Apple Blames Earnings Miss On iPhone 5 Anticipation 242
Hugh Pickens writes "Reuters reports that Apple shed more than five percent of its stock price value in after-hours trading after the company reported its second quarterly miss on results in less than a year, highlighting how the Apple brand is becoming less resistant to the economic and product cycles that have plagued rivals. 'Clearly it was a disappointment,' says Channing Smith, Co-Manager of Capital Advisors Growth Fund. 'We expected a lot of consumers will probably delay their upgrade and their purchases until the iPhone 5 comes out. We saw a similar trend occur last year with the iPhone 4S.' Executives acknowledged buyers were refraining from purchases because of 'rumors and speculation' around the iPhone 5, which sources have said will ship in September with a thinner and larger screen. 'The iPhone 5 is already the most hyped device and for it to exceed expectations is going to be really hard,' says BGC Partners analyst Colin Gillis. This is one of many reasons Apple is so notoriously secretive. With the levels of hype that Apple product launches garner, it would undoubtedly crush its own sales if it announced products even months in advance. Instead, Apple slowly and silently draws down inventory in distribution channels, and then the upgraded product is available immediately (or nearly immediately) after it's announced. According to Apple CEO Tim Cook, 'there is an incredible anticipation out there or for future products and as you would expect given what we've been able to deliver in the past.'"
Absolute nonsense (Score:3, Insightful)
There's nothing remarkabe about iApple products anymore, they're no better than MicroSoft products.
Its a miss... (Score:4, Insightful)
But still insane profit.
it looks bad (Score:4, Insightful)
but imagine how bad it will be when apple's competitors products are no longer being blocked by the court system in frivolous lawsuits.
Maybe the expectations are unrealistic? (Score:5, Insightful)
Duh! (Score:5, Insightful)
The only people who were disappointed with Apple's results were the "financial analysts" (and I put that in quotes for a reason...) who made wild predictions and were proven, as they often seem to be proven, wrong. I don't know of any other profession, _including_ meteorologists, where being wrong in your prediction that often is acceptable.
Anyone who couldn't foresee buyers slowing down on iPhone purchases as the refresh date approaches, is an idiot. Apple has released their new model like virtual clockwork for several years. There was going to be a slowdown. Expect it. Here, I'll make a bold prediction - in one year's time, rumours will ramp up of an "iPhone 6" (which will actually be called the "iPhone 5S" though nobody will be smart enough to foresee that...) and sales of the iPhone 5 will slow down though Apple will still have an exceptionally strong quarter selling an enormous number of devices though "market analysts" will claim it's a disappointment. Write it down. Take it to the bank. That's a prediction you can bet money on.
Seriously, why investment firms pay these morons even a penny for their ill-informed random guessing is beyond me. Actually, that's not fair - if they were guessing randomly, they'd at least have a chance of periodically getting it right and the majority of these people get it 180 degrees wrong every time...
The rot setting in? (Score:1, Insightful)
They miss their targets while their competitors (credible) competing products are banned? Wow, apple better pray the judges don't unban Samsungs products.
Re:Maybe the expectations are unrealistic? (Score:5, Insightful)
The thing is they don't care about your fancy book learning, they want that money in their back account NOW.
It's yet another problem with corporate governance. They'd rather take the $5 they earn right now rather than the $5000 it can grow into if they cultivate a long-term strategy and act in a sane manor.
Re:it looks bad (Score:5, Insightful)
but imagine how bad it will be when apple's competitors products are no longer being blocked by the court system in frivolous lawsuits.
From Apple's point of view they are far from frivolous. They are a delaying tactic, so that competitors products come to market later than the equivalent Apple technology generation.
Re:The rot setting in? (Score:2, Insightful)
You are an idiot. Did you read the article or look at the numbers?. They missed analysts made up predictions (downwards) and their own predictions (upwards) Apple made 1.5 billion more than the same period last year.
The only rot that has set in is between your ears
Re:Predictable product launch dates... (Score:5, Insightful)
This isn't really a "problem", except in the eyes on a market focused on quarterly earnings. They make most of their money in the quarters they release a new phone or a new tablet. That doesn't mean they make less money overall, it just focuses when the majority of that money comes in. What's really insane is that not only did they make a shit pot of money this quarter, it's a much bigger shit pot than the same quarter last year. For some reason it's a "problem" that the shit pot is slightly smaller than some random guys who don't even work for the company sort of though it might be. This is rather like you winning a gold medal at the Olympics and me being upset with you because you didn't also set a world record in the process.
Re:Absolute nonsense (Score:5, Insightful)
Or in this case, hypowned.
Actually, I would initially argue Google as well as MS, however aside from Hype, there is one thing, which at first glance can look like a bad thing, but can also be turned into a case of 'turning your weaknesses into your strengths'.
Apple has much less variety in product lines than Google or MS in terms of the small-form-factor mobile market (cell phones, int the case of Google, tablets), or MS in terms of the notebook/desktop market. One reason I wouldn't get a MacBook - I'd have to pay a premium for things I don't give a damn about, while still missing things that are important to me.
How does Apple turn this weakness into a strength? Several things, some good, some, IMO, underhanded.
