Notoriously bearish Apple analyst predicts doom because of 'iPhone 8' production delays
An analyst with historically off-target guesses about Apple's hardware intentions and supply chain machinations is claiming that the "iPhone 8" will not only ship later than expected because of Touch ID supply problems, but also claims that full manufacturing won't fully ramp up until the first calendar quarter of 2018.
Jun Zhang from Rosenblatt Securities issued a note to investors on Friday, alleging that the fingerprint sensor behind the screen of the "iPhone 8" has so many problems, that there won't be enough component inventory until late in the holiday quarter to produce the device in any quantity. Correspondingly, Zhang believes that production orders have been trimmed down from between 100 million and 110 million to around 85 million iPhones for shortly after launch.
Notably, Rosenblatt Securities has maintained a $120 price target for shares of AAPL since September 6, 2016, despite the fact that the company has been trading above the $120 mark since January, and currently sits north of $150.
As a result of the supposed "delay" for the "iPhone 8," the analyst believes devices like the Huawei Mate 9 and smartphones by other unspecified Chinese manufacturers will take advantage of the situation. Zhang suggested that will lead to a situation where Apple's phone could "lose its competitiveness when the market fills up with high screen-to-body ratio smartphones and 3D glasses."
In the analyst's note, seen by AppleInsider, there appears to be little awareness of differentiation between the "iPhone 8" and the also-rumored "iPhone 7s" family device. That, or the analyst is assuming that the latter will have OLED screens and Touch ID embedded behind the glass as well -- which hasn't been said to be the case so far.
Historically, in April 2016, the same analyst said that if the iPhone 7 didn't have a "panel upgrade," then there was no other feature upgrade possible to drive demand, even though it acknowledged "camera upgrades, speaker upgrades, a home-button upgrade, and some software upgrades" were probable for the device. At the time, it had a $105 Apple stock price target, and the stock was actually priced at $104.35.
Apple saw sales of 78.3 million units in the holiday quarter -- the company's first quarter of fiscal 2017. That was an increase from the previous record, 74.8 million iPhones the company sold in the same quarter a year prior, and not a decline as predicted by Rosenblatt.
Rosenblatt continues to retain its "neutral" rating on the stock, which means that it believes the stock will be in line with the average return of others in its industry over the next 12 months.
In actuality, Apple stock has out-performed the rest of the NASDAQ. In the last year, the NASDAQ has climbed 22 percent to Friday's mid-day value of 5,787, while Apple has climbed over 50 percent in the same timeframe.
Jun Zhang from Rosenblatt Securities issued a note to investors on Friday, alleging that the fingerprint sensor behind the screen of the "iPhone 8" has so many problems, that there won't be enough component inventory until late in the holiday quarter to produce the device in any quantity. Correspondingly, Zhang believes that production orders have been trimmed down from between 100 million and 110 million to around 85 million iPhones for shortly after launch.
Notably, Rosenblatt Securities has maintained a $120 price target for shares of AAPL since September 6, 2016, despite the fact that the company has been trading above the $120 mark since January, and currently sits north of $150.
As a result of the supposed "delay" for the "iPhone 8," the analyst believes devices like the Huawei Mate 9 and smartphones by other unspecified Chinese manufacturers will take advantage of the situation. Zhang suggested that will lead to a situation where Apple's phone could "lose its competitiveness when the market fills up with high screen-to-body ratio smartphones and 3D glasses."
In the analyst's note, seen by AppleInsider, there appears to be little awareness of differentiation between the "iPhone 8" and the also-rumored "iPhone 7s" family device. That, or the analyst is assuming that the latter will have OLED screens and Touch ID embedded behind the glass as well -- which hasn't been said to be the case so far.
Historically, in April 2016, the same analyst said that if the iPhone 7 didn't have a "panel upgrade," then there was no other feature upgrade possible to drive demand, even though it acknowledged "camera upgrades, speaker upgrades, a home-button upgrade, and some software upgrades" were probable for the device. At the time, it had a $105 Apple stock price target, and the stock was actually priced at $104.35.
Apple saw sales of 78.3 million units in the holiday quarter -- the company's first quarter of fiscal 2017. That was an increase from the previous record, 74.8 million iPhones the company sold in the same quarter a year prior, and not a decline as predicted by Rosenblatt.
Rosenblatt continues to retain its "neutral" rating on the stock, which means that it believes the stock will be in line with the average return of others in its industry over the next 12 months.
In actuality, Apple stock has out-performed the rest of the NASDAQ. In the last year, the NASDAQ has climbed 22 percent to Friday's mid-day value of 5,787, while Apple has climbed over 50 percent in the same timeframe.
Comments
Wow I never expected that ... /s
Just asking.
Apparently, certain companies are expected to meet certain standards and others aren't. Apple is not being given a free pass like Tesla is being given. As an Apple shareholder, it doesn't matter to me if the iPhone actually does take longer to produce as long as the finished product is working properly to Apple's higher standards. The quality of the finished product is most important to me as both a shareholder and consumer. Rushing an unfinished product to market is just too risky and the consequences are much higher than shipping a merely "late" product. We're only talking about an iPhone and not some actual life-saving device.
Anyway, it doesn't change my opinion that too many analysts are just downright crooks and never have to take any responsibility for their lies and deceptions. I honestly don't pay any attention to them but I think too many potential Apple investors do.
Here is what you do not get, he is wrong but for the right reasons, if it creates FUD, and the market and investors react, and his clients can short the stock and make money going down and then jump in and buy it before the truth comes out he has done his job.
The wild part of this story is his claim that Apple had orders in for 110M units when apple has never done more than 78M it not like Apple was planning for 40% growth in one quarter. I think his attempt here was to also drive down Apple suppliers stocks as well. That would be a big hit them.
Says something about the firm.
"According to TipRanks.com, analyst Jun Zhang is ranked #3,991 out of 4,274 analysts. Zhang has a 25% success rate and forfeits 18% in annual returns. When suggesting AAPL, Zhang loses 8.1% in average profits on the stock."
edt: stock name
Tesla has never been profitable, has no clear plan for profitability, and have only rarely hit their publicly state production goals, but they have a very high market valuation (greater than most existing auto manufacturers). Most issues do not seem to be greatly scrutinized, valuation is not greatly affected, because this is a growth stock where it is all about riding the stock as it is rising, and working the timing on when to get out.
Apple is extremely profitable, has consistently been so, while almost never missing their own guidance over last two decades. They are valued less than the broader S&P 500 market, and any rumour of issues causes the stock to drop.
Perhaps it is the curse of being successful...