Apple Forecasted to Report Record Holiday Quarter Amid Concerns of Slowing iPhone Sales

[ctdonath]

Imagine what phones and technology would be like if money and greed weren't in the picture.

They'd be a whole lot worse.

It's precisely the money & greed that motivates businesses to excellence. Why bother working so hard if not for lucrative pay? Nobody is going to build the iPhone 7 or some such tech out of mere social benefit. It's _easy_ to build a "good enough" phone and overcharge for it, but nobody will want it. It takes a trainload of money to, say, build a "retina display" factory to such a degree that the panels are priced like commodities from first production; nobody is going to spend that without prospect of making a trainyard of money in return - and the world benefits by "retina displays" being soon available to all (the display world was disinclined to make that step without a profitably huge customer).

You'd be hard-pressed to explain why the iPhone etc would be any better if not for Apple building something customers are _happy_ to spend a 50% markup on, earning the company tens of billions _per_quarter_ in the process.

You gonna put in a hard 60 hours a week "if money and greed weren't in the picture"? He11 no, you'd clock out at exactly 40 hours of breaks - if you showed up at all. Give you 2x overtime pay, and you'll be there.

A thought: Apple isn't paying you $10,000,000/yr to design the next iPhone. So why aren't you designing it? money & greed isn't in your picture, right? get busy already, for the sake of society at large.

 

[dk001]

I don't think having inventory is new at all. Scarcity typically only happens at initial product release, either because of temporary supply chain issues, or because of intentional manipulations to gin up consumer excitement and subsequent sales. Once the dust settles, there's usually ample inventory. Given their ample margins, having inventory isn't a hardship, either.

Speaking of margins, regardless of what the year-over-year iPhone sales turn out to be, people shouldn't forget that all of those units equal profit, which is more than other device manufacturers can say. All the hand-wringing over this quarterly report is just comical.

That's why I am... questioning (question thinking?). There has usually been a decent overall supply (excluding launch) but with gaps. "have lots of iPhone 6 but short on the 64GB and 128GB model". This year the wife wanted a new iPad, looked at getting a rMB, one daughter wanted ... you get the picture. Went online to check inventory at local Best Buys and Apple Store and they all had everything. not warehoused and will deliver, everything in the store. In all my years of using Apple stuff, I have never seen this.
So, what changed? Slow sales? Stuffed supply chains, over-forecasted?
Slob inventory is not a good thing. Could Apple end up with this situation next Fall?

 

[maflynn]

record sales or not, get ready for the stock to drop.

There's an old saying, buying on the rumor, sell on the fact.

While the numbers do look really good at a high level - record setting to be sure, Digging down, a bit deeper, there may be some trends, particularly the possible slowing of iPhone sales.

At some point iPhone sales will no longer be breaking records or having massive sales figures. I think wallstreet is just waiting for signs of that. No matter how you spin it, Apple is heavily reliant on the iPhone sales, it makes up a major portion of their profits.

 

[dk001]

There's an old saying, buying on the rumor, sell on the fact.

While the numbers do look really good at a high level - record setting to be sure, Digging down, a bit deeper, there may be some trends, particularly the possible slowing of iPhone sales.

At some point iPhone sales will no longer be breaking records or having massive sales figures. I think wallstreet is just waiting for signs of that. No matter how you spin it, Apple is heavily reliant on the iPhone sales, it makes up a major portion of their profits.

That's been the concern for a while now - single product reliance - and why investors (and us ) have been waiting for the "next big thing".

 

[maflynn]

That's been the concern for a while now - single product reliance - and why investors (and us ) have been waiting for the "next big thing".

Other large corporations have faced the same issue, sometimes that wait was short, sometimes people are still waiting.

Ms for instance has relied so long revenue from Windows and Office, that investors were very skittish. I think some of the moves to a subscription based model, and other service based actions have allayed those fears but the fact remains. A single product company can only milk that cow for so long.

