Apple Lowers Revenue Guidance for Q1 2019 Citing 'Fewer iPhone Upgrades' Than Anticipated

[Pearple]

Anticipate my ass. I won’t buy anything that is larger than my SE.

 

[GuruZac]

There you go...from the horses mouth.

Basically

Especially now that Samsung, Huawei and OnePlus are offering cheaper but equally good if not better alternatives.

If I ever jumped ship, which I won't, but if I ever did, I'd move over to the OnePlus. That's always been a compelling phone to me, especially considering it offers Note 9 performance at 60% of the price.

 

[kidaje]

Just say it as it is Tim..

prices too high and products has major design problems.. and you don’t give a ****

 

[hollowplayer]

its very simple, normal people cant afford 1k+ phone.

 

[TheShadowKnows!]

Their corporate profit margin has generally hovered in the 35-40% range for many years now.

Maybe so.

But the problem lies on designs that shortchange longevity and limit life-cycle:

1. Soldered and glued-on consumables (e.g. memory and batteries, respectively)
2. Proprietary, sole-source and soldered solid-state disk capacities (priced exhorbitantly, well beyond the Apple tax)
3. Removal of native ports with uber-reliance on iNTEL's proprietary, all-in-one, Thunderbolt.
4. ...

I personally do not mind the so-call 30% Apple tax. But I do mind the new, built-in, absence of modularity.
[That same 30% Apple tax used to gift longevity -- not anymore.]

Just my opinion.

 

[KPOM]

I think that they did a decent job with pricing at the time prices were most likely set. I also think they guided accurately considering the global economy at the time they guided, but the global economy has slowed down more quickly than I think most expected, especially over the past few weeks.

I distinctly recall articles from last month essentially laughing off the idea of a recession beginning by the end of 2019, and now there's some walking back going on. This economy's not pretty for growth for any company.

Yes, this many consecutive years of economic growth is unprecedented, and the Fed boxed itself into a corner. There’s no easy way to sell $4 trillion of securities back into the economy.

 

[msama]

Aren't a lot of the larger brands lowering/missing guidance? I know apple products are expensive, but I think there's more going on here.

 

[Spoon!]

Anticipate my ass. I won’t buy anything that is larger than my SE.

You're probably gonna be stuck on your SE then for quite a while.

Aren't a lot of the larger brands lowering/missing guidance? I know apple products are expensive, but I think there's more going on here.

No ... it's probably just the prices. I upgrade every year and this is the first year that I haven't.

 

[Yojimbo007]

I think, for AAPL shareholders, the most important piece of information in this 8-K might be the estimate for the diluted share count that will be used to calculate EPS. It suggests that Apple didn’t buy a lot of shares during the last quarter as some might have expected.

I have my own take on that information, and what it might mean for AAPL going forward. Others can make their own assessment. But, regardless of how one thinks that information cuts, it’s noteworthy.

Maybe in anticipation of further fall they did not go all out..
Maybe this quarte after the report they will be more agressive .

 

[lewchenko]

Just heard on sky news that the share price is down 7% in after hours trading and further trading has been suspended.

 

[lars666]

Very courageous of Apple to come clean with a warning instead of trying to stuff the channel for a quarter or two hoping things improve. Says a lot about the ethics of the company.

If they can already foresee that the revenue will be significantly lower than originally reported, they have to correct it. As a stock company, they are obligated to do this - or at least, if they don't, it would get VERY ugly when the final numbers are released.

 

[haydn!]

This is not true, see quote directly from Cook:

"While Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline, in some developed markets, iPhone upgrades also were not as strong as we thought they would be."

He says iPhone upgrades in developed countries were also not as strong as Apple thought.

If you read in between the lines, it's clear that pricing is the main issue, look at this other quote from Cook, he mentions 3 reasons, all 3 reasons have some relation with money:

"...we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, US dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements."

Pricing is the main issue. Wake up guys, worst mistake Apple and everyone can do is be purposefully blind to the real issue.

This is spot on. The currency related increases in the UK are what made me hold out three years between iPhones and eventually 8 years between MacBooks (finally bit the bullet on both in 2018).

The increases are “justified” from an outsiders perspective if you look solely at exchange rates. But you see a price jump £800, like they did with the 2016 MacBook Pro refresh, things start to get to hard to justify locally.

