Analysts applaud Apple results: The competition may never catch up

“After knocking the socks off Wall Street estimates, Apple Inc. was rewarded with price-target upgrades on Tuesday by several analysts and a declaration that the iPhone maker may have left its competition in the dust for good,” Barbara Kollmeyer reports for MarketWatch.

“Apple sold 39.2 million iPhones in its fiscal fourth quarter, far more than Wall Street forecasts of 37.8 million units, and the company said it can’t meet demand for the new iPhone 6,” Kollmeyer reports. “The success of the iPhone and corresponding struggles at rival Samsung Electronics Co. are ‘driving people into the AAPL ecosystem for the long term,’ said Chris Caso, analyst at SIG Susquehanna… He pointed to exceptional sales of Macs in the third quarter as proof. The company shipped 5.5 million Macs in the September quarter, which surpassed Susquehanna’s estimate of 4.3 million and consensus of 4.9 million. ‘In total, we think it’s going to become increasingly difficult for competitors to break the market dominance that Apple is now achieving,’ said Caso.”

“Apple’s price target was lifted to $115 from $110 by Morgan Stanley analyst Katy Huberty and her team, who also say the iPhone cycle should be stronger for longer,” Kollmeyer reports. “As well, only half of the 250 million iPhone 4s and older devices still in use are expected to be upgraded this year, which means ‘considerable pent-up demand’ could be seen in 2016, she said. And if Apple Pay or Apple Watch gain traction, the potential for iPhone upgrades could be even greater.'”

Read more in the full article here.

MacDailyNews Take: 5.5 million Macs sold in 91 days.

As we wrote on January 10, 2005, after Apple had just reported 836,000 Macs sold in Q405:

As we have always said, even as many short-sightedly waved (and continue to wave) the white flag, the war is not over. And, yes, we shall prevail… No company is invincible. Not even Microsoft.

Related articles:
Apple seen riding higher on strong iPhone demand, iPad rebound – October 21, 2014
Apple bulldozes Street with record quarterly revenue of $42.1 billion – October 20, 2014


    1. maybe not invincible…

      but Apple is super awesomely incredibly unimaginably strong right now , climbing up to further heights and cementing it’s hold on loyal fans and gaining new adherents, meanwhile it’s rivals are imploding upon themselves, giving profit warnings, with zero ability to innovate (as past success were due mainly to shameless copying) and now after losing patent lawsuits are left to produce gut turning craptastic junk…

    2. You are correct. This is where company’s take their eye off the ball and fall from grace. Heads get to big. Hopefully this doesn’t happen to Apple.. just not sure that’ll be the case.

      1. Rob, I call simplistic. For Apple to fail, it needs to do more than take the eye off the ball. It needs to copy its idiot greedy competitors.
        Steve Jobs was worried about that and created Apple Univ. to help ensure its execs would know what was important and what was not. So far its worked just great. 🙂

      1. LOL. Did you see their presentation? They showed mockups of their new “continuum” feature. I doubt they will release Windows 10 in 2015, but if they do, it will be gimped. Between now and sometime in the distant future more and more users will switch to Apple.

    3. That is sort of common experience, but as such it is only applicable to companies that pursue market share and other sales metrics.

      That does not describe Apple.

      Apple’s focus is to build great products that customers will love using.

      That’s why claiming Apple needs competitors is bogus. That’s why claiming Apple needs to lower prices is bogus. And that’s why claiming Apple is invincible misses the mark.

      As long as Apple continues to focus on delighting their users and making complex situations easier for the user, they will continue to gain loyal adherents and thus grow and grow and grow.

      1. You would think analysts would stop pushing Apple to lower prices by now, but they never seem to learn that tactic isn’t necessary. They can’t seem to get past that market share attraction which has never been a guarantee of any company’s financial success.

        1. I know! I wonder if the amateur analysts do better for no other reason than they have created a financial model *specifically* for Apple whereas the professionals create a new instance of their regular tech company financial model and do a “Save As… Apple” and go from there.

          But still, wouldn’t you also think the customers of those analysts would, at some point, ask “You were wrong — again — what gives?”

  1. Uh, Samsung must be working hard on new videos that show the superior Galaxy line…. I wonder if they can make one now?

    So sweet to see Samsung realize they are NO Apple. LOL!!!!

  2. There’s one thing about that nearly decade old MDN take that bugs me every time you guys post it: Apple’s not invincible either, and hopefully they never develop the arrogance to think otherwise. That’s why I liked Apple maintaining the “Depression-era” mentality over its “cash hoard.” It proved that they were well aware of the fact that no matter how good things seem today, no matter how secure you think your future is, tomorrow could always take a turn for the worse.

