Optimistic note sounded on Apple's earnings, with concerns about Q3 guidance & 5G iPhone w...

Posted:
in AAPL Investors
As expected, a $58 billion earnings result that beat Wall Street consensus are driving analysts to discuss Apple's future, with eyes focused on a higher than expected revenue range for the third fiscal quarter, and ongoing concern about iPhone sales.

ARKit at Apple Park

Bernstein

"Apple's fiscal Q2 was fine," wrote Bernstein analyst Toni Sacconaghi. A 5 percent revenue decline was "consistent with expectations," he noted, and earnings per share (EPS) was 10 cents over consensus but in line with Bernstein estimates.

"Most importantly, Apple's Q3 revenue guidance was much better than expected, at $52.5-54.5B vs. our expectation of $50-52B (and consensus at $52.1B)," Sacconaghi said. This guidance is allegedly "credible" but worthy of skepticism, as it "implies the most benign sequential Q3 iPhone revenue decline in history...right after Apple just experienced the worst Q2 sequential iPhone revenue decline in history."

The firm expects Apple's real-world Q3 revenue to slot in at $53.3 billion, and is holding to a "market perform" rating with a $190 stock target.

Piper Jaffray

Michael Olson remarked on "strong fundamental performance," but said that Piper expects "limited excitement around this year's iPhone launches." Investors will probably be placated, he continued, by healthy services revenue until "anticipation for 5G iPhones begins to build" in the second half of 2019.

Olson is giving Apple stock an "overweight" rating and raising his target from $201 to $230.

Wedbush

Daniel Ives called Apple CEO Tim Cook "the comeback kid," saying that iPhone demand has "weathered the storm" and is beginning to "rise from the ashes of the December debacle." In contrast with Piper's Olson, Ives pointed to a "healthy product cycle" predicted to arrive this September. The analyst issued an "outperform" rating while raising his target from $225 to $235.

Wells Fargo

"While Apple highlighted the success of its iPhone trade-in program, in part driven by its higher incentives," wrote Aaron Rakers, "we think anticipation of a 5G iPhone in 2020 could impact upgrades." Past reports have suggested 2019 iPhones will be limited to 4G because of slow 5G development by Intel, combined with the Apple v. Qualcomm battle, which only recently ended. Access to 5G networks, where available, may also remain relatively expensive to implement with limited U.S. coverage.

Loup Ventures

"The $75B addition to the buyback was below our $100B expectation, and the 5% dividend increase was below our 16% expectation," said Gene Munster. "Despite that fact, returning capital to investors still represents a lever that could move shares 28% higher over the next five years. This is based on returning $50B per year ($250B total) in cash from operations along with the outstanding $113B in net cash on the balance sheet on their way to 'net cash neutral.'"

Morgan Stanley

"The real surprise" was Apple's June-quarter guidance, according to Katy Huberty, who observed that its predicted 8 percent sequential decline would be well above a normal 13 to 16 percent, and even a Wall Street consensus of 11 percent. The analyst is raising estimates for fiscal 2019 ($257.3 billion) and 2020 ($264.4 billion) revenue, and a price target from $234 to $240, citing factors like recovering iPhone sales and growing services revenue that investors "underappreciate."

Comments

  • Reply 1 of 16
    knowitallknowitall Posts: 1,426member
    There is no logic in predicting (Apple) results.
    AppleExposedlolliver
  • Reply 2 of 16
    SpamSandwichSpamSandwich Posts: 31,334member
    To all longs today... smart move. :D 
    leavingthebigglkruppAppleExposedmonstrosity
  • Reply 3 of 16
    robjnrobjn Posts: 224member
    These financial analysts think 5G is going to be the next big thing.

    I think they are wrong for 3 reasons.

    1) 5G offers no known new application to give added user value. For example, LTE was big because it enabled the ability to stream video etc. but 5G does not enable any new functionality to the user apart from saying everything will be faster.

    2) 5G does not work over medium or long distances and telecom executives say it will “never exist outside of cities”. So no new technology or service will be able to rely on 5G speeds if it is to work in rural areas.

