Apple's Jan. 23 earnings conference call viewed as most important in 10 years
Ahead of its holiday quarterly earnings report, Apple finds itself in a situation the company hasn't encountered in awhile: investor expectations for the next year are surprisingly low.
With that in mind, Ben A. Reitzes of Barclays Capital believes Apple's earnings conference call on Jan. 23 will be the company's most important in the last decade.
Over the last three months, Apple's stock price has fallen by nearly 17 percent. One of the reasons is believed to be investor concern over Apple's continued growth potential and gross margins heading into calendar 2013.
Barclays has maintained its overweight rating for AAPL stock, as Reitzes believes that Apple faces lower expectations for its fiscal year 2013. He sees new product cycles from the company later this year helping to change investor sentiment.
In particular, Reitzes is a proponent of Apple building a low-end iPhone to address emerging markets like China. Recent reports have claimed that Apple plans to release such a device this year.
While some investors are concerned that a low-cost iPhone would cut into Apple's margins, Reitzes doesn't share that sentiment. He also believes that other investors will change their tune if and when the product is built.
"We believe Apple can sell a phone with a more inexpensive casing for emerging markets and a (bill of materials) below $150, and believe concerns around margin dilution may be overdone, given the pending benefit to revenues," Reitzes wrote in a note to investors on Friday.
He believes that Apple is in a "peer group of U.S. disruptors" that also includes Google, Amazon and Facebook. Reitzes noted that Amazon and Google also saw large sell-offs in 2011, but those are a "distant memory" after both companies rebounded in 2012.
"Momentum can change quickly among the leaders in disruptive mobility ??along with sentiment," he said. "If Apple can prove yet again it is more than a handset company, then we believe shares can recover."
With that in mind, Ben A. Reitzes of Barclays Capital believes Apple's earnings conference call on Jan. 23 will be the company's most important in the last decade.
Over the last three months, Apple's stock price has fallen by nearly 17 percent. One of the reasons is believed to be investor concern over Apple's continued growth potential and gross margins heading into calendar 2013.
Barclays has maintained its overweight rating for AAPL stock, as Reitzes believes that Apple faces lower expectations for its fiscal year 2013. He sees new product cycles from the company later this year helping to change investor sentiment.
In particular, Reitzes is a proponent of Apple building a low-end iPhone to address emerging markets like China. Recent reports have claimed that Apple plans to release such a device this year.
While some investors are concerned that a low-cost iPhone would cut into Apple's margins, Reitzes doesn't share that sentiment. He also believes that other investors will change their tune if and when the product is built.
"We believe Apple can sell a phone with a more inexpensive casing for emerging markets and a (bill of materials) below $150, and believe concerns around margin dilution may be overdone, given the pending benefit to revenues," Reitzes wrote in a note to investors on Friday.
He believes that Apple is in a "peer group of U.S. disruptors" that also includes Google, Amazon and Facebook. Reitzes noted that Amazon and Google also saw large sell-offs in 2011, but those are a "distant memory" after both companies rebounded in 2012.
"Momentum can change quickly among the leaders in disruptive mobility ??along with sentiment," he said. "If Apple can prove yet again it is more than a handset company, then we believe shares can recover."
Comments
I think this cheaper iPhone is in fact a future offering of Apple. Tim Cook has said that China will soon be their number one market, and in order to accomplish that, they will have to compete with mid and low end Android products on a grand scale. Read more here: http://tinyapplebytes.com/
Originally Posted by TinyAppleBytes
I think this cheaper iPhone is in fact a future offering of Apple. Tim Cook has said that China will soon be their number one market, and in order to accomplish that, they will have to compete with mid and low end Android products on a grand scale.