    I have faith in Cook and Co. to not let success go to their head. However, the mounting missteps (the stream, iOS 8.0.1, the U2 album, etc.) and perceived missteps (“The Fappening” and “Bendghazi”) do mount up in people’s minds. No one thing will hurt Apple in the longterm, but I also don’t want to see Apple in a “death by a thousand paper cuts/tiny snafus” situation. They need to stay focused on the prize and not let past success lead them down a bad path. But like I said, I have faith in Cook and his team to not do that. I just don’t like seeing hubris oozing from people (Apple, MDN, etc.).

    Hopefully now, with this mindblowingly awesome quarter and the insane Q115 to come, they can start working on refining what they’ve already got out (specifically, software and services). While obviously there will be huge pressure on Apple to deliver for the holidays, those people are not the same ones who work on those software and services projects. So here’s to a great FY15!

    1. Docwallaby, show me where Microsoft was ever bold enough to introduce a new product that cannibalized its own product? Apple has repeatedly and consistently done this through its entire life. Apple II to Mac, the iPod mini to iPod nano, the iPod to the iPhone, etc.

      Apple is not afraid to be the source of cannibalization of its own products. MS never had that vision or courage.

    2. And “Bendghazi” is an extremely offensive slang term. No one died in Watergate but people died in Benghazi. No one died from a bent iPhone, pick a different term.

      The U2 album was hardly a disaster, just a bunch of whiny people that didn’t like a particular album or band that got mad that they got it for free.

      You are really stretching with that one.

      1. Whines openly about “Bendghazi” then brazenly accuses others of being a “bunch of whiny people”.

        This kind of narcissistic hypocrisy doesn’t grow on trees. It’s nurtured in a petri dish in some weirdo lab run by the Koch brothers.

      2. Many many many Americans died in wars for principle of Democracy and Freedom. Watergate was a blatant autocratic abuse of power by the Republican president Richard Nixon to subvert Democracy in the United States. Richard Nixon and his team spat on the graves of every one of our relatives who took a bullet for this country. So do not try to soften Watergate – it is 1 million times more offensive for the highest office holder in the USA to assault American Democracy during the Vietnam War, than it is for a Libyan terrorist with a missile launcher to shoot at a US Embassy.

      3. Wow, way to completely miss the point. NONE of the issues I mentioned were or are in any way, shape, or form serious issues. The streaming issue in September? Not the first time Apple’s had problems live streaming its events, and everyone freaked out for no reason. The U2 album–people getting pissy over free music? iOS 8.0.1 is probably the worst, but it basically affected handfuls of people before the update was yanked. Then there’s things I didn’t mention: Maps in 2012, whatever HealthKit bug Apple discovered as iOS 8 launched, and on and on and on.

        NONE OF THEM ARE SERIOUS ISSUES! They’re little, tiny problems that occur due to carelessness, rushed products, or hubris. And they add up over time. They take on a cumulative effect in the minds of the media and potential purchasers. All I was saying, when you get down to it, was that I hope Apple now has some breathing space to be MORE CAREFUL and avoid these types of overblown mistakes that give off a bad perception of Apple even if I and millions of people recognize that they’re not actually the big deal they are portrayed to be. And I was saying I have faith in Cook’s Apple to DO JUST THAT.

        And what did anything I said have to do with cannibalization and courage? I’m talking about not letting success get to your head to the point that you make stupid decisions. Apple’s stance on cannibalization is a cold, calculated business decision that I fully support because it makes sense. Now, you want to talk about companies doing brave, stupid things? Let’s use Microsoft: the company that pushed out Windows 8. That was a ballsy move, and one Apple would have never made because it was arrogant and downright stupid.

        Apple is a very calculating and deliberate company that, when it chooses to do something, does so deliberately and with overwhelming force. They’re cautious, but not cautious to the point of paralysis. And that trait is what makes Apple so successful–while companies like Microsoft are both scared stiff of losing their core business and arrogantly assuming they’re too big to fail. (Somehow, they manage to live out those seemingly contradictory mindsets simultaneously.)

        Next time, try to understand what someone is actually saying before you run your mouth.

        However, you are right about the offensive nature of the “Bendghazi” term. (Although I would argue that Watergate ruined numerous innocent lives in addition to those of the criminals directly involved in the scandal. But you’re right, to my knowledge, nobody died as a direct result of Watergate.) I allowed my distaste of the overused -gate suffix to cloud my thinking. Can we perhaps come up with a new term that doesn’t reference, diminish, or demean actual real-world scandals and their victims?

