anantksundaram

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  • Apple's earnings warning indicates trouble in China, but everyone should calm down


    tjwolf said:
    Clearly something happened within the last month or so that Apple execs didn’t see coming.
    This to me is the MOST concerning thing. It suggests to me that it’s not trade (old news, if anything tariffs have been delayed), it’s not the government or Huawei (Chinese competitors have been gaining share for a year now), it’s not the dollar (which is no worse than what it has been in the past six months), it’s not the slowing of the Chinese economy (this is also old news). 

    IMHO, it could well be the product and the price. Especially the XR, starting at $750 (for a laughable 64GB). Frankly, when it was introduced, my reaction was “meh, some candy-colored overpriced crap”. Apple did something similar before (5s? 6s?) and those colored phones did not do well, IIRC. And, while I did buy the Xs Max, I can’t say it does anything different or better than the X that I bought last year. Interestingly, two people in my family have no interest upgrading from their iPhone 8, and one had to be bribed to switch to my X (so that I could get the Xs Max). 

    I think the XR — I have not seen one in the wild yet! — could well be history in the next product iteration. And Apple had better get on the 5G game asap, or the next product cycle could be tough too. 

    The trade tariffs may be "old news", but the effect it - along with the recently intensified witch hunt of Huawei - has had on the Chinese is not.  I submit that the Chinese consumer has turned much more against American products than folks, including executives at AAPL, thought.  The average AAPL Chinese consumer thinks the US initiated trade war and pursuit of Huawei is completely unjustified and is doing his/her bit to fight back against the "American aggressor".  How?  By buying Chinese (e.g. Huawei) and shunning American products.

    Apple is "collateral damage" in Trump's ill-conceived trade war that only his simple mind thinks is "easy to win".

    I don't think it's product and price at all.  If that were the case, how do you explain the record or near record sales in other regions?  IMHO, you're letting your personal opinion of Apple's products cloud overall judgement.  BTW, the "colored" phone that didn't do well was the 5c.  If you bought an Xs Max this year and an X last year, you're clearly in the minority (of people with too much money and too little sense).  And, at the very least, if you're being disingenuous by saying it does nothing different/better: it has a friggin' bigger screen!  That's *different*.

    Finally, according to AAPL, the Xr was Apple's best-selling phone this xmas quarter.  That alone invalidates your opinion that its destiny will be similar to the 5c.
    Another pointless and ill-informed set of thoughts.

    One, it is the job of a CEO to sniff out such changes in consumer sentiment, especially in a market that accounts for 20% of his revenue.

    Two, other US consumer products are doing fine in China. As an example, Nike -- another quintessentially American product -- is doing fine in China, and the CEO made a statement to that effect just ten days ago.

    Three, there is no "trade war." Yet. It's pure hyperbole. Look up the facts. Not one of Apple's products is subject to tariffs yet. And the two countries are in negotiations.

    Four, you may think a "friggin' bigger screen!" is what matters, but others may not. Similarly -- and ironically, on the topic of "too much money and too little sense" -- you may think that price does not matter bit a lot of others may think otherwise. And, on the topic of price, Cook himself -- if you bothered to look up actual facts -- complained about "fewer carrier subsidies" leading to fewer upgrades: what do you think this is, if not the market's responsiveness to price!? (Also, something that did not happen overnight -- carrier subsidies started to disappear a couple of years ago).

    Five, being the "best-selling this Christmas quarter" is a meaningless statement. Best-selling in terms of what -- aggregate revenue? Units sold? Relative to the Xs and the Xs Max? Relative to 2017? 2016? Don't just re-spout cheap corporate-speak.

    Just curious: How many XRs have you seen?
    williamlondon
  • Apple's earnings warning indicates trouble in China, but everyone should calm down

    tedz98 said:
    tedz98 said:
    While everyone is reacting to the here and now, remember Wall St. is forward looking.  The concern is that this is the beginning of a trend of reduced earnings and struggles with selling product in developing markets.  

    Apple has saturated the the market for premium phones. iPhone owners are delaying replacing their phones.  Developing markets can’t afford Apple’s premium priced iPhones and overwhelming turn to Android phones. Is Apple capable of delivering a truly new and innovative product that can propel revenue growth?  They missed a huge opportunity with smart speakers and are playing catch-up. Can they develop services offerings that are compelling and revenue/profit rich?  These are the factors driving the share price. 

    the trade issues with China will eventually work their way through.  But for now there is much uncertainty, which is always a negative on Wall St.  Apple is at risk relying on China for manufacturing and this needs to be addressed. The Chinese market is not a free market and Apple cannot count on growth there due to government interventions.  

