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Apple Blames Earnings Miss On iPhone 5 Anticipation
Hugh Pickens writes "Reuters reports that Apple shed more than five percent of its stock price value in after-hours trading after the company reported its second quarterly miss on results in less than a year, highlighting how the Apple brand is becoming less resistant to the economic and product cycles that have plagued rivals. 'Clearly it was a disappointment,' says Channing Smith, Co-Manager of Capital Advisors Growth Fund. 'We expected a lot of consumers will probably delay their upgrade and their purchases until the iPhone 5 comes out. We saw a similar trend occur last year with the iPhone 4S.' Executives acknowledged buyers were refraining from purchases because of 'rumors and speculation' around the iPhone 5, which sources have said will ship in September with a thinner and larger screen. 'The iPhone 5 is already the most hyped device and for it to exceed expectations is going to be really hard,' says BGC Partners analyst Colin Gillis. This is one of many reasons Apple is so notoriously secretive. With the levels of hype that Apple product launches garner, it would undoubtedly crush its own sales if it announced products even months in advance. Instead, Apple slowly and silently draws down inventory in distribution channels, and then the upgraded product is available immediately (or nearly immediately) after it's announced. According to Apple CEO Tim Cook, 'there is an incredible anticipation out there or for future products and as you would expect given what we've been able to deliver in the past.'"
But still insane profit.
but imagine how bad it will be when apple's competitors products are no longer being blocked by the court system in frivolous lawsuits.
Anyone with a shade of education will understand statistical deviation around a steady trend. If you expect to make the exact extrapolated revenue figure, well, you should maybe go back to school or finde a more appropriate job than administering investment funds or consulting for the investment community. Just a thought.
The only people who were disappointed with Apple's results were the "financial analysts" (and I put that in quotes for a reason...) who made wild predictions and were proven, as they often seem to be proven, wrong. I don't know of any other profession, _including_ meteorologists, where being wrong in your prediction that often is acceptable.
Anyone who couldn't foresee buyers slowing down on iPhone purchases as the refresh date approaches, is an idiot. Apple has released their new model like virtual clockwork for several years. There was going to be a slowdown. Expect it. Here, I'll make a bold prediction - in one year's time, rumours will ramp up of an "iPhone 6" (which will actually be called the "iPhone 5S" though nobody will be smart enough to foresee that...) and sales of the iPhone 5 will slow down though Apple will still have an exceptionally strong quarter selling an enormous number of devices though "market analysts" will claim it's a disappointment. Write it down. Take it to the bank. That's a prediction you can bet money on.
Seriously, why investment firms pay these morons even a penny for their ill-informed random guessing is beyond me. Actually, that's not fair - if they were guessing randomly, they'd at least have a chance of periodically getting it right and the majority of these people get it 180 degrees wrong every time...
I've got a 3GS also, but am really at a crossroads. I bought the 3GS week one after the launch. At the time it was the exact phone I wanted. Now, though I'm torn... my 3GS screen just cracked and nothing is quite right.
No point in buying a 4S with the 5 around the corner. (Hell even if i wanted a 4S, waiting for the 5 and picking up the 4S on sale or gently used makes sense. But really.. I don't have a 4 or 4S precisely becuase they added nothing I wanted. And iphone 5 isn't looking to change that.
The Samsung Galaxy S3 is high on my list and well reviewed, but until they officially announce jellybean for it with a ship date... I'm holding out. I've been burned before on promised upgrades that never materialized. Jelly bean seems like enough of an improvement that I won't settle for for anything less.
And even the Lumia's -- I actually really like them and am even seriously consideriing one for my next phone, but with WinPhone 8 around the corner, and it already being announced that the existing lumia's won't be upgraded. Again... holding out.
Right now is just a terrible time to buy almost a smart phone, to the point I'm seriously considering getting the screen fixed on this one. I can hand it down to my daughter or something.
This isn't really a "problem", except in the eyes on a market focused on quarterly earnings. They make most of their money in the quarters they release a new phone or a new tablet. That doesn't mean they make less money overall, it just focuses when the majority of that money comes in. What's really insane is that not only did they make a shit pot of money this quarter, it's a much bigger shit pot than the same quarter last year. For some reason it's a "problem" that the shit pot is slightly smaller than some random guys who don't even work for the company sort of though it might be. This is rather like you winning a gold medal at the Olympics and me being upset with you because you didn't also set a world record in the process.
I don't need a million points of light, just two points of multi-mode fiber and a 10 Gig-E router.
Or in this case, hypowned.
Actually, I would initially argue Google as well as MS, however aside from Hype, there is one thing, which at first glance can look like a bad thing, but can also be turned into a case of 'turning your weaknesses into your strengths'.