    3. Hey docwallaby,

      You bring up a very good point in your post about the MDN take “No company is invincible. Not even Microsoft.” Yes Apple is not invincible but their strategy is a lot different from other companies in that they don’t consistently bad mouth others or try to sabotage their competitors through tactics like Microsoft’s “Embrace, Extend, Extinguish”.

      The screw ups that Apple has are their own, on their own products not on FUD attacks or sabotage of other products. Being invincible helps when you are aggressively attacking others, Apple does not strike me as a company that aggressively attacks others. Now this might be an issue as it’s probably deemed to be totally unpatriotic but fortunately doing your own thing, making you own great products ensures that the moral high ground and that is a very brilliant approach.

      Those sorts of ideas soothe any qualms I have about the MDN take.

      1. Nothing lasts forever. In the long-term, company managements and cultures change, and history has shown that you cannot continue replacing quality with like quality indefinitely.

        Technological developments also have a way of making so-called “indispensable” things redundant and outdated quickly – just ask the music companies.

        But right now, Apple still seems far from hitting its peak. I seriously see a $100-billion quarter for the company within the next five to 10 years. They say they just cannot keep up with demand for the iPhone 6. And that’s frightening. What IS that demand really like?

        Also, Apple’s huge cash mountain, which just keeps growing rapidly with each quarter, will allow them to buy their way into as secure a future as possible. Already, they are picking off the cream of the world’s crop of outstanding corporate creators and managers as and when they need them. Apple will be able within a matter of years to probably buy up a small country!

        Their biggest secret, though, remains the quality of their products. All these little so-called snafus like Bendgate, U2, faulty updates etc are not what drive customers, the most important element in a company’s success.

        When I look for a phone, I’m not making my decision based on whether somebody spent a whole lot of energy trying to bend a phone or on whether I like or dislike U2. All that is just titillation and entertainment. My hard-earned dollars will go on the best product I can find.

        This is a story often told, but worth repeating. When Denis Rodman was with the Bulls and running into all sorts of controversy for off-court shenanigans, Jordan told him: “Just play good basketball. The rest will go away if you do that.”

        As long as Apple keeps making quality products – and acts swiftly when that quality flags – the other stuff will just keep going away.

  3. Samsung and the others will never be able to pass Apple because they are following Apple. If they tried to ever pass Apple (the leader) they would not know where to go next.

    Much like Steve Jobs said and did while developing of the “Next New Thing”. You can’t survey the public about something they don’t know they want or need until you show it to them. That is the Apple way! I hope Apple never looses this approach to their development process!

  4. Will Samsung become the next Nokia? They failed to take out AAPL at the upper- and mid-ranges, and they’re getting eaten at the low end by the Chinese copy shops. Samsung has many more and much larger business lines than Nokia has, so I expect it’ll survive better than Nokia has. And I don’t expect they’ll be completely forced out of the phone business, so I guess I would say I expect they’ll fall back into being just another dog in the pack.

    They’re being disrupted by the copy shops before they could disrupt AAPL (kind of deliciously ironic, that…)

  5. There are still the analysts concerned about Apple losing iPhone market share in the poverty-class BRIC nations. There are those claims that Android will gain an additional one billion new consumers and they think that’s significant enough to harm Apple’s iPhone business. I don’t think those consumers will be worth very much to Google or hardware partners and definitely introduce more fragmentation into Android but analysts have their own agenda about how Apple is going to fall to Android.

    Although analysts claim emerging nations are important for the future, I’m fairly certain $75-$100 smartphones won’t allow enough in profits for those manufacturers to thrive unless they build really cheap junk which consumers will eventually hate using.

    1. And therein lies another fallacy. True, there’s still a lot of poverty in the BRIC nations – and the poor there are never going to get any kind of phone, period. Instead, it is the growing middle-class and tycoonery, awash in money, who are going to get the best, which is Apple products. China is already a huge driver for Apple’s bottom line, and it’s a matter of time before India’s 300-million strong and growing middle class starts making a similar contribution.

  6. I bought one of those 5.5 million Macs! I love my new MBP. Oh and my friend Jesper bought the same. We both love our…
    You get the idea.

    Hey next generation of techies! Kick Apple’s ass! I dare you! Apple always needs competition.

    ♬ Don’t dream it – be it.♪♪

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