    3) 5G promises to be inefficient, make devices run hot and drain batteries much quicker. As devices heat up, processors will get throttled and the overall user experience on 5G will be worse and sometimes even feel slower than LTE.

    Now faster speeds when your in densely populated areas would be a good upgrade once the chips can meet a certain standard of efficiency. But 5G is certain not going to drive a smartphone super sales cycle. These days, people in general upgrade when their phone breaks and not just for new technologies.

    I think Tim was smart to “punt” Katie Huberty’s question. I think he’s smart enough, and user experienced focused enough, to have some degree of skepticism about the early 5G experience and real world user benefits. And equally smart enough to keep such thoughts to himself.

    fotoformatlkruppDanManTXchickAppleExposedtht
  • Reply 4 of 16
    leavingthebiggleavingthebigg Posts: 1,155member
    The pro-5G analysts continue to think people are falling for the 5G scam. Many people are aware of AT&T’s 5GE fake out and are aware of the limited, problematic and expensive availability of 5G beyond 2020. 

    Unsurprisingly, none of the above analysts are talking about the direct-license agreement between Apple and Qualcomm which removes Qualcomm’s ability to earn money from Apple’s suppliers for Apple’s products. 

    The same goes for Apple’s license costs. A clear indication of those costs were provided yesterday.

    Why are the analysts being silent about these announcements?
  • Reply 5 of 16
    jimh2jimh2 Posts: 161member
    robjn said:
    These financial analysts think 5G is going to be the next big thing.

    I think they are wrong for 3 reasons.

    1) 5G offers no known new application to give added user value. For example, LTE was big because it enabled the ability to stream video etc. but 5G does not enable any new functionality to the user apart from saying everything will be faster.

    2) 5G does not work over medium or long distances and telecom executives say it will “never exist outside of cities”. So no new technology or service will be able to rely on 5G speeds if it is to work in rural areas.

    3) 5G promises to be inefficient, make devices run hot and drain batteries much quicker. As devices heat up, processors will get throttled and the overall user experience on 5G will be worse and sometimes even feel slower than LTE.

    Now faster speeds when your in densely populated areas would be a good upgrade once the chips can meet a certain standard of efficiency. But 5G is certain not going to drive a smartphone super sales cycle. These days, people in general upgrade when their phone breaks and not just for new technologies.

    I think Tim was smart to “punt” Katie Huberty’s question. I think he’s smart enough, and user experienced focused enough, to have some degree of skepticism about the early 5G experience and real world user benefits. And equally smart enough to keep such thoughts to himself.

    +1 on everything you said especially #1. Up until now there was a need for faster service and that need was met with LTE. Ever since dialup modems we have been one step beyond speed wise whether it be pictures, songs, videos and streaming. My brother-in-law is installing the 5G antennas and related hardware and I keep asking him what applications will use it and I can't get a single example other than the smoke everyone has been blowing about it. I'm going to equate this to getting a car that can go 120mph versus one that go 200mph. The speed difference has no bearing on driving. One might have better acceleration (your video starts a few seconds quicker), but once at 80mph both are tapped out for usefulness. Sure the one can go 200mph is significantly faster, but the speed offers little to no advantage. I will add that cars are not the best comparison as style, performance and handling help a person decide what fits their needs even if they can't use all of what they are paying for.
  • Reply 6 of 16
    jimh2jimh2 Posts: 161member

    The pro-5G analysts continue to think people are falling for the 5G scam. Many people are aware of AT&T’s 5GE fake out and are aware of the limited, problematic and expensive availability of 5G beyond 2020. 

    Unsurprisingly, none of the above analysts are talking about the direct-license agreement between Apple and Qualcomm which removes Qualcomm’s ability to earn money from Apple’s suppliers for Apple’s products. 

    The same goes for Apple’s license costs. A clear indication of those costs were provided yesterday.

    Why are the analysts being silent about these announcements?
    5G will give the mobile phone companies a way to increase rates. The play will be to buy the last LTE phone that is in production by Apple (before the 1st 5G phone). You will have more than enough speed, better battery life, and be able to stay on your rate plan. That said the public is going to eat 5G up because they will be convinced they need it.
  • Reply 7 of 16
    gatorguygatorguy Posts: 20,932member
    robjn said:
    These financial analysts think 5G is going to be the next big thing.

