“Mohan advises investors should ‘wait for a cyclically better entry point’ given ‘the financials will take a pause from the significant growth witnessed over the past year,’ even though ‘We view Apple as one of the most innovative companies in the world with significant optionality driven by $200bn cash on hand and the ability to enter new markets,'” Ray reports. “Mohan is concerned about China, and about slowing of new users coming into the iPhone fold.”
“Also this morning, Jefferies & Co.’s Arthur Liao cut his rating on Apple contract manufacturer Pegatron to Neutral from ‘Add,’ warning of an impending supply chain ‘disaster’ regarding iPhone. Liao cut his target to $75 in New Taiwan Dollars from $109 previously, writing that the company faces a sharp-curtailment in the number of iPhones that it would appear Apple is building for Q4 of this calendar year,” Ray reports. “Front and center on the hyperbole front this morning is Global Equities’s Trip Chowdhry, who cuts his target on Apple to $155 from $176, writing ‘We are expecting a disastrous China business for Apple and are reducing Apple’s revenue estimates from China for both 4QFY2015 and full FY2016 by 8% (2% higher than the decline in Revenue suffered by any of the closest proxies during the 2008-09 Global recession).'”
MacDailyNews Take: As we wrote back on June 13th:
Those who are interested in actually analyzing companies vs. fomenting low-information investor sentiment against them, are those who listen to what Apple’s management tells them:
“Even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary. The beginning inventory positions can vary, I mean there is just an inordinate long list of things that would make any single data point not a great proxy for what’s going on,'” Apple CEO Tim Cook stated on January 23, 2013.
Read more in the full article here.
MacDailyNews Take: More prodding of the weak-minded. The Big Lie about AAPL is in full effect.
Now for some facts regarding Apple’s growth prospects:
Apple’s iPhone 6/Plus penetration among iPhone owners is a mere 27%. That means there are 73% primed for upgrading to the iPhone 6s/Plus. And, that’s not counting those fleeing from fragmandroid to quality in ever-increasing numbers. And iPhone has 99% user satisfaction. Every year or two, there are hundreds of millions of iPhone users waiting to upgrade.
Like PC sales, iPads have a far longer replacement cycle than smartphones, which turn over every two years (at most). Wholly unlike PCs. “iPad Pro” (likely) and, indeed, true iPad multitasking for iPad Air 2 and newer (also to debut this fall), await in the wings, with iOS 9 set to arrive in a few months. Older iPads need not apply of which there are hundreds of millions in use today. The first real round of iPad upgrades loom.
Apple Watch’s best month last quarter was the last month of the quarter, in June, as supplies finally hit stores and could begin to satisfy demand. Demand that is sure to grow as we approach the holiday shopping season.
According to IDC, Apple’s Macintosh has 13.5% market share in the U.S. and 7.5% worldwide. Apple’s Mac has outgrown the PC market for the last several years. Apple’s indomitable Mac has headroom of a mere 86.5% in the U.S. and 92.5% worldwide.
We won’t even get into Apple TV + Internet TV, Apple Pay, or Apple Music, much less Apple Car.
Sometimes, as with recent record results, even when it’s very good, it’s made to seem bad to low-information investors.
The facts: Apple sold 47.5 million iPhones in the third quarter, up 35 percent year-over-year. But analysts had expected around 49 million units. Analysts also expected growth of more than the mere 35% that Apple posted (in the June quarter, no less) and wanted guidance of more than $51.13 billion – $51.13 BILLION! – in the 90-some-odd-day quarter prior to holiday shopping season in which Apple’s all-time record for the September quarter, so far, stands at $42.1 billion, but Apple only gave guidance with a top end of $51 billion, not $51.13 billion for which some analysts had hoped.
Those are the reasons, besides single data points being misconstrued (by mistake or on purpose), for all of this handwringing over Apple.
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