 

[applezulu]

That's why I am... questioning (question thinking?). There has usually been a decent overall supply (excluding launch) but with gaps. "have lots of iPhone 6 but short on the 64GB and 128GB model". This year the wife wanted a new iPad, looked at getting a rMB, one daughter wanted ... you get the picture. Went online to check inventory at local Best Buys and Apple Store and they all had everything. not warehoused and will deliver, everything in the store. In all my years of using Apple stuff, I have never seen this.
So, what changed? Slow sales? Stuffed supply chains, over-forecasted?
Slob inventory is not a good thing. Could Apple end up with this situation next Fall?

I guess I find it interesting that (accepting your anecdotal experience at face value) having inventory in stock at retail locations is necessarily evidence of something going wrong. In a perfect retail world, inventory comes in the back of the store just in time to meet the demands of customers coming in the front door. If you're in the business of selling things, scarcity of stock is only good if your customers are so exited about your product that they're willing to wait for supply to catch up rather than turning to competitors instead.

In Apple's case, scarcity is only beneficial during the hype of a new product release. Last year, supply chain issues with the Apple watch caused scarcity to exceed the desired effect for PR. I have little doubt but that experience lead to increased emphasis on meeting retail demand for all categories. In the past couple of years, Apple has been expanding its retail presence beyond its own stores. Relationships with those retailers are not enhanced if shortages mean customers can't walk out of the store with what they wanted when they came in. (And Apple's simplicity of options in any given product line means a lot of customers have already made their decisions before they ever left home to go shopping.)

Apple only has an inventory problem if they can't meet customer demands or if they overproduce massive gluts of products that must be trashed at the end of a product year. Meeting customer demand in the front of the store is not necessarily evidence of oversupply in the back. Particularly given a company like Apple's capacity for keeping detailed inventory analytics, it's not even a good bet to assume any great probability that meeting demand is evidence of oversupply. If anything, I would speculate that your observations are evidence of improved supply chain management, not of some sort of failure.

 

[dk001]

I guess I find it interesting that (accepting your anecdotal experience at face value) having inventory in stock at retail locations is necessarily evidence of something going wrong. In a perfect retail world, inventory comes in the back of the store just in time to meet the demands of customers coming in the front door. If you're in the business of selling things, scarcity of stock is only good if your customers are so exited about your product that they're willing to wait for supply to catch up rather than turning to competitors instead.

In Apple's case, scarcity is only beneficial during the hype of a new product release. Last year, supply chain issues with the Apple watch caused scarcity to exceed the desired effect for PR. I have little doubt but that experience lead to increased emphasis on meeting retail demand for all categories. In the past couple of years, Apple has been expanding its retail presence beyond its own stores. Relationships with those retailers are not enhanced if shortages mean customers can't walk out of the store with what they wanted when they came in. (And Apple's simplicity of options in any given product line means a lot of customers have already made their decisions before they ever left home to go shopping.)

Apple only has an inventory problem if they can't meet customer demands or if they overproduce massive gluts of products that must be trashed at the end of a product year. Meeting customer demand in the front of the store is not necessarily evidence of oversupply in the back. Particularly given a company like Apple's capacity for keeping detailed inventory analytics, it's not even a good bet to assume any great probability that meeting demand is evidence of oversupply. If anything, I would speculate that your observations are evidence of improved supply chain management, not of some sort of failure.

Not saying it is wrong, just not the norm. Was wondering what is driving the change.

 

[Sedrick]

Analysts are concerned that Apple only has one growth market and that's the iPhone. That segment of the market is slowing down for them. So, with iPhone sales starting to level off, where does Apple go for growth?

 

[ctdonath]

In all my years of using Apple stuff, I have never seen this.
So, what changed? Slow sales? Stuffed supply chains, over-forecasted?

How about: product is available when customer wants it.
That's a good thing.

You're not privy to whether there's racks full of product in the back getting stale in hopes someone will buy, or a perfectly balanced just-in-time inventory ensuring there's enough, and little more, on the shelf to match demand.

