iPhone 5 sales strong, but iPad supply issues affected Apple's holiday quarter - report
The 2012 holiday season was a blockbuster quarter for the iPhone 5, but iPad sales may have been lighter than expected because of supply issues, according to one analyst.
Mark Moskowitz of J.P. Morgan said on Thursday that his team's research indicates near-term supply constraints affected iPad sell-in activity through the end of November.
Moskowitz had previously forecast sales of 20.1 million iPads in the December quarter, but he has now trimmed that estimate to 18.4 million units.
"While lighter iPad units could frustrate investors, we believe the miss is explainable," he said. "In our view, it was a supply???not demand ??issue."
While the iPad number could be soft, Moskowitz, like other analysts, dismissed recent concerns that iPhone demand could be waning. That sentiment, which pushed Apple's stock below $500 this week, was driven by an article from The Wall Street Journal that alleged iPhone component orders were drastically reduced in response to weakened demand.
Earlier this week, Moskowitz dismissed that and other reports as just "noise" that would fuel an investor overreaction. On Thursday he stood by that sentiment, and reiterated his belief that any order cuts could mean that iPhone 5 manufacturing yields are improving. Moskowitz has forecast sales of 47.9 million iPhones in the December quarter.
The analyst also belives Apple's gross margins could recover faster than most market watchers expect, which he said would be a "major positive" for AAPL stock.
"In our view, many investors have been locking in gains on Apple and reducing the relative weighting of the stock in their funds because it was difficult to defend a stock where gross margin declines were expected in the coming year," he wrote. "This overhang stands to subside faster than expected, in our view, if component order cuts related to iPhone 5 imply manufacturing yields and thereby gross margins are on the rebound."
Given recent pullbacks in the stock, J.P. Morgan has reduced its 12-month price target to $725, down from the previous prediction of $770. However, the firm has maintained an "overweight" rating on Apple.
Mark Moskowitz of J.P. Morgan said on Thursday that his team's research indicates near-term supply constraints affected iPad sell-in activity through the end of November.
Moskowitz had previously forecast sales of 20.1 million iPads in the December quarter, but he has now trimmed that estimate to 18.4 million units.
"While lighter iPad units could frustrate investors, we believe the miss is explainable," he said. "In our view, it was a supply???not demand ??issue."
While the iPad number could be soft, Moskowitz, like other analysts, dismissed recent concerns that iPhone demand could be waning. That sentiment, which pushed Apple's stock below $500 this week, was driven by an article from The Wall Street Journal that alleged iPhone component orders were drastically reduced in response to weakened demand.
Earlier this week, Moskowitz dismissed that and other reports as just "noise" that would fuel an investor overreaction. On Thursday he stood by that sentiment, and reiterated his belief that any order cuts could mean that iPhone 5 manufacturing yields are improving. Moskowitz has forecast sales of 47.9 million iPhones in the December quarter.
The analyst also belives Apple's gross margins could recover faster than most market watchers expect, which he said would be a "major positive" for AAPL stock.
"In our view, many investors have been locking in gains on Apple and reducing the relative weighting of the stock in their funds because it was difficult to defend a stock where gross margin declines were expected in the coming year," he wrote. "This overhang stands to subside faster than expected, in our view, if component order cuts related to iPhone 5 imply manufacturing yields and thereby gross margins are on the rebound."
Given recent pullbacks in the stock, J.P. Morgan has reduced its 12-month price target to $725, down from the previous prediction of $770. However, the firm has maintained an "overweight" rating on Apple.
Comments
Ahhh...
So the 'bear' manipulators got called out on the iPhone BS, so now they're switching to made up iPad numbers instead.
Quote:
Originally Posted by GQB
Ahhh...
So the 'bear' manipulators got called out on the iPhone BS, so now they're switching to made up iPad numbers instead.
It's a sad day when the WSJ is rightly referred to as one of the "'bear' manipulators". Thanks for trashing another American institution RM.
