and space between now and Apple's quarterly report. Plus the 2 or 3 weeks after - when the sharks work to drive share price down. Two spaces in market traffic filled with garbage noise...and opportunity.
Comments
years. Yes, even the 8+, which sported the largest screen in the year it was released along side the 8 and the X. So the true successor to the + models is the dual-camera XS Max, not the single-camera Xr. Clearly, the Xr is the successor to the non-plus 8 (the non-plus models were the entry level new model each year since the 6 series, as is the Xr this year).
Are HomePods a success? On one hand there were a ton of $100 off sales for the HomePod , a product still in its first year. On the other hand most of those people picking up HP probably have Apple Music and this will turn into continuing services revenue. I await the DED article?
40% drop in share price is a "collapse." Clearly, that is an irrational overreaction in the stock market.
Reports of supply chain issues or production cuts did not correctly predict a slight change in Apple's expected revenue. There was no scoop to make. Also, getting a scoop and attacking other writers are not mutually exclusive.
Hopefully they will add more colors to the XS and XSMax successors.
Now that’s rich. You think predicting Apples future is as simple as “hiring a writer”?
Investors do care about the long term but unless you discount everybody who has sold stock in the last few months as non-investors that’s already priced in.
Bad news is China’s nationalist antipathy to Apple. The arrest of the huawei cfo is still an ongoing event. (And why is China subject to US sanctions?). That’s a long term issue. If this woman is extradited or jailed the saga continues.
Good news is the increases in services and installed base. Note that he said a 100M increase in active devices, which might include AirPods or whatnot. So it’s not active users. Still fairly impressive.
Firstly, there were push notifications flogging new phones, then the upgraded trade in program, and the change in language on its web presence to promote actual features of the phone rather than some byline like, "All the power. All the time".
If this wasn't enough to pique interest.... but then those like DED simply dismissed this change in behaviour in favour of the rolling Apple juggernaut narrative, rather than trying to understand why this was happening.
More interesting would be active users.
We also know the Chinese market is dragging down other American companies and that domestic Chinese goods and services are being delayed/deferred by consumers tightening their belts. It has little or nothing to do with state Chinese propaganda supporting Huawei.
"And why is China subject to US sanctions?" Because the U.S. sanctions U.S. technology exports to countries including Iran and North Korea. These are enforced as part of trade pacts, so a Chinese company fraudulently flouting sanctions has broken U.S. law and is subject to arrest, trial and punishment. Did you notice that this previously occurred with ZTE? The company paid a huge fine and agreed to stop skirting sanctions. Huawei will do the same. The U.S. wouldn't have had this executive arrested if there were not prosecutable evidence of wrongdoing. It's not like Trump woke up and decided to arrest a Chinese executive.
There is also no mystery why Apple is working overtime to try to push upgrades: it's a commercial business engaged in a profit-making exercise in a shrinking market--smartphones have been retracting. Of course Apple is pursuing new efforts to sell phones. That's what it does. It's not a conspiracy or evidence that the company is right around the corner from doom. That's your narrative. Every story suggesting that Apple just now invented promotion, advertising and incentives because it was on the brink of going out of business is the lie you're looking for. That's the false narrative presented without supporting facts.
The article also fundamentally does not understand the current short term investor mindset many traders have. In this environment, they don’t care if Apple sold as many phone as last year. They don’t care about the forums of Apple faithful like us. They care about increasing profit (or the potential for increasing profit) and they want to see more phones sold over the same quarter last year and often, over the previous quarter. However logical the explaination about China sales, investors don’t care - they just sold. They are about trying to make money, not win upvote awards from the brand faithful. Besides if they sold on the news they could buy the dip they helped create (Jim Cramer over at CNBC is shilling $120) and profit again.
Maybe 30%?
Which is great.
Apple succeeding in other categories further solidifies their future.
That became apparent when it said:
"Apple has hung the moon for investors for so long now that the idea of the company struggling sent the entire global stock market into a paroxysm of fear and plunging indexes," Swisher wrote. That's colorful language, but what does it mean?"
The fact is: for a decade now Apple has been seen as infallible. A juggernaut that can't lose, can't miss, and can't be beaten. But suddenly, when a soft spot or crack appears, that image blows up quickly.
In other words: It's not the current negative reporting that is at fault (although it is exaggerated), it was the prior reporting that assumed Apple's infallibility.
I believe that this may be the best thing could have happened to Apple - because Apple itself has gotten trapped by that image and has been terrified of putting out a less than stellar, less than perfect product. Now that we now that Apple is fallible and imperfect, we can get on dealing with reality.
(and, before anybody attacks me for being anti-Apple, nothing could be further from the truth. Apple may not be perfect, but it's still way far out in front of anybody else out there)
Being the best of a bad lot, a corrupt midden...means I watch Bloomberg TV a fair piece to acquire more direct knowledge of markets than I could elsewhere. They corner the market in talent often allowed free rein.
They also take the time and space to remind viewers who they hate. Notably, China, Apple. The staff knows this. So do their guests who often confront the party line with facts. When "expert" Martin What'sisname shows up on Bloomberg Technology I either hit MUTE on the remote or shift to CNN to see if they've accidentally wandered away from the omnipresent magazine format and fallen into offering a minute of news. Often a FAIL.
It is what it is. The best of a bad lot.
I have a decent track record catching bottoms. Don't forget we have both the time and space between now and Apple's quarterly report. Plus the 2 or 3 weeks after - when the sharks work to drive share price down. Two spaces in market traffic filled with garbage noise...and opportunity.