Analyst claims iPhone demand slowing but 3G model in cards
In a roller-coaster of a research report issued Tuesday, analysts for CIBC World Markets said they are picking up a significant decline in demand for Apple Inc.'s iPhone this month, but added that a second-generation of the handset could arrive much sooner than expected.
"Based on our store checks, we believe that demand for the iPhone has seen a significant decline in the past 10 days," analyst Ittai Kidron told clients. "We have noticed decent inventories at stores, and thin demand at best. In fact, most Apple store visitors were not looking at the device and only a very small subset bought it."
Kidron's comments, combined with disappointing first weekend iPhone activation numbers, were credited Tuesday with sending shares of Apple on an early morning skid.
Given the weakness in demand, the analyst said he wouldn't be surprised to see AT&T and Apple step up their marketing efforts around iPhone in the near future. He added that "checks suggest Apple is actually looking to introduce a 3G version of the iPhone for the U.S. market in November, ahead of the holiday season and earlier than currently expected."
Kidron cited a recent in-house survey of iPhone buyers that suggested the key shortcoming of the current iPhone model is its poor data connectivity through AT&T's yesteryear EDGE network. "This isn't a surprise," he explained, "and Apple's CEO Steve Jobs admitted the iPhone's cellular connectivity can use an improvement. We now believe the 'improvement' could come soon."
Offering one last data point to his clients, the CIBC analyst said while many in the industry had expected iPhone to hit BlackBerry maker RIM in the ribs, the emergence of the Apple handset appears to be having the opposite effect.
"Based on our checks, it seems that the iPhone has significantly increased awareness for email devices," he wrote. "A positive mainly for RIM -- the brand of choice for email devices."
CIBC World Markets, which does not hold a rating on Apple shares, notes in a disclaimer that it "does and seeks to do business with companies covered in its research reports."
As a result, the firm says, investors should be aware that CIBC may have a conflict of interest that could affect the objectivity of its reports.
"Based on our store checks, we believe that demand for the iPhone has seen a significant decline in the past 10 days," analyst Ittai Kidron told clients. "We have noticed decent inventories at stores, and thin demand at best. In fact, most Apple store visitors were not looking at the device and only a very small subset bought it."
Kidron's comments, combined with disappointing first weekend iPhone activation numbers, were credited Tuesday with sending shares of Apple on an early morning skid.
Given the weakness in demand, the analyst said he wouldn't be surprised to see AT&T and Apple step up their marketing efforts around iPhone in the near future. He added that "checks suggest Apple is actually looking to introduce a 3G version of the iPhone for the U.S. market in November, ahead of the holiday season and earlier than currently expected."
Kidron cited a recent in-house survey of iPhone buyers that suggested the key shortcoming of the current iPhone model is its poor data connectivity through AT&T's yesteryear EDGE network. "This isn't a surprise," he explained, "and Apple's CEO Steve Jobs admitted the iPhone's cellular connectivity can use an improvement. We now believe the 'improvement' could come soon."
Offering one last data point to his clients, the CIBC analyst said while many in the industry had expected iPhone to hit BlackBerry maker RIM in the ribs, the emergence of the Apple handset appears to be having the opposite effect.
"Based on our checks, it seems that the iPhone has significantly increased awareness for email devices," he wrote. "A positive mainly for RIM -- the brand of choice for email devices."
CIBC World Markets, which does not hold a rating on Apple shares, notes in a disclaimer that it "does and seeks to do business with companies covered in its research reports."
As a result, the firm says, investors should be aware that CIBC may have a conflict of interest that could affect the objectivity of its reports.
Comments
The Apple Store I visited had a steady stream of people leaving with an iPhone or an iPod... and I was there only for 20 minutes!
CIBC World Markets, which does not hold a rating on Apple shares, notes in a disclaimer that it "does and seeks to do business with companies covered in its research reports."
As a result, the firm says, investors should be aware that CIBC may have a conflict of interest that could affect the objectivity of its reports.
[ View this article at AppleInsider.com ]
This is just boiler-plate disclaimer.
Looks like the negative news on the iPhone is beginning to pile on..... it will have to go thru this inevitable cycle so that the nay-sayers and second-guessers can get it out of their systems.
This is just boiler-plate disclaimer.
