Apple shares yesterday closed below $100 for the first time in 15 months, the WSJ noting that the value of the company has dropped by $100B in a little over a month, losing 7% this week alone.
The Cupertino company’s 4.2% drop on the day was greater than the overall market’s slide and the 3% slump in the Nasdaq Composite, which closed down 10% from its May peak. Since early December, Apple has shed $100 billion in market value.
The slide is being attributed to two factors: one (semi-)factual, one speculative …
On the factual side, the Chinese economy has been slowing for some time, with particular concern this week when regulators suspended trading in Chinese shares not just once but twice. The People’s Bank of China had also reduced the value of the Yuan eight days running.
The immediate crisis in China appears to have eased today, markets closing 2% up and the currency rate also rising, but longer-term fears remain.
I describe this as a semi-factual issue in Apple’s case, as nobody knows what impact – if any – this is having on Apple’s sales in the country. It’s perfectly possible for a premium brand to continue to sell well in an overall sluggish economy.
On the speculative side, there have been widespread suggestions from analysts and media alike that Apple is scaling back iPhone orders in the light of reduced demand, many analysts forecasting that Apple may see its first ever drop in iPhone sales in the current quarter.
As we noted earlier this week, Apple’s complex supply chain makes it notoriously difficult to use supplier reports to assess overall iPhone production levels. One analyst recently suggested that even if production has slowed, existing inventory means that won’t necessarily be reflected in reduced sales.
While some investors may be selling, Business Insider notes that none of the analysts tracked by Thomson Reuters advocate doing so, all of them rating AAPL as a hold or a buy. The report does, though, contain the caveat that some have not updated their ratings in the past month, so may do so later.
We won’t know this quarter’s iPhone sales numbers until sometime in April, when Apple reports its earnings for fiscal Q2 (calendar Q1). However, we’ll get a big clue from the forward revenue guidance the company offers on January 26, when Apple reports its holiday quarter earnings.
Photo: Reuters
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Are some investors stupid, or just acting stupid?
How many times did tim tell you, don’t trust the damn reports.
I want them to sell 80 million iPhones, so they can shut analysts up.
It’s stupid or lying. They know the slightest mention of “supply chain indicates huge cut” sends the price down. Maintain this for a couple weeks, then buy. Earnings come out and Boom! Best quarter ever, price soars, profit. Rinse, repeat next quarter.
It’s the “sheep” that are dumping — The “smart” investors are increasing their Apple holdings. Who cares what the “analysts” say – do your own research and make your own mind up. It Is YOUR Future Money.
You know who is buying and selling? Cool story
https://m.youtube.com/watch?v=gMShFx5rThI
Make sure u watch at least the 1st 4 mins …
Seems to me we’ve had “peak iPhone” fears since 2012.
I hope Apple used this opportunity to buy back millions of shares that are being dumped by the investors who have no faith in the company. The irrational market is trying to wipe out as much of Apple’s value as possible. It’s unlikely Carl Icahn is dumping his shares over these “investor fears.” I don’t understand why so many people believe in unverified and anonymous reports. I can’t believe there are so many timid investors holding Apple. CNBC is really going after Apple and trying to make it look like a company that’s really in trouble. I guess we’ll all know the truth for sure come January 26 when Apple quarterly results are announced. Until that time it seems rather foolish to dump Apple stock. If Apple is unable to maintain a fair share price then Tim Cook had better give out higher dividends this time around.
Blackout period. Apple cannot buy back any shares 5 weeks before earnings release.
Apple should close shop and give the money back to the shareholders! ;)
Just keep buying after looking at the Apple sales numbers as reported here, year over year, how much sales have increased.
Good time to increase Apple positions before someone, somewhere, looks at the “real” numbers and not what the analysts predict – and realizes just how undervalued Apple stock is!
YMMV
Apple should shift to an iPhone refresh cycle of 18 to 20 months, do away with S series entirely. People would be much more inclined to upgrade each release knowing they’d be waiting 3 years to refresh if they skipped a generation. At this point people are starting to hold iPhones longer and longer much like the iPad.
interesting idea. this might work actually.
Such a stupid idea. You are suggesting that Apple intentionally slow down on developing and selling better phones so that when they do customers are more likely to upgrade each release. All that would really do is allow competitors another six months to incorporate technological improvements into their own flagship phones and be more competitive against Apple’s flagship. So you want Apple to shoot themselves in the foot by not using their huge R&D budget to make the best phone they can, when they can.
you must be joking … Apple “making the best phone they can, when they can”. Apple is intentionally holding back innovation and better specs with every new iphone, to make more profits and to spare it for the next generation
If you think the current yearly upgrades will last into perpetuity you are deranged. iPad and iPhone models will be adjusted, as will Android devices, the benefit of upgrading drops every year as chips get better and better, the iPhone 6 is perceived as an immediate interaction response already, a faster chip may half the true lag from 3 milliseconds down to 1.5 milliseconds but a human can’t process/experience that benefit so the user has no reason to upgrade until several new chips have been released that can be felt as an actually better user experience.
Secondly, Apple has never been in an arms race with competitors for features. Apple TV still isnt 4K, Apple couldnt give two shits what the competition is selling in their devices, Apple sells you an ecosystem, if you think 6 months would cause people to go to Android youre mistaken.
This is to do with global economic factors and massive drops across the planet over the last week or so – nothing to so with any rumours. All shared are down, billions wiped off values.
