“When Apple reports second-quarter earnings on Tuesday after the bell, sales will be down from the same time last year. That’s according to Apple’s own guidance,” Kif Leswing reports for CNBC. “Apple has been pummeled in the headlines all year. On January 2, Apple said that its critical holiday quarter revenue would be $7 billion short of its previous projection because iPhone sales had taken a beating in China.”
“Since then, Apple has made the rare move of cancelling a previously announced product, held a strange invite-only event at its campus without any new hardware products and missing critical details on the products it did announce, and most recently, settled a legal war with Qualcomm and paid it a one-time amount analysts believe to be in the billions,” Leswing reports. “Yet Apple stock keeps going up.”
“But Apple’s rising stock suggests that the market is finally digesting what the company has been broadcasting for years: Apple is changing its story — it’s not the iPhone company anymore, even though that single product accounts for over 60% of Apple’s sales,” Leswing reports. “Instead, Apple sells a slew of online services with recurring billing, so Apple deserves to be priced more like Amazon, Google, or Facebook.”
Read more in the full article here.
MacDailyNews Take: Objects in media are smaller than they appear.
Fundamentals are the best in tech by far…
Maybe idiot short-sighted investors are finally coming around to realizing that.
Book ’em, Danox !
“even though that single product accounts for over 60% of Apple’s sales”
This also means 40 percent of revenue is coming from other sources and that piece of the pie is growing quite fast. I tried to tell the doom and gloom trolls back during the recent market chaos when AAPL took a tumble but they never listen to facts.
Bingo….!!
The biggest clue that this is a hit piece is that Apple “held an strange invitation-only event at its campus without any new hardware products.” Every year, NBC, CBS, ABC, and Fox hold equally “strange” events to announce upcoming programs without a single hardware announcement. Apple Computer Inc. changed its name and diversified 12 years ago; it is not just a hardware company anymore.
The second indication is the reference to Apple settling the Qualcomm suit and paying billions. Yes, but Apple had stated for years—and everybody knew—that they owed billions, just not how much. They settled the suit for billions less than Qualcomm was demanding.
AAPL hasn’t even recovered its 1 year moving average share price.
Also, what is undeniable: Apple’s hardware and services are interlinked. It is not very likely that someone in China is going to seek out Apple music or video if they don’t own an iPhone. Perhaps you could explain to us why decline in hardware sales in the beginning of a slowing global economy is somehow disconnected from your bullish stock predictions.
Easy to do. It’s the installed base of iOS devices already in consumer hands – not quarterly sales or sales increases — that drives services and wearable sales. That’s over 900 million iOS devices that phone home to Apple regularly. That number won’t go down and is still going up. As the replacement cycle elongates, these folks have more money available to buy apps, subscriptions, etc. Pretty obvious on close examination. Widely misunderstood.