Memo to Apple: Prepare for weak Christmas season sales or something

“Numerous seasoned retail analysts have already labeled the looming 2013 Holiday Season as the worst sales event of its kind since 2008. In 2008, Americans were coping with the fallout of a credit crisis that was the epicenter that jarred the real estate and stock markets into major corrections,” Kofi Bofah writes for Seeking Alpha. “This year, American consumers have been left to navigate after affects of a government shutdown, alongside the ongoing launch of The Affordable Health Care Act, or Obamacare. Earlier this year, Social Security payroll taxes increased from 4.2% to 6.2%. The additional taxes are most likely to affect the buying habits of middle-income Americans. Prospective Apple customers are now in the market for value, instead of performance, or whatever hipsters may believe to be cool.”

“A recent report out of investment bank Morgan Stanley warned retailers to ‘expect coal’ throughout this 2013 Holiday Season. Morgan Stanley analysts foreshadowed a slight 1.6% year-over-year increase in comparable store sales (Morgan Stanley estimates exclude J.C. Penney) through this Holiday Season and fourth calendar quarter,” Bofah writes. “According to Morgan Stanley, the projected scant growth in sales is solely due to an expansion of the population, rather than heightened consumer interest. The National Retail Federation did anticipate that gift spending per person would actually decline by 2.5% to $536.85 during the 2013 Holiday Season. Most likely, this coal-in-stocking undertow will also drag down Apple results.”

“A weak 2013 Holiday Season would foreshadow another year of flat earnings statistics at Apple. The stock market functions as a pricing mechanism to discount future growth, rather than immediate balance sheet snap shots,” Bofah writes. “As such, the $146.8 billion in cash and securities now lying fallow on the Apple books shall not be mistaken for game changing innovation. Apple may very well begin to trade like a utility through 2014.”

Read more in the full article here.

MacDailyNews Take: iCal’ed.

Bofah doesn’t understand Apple customers.

The fact is that Apple customers are among the least likely to be affected by macroeconomic conditions to the point of forgoing Apple products during the holiday season. Worry about HP, Microsoft, McDonald’s, Samsung and Walmart, Kofi, not Apple.

In addition, Apple is a global company. While the U.S. is indeed an important market for Apple, it certainly isn’t the only market into which Apple sells.

Related article:
Android has the most unit share, but Apple dominates profit share, making more money than all Android smartphone makers combined – November 15, 2013
Android users poorer, shorter, unhealthier, less educated, far less charitable than Apple iPhone users – November 13, 2013
What we mean by ‘Hee Haw demographic’ – November 13, 2013
IDC data shows two thirds of Android’s 81% smartphone share are cheap junk phones – November 13, 2013
Android phones 3 times more likely than Apple iPhones to have been bought at discount store – August 22, 2013
CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
Twitter heat map shows iPhone use by the affluent, Android by the poor – June 20, 2013
Apple’s iPhone generates more in carrier fees than rival smartphones – January 30, 2013
Newsflash: Apple sells premium products at premium prices to premium customers – October 23, 2012

26 Comments

  1. Memo to you: you are wrong.

    As many commenters pointed out, Apple is a high-end consumer products company. Those who can afford there more expensive products I least likely to be affected by the recession. Furthermore, those who cannot afford it managed to go way out of their way to buy these products for their kids because they are coveted. I work in a high school and have seen numerous iPhone 5s, 5C, and even kids bringing iPads to school now. This coming from a school where 70% of the kids are on free and reduced lunch. They pig, barter, and steel to get Apple products because they are sexy and have brand-name recognition the way Nike does. It’s a status symbol still.

    I keep repeating myself over and over and continue to be called ignorant and a full, but Apple is not targeting value conscious are price conscious buyers. This is why android as a whole market cannot accurately be compared to iOS.

    Data reported that on Black Friday Apple and iOS users spent an average of $127 per transaction compared with $105 per android. 40% of iOS devices purchased were with android devices as well. To get an idea of the “market” you really need to compare high-end phones to high-end phones and not an entire Low, medium, and high-end market against apples higher end devices. Furthermore they’re not just the phone company or an iPad company or even just a computer company. They sell more products and Tim Cook has insisted new products are coming into thousand 14.

    And to say android is “taking” AppleShare when it sells a $50 device is not accurate by any means.

    Apple sold incredibly during the holidays and continues to be a product that sluggish retailers are using to coax people into their stores.

    It’s pretty frustrating to see things like this published to look like “news” when it is complete bullshit and an opinion. The world may end tomorrow. And I love to say that and treated as news. Have some fast data to back yourself up.

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