Displaying items by tag: iphone

(San Francisco)

We have covered a lot of bear market indicators this year. Every investor is understandably wondering when the next bear might bite. So how about this for an indicator—Apple just entered a bear market. Now we know that Apple’s decline seems to be quite particular to its own situation—especially the fear over iPhone sales that were cemented by the company’s announcement that it will stop reporting such figures—but what if it is a leading indicator for the whole market? Apple is not alone among big companies either—over 40% of the S&P 500 was in its own bear market at the October low in equities.

FINSUM: We do not think Apple’s bear market in its self signifies much about the underlying market. Apple’s trouble really stems from one issue—one of the most successful products in history is finally starting to see slower growth as the result of its own spectacular success. We do not think that is a bear market indicator.

(San Francisco)

The market fell in a big way yesterday. The root cause? Apple. Apple has cut its iPhone sales guidance, and it now seems a recession is coming to the whole Apple universe. The numerous companies that make their living supplying Apple seem set for a severe correction and are paring their estimates back sharply. Investors didn’t seem ready for this slowdown in the iPhone, perhaps misguided by the hype that has recently surrounded new models. The fact is that the iPhone is now a mature product, and maintaining the kind of growth it once had is likely untenable, a fact that even Wall Street analysts are starting to admit.

FINSUM: Apple’s business is changing and it seems to be doing a good job managing that transition, though everyone hopes it will have a new dynamite product. That said, a general recession surrounding the iPhone universe seems likely.

(San Francisco)

Apple is set to release, not one, not two, but three new iPhones later this year. Bloomberg describes the phones this way, saying “the largest iPhone ever, an upgraded handset the same size as the current iPhone X and a less expensive model with some of the flagship phone’s key features”. The iPhone X has not sold as well as forecast, and there has been consumer pushback on price, which may have led to the change in lineup. “This is a big deal”, says a venture capitalist and Apple commentator, “When you have a measurable upgrade in screen size, people go to update their phone in droves. We saw that with the iPhone 6, and we think this is setting up to be a similar step up in growth”.

FINSUM: We think this is a smart strategy, but we are surprised that Apple is caving in on pricing.

(San Francisco)

It is hard to overstate how well Apple is doing right now. Despite flat volume in phone sales, the huge prices of its devices mean not only are its revenue and profits surging, but it now commands its largest ever share of the smartphone market (51% globally). The company’s first quarter revenue was up 13% from last year, with net income hitting a jaw dropping $20.1 bn in the first quarter. Apple now commands 76% of all smartphone revenue in the US.

FINSUM: Apple’s ability to compel consumers to pay exorbitant prices for its product is a sign of strength for the overall business. Imagine if the iPhone X had actually been a hit?

(San Francisco)

One doesn’t quite know how to feel about the news, but the gut instinct is that it is negative. Apple’s earnings came out yesterday, and the company reported its greatest profit ever. But guess what, sales came in weaker than expected for the new flagship iPhone X. iPhone sales dropped 1% in the fourth quarter (the most important time of year), which has scared many into thinking the new phone has not sparked the next replacement “super cycle” that the company and analysts hoped. Apple did mention that the quarter was a week shorter than in the previous year, and that iPhone sales would have been 22% higher had they been equivalent.

FINSUM: Okay so the note about the length of quarter is relevant, but the overall impression is that the iPhone X has failed to live up the hype. And it makes sense to us—have you heard any friends raving about the new iPhone? We certainly have not.