Quote:
Originally Posted by Rogifan
I don't think Rupert Murdoch has anything to do with it. WSJ just following the herd.
Walt Mossberg and AllThingsD is also part of Murdoch's press stable. Are they part of the problem too? Not in my opinion.
Here we go again with the click whoring by AI.
Quote:
Originally Posted by Gatorguy
Walt Mossberg and AllThingsD is also part of Murdoch's press stable. Are they part of the problem too? Not in my opinion.
They are, by lending a degree of respectability to what has become essentially just another rag in Murdoch's sleazy propaganda and exploitation empire.
For real. All of these analyst are going to be proven wrong next week.
WSJ doesn't really follow his politics.
I luv it... Trashing the WSJ upset you? The same "honest John institution" owned by none other than Rupert Murdoch himself? The King of respectability in world media? The same Murdoch whose son knowingly illegally hacked into throngs of people's personal data and bribed loads of police and government officials? And to think the WSJ and Faux News are immune to such nonsense --and your butt hurt.. Waaaaaaaa.
Maybe AI should have a Front page, Back page, Analysts page, Apple suing/getting sued page and a "Digitimes says" page so that we can ignore the last 3 and then aren't bombarded with so much chaff.
Quote:
Originally Posted by gijoeinla
I luv it... Trashing the WSJ upset you? The same "honest John institution" owned by none other than Rupert Murdoch himself? The King of respectsbility in world media? The same Murdoch whose son knowingly illegally hacked into throngs of people's personal data and bribed loads of police and government officials? And to think the WSJ and Faux News are respectable and your butt hurt.. Waaaaaaaa.
I think you need to work on your reading comprehension skills.
Quote:
Originally Posted by anonymouse
It's a sad day when the WSJ is rightly referred to as one of the "'bear' manipulators". Thanks for trashing another American institution RM.
(edit... re-read your post and realized we agree.)
Moskowitz may be right, but the iPad mini is still sold out everywhere months after its launch so its sales are very strong. Apple is in a great position here: the regular iPad is best suited for home use or if you need a big screen, and the iPad mini is perfect for travel or on-the-go use. So they are not perfect replacements for each other, each has its advantages. Meaning some customers will want to own both. And the iPad continues to take sales from people who would have previously bought a Windows PC.
Another key point Moskowitz makes is that manufacturing margins improve over time. Something that has been lost in all this margins-are-falling negative Apple sentiment.
The good thing is that all these false rumors will go away in 6 days. How come the Wall Street Journal is not reporting on Samsung screen orders? Not sure if they or CNBC bashing Apple stock for no reason are worse.
Quote:
Originally Posted by Evilution
Instead of asking analysts who are trying to drive the share price down, why not just wait for Apple to announce the actual sales reports?
I'll watch carefully for your insistance that Amazon (et al) do likewise.
Somehow its only Apple who has to divulge competitive data, huh?
Quote:
Originally Posted by lkrupp
"...according to one analyst."
Here we go again with the click whoring by AI.
Whores give you what you want. Give it to me baby, uh-huh uh-huh.
Quote:
Originally Posted by Rogifan
I know there are a lot of people who despise Murdoch's politics, but outside of the editorial page the
WSJ doesn't really follow his politics.
Fox claims the same... that there's a firewall between their editorial and news.
Patent nonsense, and that erodes any trust I once had for WSJ.
Can't believe that people actually pay attention to this nonsense.
THIS TOO is a lie.
Now that EVERY ANALYST that has tried and FAILED to say that Apple had some failing during the holiday quarter to cover-up their COMPLETE, IN-CORRECT and in some cases attempted stock manipulation failures, yet a final gasp of utter hysteria comes from another bleeding, screaming, drowning pundit of loser-ness, trying to draw some accolades to justify their existence…
YOU LOSE…. YOUR LIES HAVE FAILED YOU AT LAST….
This issue has been extensively studied. The short answer is, your experience is true much more broadly.
A vast majority of mutual funds -- especially active funds -- underperform a blindfolded monkey.