I bet China is a big area of growth for BMW too, but I don't see them making a special "cheap" car for that market either. It would kind of defeat the purpose. The reason that people like Apple devices is that they can rely on a certain level of quality in everything they do (and that lends prestige to the brand, so people also buy the products because of this "prestige"). People are willing to pay extra for that guarantee, or the associated "brand prestige." If Apple started making cheap crap, they would lose this advantage. My sister had a Samsung Android phone, probably not one of the best ones, and she hated it so much that when I got her an iPhone for Christmas, she actually cried tears of joy. I think the best Samsung phones are probably pretty decent from what I can tell, but I doubt she'd get another Samsung anytime soon, just because her first experience with one was so bad. If her first Samsung was a Galaxy S3, maybe she'd be a repeat customer.
as an ex tiffany employee i can tell you you don't get bargain at tiffany's for what you get. you pay a premium for the blue box it is in, and your girl knows that you love her enough to simply throw your money away. the product is top quality and perfectly crafted but you can buy a similar diamond anywhere but you dont get the box and the bragging rights for your best girl . apple is in this league it as well as tiffany's has a cash'e that although there are lots of people in their market they actually have no competition.
to ask either of them to wallow in the treadmill of commodity competition shows a person who does not understand branding and tribal purchasing. Apple needs to keep focusing on that 75 % profit share of the market!
Quote:
Originally Posted by monstrosity
Please, no more about this mythical 'low cost iPhone'.
Shiller already made that a moot statement.
But, I can tell you, judging from consistent past behavior, the iPhone 5 will eventually be a low cost phone, we just have to wait a year or two....... LOL...
If Apple gets on a 6 to 9 month refresh cycle with their phones, then we'll see these things dropping in price sooner after they release a replacement "flagship" product.
…most important in 10 years
WHY?!
…investor expectations for the next year are surprisingly low.
That's because they're complete idiots.
Quote:
Originally Posted by SpamSandwich
Typical hyperbolic BS... Analysts aren't worth the bandwidth they're given.
All analysts do is have spread sheets with certain data they monitor and they use their own internal gut feeling on what they feel Apple will do from quarter to quarter and project what they THINK the stock price is going to do based on past history, trend lines, etc. and they put their project growth rate (+ or -) and that's all they do.
Most professional analysts have a fairly large (many times 30 or even 40) companies they follow and report on, so they have basically about an hour a week that they can devote to studying the company. Some spend more time on Apple because they are a higher profile company.
Some have been consistently wrong and underestimate or overestimate. It would be nice if there was a sight devoted to covering the percentage of accuracty amongst the various market analysts, and stock analysts to figure out WHICH ones to listen to and which one's not to.
Yeah, if only... :rolleyes:
Why do analysts get any credibility? These are the same people who said 6 years ago that Apple couldn't possibly compete in the mobile phone business because of how different it was from the PC and music player business. Now they have to prove that they are more than a handset company?
hahaha
Quote:
Originally Posted by Tallest Skil
WHY?!
That's because they're complete idiots.
Why? The Dec quarter is the biggest, historically, for the year and it sets the tone for the remainder of the year. It's tough for Apple to get a different sales cycle. But it typically goes like this.
Dec quarter BIGGEST
March quarter 2nd biggest
June quarter 3rd biggest
Sept quarter 4th biggest
Now, their last Sept quarter wasn't as big as they originally thought and that kind of hurt Apple, even though it was larger than the previous year's Sept quarter, it wasn't as big as Apple original first projected. Plus they had supply issues with certain products, iPhone 5 in the beginning, iPad mini cellular models, now it's the iMacs, which are selling well for that type of product. Foxconn is building more assembly plants, but it takes time to build assembly plants as fast as they need them, plus the building of some products are a little difficult, then they have the supply of components because they've switching away from Samsung.
Does this help?
According to the first result on a real quick Google search, there are 6,973,738,433 + people on the planet. Don't blame me if that figure is inaccurate or not up to date, blame Google. A bunch of people probably got murdered while I was typing this post, but that's not my fault either.
But who gives a shit really? It's not Apple's goal to sell as many phones as they can to every person on planet earth in every possible market, so why do certain people keep claiming that Apple has to release some crappy, cheap ass phone?