    I think they are wrong for 3 reasons.

    1) 5G offers no known new application to give added user value. For example, LTE was big because it enabled the ability to stream video etc. but 5G does not enable any new functionality to the user apart from saying everything will be faster.

    2) 5G does not work over medium or long distances and telecom executives say it will “never exist outside of cities”. So no new technology or service will be able to rely on 5G speeds if it is to work in rural areas.

    3) 5G promises to be inefficient, make devices run hot and drain batteries much quicker. As devices heat up, processors will get throttled and the overall user experience on 5G will be worse and sometimes even feel slower than LTE.

    Now faster speeds when your in densely populated areas would be a good upgrade once the chips can meet a certain standard of efficiency. But 5G is certain not going to drive a smartphone super sales cycle. These days, people in general upgrade when their phone breaks and not just for new technologies.

    I think Tim was smart to “punt” Katie Huberty’s question. I think he’s smart enough, and user experienced focused enough, to have some degree of skepticism about the early 5G experience and real world user benefits. And equally smart enough to keep such thoughts to himself.

    You think folks really spreadsheet this stuff before deciding? If they did a lot of folks would have first realized they really don't need maxed out memory and the fastest processor with the biggest screen to begin with. TBH they don't even need new phones much of the time. Yet they buy them anyway. Why? Because they can and/or they think they might need that new shiny stuff. 5G will be the same thing.

    A whole lotta people, maybe even most new buyers, will think there's some big advantage, if not immediately then very soon especially when the sales person gets done wowing 'em with the possibilities. Yeah, 5G is gonna be a "thing", and folks are going to want it even if it's doesn't factually offer real world benefits to them personally at the moment. Rational is one thing but how many times have you decided something "rationally" only to weeble wobble in the showroom or in front of the retailers display when it comes time to close the purchase? 
    edited May 1
  • Reply 8 of 16
    avon b7avon b7 Posts: 4,072member
    robjn said:
    These financial analysts think 5G is going to be the next big thing.

    I think they are wrong for 3 reasons.

    1) 5G offers no known new application to give added user value. For example, LTE was big because it enabled the ability to stream video etc. but 5G does not enable any new functionality to the user apart from saying everything will be faster.

    2) 5G does not work over medium or long distances and telecom executives say it will “never exist outside of cities”. So no new technology or service will be able to rely on 5G speeds if it is to work in rural areas.

    3) 5G promises to be inefficient, make devices run hot and drain batteries much quicker. As devices heat up, processors will get throttled and the overall user experience on 5G will be worse and sometimes even feel slower than LTE.

    Now faster speeds when your in densely populated areas would be a good upgrade once the chips can meet a certain standard of efficiency. But 5G is certain not going to drive a smartphone super sales cycle. These days, people in general upgrade when their phone breaks and not just for new technologies.

    I think Tim was smart to “punt” Katie Huberty’s question. I think he’s smart enough, and user experienced focused enough, to have some degree of skepticism about the early 5G experience and real world user benefits. And equally smart enough to keep such thoughts to himself.

    Three words to your three points: 

    1. Marketing
    2. Marketing
    3. Marketing

    Not having 5G would be a serious impediment. So serious that Apple preferred to settle with QC (at lightning speed) than plough ahead with a cause that Apple itself brought. 5G will be the buzzword this year end and all of next year.
  • Reply 9 of 16
    leavingthebiggleavingthebigg Posts: 1,155member
    avon b7 said:
    robjn said:
    These financial analysts think 5G is going to be the next big thing.

    I think they are wrong for 3 reasons.

    1) 5G offers no known new application to give added user value. For example, LTE was big because it enabled the ability to stream video etc. but 5G does not enable any new functionality to the user apart from saying everything will be faster.

    2) 5G does not work over medium or long distances and telecom executives say it will “never exist outside of cities”. So no new technology or service will be able to rely on 5G speeds if it is to work in rural areas.

    3) 5G promises to be inefficient, make devices run hot and drain batteries much quicker. As devices heat up, processors will get throttled and the overall user experience on 5G will be worse and sometimes even feel slower than LTE.

