Stefan Redlich for Seeking Alpha:
Apple’s fiscal Q3 2019 results featured a comfortable double beat with EPS beating by $0.08 and revenue by almost $400M.
In the past Apple’s narrative always has been centered on the iPhone, precisely iPhone unit sales and the average selling price (ASP). Although Apple stopped disclosing that information in FY2019, analysts still have not abandoned coming up with out-of-the-blue unit estimates for iPhone. For instance, in mid July Loop Capital estimated 182M iPhone unit sales in 2019 with ASP of $733 compared to a consensus of 185M at $754 ASP. However, renowned Wall Street firm JPMorgan (JPM) has made a real fool of itself when it trimmed Apple’s stock price target by a full $2 from $235 to $233 as it revised its iPhone shipment estimates slightly. Not only will they never be able to verify their assumptions, as Apple won’t disclose these figures, but why a $2 reduction in a stock price target which is way above the current stock price is newsworthy will never be answered.
MacDailyNews Take: Predicting a number that will never be revealed is oh-so-daring.
We estimate eleventy gazillion iPhone units sales in 2019 and umpteen bazillion in 2020. And we’ll be just as right as every other so-called analyst, too, since Apple no longer reports unit sales. — MacDailyNews, November 29, 2018
Don’t mistake that [Apple’s] reduced reliance on iPhone as a claim that iPhone is dead since that’s very far away from reality… By selling $26B worth of iPhones, Apple’s active installed base of iPhone reached another all-time high in each geographic segment, and with customer satisfaction at almost 100% and ongoing loyalty in the B2B world as well, there’s no reason to believe that installed base will shrink anytime soon.
MacDailyNews Take: Yup.
Apple will continue to sell tens of millions of iPhones each quarter for many, many years. — MacDailyNews, August 1, 2019
Like the Amur Leopard, the iPhone isn’t totally dead. Just endangered due to lack of product management. As Apple abandons affordable markets (5/SE customers for example) and pushes unecessarily costly oversized OLED models, the iPhone market share will shrink. Turns out it is just too hard to make 35% margins when delivering a quality mainstream product. Apple instead goes elitist.
Timmy has a history of waiting up to 6 years to update a product, then finally giving in and revealing a shiny new model that technically looks impressive … then slaps on an entry level price that is akin to a used good-condition car. Apple simply doesn’t want to serve mainstream anymore.
We know the iPhone story isn’t dead. Apple will still sell tens of millions of iPhones every quarter. What’s dead is the iPhone growth story and that’s the only thing that matters to big investors. No big investor wants to put money into a low- to no-growth company when they can easily find other companies who’ll be growing in the double digit range each quarter. Hedge funds have no time to waste on Apple. They think Tim Cook is a joke and they will totally be smooching Jeff Bezos, Satya Nadella, and Mark Zuckerberg behinds. Those CEOs can deliver while Tim Cook can’t.
Absolutely nothing is hurting Microsoft’s cloud business and tariffs be hanged. Meanwhile, AAPL is sinking like a stone with no end in sight. Apple couldn’t hold onto earnings share gains for two lousy days. What big investor wants to put up with that crap?
There isn’t much room for improvement on any smartphone, so instead Apple needs to get into some alternative growth market, namely cloud computing. Apple pushing the iPhone is akin to flogging a dead horse. I see nothing wrong with paying $1000 for a flagship smartphone but I’m going to hold onto it for three years if possible. If Apple thinks they can get consumers to upgrade $1000 iPhones every year, they’re crazy. Apple might stand a better chance with a $300 SE3 or something like that. At least that’s something reasonable for poor consumers to aspire to and not be totally out of reach. The Chinese Android smartphone manufacturers are smacking everyone around with their low-cost, full-featured smartphones which pretty much put the nail in the coffin for iPhone growth.
I remember years ago how the Chinese iPhone buyers used to come to the U.S. Apple retail stores and leave with dozens of boxes of iPhones. Man, those days are gone forever. Now they stay home and buy $500 Chinese Android smartphones which they realized will suit them just as well as a $1000 iPhone. Rather sad.