UBS cuts Apple estimates, reduces price target from $700 to $650

“UBS analyst Steve Milunovich sliced his estimates for Apple for both FY 2013 and FY 2014 to reflect the findings of a new survey by Consumer Intelligence Research Partners that finds customers shifting to cheaper iPhones with less memory,” Eric Savitz reports for Forbes.

“For FY 2013, he now sees profits of $44.68 a share, down from $47; for FY 2014, he goes to $52.80, from $55.85,” Savitz reports. “Milunovich maintains his Buy rating on the shares, but trims his target to $650, from $700.”

Savitz reports, “The survey, according to Milunovich, reached some surprising conclusions: Demand for storage has declined from about 30 GB with the 4S to 20 GB for the iPhone 5, with fewer customers choosing the 64 GB model. Demand for older models has increased to 50% in the iPhone 5 cycle to date, compared with 33% in the 4S cycle.”

Read more in the full article here.

MacDailyNews Take: One question: How many of those older model and lower memory iPhone sales were to buyers who otherwise would not have purchased an Apple iPhone at all?

Only Apple’s executive team — not research firms, analysts or pundits — knows the answer to that one. Obviously, that answer could shine a whole new light on CIRP’s data.

The parade of AAPL analysts to jump to negative and possibly incorrect conclusions based on third-party data continues.


  1. To do this today (a day before earnings) only proves they dont give a shit about facts. I would be scared of trusting this bank with my money if their analysts jus love to guess.

  2. It is nice for a change to be going into an earnings announcement without wild over estimations that they put out there in recent years – numbers that apple could never meet. This current pessimism may allow for the analysts to be blow away by the real numbers rather than “disappointed” by apple’s “shortfall” from their overly optimistic predictions of yore.

  3. I continue to be amazed at how much this site and its commenters get sidetracked by downgrades or upgrades of AAPL. If you are an investor, the only thing that matters is what Apple reports. If you are an investor, you are looking for a payoff on your investment over years, so single quarter setbacks or blowouts should not drastically change your thesis. The problem is, most people that get up in arms are speculators looking for fast money up or down. You have no basis on which to truly analyze the numbers and what they really mean. Many believe you are smart because you bought Apple lower than where it is today and hung on for the ride upward. This does not make you a good investor. It makes you a lucky speculator. If you are a TRUE INVESTOR, analyze the data and be patient to see if it plays out over time as you expect. Apple falling to 300 would be a gift from the greatest gods above. It simply means you get to buy that much more. Like Buffett says, buy a stock as if the market were to close for 5 years and you could not sell it again before that time. Would you buy AAPL? Make you case to yourself as to why you would or would not and then track the data as you get it. Don’t blame analyst. Profit from them scaring the sheep out of a great investment on bad “guesses”. If you know better, then make your investment and be patient.

    1. So everyone else that is made money in Apple except for you was lucky? You’re the only one that does research? Buy-and-hold forever is the only way to invest? I’ve been a long time AAPL investor. And I don’t hold forever. And I do detailed research. And I certainly know when to take my profits and wait for a better reentry point. As any intelligent investor knows, at some point you’re greedy to not take your profit. And foolish. And the last thing I am is a daytrader. Or speculator. No, you sound like someone way underwater in AAPL. My guess is that you wish you had sold in September. I did. Now you’re trying to justify being a buy and hold forever investor. It doesn’t wash.

      1. I have held Apple Long since 2005. But that does not matter as you probably will not believe me. I could just as easily say I taught Jony Ive everything he knows about design. You missed my point in your defensive attack on my post. I simply am stating the fact that to get bent over every report that comes and goes shows a local of conviction as to why one owns an investment. If you know your reasons and have detailed them, only when new facts come to light should you evaluate the soundness of your investment expectation. The idea of trying to validate or discredit every analyst or blogger that has an opinion on Apple as a way to defend your holding of the stock is both a waste of energy and time. I am certain many others have done their homework and have been rewarded for their efforts. My comment is simply an observation of those so easily angered and resort to name calling and discrediting every analyst that has an opinion. That is all it is. If it happens to influence the stock price, so be it. That is only a short term move as the fundamentals and actual performance of the company over the long term will determine the future price of the shares. Short term, market votes on AAPL, long term market weighs AAPL.

        1. Goodness I’m not defensive. I was simply responding to your post. And I don’t need to discredit you, your post does that. At least to anyone who knows anything about investing. You are the one who made the “lucky” comment about Apple investors. And them not being smart. And how you are a “True Investor”. I didn’t call you any names. That’s not necessary. Is it?

    2. When you are not retired and still putting money away, you have the luxury of taking a buy and hold strategy. When you are about to retire or are retired, your strategy is useless. When you want to make more money than buy and hold allows, you go with the trends

      Most ‘investors’ only know how to buy and have no clue as to how or when to sell. The market eats these ‘investments’ for breakfast, lunch and supper.

      1. Absolutely. And I’ll go even further by saying that buy-and-hold doesn’t make any sense when you’re still working. It never makes sense. As you state, so many people do not know when to sell. At some point it is just plain foolish to not take your profit off the table. Nothing goes up forever. Everything comes down if only for a short time. Sure I’d like to see Apple drop to $300 too, that would be $400 cheaper than where I sold it. I’m always amazed at the folks on this site who try to justify buy and hold forever. They try to throw out speculating or daytrading as a reason they hold forever. You don’t have to speculate or be a daytrader to know when you have a tidy profit and it’s time to reap what you sow. You invest for a reason. You invest to make a profit. If you don’t ever take your profit why do you invest? For that day 50 years away? Buy low and sell high isn’t luck. It takes research and due diligence. Buy and hold forever is nothing but hope and guessing. How smart is that?

      2. Regardless of whether you are retired or not has no weight on whether or not you should invest using sound principles. What does have weight is your overall financial position, ability to sustain a loss on an investment, liquidity needs both in the short and long term, and your ability be able to make decisions based on the investment alone and not emotions or financial hardships that may force yours to act at inopportune times. The bargain bins are lined with trend following books, and day trading strategies. Over time sound investing principles always win out. Fly by night trends and chart reading strategies may work for periods, but always revert to the mean, end up being less tax efficient, and usually end up grossly underperforming a more simple and fundamentally based investing discipline.

  4. Of course the ASP for iPhones will go down over time. Apple are selling the previous years models for less. People who wouldn’t pay 200 or 300 for a phone with contract, are now getting the iPhone for no or little upfront fee.
    As a result Apple are increasing their addressable market but because the manufacturing costs are lower for the cheaper iPhones their margin will remain good.
    Standard Apple play – they did that with the iPod, are doing that with Macs and will continue the strategy with iPhones and iPods. They capture the high end market and gradually produce lower cost products to squeeze the competition.

    1. And that’s essentially the trend we’re seeing in the overall market. Sales of high-end smartphones are not shrinking in real numbers (in fact they’re continuing to grow).

      Because the smartphone market is growing, and gobbling up sales that used to go to dumbphones, we’re seeing more and more low-end smartphone sales — but not ‘at the expense of’ high-end phones like the iPhone models.

    1. We’ve noticed the trend in our home. For us, it was just about having more than one iOS device now.

      Our phones are for calls, email, maps, the web, and a few key apps. iPads seem to accumulate the videos. And we’ve got a couple of older iPods for music.

      Would I buy an iPhone that’s slower or has a poorer screen? Not at all. But storage is just less important for us.

  5. at some point the puts are going to be overloaded and the put writers are going to be buying up calls and institutions are going to put back into AAPL the 300 billion dollars of sideline cash they are holding.

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