Apple in Trouble
The economy is what i would like to call a bitch. Very unpredictale. The bitchy temptress has engorged a lot of victimc of late. But one thats worth a special mention is Apple Inc. Apple Inc has seen its shares fall more or less steadily of late. And even though the uncertainty in the economy was one cause, theres no denying that i-Phone is partly to blame as well.
The people at Apple grossly overestimated i-Phone popularity. They figured it was gonna be another ipod in term of succes. But from surveys conducted, seems even people who go window shopping are not interested in checking out the i-phone. The company that could do no wrong has finally messed up and Steve Jobs must be shitting in his pants right about now.
The reason this whole topic interest me is one word: ipod. If things continue to get ugly for Apple, they might have to consider increasing their revenues by slashing prices. But it is a long shot - they are business men after all. Like any business men who is worth his grain of salt, they will figure away to come out of this with a huge profit. Still, i hope to be a vulture and gain from their loss.
Update: Apple stocks climbed up again yesterday. Damn, i think i may have missed mychance.
posted by Nashenee at 7:31 AM
6 Comments:
Specify your sources please. This is not what i got from the news. Please do not report inaccurate accounts from your narrow-minded shoddy conclusions. Apple stocks recently dropped 6% due to the announcement that AT&T had activated 146,000 iPhones, which is a far less number than Apple has sold (I'm pretty sure this indicates popularity). And another previous big dip was because engadget.com falsely reported that there will be an iPhone production delay to the public, but unfortunately for engadget the source for the news was from a former Apple employee who deliberately did that out of spite and thus putting engadget in deep shit right now. Luckily for them, Apple stocks soared up really fast following the drop since the price of their shares went low and everyone wanted to profit when it gained momentum.
At most recent, Apple shares dropped 7 percent due to rumors that apple might cut production of its iPods but like in the other 2 cases, the shares are on its way to recover back to the same position of all time high prices last Friday. If that is truly the reason, it usually means a new iPod is on the way.
So for your own sake, don't try your luck on something you know very little about or you might suddenly find yourself facing deep shit like engadget.com if the news spreads beyond control.
I think i'll let the news speak for itself
This, by Reuters, a news agency
NEW YORK (Reuters) - Shares of Apple Inc (AAPL.O: Quote, Profile, Research) fell 4 percent on Tuesday after AT&T Inc (T.N: Quote, Profile, Research) issued initial subscriber numbers for customers of Apple's iPhone that were below analyst estimates.
Shares of Apple were off $5.70 to $138.02 on Nasdaq after AT&T, the exclusive service provider for iPhone, said it signed up 146,000 iPhone customers as subscribers in the first two days of iPhone sales, well below analyst estimates for sales. (Me: THIS DOES NOT INDICATE POPULARITY)
Pacific Crest analyst Andy Hargreaves said that while iPhone sales figures for coming months would be more telling than the first few days, AT&T's number had disappointed investors as some analysts estimated sales "north of 500,000." (Me: DOES NOT INDICATE POPULARITY)
Hargreaves had himself estimated 400,000 iPhone sales for the first two days, he said.
"The difference (between sales and activations) is going to be what was sold on eBay or activations that didn't happen immediately. There were some problems with activations but from what we heard it was minimal," the analyst said.
Apple and AT&T had attracted long lines of gadget enthusiasts to their stores when the much-hyped iPhone first went on sale in the evening of June 29.
news interrupted a steady rise in Apple’s stock price that started with the iPhone’s release. The 18 percent surge generated $18 billion in shareholder
This, by MSNBC
Apple shares drop on iPhone activations
AT&T issues initial subscriber numbers below analyst estimates
SAN JOSE, Calif. - AT&T Inc. wiped some of the glow off Apple Inc.’s iPhone on Tuesday, releasing numbers that showed fewer people than expected signed up for service in the first two days of the multimedia cell phone’s release.
AT&T — the iPhone’s exclusive carrier — said it activated 146,000 iPhones on June 29 and 30, a number that disappointed investors following some analyst forecasts that Apple would sell 500,000 or more iPhones in its first weekend.
The news interrupted a steady rise in Apple’s stock price that started with the iPhone’s release. The 18 percent surge generated $18 billion in shareholder wealth.
On Tuesday, Apple shares fell $8.81, or more than 6 percent, to $134.89, wiping out more than $7 billion of Apple’s market value.