If there are too many compromises on a cheap product, then it would no longer be worthy of having the Apple logo on that device. And again, why does Apple need a few more customers who have no money? Where is the profit in cheap ass phones and where is the profit in cheap ass customers? I doubt that Apple will be receiving a cut of the monthly cell phone bills paid to the telecom companies. So what exactly does Apple gain from this?
Ever since Apple starting giving into the analysts and other douchebags, the stock has been going down. Nokia has been a much more profitable stock than Apple lately.
Quote:
Originally Posted by TinyAppleBytes
I think this cheaper iPhone is in fact a future offering of Apple. Tim Cook has said that China will soon be their number one market, and in order to accomplish that, they will have to compete with mid and low end Android products on a grand scale.
See, this is the sort of "analyst thinking" that just get's its facts in a twist and comes up with a conclusion that has nothing to do with the statements made.
Apple doesn't need to have the greatest market share in, say, smartphones, in China for it to be their "number one market". They don't, "have to compete with mid and low end Android products on a grand scale." For it to be Apple's number one market, they have to make more profit there than anywhere else, which, roughly means selling more of their own stuff in China, than they do in any other single market. So, in essence, Apple's markets are competing against each other to determine which is number one. Android crap is completely irrelevant in that equation.
So, no, Apple does not have to offer a cheaper iPhone for China to become their number one market.
How far would the stock have to drop to make it possible for Apple to use its cash to take the company private? If AAPL got to a market cap near Google or Microsoft would that do it? Then we wouldn't have to listen to this insane crap from analysts. No more fiscal reports, no more sales and margins to argue over, publicly anyway.
Quote:
Originally Posted by lkrupp
How far would the stock have to drop to make it possible for Apple to use its cash to take the company private? If AAPL got to a market cap near Google or Microsoft would that do it? Then we wouldn't have to listen to this insane crap from analysts. No more fiscal reports, no more sales and margins to argue over, publicly anyway.
How would that benefit you? Or Apple (since they don't have to "listen" to any of this)? It's amateur investors who think that a company like Apple cares what its stock is doing. Apple's employees come to work for their paycheck and that's it. Only the very highest executives have large stakes in the stock. The market and the analysts have nothing to do with the company's operations from day to day.
That kind of scenario could never happen. All Apple can do is buy up some of it's outstanding shares in exchange for it's cash, but it would never be able to buy up all of the shares because for each share that they do buy, the remaining shares all gain a little value. At some point, Apple would run out of enough cash to buy another share of the company. But way before that, they would stop buying up shares because they need money on hand to actually run the business.
Another problem that you are overlooking is that companies have to be owned by something -- Apple can't own themselves. Only people and/or other businesses can own them. What single person or company do you think has enough money to own Apple outright? That's right, there isn't one.
If Tim Cook was successful in signing on China Mobile, that will definitely be a big boon to Apple. T-Mobile will obviously add some increase market share in the smartphone market, but China Mobile will be UUGE.
According to your article "Apple has already struck a deal with China Mobile to begin offering the iPhone".
Do you have a second source for this assertion or are you just talking out your ass?
Quote:
Originally Posted by drblank
All analysts do is have spread sheets with certain data they monitor and they use their own internal gut feeling on what they feel Apple will do from quarter to quarter and project what they THINK the stock price is going to do based on past history, trend lines, etc. and they put their project growth rate (+ or -) and that's all they do.
Most professional analysts have a fairly large (many times 30 or even 40) companies they follow and report on, so they have basically about an hour a week that they can devote to studying the company. Some spend more time on Apple because they are a higher profile company.
Some have been consistently wrong and underestimate or overestimate. It would be nice if there was a sight devoted to covering the percentage of accuracty amongst the various market analysts, and stock analysts to figure out WHICH ones to listen to and which one's not to.
AnalystInsider, or AnalystAnalyst?
Quote:
Originally Posted by Apple ][
Nokia has been.
Fixed.