    Overall Apple will continue to  be a highly successful enterprise but they will struggle with the double digit growth the market became accustomed over the past decade. 
    Wall Street hasn't been forward-looking in over 20 years.
    The value of a share of stock is the net present value of all FUTURE earnings.  If that’s not forward looking I don’t know what is 
    I agree that's the ideal. However, that isn't how Wall Street has been responding to anything for a very long time.
    You couldn't be more wrong. Markets can -- and often do -- under- or over-react, but it is simply not factual to suggest that the sine qua non of markets is capitalizing future cash flows (earnings being a proxy).

    Don't ignore the fact that markets have been quite positive about Apple. In fact, more so than being negative: after all, it's the same market that gave Apple a stock price of $230+ per share and a market cap of $1.1 trillion.

    I find that people always complain about the market when their choice of stocks/portfolios suck.
    williamlondon
  • Apple's earnings warning indicates trouble in China, but everyone should calm down

    rainmaker said:
    The overreliance on China for manufacturing and growth put company earnings at risk. What bugs me is Tim Cook was on an advisory council to the White House, so he should’ve seen the tariffs and trade issues coming from far away and spent more time trying to insulate Apple from the inevitable.
    What makes you believe Tim Cook didn’t see this coming? The fact that he didn’t move manufacturing from china overnight? 
    Clearly something happened within the last month or so that Apple execs didn’t see coming.
    This to me is the MOST concerning thing. It suggests to me that it’s not trade (old news, if anything tariffs have been delayed), it’s not the government or Huawei (Chinese competitors have been gaining share for a year now), it’s not the dollar (which is no worse than what it has been in the past six months), it’s not the slowing of the Chinese economy (this is also old news). 

    IMHO, it could well be the product and the price. Especially the XR, starting at $750 (for a laughable 64GB). Frankly, when it was introduced, my reaction was “meh, some candy-colored overpriced crap”. Apple did something similar before (5s? 6s?) and those colored phones did not do well, IIRC. And, while I did buy the Xs Max, I can’t say it does anything different or better than the X that I bought last year. Interestingly, two people in my family have no interest upgrading from their iPhone 8, and one had to be bribed to switch to my X (so that I could get the Xs Max). 

    I think the XR — I have not seen one in the wild yet! — could well be history in the next product iteration. And Apple had better get on the 5G game asap, or the next product cycle could be tough too. 
    muthuk_vanalingamwilliamlondon
  • Cook talks slumping iPhone sales in interview, to reportedly hold 'all-hands' meeting with...

    ElCapitan said:
    There is also another issue that nobody really wants to talk about in fear of not being PC, but nobody but a small section of the potential customer base want to listen to a potty mouth SJW CEO going on about how their customers should live their lives and what values they should hold. 

    If Timmy wants to be an activist - fine - keep it at the local level where it might be relevant, but the moment he steps outside the US, his message is either irrelevant because many countries gained the rights he keeps fighting for even decades ago, or it flies right in the face or their religion, culture and belief systems.  Incidentally these geographies falls under Apple's definition of emerging markets. So it is not only price and currency issues that discourage customers in these markets. 
    This I agree with wholeheartedly. Tim and his co-CEOs can say/do whatever they want from 5pm - 8am, but the rest of the time, their job is to manage an organization for their customers and shareholders. 

    Corporations have absolutely no business getting involved with setting social policy agendas. It’s a short step from there to fascism. 
    ElCapitanmuthuk_vanalingamdesignrcolinng
  • Apple assessed Apple TV 'dongle' to goose adoption of new streaming service, report says

    Rayz2016 said:
    avon b7 said:
    Apple TV was without a doubt the worst Apple product I ever bought. 


    Odd that you don’t actually like Apple kit, but keep buying it. 🤔
    I usually disagree with @avonb7 on just about everything, but not on this one: AppleTV is a pos product wallowing in mediocrity. I have three at home, but barely turn them on anymore. The Roku that my son has is so much better (including its killer app, Xfinity Stream). I am thinking of replacing all of my AppleTVs with that. 

    Apple was was the pioneer on this one, but has stumbled badly. Period. 
    williamlondonlkrupp