I'd say "sold out" is a significant failure: people WANT to shell out hundreds or thousands of $$$ but there's nothing to buy ... missed sales and disappointed would-be customers.

 

[dk001]

How about: product is available when customer wants it.
That's a good thing.

You're not privy to whether there's racks full of product in the back getting stale in hopes someone will buy, or a perfectly balanced just-in-time inventory ensuring there's enough, and little more, on the shelf to match demand.

I'd say "sold out" is a significant failure: people WANT to shell out hundreds or thousands of $$$ but there's nothing to buy ... missed sales and disappointed would-be customers.

From a marketing / sales perspective, a change of this magnitude is driven by a change in the planning / forecasting arena. Apple has always had a "tight" supply chain. The apparent change is driven by... ?

Oh well. I'll go back to my "observing".

 

[naeS1Sean]

They'd be a whole lot worse.

It's precisely the money & greed that motivates businesses to excellence. Why bother working so hard if not for lucrative pay? Nobody is going to build the iPhone 7 or some such tech out of mere social benefit. It's _easy_ to build a "good enough" phone and overcharge for it, but nobody will want it. It takes a trainload of money to, say, build a "retina display" factory to such a degree that the panels are priced like commodities from first production; nobody is going to spend that without prospect of making a trainyard of money in return - and the world benefits by "retina displays" being soon available to all (the display world was disinclined to make that step without a profitably huge customer).

You'd be hard-pressed to explain why the iPhone etc would be any better if not for Apple building something customers are _happy_ to spend a 50% markup on, earning the company tens of billions _per_quarter_ in the process.

You gonna put in a hard 60 hours a week "if money and greed weren't in the picture"? He11 no, you'd clock out at exactly 40 hours of breaks - if you showed up at all. Give you 2x overtime pay, and you'll be there.

A thought: Apple isn't paying you $10,000,000/yr to design the next iPhone. So why aren't you designing it? money & greed isn't in your picture, right? get busy already, for the sake of society at large.

Passion...

 

[I7guy]

They'd be a whole lot worse.

It's precisely the money & greed that motivates businesses to excellence. Why bother working so hard if not for lucrative pay? Nobody is going to build the iPhone 7 or some such tech out of mere social benefit. It's _easy_ to build a "good enough" phone and overcharge for it, but nobody will want it. It takes a trainload of money to, say, build a "retina display" factory to such a degree that the panels are priced like commodities from first production; nobody is going to spend that without prospect of making a trainyard of money in return - and the world benefits by "retina displays" being soon available to all (the display world was disinclined to make that step without a profitably huge customer).

You'd be hard-pressed to explain why the iPhone etc would be any better if not for Apple building something customers are _happy_ to spend a 50% markup on, earning the company tens of billions _per_quarter_ in the process.

You gonna put in a hard 60 hours a week "if money and greed weren't in the picture"? He11 no, you'd clock out at exactly 40 hours of breaks - if you showed up at all. Give you 2x overtime pay, and you'll be there.

A thought: Apple isn't paying you $10,000,000/yr to design the next iPhone. So why aren't you designing it? money & greed isn't in your picture, right? get busy already, for the sake of society at large.

Peter Drucker 101. When the sole motivation is the bottom line, the business will fail.

 

[Amazing Ox Space Monkey]

So many analysers, and each one of them has come up with a different number regarding the estimated revenue. I mean, do they throw a die or something. There exist only so many data analytics methods yet the number vary in large proportions. The difference between the highest (82.4) and the lowest (74.6) is 10%. I'd dare to say many of the applied methods for calculating the estimated revenue are irreliable - to put it mildly.

So I know of a very good market analyser, Amazing Ox Space Monkey, who works for Audacious Ox Ltd., and his prediction is (takes a moment to look at his chrystal ball) exactly $77.7 billions.

