Apple earnings can throw a major surprise

“Apple shocked the market in early January when it revised the revenue estimates lower. Most of the blame has been put on the China market. However, there are several other reasons for the dramatic fall in sales number for the holiday quarter,” Bluesea Research writes for Seeking Alpha. “The higher pricing for the iPhone is one of the reasons why customers are delaying their purchases.”

“Apple is now trying to give a better deal to customers by offering massive discounts,” Bluesea Research writes. “However, the management would need to walk a tightrope on this aspect. If they over-emphasize on the discounts, it will end up hurting the margins and not to mention the long-term branding for the company.”

“Apple could show another quarter of operating margin decline in the next earnings call. The company had reported 11 straight quarters of year-on-year operating margin decline which was broken in the last quarter due to different launch dates of pricier iPhone models,” Bluesea Research writes. “If the company reports substantial revenue as well as margin decline, we should see another round of correction in the stock.”

Read more in the full article here.

MacDailyNews Take: Suffice to say that Apple’s Q119 earnings results and subsequent conference call on January 29th will be very, very interesting!


    1. Trump’s trade war has only begun.

      Remember, consumers are only now just starting to feel the price effects from jacking up steel tariffs.

      Apple may be the biggest casualty of the china tiff, since its businesses entirely depend on cheap Chinese labor.

      Plus with the repubs locking out federal employees, GDP is projected to tumble. Accurate measurement of how bad business may be destroyed by petulant brat Trump won’t be possible in the near term because the federal economists who do that work are “not essential”. To an idiot like Trump, the only data he can bother reading is from talking heads on an entertainment tv channel.

      Stocks will all start sliding down faster as company after company revises their guidance down over the next couple months. AAPL included.

    2. The winds of change are beginning to blow in Cupertino. I predict 2019 is the year Cook gets the boot from the CEO chair. He will remain on the board as a consultant on corporate greed and gay rights.

  1. As I understand it it, Apple is publicizing a trade-in program for the iPhone that had been in place for some time, but unknown to many users. Apple doesn’t simply through the traded phones into a landfill. It refurbishes them and resells them at a profit. Accordingly, aside from the modest price reductions in China, which align the China pricing with the US pricing, there has been no “massive discounts.”

    1. Big investors care nothing about these recycling programs so Apple is only valued for how many new iPhones are sold and nothing else. If a company could build a smartphone that self-destructs every year, that would be the company big investors would praise and back. Big investors only interested in increasing unit sales. Their brains only work a certain way. Honestly, no one is praising Apple for selling refurbished products.

      No company outside of Apple has any interest in selling green products as those programs cut into investor profitability.

  2. I tried to go to the article link three times. Each time my iPad Pro 12.9” 2018 model with 12.1.3 had Safari quit, and the Desktop turned sideways, so that it was vertical, even though the lock was on. I had to open the lock, and partly turn the screen for it to go to horizontal again, and then re-lock it.

    I’m not going to try the link again until there’s a note on the page that it’s fixed. I haven’t had this problem with anything else.

    1. The same thing was said about Jobs. If you expect everything to go perfectly all the time, you should never invest, for one thing.

      Right now, China, where the main problem lies, is in economic trouble. Trump’s tariffs are causing problems with these goods too. Additionally, the holding of the Huawei executive in Canada for extradition has opened a can of worms. Apple’s phones are in an informal boycott, where major companies are fining workers for buying iPhones, and are being encouraged to buy Huawei phones instead. The Chinese are very nationalistic.

      What can Cook do about these problems? Not much.

  3. Well releasing cheaper iPhones models to appeal to lower budget points would make a lot more sense than offering discounts and reducing their margin. It is not like Apple needs the extra cash to survive. At some point we will just have to accept that smartphones are a mature market and that growth will come from somewhere else like services.

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