Looks like the negative news on the iPhone is beginning to pile on..... it will have to go thru this inevitable cycle so that the nay-sayers and second-guessers can get it out of their systems.
It looks like the stock is already gaining back a little... I'm sure they don't want to be caught short when the numbers come in tomorrow (higher than expected)...
I would say they would come out with a lower priced version with just a phone and music player way before they would come out with a new 3G enabled model.
It will also be telling if they try to broaden the line quickly with lower-priced fewer features iPhone models.
Perhaps, but if they bring out a new model they've probably planned this months in advance and are doing it regardless of iPhone sales.
Perhaps, but if they bring out a new model they've probably planned this months in advance and are doing it regardless of iPhone sales.
Well, that's certainly the spin I would want to have on it if I were Apple... we'll have a better handle on things tomorrow...
I think iPhone sales over the next 90 days will be the most telling. If the iPhone has 'legs', sales over the next 90 days will need to be steady and improving.
This is true to a certain extent, but lets not forget that a large percentage of individuals are currently locked into contracts, myself included. It's quite likely that those who were willing to shell out the bucks to swap carriers already have their iPhones, and the rest are waiting patiently.
I would expect the adoption curve to differ a good deal from iPods and other consumer devices which aren't affected by such factors. I think your evaluation is correct in principle, but I would lengthen the period over which I'd expect to see significant growth substantially.
Their current mobile plan to expire so they don't take a hit.
A few extra bucks to hit the budget to justify.
Birthday so their wife will get them one...(I hope she reads this)
Bugs to be worked out of current system.
Don't want to be seen as the weenie that had to have the newest gadget.
Or they quite simply have not held one in their hands or watched someone play with it.
Like myself, many have to justify purchases. Suckers pay retail right? Some are just waiting for the first promotion so they can brag they got a good deal. Anyone who bought right away paid retail...
Of course, wild speculation since then makes the actual good news into bad news
Demand is of course "slowing" after the initial, unbeatable pent-up rush. No numbers needed to tell us that. But most users going into the Apple Store NOT looking at the iPhones? I am highly skeptical.
And 3G is coming--Apple said so directly--but I doubt it will come very soon, since we now know (by comparing the internal electronics against other devices) that Apple's claims about size and battery life with 3G were true..
Initial hopes by "analysts" were for 100k sales Fri-Sun. It seems Apple beat that by nearly 50% even WITHOUT Sunday--and Friday was a partial day starting at 6.
Of course, wild speculation since then makes the actual good news into bad news
Demand is of course "slowing" after the initial, unbeatable pent-up rush. No numbers needed to tell us that. But most users going into the Apple Store NOT looking at the iPhones? I am highly skeptical.
And 3G is coming--Apple said so directly--but I doubt it will come very soon, since we now know (by comparing the internal electronics against other devices) that Apple's claims about size and battery life with 3G were true..
But that's 3G for Europe, not for the US.
I so far haven't heard anyone with an iPhone say they wish it had 3G. Anandtech did tests where he found 3G to be a significant drain on the battery while real world speed was not much better.
Apple shares fall; CIBC sees iPhone release pushed back
That iPhone demand has dropped somewhat from what it was opening weekend is a no-brainer. Just another idiotic report designed to get the stock price down ahead of earnings. It does present a good opportunity to buy the stock or buy some cheaper calls. It's also not bad having the stock be lower before earnings and have lowered expectations. It's a good setup for a post-earnings rally. That's all fine as long as we know this is all a bunch of carp.
I so far haven't heard anyone with an iPhone say they wish it had 3G
That's because those of us who want 3G haven't bought an iPhone yet and are still waiting.
That's because those of us who want 3G haven't bought an iPhone yet and are still waiting.
I am an iPhone user and like it very much. Yes, I do wish the Edge were faster, but with the WiFi access it is blazing quick. The phone, calender and iPod are excellent however. I don't think that this first generation of melded technologies is terrible in any way. I think Apple did an excellent job. This is coming from a person who usually waits until the 2nd generation to buy any Apple product.
first they said apple stores only has about maybe 800 per store at lauch day, a seen the fedex truck arrive at the store with 3 pallets around launch time...
fraklinc...
Have you ever heard of this thing called 'punctuation'?
fraklinc...
Have you ever heard of this thing called 'punctuation'?