 

[ghanwani]

I won’t buy anything that is larger than my SE.

What will you do if your SE breaks and you can’t find another one? What will you do if there’s nothing smaller 5 years from now and the SE is too slow?

 

[macsimcon]

Yes, this many consecutive years of economic growth is unprecedented, and the Fed boxed itself into a corner. There’s no easy way to sell $4 trillion of securities back into the economy.

Fair point, but maybe injecting all that money into the economy was the reason the economy was doing so well? Deficits DO matter, they add up over time. You have to pay the piper eventually.

 

[Spoon!]

What will you do if your SE breaks and you can’t find another one? What will you do if there’s nothing smaller 5 years from now and the SE is too slow?

He will buy a flip phone.

 

[KPOM]

Maybe so.

But the problem lies on designs that shortchange longevity and limit life-cycle:

1. Soldered and glued-on consumables (e.g. memory and batteries, respectively)
2. Proprietary, sole-source and soldered solid-state disk capacities (priced exhorbitantly, well beyond the Apple tax)
3. Removal of native ports with uber-reliance on iNTEL's proprietary, all-in-one, Thunderbolt.
4. ...

I personally do not mind the so-call 30% Apple tax. But I do mind the new, built-in, absence of modularity.
[That same 30% Apple tax used to gift longevity -- not anymore.]

Just my opinion.

Thunderbolt is no longer proprietary, and USB-C is an industry standard.

 

[ryanwarsaw]

Maybe in anticipation of further fall they did not go all out..
Maybe this quarte after the report they will be more agressive .

That is also my guess when they lost their ass the first time they probably didn't see the market crash, nobody could predict that. However they had to have seen this coming from a mile away. They knew they had to disclose this early.

 

[robjulo]

Could be. I wonder if they realize that no one gives an ounce of credibility to the opinions and "facts" they post...as their shtick is always the same. One already has several posts and this thread is only minutes old.

I wonder how many are not doing this pro bono. Some of these members are so 'over the top' on defending any bad news for Apple

 

[jonblatho]

Yes, this many consecutive years of economic growth is unprecedented, and the Fed boxed itself into a corner. There’s no easy way to sell $4 trillion of securities back into the economy.

Doesn't help that the U.S. and China are helping things along with their trade war. In fact, Apple outright blamed this much while not blaming iPhone pricing for weaker than expected iPhone sales.

 

[asopublic]

You mentioned they didn't buy back as many this quarter. So they obviously must have seen the storm coming.

5.00 billion shares outstanding on 9/30/18 and the Shareholder's letter expected 4.77 billion shares outstanding. Here's a link to past outstanding shares.

https://www.macrotrends.net/stocks/charts/AAPL/apple/shares-outstanding

 

[Spoon!]

Thunderbolt is no longer proprietary, and USB-C is an industry standard.

I think he’s more referring to the lack of USB 3.0 ports. It’s also ridiculous that you can’t plug your iPhone into your laptop out of the box. You need an adapter.

 

[KPOM]

Fair point, but maybe injecting all that money into the economy was the reason the economy was doing so well? Deficits DO matter, they add up over time. You have to pay the piper eventually.

The stated point of quantitative easing was to boost the economy. Whether it was a good idea is debatable, but in any case, they did it, and now they are trying to unwind it. Tax reform provided both a one-time boost, as well as some ongoing benefits of a lower cost of capital in the US, though with larger budget deficits at least in the short term.

 

[furi0usbee]

Fewer upgrades? You don't say... When I was upgrading my iPhone (up through iPhone 5) every 24 months at $500, that was doable. The tech was young and exciting and it was worth it to be on the bleeding edge. $1000+ every year? Nahhh. Is there $500+ in advancements in the latest iPhone vs my iPhone 5? It makes calls, I can surf the web, I got apps, etc. Apple is in for a rude awakening. I can see the tipping point where the race back to sanity in terms of pricing gets going. If that's the case, Apple in deep doo-doo.

 

[NIKKG]

The gig is up, lower your prices and start innovating! People see through your bs.

 

[furi0usbee]

PS - When the conversation is about the high prices and not the high innovation, there is a problem.