    Now faster speeds when your in densely populated areas would be a good upgrade once the chips can meet a certain standard of efficiency. But 5G is certain not going to drive a smartphone super sales cycle. These days, people in general upgrade when their phone breaks and not just for new technologies.

    I think Tim was smart to “punt” Katie Huberty’s question. I think he’s smart enough, and user experienced focused enough, to have some degree of skepticism about the early 5G experience and real world user benefits. And equally smart enough to keep such thoughts to himself.

    Three words to your three points: 

    1. Marketing
    2. Marketing
    3. Marketing

    Not having 5G would be a serious impediment. So serious that Apple preferred to settle with QC (at lightning speed) than plough ahead with a cause that Apple itself brought. 5G will be the buzzword this year end and all of next year.
    Yes, Apple settled with Qualcomm to get the direct-license agreement that prevents Qualcomm from going after Apple’s suppliers.

    Yes, Apple signed a 6 years long agreement with Qualcomm for chips without telling anybody which chips. Everybody is assuming 5G instead of all the 4G/LTE chips Apple needs to support older devices. 

    Qualcomm isn’t the only winner here. 
    lolliver
  • Reply 10 of 16
    lkrupplkrupp Posts: 7,170member
    gatorguy said:
    robjn said:
    These financial analysts think 5G is going to be the next big thing.

    I think they are wrong for 3 reasons.

    1) 5G offers no known new application to give added user value. For example, LTE was big because it enabled the ability to stream video etc. but 5G does not enable any new functionality to the user apart from saying everything will be faster.

    2) 5G does not work over medium or long distances and telecom executives say it will “never exist outside of cities”. So no new technology or service will be able to rely on 5G speeds if it is to work in rural areas.

    3) 5G promises to be inefficient, make devices run hot and drain batteries much quicker. As devices heat up, processors will get throttled and the overall user experience on 5G will be worse and sometimes even feel slower than LTE.

    Now faster speeds when your in densely populated areas would be a good upgrade once the chips can meet a certain standard of efficiency. But 5G is certain not going to drive a smartphone super sales cycle. These days, people in general upgrade when their phone breaks and not just for new technologies.

    I think Tim was smart to “punt” Katie Huberty’s question. I think he’s smart enough, and user experienced focused enough, to have some degree of skepticism about the early 5G experience and real world user benefits. And equally smart enough to keep such thoughts to himself.

    You think folks really spreadsheet this stuff before deciding? If they did a lot of folks would have first realized they really don't need maxed out memory and the fastest processor with the biggest screen to begin with. TBH they don't even need new phones much of the time. Yet they buy them anyway. Why? Because they can and/or they think they might need that new shiny stuff. 5G will be the same thing.

    A whole lotta people, maybe even most new buyers, will think there's some big advantage, if not immediately then very soon especially when the sales person gets done wowing 'em with the possibilities. Yeah, 5G is gonna be a "thing", and folks are going to want it even if it's doesn't factually offer real world benefits to them personally at the moment. Rational is one thing but how many times have you decided something "rationally" only to weeble wobble in the showroom or in front of the retailers display when it comes time to close the purchase? 
    Yep, there’s a sucker born every minute, even if Phineas T. Barnum didn't actually say that.
    gatorguy
  • Reply 11 of 16
    avon b7avon b7 Posts: 4,072member
    avon b7 said:
    robjn said:
    These financial analysts think 5G is going to be the next big thing.

    I think they are wrong for 3 reasons.

    1) 5G offers no known new application to give added user value. For example, LTE was big because it enabled the ability to stream video etc. but 5G does not enable any new functionality to the user apart from saying everything will be faster.

    2) 5G does not work over medium or long distances and telecom executives say it will “never exist outside of cities”. So no new technology or service will be able to rely on 5G speeds if it is to work in rural areas.

    3) 5G promises to be inefficient, make devices run hot and drain batteries much quicker. As devices heat up, processors will get throttled and the overall user experience on 5G will be worse and sometimes even feel slower than LTE.