Shares are indeed down globally, but as the piece shows, Apple shares have been harder hit than comparable stock.
My verdict:
– iPhone 6 and 6S design is not Apple-Standard. too large bezels. 4 and 5 just looked “cooler”
– ipad pro is not a hit. I waited for it for years, then returned it like many others
– apple watch: price much too high. apple’s greediness at its best. but: room for improvement in next generations
– macs: become more and more like ios devices. not upgradeable.
Except your verdict does not match reality. iPhone 6 series was the best selling iPhone ever. Apple is selling more Macs than ever.
iphone 6 sold so well because people were waiting years for larger displays. I also have a 6 plus, but I hate the design every day …
macs: Aplle would sell much much more macs if they were upgradeable. I know quite a few who still use years old macbooks because they put in cheap 0,5 or 1TB SSDs. what apple charges for new macbooks with big SSDs is insane
Much as I loved the days of upgradable Macs, we’re in a tiny minority. For the average mass-market consumer, it’s all about the sleekness.
Rogifan, Based on Apple reported sales so far, the 6S is the best selling iPhone ever. Now this may slow down and the 6 might retain the crown. But as of last quarter the 6S was on pace ahead of the 6. Maybe this is due to earlier launch in China or maybe not. We don’t know.
As you say though, Jak24 is wrong on all his other points as well.
It’s about CHOICES: Apple could easily offer upgradeable macs for those who want them. Those who want the thinnest possible macs choose non-upgradeable. But sadly, it seems it’s all about MONEY at Apple recently… and “upgradeable” may mean losing some money (but keeping or gaining loyal customers)
Upgradeable makes less and less sense each year. If you were buying a Mac 10 years ago for $2,000 maybe you needed to upgrade it. Today if you are buying it for the same $2,000 it is probably easier and not much more expensive to simply sell it after three or four years (getting about half your money back) and buy a new one instead of buying an after market GPU or something like that. Adjusted for inflation these devices keep getting cheaper (at least for U.S. folks who are on the right side of the strong U.S. dollar these days).
Though I do wish the RAM were always upgradeable. That has historically been an easy and cheap upgrade in a computer.
Apple is progressively selling more and more Macs despite the PC market overall declining. So their products seem to be becoming more and more attractive. So the market seems to like Apple’s decision.
Lets assume the analysts are correct – do these idiots realise that Apple have more than just iPhones? heard of these things called Mac’s? Apple TV? Apple Watch? honestly, the doom and gloom by so many of these idiot analysts make it as though the only product Apple sells is the iPhone and on occasion a tablet.
“The People’s Bank of China had also reduced the value of the Yuan eight days running.”
Since a huge portion of Apple’s costs are associated with using U.S. dollars to buy material and manufacturing out of China, how is it that decrease in value of the Yuan is not going to help Apple’s profits? Maybe all those contracts are U.S. dollar denominated and it does not matter. But ultimately those costs go to paying labor in China in Yuans. So someone’s costs are going down and Apple should be able to reap some of the benefit.
Of course international Apple sales are being hurt by the U.S. dollar being strong because Apple is pricing product very “high” in other countries so those sales produce the desired amount of U.S. dollars after exchange. But the reason China allows devaluation of the Yuan is to make its products more competitive and Apple is probably the single biggest buyer of Chinese products and labor (directly or indirectly). So they are presumably going to eventually get them cheaper.
I believe Apple does use dollars for its supplier contracts, so there would be no upside to Apple.
Then initially yes. But Apple and their counterparties know that many or maybe most of those U.S. dollars get converted into Yuan. If they get converted into progressively larger amounts of Yuan then eventually Apple will be able to lower the U.S. dollars paid of those Chinese goods and services.
Much of Apple’s money is held offshore, may even be held in Yuan and not the dollar.
Off shore, yes, but no I don’t believe they hold anything significant in Yuan. Frankly I doubt many major U.S. companies do that. But Apple certainly does get Yuan daily (selling goods in China to consumers, so fairly vast amounts of Yuan coming in) and spends Yuan’s daily (to all their employees in China and to some of their smaller suppliers and local shippers would be my guess). Who knows how much these things wash or if Apple has to convert Yuans into U.S. dollars on a regular basis.
Apple’s sales are also rising fastest in China than in other regions. So a bigger devaluation will hurt their sales in dollar terms.
Tim Cook is doing his job…preparing Apple for a Google take over. That’s always been his objective. The board of directors want a major buyout as they know that without Steve, Apple is doomed. Apple has proven it can’t innovate without Steve at the helm. The only option is to sell, but not make it so obvious. Tim is the single worse choice of a CEO with the massive options at the time of Steve’s death. The reason the robotic Al Gore Tim Cook was chosen was to drive it into the ground.
Here is another link to an article published today about Wall Street Missing Apple valuation http://ophirgottlieb.tumblr.com/post/136889326609/wall-street-is-missing-apples-secret-weapon
Get your financial advice from Tumblr posts? yikes
Follow the link, Read his background and what he’s done and how much he’s responsible for – then post that comment.
YMMV
In case you are really interested and not just trolling”
“He has a master’s degree in financial mathematics from Stanford University as well as an MBA in finance from the University of Southern California and an undergraduate degree in quantitative economics with a focus in mathematics from the University of California, San Diego.”
Yeah – I tend to think, after reading his article – at least he knows what he’s talking about!
Again – YMMV!