Analysts cautioned against reading too much into AT&T’s activation numbers, saying the actual number of iPhones sold may be much higher but was not reflected in the figure because many users had activation problems and couldn’t sign up for a few days.
“It’s just had such a run on overexpectations, I don’t see this as any sort of disappointing metric in terms of the iPhone overall,” said Ingrid Ebeling, an analyst with JMP Securities. “I think it’s just gotten a little overhyped over the past month.”
Also weighing on Apple’s stock Tuesday was a report from CIBC World Markets that said demand for the iPhone has experienced a “significant decline” in the past 10 days, a slowdown driven in part by dissatisfaction with the slow data transfer speeds on AT&T’s network. CIBC used store visits and a survey of iPhone buyers to reach its conclusions.
CIBC said it expects Apple and AT&T to boost their marketing push for the iPhone and the companies could introduce a new model in November — earlier than expected — that operates on a faster network. The two models now available cost $499 and $599.
Apple spokesman Steve Dowling declined to comment.
Apple is expected to release more information on the iPhone’s sales in its third-quarter earnings report on Wednesday. The company has been tightlipped about its near-term sales forecasts, saying only that it hopes to sell 10 million worldwide by 2008.
Shaw Wu, an analyst with American Technology Research, said the little information Apple is likely to release will be closely watched by investors looking for signs of the iPhone’s momentum.
“Even though it’s only two days of information, it’s definitely going to be looked at carefully,” Wu said.
Analysts are expecting Apple to continue its strong profit growth. According to a survey by Thomson Financial, Apple is expected to earn 72 cents a share on $5.29 billion in revenue for the third quarter.
From Chicago Tribune
Apple shares drop on iPhone demand worries
By Jeff Kearns | Bloomberg News
4:44 PM CDT, July 24, 2007
Apple Inc. shares fell the most in six months after analysts said demand may be slowing for the iPhone, which Chief Executive Officer Steve Jobs expects to become the company's third major business.
Piper Jaffray & Co. analyst Gene Munster, whose June 2004 recommendation to buy Apple stock preceded a 761 percent rally in the shares, said iPhone sales may disappoint some. While Apple probably sold about 200,000 iPhones in its first two days, it may have missed some analysts' estimates of up to 500,000, according to Munster, who said Apple sales met his expectations.
Early acceptance of the combination iPod and mobile phone is crucial to Apple's strategy to crack the mobile-phone market, which is almost four times larger than the PC market. If demand falters, Jobs may fall short of his goal to make the device a third major business after Macintosh computers and iPods.
"There's such great expectation built into the stock now because of its valuation that a miss, if the iPhone numbers come in light, it's going to weaken that premium mentality investors have for Apple shares," said Mark Mowrey, an analyst at Al Frank Asset Management in Laguna Beach, California, which owns about 38,500 Apple shares.
AT&T Inc., the largest U.S. phone company and sole service provider for the iPhone, said in a statement today that it activated 146,000 of the phones in the first two days of the sales agreement. Apple introduced the iPhone, its first mobile device, in the U.S. on June 29.
Shares of Cupertino, California-based Apple fell $8.81, or 6.1 percent, to $134.89 at 4 p.m. in Nasdaq Stock Market composite trading, the steepest decline since Jan. 18.
Apple spokesman Steve Dowling said the company has no comment on iPhone shipments until Apple reports earnings tomorrow.
UBS AG said iPhone sales for the two-day period were "likely much higher" than the number of activations AT&T reported and that investors should "not overreact."
Delays in online ordering, limited supplies at AT&T retail stores and buyers who re-sold the devices likely delayed iPhone activations until July, analyst Benjamin Reitzes wrote. The New York-based analyst maintained his "buy" rating on Apple, which he has held since 2004, and his $160 share-price forecast.
Analysts expect Apple to say third-quarter profit, before some items, was 72 cents a share, the average of 23 estimates in a Bloomberg News survey.
AT&T Chief Financial Officer Rick Lindner said in an interview today that Apple will report a larger number for second-quarter iPhone sales tomorrow, since some phones were sold but not activated.
Apple results will include sales of units they made to AT&T for distribution, almost all of which were sold out in the first few days except for a few used for demonstration purposes, he said. Technical problems caused delays for about 8,000 to 10,000 subscribers in the first weekend of sales, he said.
Piper Jaffray's Munster said that the number of activations doesn't change his outlook that the iPhone will be the next "major driver" for Apple's growth.