    Now faster speeds when your in densely populated areas would be a good upgrade once the chips can meet a certain standard of efficiency. But 5G is certain not going to drive a smartphone super sales cycle. These days, people in general upgrade when their phone breaks and not just for new technologies.

    I think Tim was smart to “punt” Katie Huberty’s question. I think he’s smart enough, and user experienced focused enough, to have some degree of skepticism about the early 5G experience and real world user benefits. And equally smart enough to keep such thoughts to himself.

    Three words to your three points: 

    1. Marketing
    2. Marketing
    3. Marketing

    Not having 5G would be a serious impediment. So serious that Apple preferred to settle with QC (at lightning speed) than plough ahead with a cause that Apple itself brought. 5G will be the buzzword this year end and all of next year.
    Yes, Apple settled with Qualcomm to get the direct-license agreement that prevents Qualcomm from going after Apple’s suppliers.

    Yes, Apple signed a 6 years long agreement with Qualcomm for chips without telling anybody which chips. Everybody is assuming 5G instead of all the 4G/LTE chips Apple needs to support older devices. 

    Qualcomm isn’t the only winner here. 
    Of course not, Apple resolved an impending major problem. It 'won' an essential card in the 5G  roadmap. 

    What was surprising was the speed at which it all came to fruition, especially following TC's comments earlier this year on there not being any settlement talks.
  • Reply 12 of 16
    AppleExposedAppleExposed Posts: 1,407unconfirmed, member
    robjn said:
    These financial analysts think 5G is going to be the next big thing.

    I think they are wrong for 3 reasons.

    1) 5G offers no known new application to give added user value. For example, LTE was big because it enabled the ability to stream video etc. but 5G does not enable any new functionality to the user apart from saying everything will be faster.

    2) 5G does not work over medium or long distances and telecom executives say it will “never exist outside of cities”. So no new technology or service will be able to rely on 5G speeds if it is to work in rural areas.

    3) 5G promises to be inefficient, make devices run hot and drain batteries much quicker. As devices heat up, processors will get throttled and the overall user experience on 5G will be worse and sometimes even feel slower than LTE.

    Now faster speeds when your in densely populated areas would be a good upgrade once the chips can meet a certain standard of efficiency. But 5G is certain not going to drive a smartphone super sales cycle. These days, people in general upgrade when their phone breaks and not just for new technologies.

    I think Tim was smart to “punt” Katie Huberty’s question. I think he’s smart enough, and user experienced focused enough, to have some degree of skepticism about the early 5G experience and real world user benefits. And equally smart enough to keep such thoughts to himself.


    Yet the knockoffs will brag about 5G front and center. Samsung will market 5G specs(if they haven't already) and the iKnockoff Knights will say "Apple is falling behind".

    I've already read arguments here that "Apple is falling behind" by not adding fake 5G to iPhone.
  • Reply 13 of 16
    croprcropr Posts: 955member
    robjn said:
    These financial analysts think 5G is going to be the next big thing.

    I think they are wrong for 3 reasons.

    1) 5G offers no known new application to give added user value. For example, LTE was big because it enabled the ability to stream video etc. but 5G does not enable any new functionality to the user apart from saying everything will be faster.

    2) 5G does not work over medium or long distances and telecom executives say it will “never exist outside of cities”. So no new technology or service will be able to rely on 5G speeds if it is to work in rural areas.

    3) 5G promises to be inefficient, make devices run hot and drain batteries much quicker. As devices heat up, processors will get throttled and the overall user experience on 5G will be worse and sometimes even feel slower than LTE.

    Now faster speeds when your in densely populated areas would be a good upgrade once the chips can meet a certain standard of efficiency. But 5G is certain not going to drive a smartphone super sales cycle. These days, people in general upgrade when their phone breaks and not just for new technologies.

    I think Tim was smart to “punt” Katie Huberty’s question. I think he’s smart enough, and user experienced focused enough, to have some degree of skepticism about the early 5G experience and real world user benefits. And equally smart enough to keep such thoughts to himself.


    5G should be split up in 2 parts: one that is using the existing frequency spectrum (similar to 2G, 3G and 4G networks)  and one that uses the higher  frequencies (the millimeter waves),  Because the latter will only be available in a later phase, let's concentrate on the advantages of the former.

