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Analysts pile the pressure on AAPL saying company over-optimistic or “deliberately overstating” position

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As if Apple’s management wasn’t under enough pressure from the stock falling below $100 yesterday, two firms of analysts have said that the company was either over-optimistic in its iPhone sales expectations or has even been guilty of “deliberately overstating underlying trends.”

Business Insider quotes excerpts from investor notes from Pacific Crest and UBS, each suggesting that Apple has over-estimated iPhone demand. Both point to apparent contradictions between Apple’s predictions of continued growth and supply-chain reports of reduced orders.

UBS says that it believes Apple has been taken by surprise with the relatively low numbers of people upgrading from older iPhones.

We think the most likely reason for a shortfall is that the upgrader portion of unit demand has stalled significantly in recent months and is failing to meet Apple’s own expectations.

The note from Pacific Crest goes much further.

Management’s confidence now looks highly likely to be misplaced, which suggests that it was either ignorant of the challenges it faced or deliberately overstating underlying trends. The former seems unlikely, which suggests that management has taken a much more aggressive tone as growth in the high-end smartphone market has slowed. This reduces our confidence in Apple’s commentary going forward.

Business Insider notes that the Wall Street consensus is for significant year-on-year fall in the current quarter, ranging from Stifel, Aaron Rakers and team forecasting an 8% drop in sales through to Pacific Crest at 18%. Even noted Apple bull Katy Huberty at Morgan Stanley is predicting a 15% fall this quarter.

As we noted earlier, Apple’s guidance for the current quarter will be issued when it reports its holiday quarter numbers on January 26th.

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Comments

  1. Ryan Simmons - 8 years ago

    Apple’s stock is just irrelevant now, at least from the point of view of someone interested in Apple, or for tech journalists – the stock has just defied the laws of physics over the past 10 years, and now as a result Wall Street is just completely illogical and irrational about it, so whether it is doing good or bad means nothing to anybody else.

  2. William D - 8 years ago

    Like it or not what Wall Street thinks is important. The tech press has a tendency to think they’re all wrong and havent got a clue, but to rubbish analysts at huge financial institutions such as UBS, in the round, is not always very clever.

    They have deep links into companies within the supply chain, generally predict the next quarterly unit sales and profits fairly well.

  3. rogifan - 8 years ago

    One thing to note: Pacific Crest is a known Apple bear. So they should probably be taken with a big grain of salt like Gene Munster is. And it’s auite amusing that all of this is being said BEFORE Apple has reported the December quarter or provided guidance for March.

  4. viciosodiego - 8 years ago

    Same crap, different day.

  5. tomtubbs - 8 years ago

    Sure do want to pressure the stock down before the bounce back from Q4 earnings call?

  6. All this is certainly helping with my retirement funds. Awesome.

  7. just-a-random-dude - 8 years ago

    ROFLMAO. I love this one:

    > This reduces our confidence in Apple’s commentary going forward.

    Apple’s commentary has been on par for more than a decade, it was the analysts have been over-aggressive and consistently wrong on all parts of Apple.

    Like every single company that goes on a hyper-scale growth, they will start to decline down quickly to stabilize in the middle. It happens, the winners are the ones smart enough to know to buy when the company is on the rise and sell before it declines.

  8. rudygray - 8 years ago

    Those Wall Street bastards spewing out worthless garbage as usual

  9. jak24 - 8 years ago

    It’s about time Apple gets some punches in the face. Good for us costumers! (If you own stock better get rid of it anyway, as a world-wide crash might come rather sooner than later)

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Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!


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