Apple has much less variety in product lines than Google or MS in terms of the small-form-factor mobile market (cell phones, int the case of Google, tablets), or MS in terms of the notebook/desktop market. One reason I wouldn't get a MacBook - I'd have to pay a premium for things I don't give a damn about, while still missing things that are important to me.
How does Apple turn this weakness into a strength? Several things, some good, some, IMO, underhanded.
1) More time for QA - since the products are tied together, and their is a smaller variance, Apple can spend more time on QA per product, while still spending a lot less money on QA. I wouldn't argue they are any more stable than a good MS or Google product, but they certainly are less quirky than all but the very best MS or Google alternatives, and they are more polished in most regards, than any of the competing products.
2) Marketing - Apple can get by the lack of options by convincing the market they want what Apple is selling, rather than selling what the market wants. Often promoting hackish/clunky workarounds as acceptable. The caveat, is these tend to also primarily affect smaller groups in the market.
3) Less confusion - users won't get option overload, which easily happens for a user not fairly well knowledgeable in a subject where there are many options.
Self proclaimed typo king, and inventor of the bear destroying coffee table (patent not pending).
I've heard these stories for years now. "Apple misses targets of financial analysts" except that the the last three words are often left out. They missed the targets of others for years and years with the iPod. If Apple made one gazillion dollars next quarter, the analysts would complain they didn't make two gazillion dollars. Apple themselves does not put out targets like this because the rampant speculation is bad enough now. Other companies also have to deal with analysts' expectations too.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Apple themselves does not put out targets like this because the rampant speculation is bad enough now.
Actually they do, Apple do give out specific guidance and forward looking statements to the financial markets on expected earning targets. For this Q3 Apple said they would be making $34b revenue, and they did $35b, similar for profit - so they beat their own targets.
But, the problem is that they have historically so consistently given guidance significantly below actual results, quarter after quarter, even very close to publishing the results (and enjoying all the "Apple crushing expectations again" headlines), so that when this time the gap between the Apple guidance and actual results were much much less, it was a negative surprise even to the people trying to listen to the guidance directly from Apple themselves.
What you gotta realize is that the stock market, and especially the price of certain closely watched stocks like Apple's, are driven by trader's emotions and expectations. If they believe the price will go up, they buy, and the price goes up. If they believe it will fall, they sell, and the price goes down.
If it were objective, based solely on P/E ratios and such, Apple would already be trading at over $1,000.
Clearly a troll, but common FUD nonetheless---and, as per the parent, Apple turning a weakness into a (perceived) strength). However, either:
Despite "choice is bad" propaganda, which is surprisingly successful, especially among those who should know better, actually making a good choice is not difficult for anyone.
Don't think of it as a flame---it's more like an argument that does 3d6 fire damage
Bullshit
http://biopsychiatry.com/happiness/choice.html
I certainly agree with most of your comment, but I do have one big gripe, and I say this as a lifelong PC freak.
One reason I wouldn't get a MacBook - I'd have to pay a premium for things I don't give a damn about, while still missing things that are important to me.
This is where I have to rebut. I've owned, repaired and/or sold just about every PC laptop on the market. When the time came to replace my own aging laptop last year, I looked everywhere for the right fit. There were none. Then someone hired me to write mobile apps so I needed a Mac. I bought a Macbook Pro, and it is the best damned laptop I've ever owned. I still hate the OS, but the hardware is fantastic. Fast, quiet, sturdy, functional, epic battery life. It is everything I want in a laptop. I don't feel like I paid a premium, because high-end PC laptops are just as expensive, yet they're pitched as "desktop replacement" devices, which is a euphemism for "big fragile noisy non-upgradable piece of tethered junk with a built-in UPS". I paid a high-end price for a high-end machine, got exactly what I wanted.
I kid you not, I'm in the PC sales and service business, and for years I've recommended Dell laptops, because hey at least you get a good warranty with your shitty laptop. I still do, because for most people, that's all they need, but for any professional use I try to steer them toward a Macbook. As a freelancer, I quite enjoy the convenience of a full day's work on a single charge. Worst case, if I'm doing compile-heavy stuff, I can quickly top-up during a coffee break, head over to the pub and sip a few pints while logging the other half of the day's billables.
Now, on the converse, I am not at all interested in Mac desktop computers. THAT is paying a premium for run-of-the-mill hardware. I wouldn't even buy an iMac for myself, because I can bolt a mini-ITX box to almost any LCD and have the same small footprint at a quarter of the cost. I sell "luxury" PC desktops (gamers, design nuts etc), and I don't think of Mac Pros as anything even remotely luxurious. Shiny, but not powerful for the money.
-Billco, Fnarg.com