How Apple beats the ‘tough compare’ of holiday iPhone sales

“Brean Capital’s Ananda Baruah today pounds the table for shares of Apple, reiterating a Buy rating, and a $170 price target, urging investors to look past ‘supply chain ‘noise” regarding December and March iPhone shipments to what he sees as several positives,” Tiernan Ray reports for Barron’s. “Baruah also thinks that amidst all the noise predicting slow growth, or even declines, in iPhone in 2016 — a peak in the product’s lifespan — that the company can sell around 250 million units, or 7% growth from what he thinks will be 233 million units this calendar year, and possibly even see 10% growth.”

Ray reports, “Going quarter by quarter, Baruah thinks all the hand-wringin in recent weeks over December iPhone shipments will be proven wrong as the company beats a bogey of 76 million to 78 million in unit shipments: ‘We believe 1) the Street had unreasonably strong expectations coming into the Dec Q (generally set ~76M – 85M units shipped) and 2) that AAPL has had a very close eye on being able to achieve what has become a Dec Q Street iPhone estimate of 76M – 78M; we think that the company can deliver this number by building 70M – 75M and shipping the balance from inventory.'”

Read more in the full article here.

MacDailyNews Take: The real story will be revealed for all to see in late January.

Those who underestimate Apple and Tim Cook are due for a rude awakening.MacDailyNews, November 23, 2013

12 Comments

  1. The main thing that analysts don’t realize about Apple is that the iPhone does not have to continue to grow in order for the stock to warrant growth. The Apple bank account is the thing that keeps growing, whether iPhone sales grow or not. How they can be blind to this is beyond me.

    1. They should be able to realize it. They’ve already been told that the majority of older iPhones have not been upgraded and obviously based on a particular cycle there will be recurring iPhone sales far more often than most companies can have for any other high-tech product. A one to two year product cycle for an iPhone is very high. You’re not going to get that from HDTVs, cameras, A/V receivers, gaming consoles, or what have you.

      The analysts biggest argument is that the iPhone MIGHT fall out of favor based on what has happened to other companies in the past but there is absolutely no guarantee it will happen next year or the year after that. That time frame is dependent upon the company failing to improve the product or some other rival company making some unprecedented breakthrough. That example could be said about almost any other tech company in existence and not just Apple.

  2. Stock Market 101: Wall Street doesn’t control, decide or “set” the price of a stock. When traders are (in general) more interested in selling it than buying it, the price of a stock declines. The opposite is also true. So, if you “Play” the stock market (trade) you quickly find the only way to make money on a rising stock is to be among the first to buy it (when it is still low). And the only way to avoid losing money on a declining stock is to be among the first to sell it (when it is still high). The net result, folks, is traders don’t watch the company behind the stock. They are watching each other. If a few start selling a stock, the rest rush to sell it, too. If they hear some news (or some analyst’s comments) that they think will cause other traders to react, they will try to be among the first to so react. Thus they become a self-fulfilling prophecy.
    Investors, on the other hand, are interested in the company. They buy and hold for the long term. For them, it’s a savings account with (hopefully) a better return. But because of this, Investors don’t influence price changes in any way.
    Wall Street is not smart, stupid or clueless. People who cry, “They just don’t understand Apple,” don’t understand the market. It’s a mob-mentality, pure & simple. They don’t care about you, me or Apple. They only care about each other and any “skill” they may have is simply the ability to predict what other traders might do before they do it.
    I’ll get off my soap-box, now.

    1. The bit you left out is that some groups can use the fickleness of traders to swing the price. A rumor here and there and all of a sudden the whole trading world believes Apple is doomed.
      That is what I find disturbing about the stock market. There is a lot of rigging going on and essentially done to fleece money out of investors.

    2. you have called it right on the nose. unfortunately, those of us who are in the investor category generally suffer at the hands of the traders.

      so be it. that is unlikely to ever change

      but i might like to suggest to mr. apple that one way to reward those of us with faith in the company, is to be granted a sizeable increase in our dividends.

      my surmise is that we will never again see the growth we did in the past. apple will continue to be successful as they build out new products, all of which will increase its earnings, but are quite unlikely to propel explosive growth and take me back to the days of a $10 share rocketing up to $700.

      so even though the stock will go up and it will go down, from here on in i believe it will a hold and dividend earning investment stock. – hence my suggestion that dividends be regularly increased, starting with a nice big one right about now.

      the stock and i (and most of us here) have taken quite a beating in the last few months, and i would like to feel as though i can still benefit from my investment – (apart from the karmic implications).

    3. This is blatantly obvious when you look at a stock’s performance over the years – especially Apple’s. The overall trend in Apple’s stock is up. Just need to weather all the back and forth trading.

      And you can see this is happening to Google right now – their stock is up $250 since July of this year!!! I believe when Apple hits a certain low, all those traders that have ramped up Google’s stock will dump and start buying AAPL.

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