Apple's iPhone sales couldn't meet investor expectations because some analysts kept increasing their estimates. "This is a disappointment relative to Street thinking, which crept up from 200k to 500k, or more, in the first two days," the Minneapolis- based analyst wrote. He kept his "outperform" rating and $205 share-price forecast for Apple shares.
CIBC World Markets said demand for the iPhone has had a "significant decline" in the past 10 days and that Apple and AT&T may try to boost demand by increasing their marketing efforts.
"We have noticed decent inventories at stores, and thin demand at best," analyst Ittai Kidron wrote in a note. "Among the stores we visited, most visitors were not looking at the device, and only a very small subset bought it."
CIBC's Kidron also wrote that the iPhone, which he initially viewed as a negative for Research In Motion Ltd., the maker of the BlackBerry smartphone, may instead be a positive.
"The iPhone has significantly increased awareness for e- mail devices," Kidron wrote. That's "positive mainly for RIM, the brand of choice for e-mail devices."
Kidron, who is based in New York, rates Research In Motion at "sector perform." He does not cover Apple.
Apple may introduce in November a U.S. version of the phone that runs on the faster 3G wireless network, Kidron wrote. A CIBC survey of iPhone users showed that the device's "key shortcoming" is its "poor data connectivity."
Before today, Apple stock was up 69 percent this year, compared with a 15 percent gain for the Standard and Poor's 500 Information Technology Index.
Call options to buy Apple shares at $140 by August were among the most actively traded U.S. options linked to a stock. The price of that contract fell 47 percent to $5.40. The price of August $115 puts doubled to $1.10.
Each call option gives investors the right to buy 100 Apple shares at a certain price, called the strike price, by a given date. A put conveys the right to sell 100 shares. Call volume and put volume were both above average, and calls out numbered puts by about 2-to-1.
There is "decent volume in the puts and I'd say that's people protecting against bad news tomorrow when earnings come out," said Andrew Wilkinson, a senior market analyst at Interactive Brokers Group in Greenwich, Connecticut. "People are bullish but you can't get away from the fact that they're taking cover ahead of earnings" by buying puts.
San Antonio-based AT&T, which reported a 61 percent jump in second-quarter profit today, fell 35 cents to $39.68. IPhone sales helped increase wireless revenue by 13 percent and helped cut customer turnover to a record low.
Research In Motion, based in Waterloo, Ontario, declined $8.73, or 3.8 percent, to $221.
Me: There are so many other sources, but i think this should do. ALthough analysist say sales number could be much higher than activation numbers, the point is the activation was at 146,000. Even if the sales were much higher, like 200,00, it is still far below the estimate of upwards of 500,000. My point is there was a gross overestimation of sales numbers. When Apple released the 146,000 activation numbers, investors were let down and shares dipped.You are right in saying the Apple shares climbed up, though. This is a lot of news, hope i dont crash the blog.
I posted the news so you guys can read it. But i'll delete it later since its a whole lot of repeat of the same news.Sorry.
Activation may not be an accurate way to gauge actual sales, since there is a lagged effect if users do not activate immediately. But it is highly unlikely that 71% of users could not activate the phone in 2 days.Or maybe iphone does in fact take longer to activate. AT&T said the activation preoblems were only minimal.
The Inquier and International Business Times reported actual thats sales figure of iphones were 270,000. Still way off the estimate.
Most rational people think thats its unfair to jugde iphones performance by the sales in its first weekend. But since the beginning of time investors were prone to overshoot. They overestimated i phones inital sales figure. Then when sales were not as high as they hoped, they underestimated iphone true performance.
But i do apologise for the remark about Apple messing up. Although iphone users did experience some glitches, it was nothing that merits Steve Jobs shitting in his pants.
It states exactly what said. "Missed some analysts estimates" is your only point here in the news, which is of course a term used by the media basically to quote from sources which have no merit or unconfirmed accuracy. The shares fell 6 percent because of the delay in AT&T activation (of course they are going to say the problem is minimal you moron, they are not going to be self-deprecating and say "Yes, we screwed up. You should use Verizon instead." Ask the buyers of the iPhone and get a jab in the eye then you'll know what i'm talking about). Not because the sales of the iPhone was below "some analysts" estimates. Your interpretation of the news was wrong and I hope you see that now.
i learnt a lot today...
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