“An analyst from a tiny research firm claimed that production of Apple Inc. (AAPL) iPhones will decline 20% in the second half,” Douglas A. McIntyre writes for 24/7 Wall St. “The claim does not hold water.”
“Even the largest research houses can only guess what the huge consumer electronics firm’s future is. And the wide spread of opinions means that only one or two can be right,” McIntyre writes. “The rest will be wrong. The statement seems obvious, but it is rarely mentioned. To make matters more obscure, any analyst can walk onto Wall St.’s stage and make a wild claim. If it is wild enough, it might get some attention.”
“Brian Blair at Wedge Partners sent a note to his clients in which he forecast that due to “slowing demand for high-end handsets globally,” iPhone production will fall to 90 million to 100 million from previous a previously forecast 115 million to 120 million. The extreme spread of each forecast indicates how inaccurate both are,” McIntyre writes. “Wedge has five analysts, at most, according to its own PR. And none of them has a reputation worth mentioning.”
Read more in the full article here.
MacDailyNews Take: Some “analysts” exist only to manage clients’ expectations and to generate trades, and hence commissions for their firms. Whether the trades are buy or sell is meaningless, only that a commission-generating trade is triggered.
Just today, a report out of China states that the production volume at the Zhengzhou iPhone assembly plant “touched over 32 million devices during the January to May period.”
Related article:
Foxconn recruiting workers for ‘sizable production’ of Apple iPhone 6, source says – July 9, 2013
Horace Dediu: Investors should expect a 40% drop in Apple shares at any time and for no reason – May 3, 2013
Funny, McIntyre has been an Apple-hater in the past, in order to troll for eyeballs to his financial aggregating website.
Caveat Emptor…
Securities Analysis = Yankee Carpetbagger
The plastic iPhone is going massacre the smartphone market. Samsung and Android’s worst fears have come true.
If anything iPhone production is going to burst at the seams. Luckily there will be a lot of idle Samsung factories to take up the slack.
Yet CNBS discussed this Wedge partners “genius” incessantly yesterday. He never said whose guess the old figure was. It obviously wan’t Apples’s. It also wan’t said that the revised amount was a 25% YOY increase. Just a hit whore hoping nor notoriety in the case he guessed right. No analysis such as what happens with free iworks and there is no need for Office 360 or Office iPad for 90% of users. Takes a couple of 100 off the Apple PX premium when you don’t have to buy the boated MS Office crap.
These Pundits live for clicks; being accurate is irrelevant.
I saw the interview yesterday on CNBC. He was actually asked what facts he had to back up this claim. The host made a point that the analyst could have an effect on the stock price with such a claim. So he wasn’t given a free ride. Sometimes they are. He quoted sources but with no hard figures. Hard figures would be impossible anyway as only Apple would have those facts. Different manufacturers account for the total supply for Apple but each individual manufacturer would not be able to quote a credible percentage (overall) of cutback for any device for Apple. I don’t go with the theory that all analysts and journalists are crooked. That’s just not true. Lawyers? Mmmmmmmmmmaybe? Analysts and journalists weren’t all crooked last summer when Apple shot up to $705. But then just as now, there are always knuckleheads. For some people it’s easier to complain about journalists and analysts than it is to make sound investment decisions themselves. You have to figure out for yourself when to take your profit. Don’t expect an analyst to do that for you. There’s no handholding in investing. Holding on to a $320 per share drop can’t be blamed on analysts or journalist. They can’t hit the sell button for you. Having said that, this guy did look to be a bit of a devious knucklehead. They are out there.
Even though this guy is a nobody the story rippled through the blogosphere like it was from the words of the Almighty Creator. I’d swear that any unfavorable news about Apple is just spread like wildfire for reasons that don’t make any sense at all. There’s no way he could pull a number like 20% production cut unless he worked in Apple’s accounting department. This is just another case of someone knowingly spreading lies and misinformation for unknown reasons. It’s too bad people like this can’t be prosecuted for spreading misinformation. He’s of no help to investors if he’s only guessing.
click bait at the very least.