1) More time for QA - since the products are tied together, and their is a smaller variance, Apple can spend more time on QA per product, while still spending a lot less money on QA. I wouldn't argue they are any more stable than a good MS or Google product, but they certainly are less quirky than all but the very best MS or Google alternatives, and they are more polished in most regards, than any of the competing products.
2) Marketing - Apple can get by the lack of options by convincing the market they want what Apple is selling, rather than selling what the market wants. Often promoting hackish/clunky workarounds as acceptable. The caveat, is these tend to also primarily affect smaller groups in the market.
3) Less confusion - users won't get option overload, which easily happens for a user not fairly well knowledgeable in a subject where there are many options.
Seriously? This sounds like a broken record (Score:5, Insightful)
Re:Its a miss... (Score:5, Insightful)
What's insane is that a company that did so well is considered to have "missed".
If you extrapolate from this one fact, that Apple does extremely well but is said to "miss" and the stock price goes down because their profits didn't grow faster than before, if you extrapolate from this one fact, you can understand why the economy - the whole economic system - is collapsing under its own greed. Enough is never enough.
[Full disclosure: I'm a shareholder since the Michael Spindler days, and yes, I understand about corporate "guidance" and what it means to say they "missed". My point stands.]
Re:Its a miss... (Score:5, Insightful)
I agree wholeheartedly... it's even worse than that: Take Swisscom as an example. They make about a billion in profit per year. Last year, IIRC, they made about 1.1 billion. This was, again IIRC, more than they made the year previous.
Since analysts had expected them to make 1.2 billion, their stock fell. They made more than the year before and still they get the finger just because they made less progress than some other random schmuck expected.
How's that even sane?
Re:Its a miss... (Score:2, Insightful)
Even more insane is that a company that makes purely luxury products has the largest market cap in what everyone has been touting as a "great recession". At least Exxon makes stuff we need...
Re:Absolute nonsense (Score:3, Insightful)
Apple has much less variety in product lines than Google or MS in terms of the small-form-factor mobile market (cell phones, int the case of Google, tablets)...
How does Apple turn this weakness into a strength?
The smaller number of products as well as a better defined launch schedule with stable form factors, UI, feature sets and accessories are also good at capturing an audience of people who are either techno-phobic or simply do not have the time or desire to re-buy and re-learn products every couple of years.
I am a highly technical person, but I appreciate how simple it is to use a iPhone, and what I learned 5 years ago is still largely applicable to using one today, but with some incremental additions.
The same cannot be said for most cell phones or smartphones from 5 years ago, changing UIs, changing feature sets, etc... all make it very difficult to know what you're getting or how to use it--at least without spending significant time with it. There are a gazillion "Android" phones out there... how do I know if I want 2.1, 2.2, 2.3, 3.0?, what do the different processor names mean?, can I actually compare "GHz" to get a reasonable idea of what is best (no)?, what apps will or won't run on this?
Often times you're forced to wait for extensive reviews of a product before you consider it because "specsmanship" means almost nothing with some of the garbage produced by certain companies. Fortunately HTC, Samsung and others have started learning that although outright lying and inflating capabilities may inflate short term sales, it only does long term brand damage, so it seems like they're producing better products these days.
Let's also not forget support--it's far easier to find people to help you use an iPhone than some random smart phone from some manufacturer. There are constant updates to the SW and apps, and for the most part these things tend to make improvements, whereas I've found with Android an update can wind you up in a broken state (this is where the walled garden, closed OS and tight HW control makes the world of difference)
Stock market is not objective (Score:5, Insightful)
If it were objective, based solely on P/E ratios and such, Apple would already be trading at over $1,000.
Re:Absolute nonsense (Score:5, Insightful)
Clearly a troll, but common FUD nonetheless---and, as per the parent, Apple turning a weakness into a (perceived) strength). However, either:
Despite "choice is bad" propaganda, which is surprisingly successful, especially among those who should know better, actually making a good choice is not difficult for anyone.
Re:Its a miss... (Score:5, Insightful)
It's truly bizarre that someone would sell their Apple stock (which is what a lower share price really means--people are trying to offload) it just because profits weren't high enough, especially considering that Apple has only recently decided to start paying dividends.
With so many companies struggling just to break even, dumping a profitable stock just because it's become slightly less profitable doesn't strike me as the least bit intelligent or wise, and instead points right back to our dysfunctional business culture, in which nothing matters but short-term profits, regardless of the company's long-term prospects and potential.
(I say this as someone who is no fan of Apple, but damn if they aren't great at making money.)
Re:Absolute nonsense (Score:2, Insightful)
In fact, you don't even have to be mildly technical to follow the regularly given advice for getting a phone that is as good or better than an Apple phone, that runs everything that can get run, and to make sure you always have the best version of the OS. Just buy a phone with the name Nexus.
Re:Absolute nonsense (Score:4, Insightful)
Bullshit
http://biopsychiatry.com/happiness/choice.html
Re:Its a miss... (Score:2, Insightful)
It's not bizarre. Apple may be incredibly profitable, but the stock is also incredibly expensive. Around $573 per share right now. And Apple is an incredibly undiversified company; all it takes is a bad fumble with the next iPhone, or somebody cooler showing up, and Apple can lose a lot of value overnight. You talk about long-term prospects? For the same price, I can buy stock in Exxon, or a dozen other natural resource companies. I think it's vastly more likely that the world will be obsessed with oil in ten years, than it will be in the iPhone 10.