“With Apple’s share price already down 15% from its high in April, numerous business articles have announced that Apple is in a ‘correction,'” Mark Hibben writes for Seeking Alpha. “By the usual definition, corrections occur to adjust for overvaluation of a stock. Even at its all-time high, Apple wasn’t overvalued, making this a false correction.”
“Paul R. La Monica’s article about the ‘correction’ in CNN Money should serve as a comprehensive list of talking points for Apple critics for the rest of the year,” Hibben writes. “His explanation for the ‘correction’ is ‘disappointing’ iPhone sales and the Canalys report citing Apple’s market share decline in China in the June quarter.”
• Disappointing iPhone sales: How disappointed can you be over a 35% y/y increase in unit sales?
• Declining market share in China: The focus on sequential changes in product shipment or market share has often been exploited by Apple critics to portray Apple as on the decline. Such portrayals are inherently deceptive.
• Apple is too dependent on iPhone: Last quarter, Apple’s non-iPhone revenue was $18.237 billion. That’s more than Google’s total revenue last quarter of $17.727 billion. If we apply Apple’s corporate operating margin rate of 28.4%, then the non-iPhone operating profit would have been $5.178 billion, once again beating Google’s total operating profit of $4.825 billion.
“In the coming months we’ll probably hear all the reasons why Apple is going to fail repeatedly in infinite variation,” Hibben writes. “The difficult comps will get frequent mention. Leaked supplier reports will claim that iPhone sales are “disappointing”. Apple Watch will be an unmitigated disaster. The litany of negative speculation will seem endless. And it probably won’t end until Apple reports fiscal 1Q 2016 results next January.”
Much more in the full article – recommended – here.
MacDailyNews Take: As fairly close followers of Apple-related news, we’ve seen this ruse numerous times.
AAPL is like a buoy. Quick, it’s back on the surface! You there, analyst, and you, too, swim down and tug on the chain! Drag it under… lower, lower… Good! Now, quick, everybody jump on, and we’ll take a ride back up to the top again!
At the most basic level, it’s extremely simple: Pump, then dump. Foment, then buy. Rinse, lather, repeat as the SEC sleeps.
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[Thanks to MacDailyNews Reader “Bill” for the heads up.]