    1) Using the existing frequencies, 5G is roughly 3 times more efficient than 4G, meaning that a single base station can handle about 3 times more traffic.  This is very important in densely populated areas, where the existing 4G base stations are suffering from saturation.  What does this mean for the end user with a 5 G enabled phone: more available bandwidth and  better user experience during the peak hours

    2) Using the existing frequencies 5G has a lower latency than 4G, meaning that the data connection reacts faster.  For the normal user this means some apps  like multiplayer shooting games, can be played on 5G connection with the same user experience as on Wifi, while on 4G you would always be shot because you saw your opponent too late.

    3) Using the existing frequencies 5G is always as fast than 4G even if your phone is limiting its power.  The power budget  needed to send/receive a 1MB of data is roughly the same for 4G and 5G

    4) Using the existing frequencies 5G works as good over long and medium distances as 4G.  The distance a base station can cover, is fully defined by the frequency  and not by the technology.  In a rural area a 5G base station at 700 Mhz will give exactly the same coverage as a 4G base station at 700 Mhz.  Given the cost for the telecom operator to install a new 5G network, it is logical that 5G will start in the city centers will prioritized

    Conclusion:  If you live in a densely populated area, the existing 4G is saturated and your telecom operator is offering 5G , you definitely have a better user experience with 5G.  In all other cases 5G does not matter for the moment.

    edited May 1 knowitall
  • Reply 14 of 16
    BebeBebe Posts: 121member
    I was not too optimistic that AAPL will recover after a big drop after the Q1 earning announcement. Oh boy, I was mistaken big time.  

    For those longs… smart move indeed as Spam said. 
    edited May 1
  • Reply 15 of 16
    monstrositymonstrosity Posts: 2,209member
    Had to drop half my AAPL when it hit 7% up yesterday due to crappy new EU regs which forced the margin up by 400% on my trading account recently. Will probably live to regret the decision, but it means I can breath easier and I pulled out on a relative high, so pretty pleased about the market response yesterday.
  • Reply 16 of 16
    carnegiecarnegie Posts: 726member
    gatorguy said:
    robjn said:
    These financial analysts think 5G is going to be the next big thing.

    I think they are wrong for 3 reasons.

    1) 5G offers no known new application to give added user value. For example, LTE was big because it enabled the ability to stream video etc. but 5G does not enable any new functionality to the user apart from saying everything will be faster.

    2) 5G does not work over medium or long distances and telecom executives say it will “never exist outside of cities”. So no new technology or service will be able to rely on 5G speeds if it is to work in rural areas.

    3) 5G promises to be inefficient, make devices run hot and drain batteries much quicker. As devices heat up, processors will get throttled and the overall user experience on 5G will be worse and sometimes even feel slower than LTE.

    Now faster speeds when your in densely populated areas would be a good upgrade once the chips can meet a certain standard of efficiency. But 5G is certain not going to drive a smartphone super sales cycle. These days, people in general upgrade when their phone breaks and not just for new technologies.

    I think Tim was smart to “punt” Katie Huberty’s question. I think he’s smart enough, and user experienced focused enough, to have some degree of skepticism about the early 5G experience and real world user benefits. And equally smart enough to keep such thoughts to himself.

    You think folks really spreadsheet this stuff before deciding? If they did a lot of folks would have first realized they really don't need maxed out memory and the fastest processor with the biggest screen to begin with. TBH they don't even need new phones much of the time. Yet they buy them anyway. Why? Because they can and/or they think they might need that new shiny stuff. 5G will be the same thing.

    A whole lotta people, maybe even most new buyers, will think there's some big advantage, if not immediately then very soon especially when the sales person gets done wowing 'em with the possibilities. Yeah, 5G is gonna be a "thing", and folks are going to want it even if it's doesn't factually offer real world benefits to them personally at the moment. Rational is one thing but how many times have you decided something "rationally" only to weeble wobble in the showroom or in front of the retailers display when it comes time to close the purchase? 
    I think that's more or less right. 5G will matter in the marketplace, whether or not a substantive consideration of its benefits would support its being important.
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