 

[MrAverigeUser]

http://files.shareholder.com/downloads/AAPL/1410315600x0xS1193125-16-438421/320193/filing.pdf

 

[LordVic]

Do you have a specific example of how Apple stock was manipulated, since your post painted a broad stroke?

Anytime you see these Analysts who are "forecasting" sales which impact stock price. At the end of the day, Ultimately these analysts predictions are completely and utterly irrelevant to anything in the industry except the market. Since by very nature of the stock market, Once the initial sale of stock is done, Apple does not further benefit from trading of the stock, Only wallstreet.

So the purpose of these analysts predictions is to either raise prediction prices or lower them, depending on what the outcome that particular analysts investment company desires.

Want to sell short a stock? Have your analyst announce they believe that a profit level will be so high, so when reality comes and it's not so high, The stock has to correct itself downwards. Similiar is done in opposite. Announce they will miss forecasts? stock goes down, Investor buys up, so when real numbers come out, price goes up in adjustment.

This is normal behaviour in the stock market and is regularly occuring. I believe Carl Icahn has participted in this with Apple stock multiple times in order to try and manipulate the price.


Another form of stock price manipulation comes from companies who have the money to do high volume trades. If enough volume is sold / bought really quickly, it manipulates the stock price as it shocks the market into a non-performance based stock price. An example of this could be a company decides to offer an unusually high value for a stock and buys millions of shares for a few billion at once. The stock price will increase, often above real market value because of the demand of this one company to buy high quantity. once the initial shock is over, and the stock price re-adjusts back to normal levels, they can afford to option or short sell for their profits. I have no evidence this particular method has occured with apple, but it IS a fairly normal method of stock price manipulation

 

[I7guy]

Anytime you see these Analysts who are "forecasting" sales which impact stock price. At the end of the day, Ultimately these analysts predictions are completely and utterly irrelevant to anything in the industry except the market. Since by very nature of the stock market, Once the initial sale of stock is done, Apple does not further benefit from trading of the stock, Only wallstreet.

So the purpose of these analysts predictions is to either raise prediction prices or lower them, depending on what the outcome that particular analysts investment company desires.

Want to sell short a stock? Have your analyst announce they believe that a profit level will be so high, so when reality comes and it's not so high, The stock has to correct itself downwards. Similiar is done in opposite. Announce they will miss forecasts? stock goes down, Investor buys up, so when real numbers come out, price goes up in adjustment.

This is normal behaviour in the stock market and is regularly occuring. I believe Carl Icahn has participted in this with Apple stock multiple times in order to try and manipulate the price.


Another form of stock price manipulation comes from companies who have the money to do high volume trades. If enough volume is sold / bought really quickly, it manipulates the stock price as it shocks the market into a non-performance based stock price. An example of this could be a company decides to offer an unusually high value for a stock and buys millions of shares for a few billion at once. The stock price will increase, often above real market value because of the demand of this one company to buy high quantity. once the initial shock is over, and the stock price re-adjusts back to normal levels, they can afford to option or short sell for their profits. I have no evidence this particular method has occured with apple, but it IS a fairly normal method of stock price manipulation

The stock market is the perhaps the only true example of supply and demand at work. With the market the price is the price. Seasoned/expert investors with billions of dollars in assets are aware of how the market moves and are not quick to react to intra-day price changes. The market always corrects itself as needed. I guess I read to much into your posts as stock manipulation by social engineering and other methods is very legal, as I was thinking you were saying that stock manipulation by illegal means regularly occurring with all parties knowingly involved (which might be the case).

 

[LordVic]

The stock market is the perhaps the only true example of supply and demand at work. With the market the price is the price. Seasoned/expert investors with billions of dollars in assets are aware of how the market moves and are not quick to react to intra-day price changes. The market always corrects itself as needed. I guess I read to much into your posts as stock manipulation by social engineering and other methods is very legal, as I was thinking you were saying that stock manipulation by illegal means regularly occurring with all parties knowingly involved (which might be the case).

Didn not mean to imply anything illegal. this is all normal stock market stuff.