Look out below! Apple is down $55 after-hours as earnings disappoint
One major area that analysts were not happy with was Apple's gross margins, which dropped to 38.6% from the 44.7% recorded last year. The average price Apple recorded for each Apple iPhone sold was $641.57, close to last year's number. But the average price received per iPad sold dropped from $568.16 in the 2012 quarter, to $469.93. That is the result of adding the lower priced Apple iPad mini. One margins start declining, they tend to continue dropping. This one piece of data alone should scare Apple as it shows that Android tablets are beginning to take share away from the iPad.
Apple iPhone 4 was "in constraint" during the entire quarter. But this is the lowest priced smartphone in Apple's lineup and is offered free with a two-year contract by some carriers. This lowers margins and reduces the average price of sold iPhones. Cook was making this sound like a positive when frankly, it is the kind of thing that Apple investors fear. This quarter could give the suits in Cupertino a reason not to produce a low priced version of the Apple iPhone as it would bring margins down even more.
Apple could nip this in the bud by using some of the $137 billion in cash it has, to buy back a chunk of stock. The best way Apple can do this and achieve the results they want would be to buy a percentage of the stock outstanding at a premium in a tender offer. This would have much more of an impact than merely buying shares in the open market from time to time.
We're not sure what will change the current feelings about Apple. we've pointed out over the last few weeks how there is a malaise surrounding the company and there is the question if Apple has lost its edge. Something has changed and as Bob Dylan once sang, "You don't need a weatherman to know which way the wind blows." Apple sold a record number of Apple iPhones and Apple iPads and still can't please the investment community. The best thing that Tim Cook can do is to blow up current plans for things like a low-priced Apple iPhone and even put talks with China Mobile on the backburner. Apple has always been a company producing innovative new products and different variations of the iPhone is not innovation. Selling more of the device in China is not innovation. It is time for Cupertino to put the ol' thinking cap on and wow us with something new.
source: Bloomberg, WSJ ,
6. Droid_X_Doug (Posts: 5723; Member since: 22 Dec 2010)
Somehow, I think you will survive. ;-)
7. MeoCao (unregistered)
I said when JB came out that it was time to short Apple shares and was laughed off the door.
iOS is the back bone of Apple's empire and JB has beaten iOS 6 in every way and that pointed out Apple's rise was over.
20. maxis3G (unregistered)
THIS IS GOOOOOOOOOOOOOOOOOOOD NEWS FOR APPLE!!
39. gallison1983 (Posts: 41; Member since: 19 Dec 2012)
Maybe if you consider the entire world. The US market is a little tricky nowadays. Most people I have spoken to personally are looking for a value proposition. They want to make sure that what they pay for will maintain value and also maintain quality. Apple is a master of that in the US. One price point for one year. Drop the price with the new model. Some people become very upset when they look at Android. Most people that bought the Note 2 on contract subsidy don't have the funding to buy a potential octa-core Note 3 (assuming the octa-core will call that phone home [I made a phunny]) and thus knowing that their phone is now outclassed shortly after purchase is disheartening.
30. anywherehome (Posts: 971; Member since: 13 Dec 2011)
and Apple still lies and adjusts true:
goo [dot] gl/s1ogE
really.....Apple's product can buy only an immoral person
44. Apple.IS.PEAKING (Posts: 3; Member since: 24 Jan 2013)
2. QWIKSTRIKE (Posts: 857; Member since: 09 Mar 2010)
Closing under the $514.00 monthly point is not a good sign for long investors.
see my postherehttp://www.phonearena.com/
When a stock fails the 50 day simple moving average most retail investors sell
5. jroc74 (Posts: 4720; Member since: 30 Dec 2010)
I'm just giving you thumbs up cuz you have been on point these past months about their stock. Despite what the nay sayers say about your guesses.
9. Droid_X_Doug (Posts: 5723; Member since: 22 Dec 2010)
Responding from a fundamentals perspective, Apple's market has matured. They have not been able to conquer new markets (China) and they are basically seeing their revenue steam reflect that circumstance. Since they have already squeezed maximum margin out of their iToys, they have hit a plateau of sorts. Steve actually recognized this before he departed. He was looking at video as the next great frontier. To date, that has been more of a work-in-progress.
Until Apple can connect the dots on a compelling value proposition around a new market (like video), look for more of the same results. My guess is that Apple's share price will drop another 5-10% before stabilizing.
12. QWIKSTRIKE (Posts: 857; Member since: 09 Mar 2010)
If it cant get back over $517 the technical's say $300s. Right now the Technical bottom is here at $446.00 the daily pivot point S2 or the 1.382 retrace of the 701 high which is also $446.00!
15. Droid_X_Doug (Posts: 5723; Member since: 22 Dec 2010)
Well, there are at least 2 quarters before new iToys are released and will show sales results, so unless Apple can open up China or an iVideo market offering, there ain't no there there.
31. speckledapple (Posts: 879; Member since: 29 Sep 2011)
I think you are right. Their market has matured and they depend greatly on expansion into new markets and their current customers coming back for more. The problem is that customers are also getting tired of the yearly update schedules (im looking at you too Android) which carries so many disadvantages as many have gotten a contract already.
The market is older and much more competitive.
43. Apple.IS.PEAKING (Posts: 3; Member since: 24 Jan 2013)
About China Mobile.
China Mobile is the biggest Mobile Carrier in China with over 650 million user. China Unicom is the second largest Mobile carrier in China with over 200 Million user.
China Mobile DON'T care about iphone. because they already the biggest in China with over 75% user. So, why would they subsidize APPLE?? If apple want marketshare, they should be the one subsidizing their phone. That's the way China Mobile work.
China Mobile even want the 50:50 cut from 30% apple got from developer. It's the same idea that Apple want some $$$revenue$$$ from Microsoft sky drive that were used by iOS user.
45. Apple.IS.PEAKING (Posts: 3; Member since: 24 Jan 2013)
2013 will be remembered as Apple TRYING to catch up with android
55. QWIKSTRIKE (Posts: 857; Member since: 09 Mar 2010)
56. QWIKSTRIKE (Posts: 857; Member since: 09 Mar 2010)
3. tykemp7 (Posts: 2; Member since: 23 Jan 2013)
Huh, how did that happen, man it looks like its a continuous downhill no matter what, its pretty hard to stop a non controlled train going down hill.
4. zig8100 (Posts: 120; Member since: 13 Dec 2012)
All their profits where from carriers and huge margins from sales.
Investors are selling high from how they see it because they see more of a drop coming. Its going to keep dropping until a new product is announced.
P.S. Pretty sure all the new Android phones announced and the upcoming Samsung phones have investors pretty scared. A lot of people are talking about switching over to the Note 3 n Galaxy S4. Even if Apple Math is true it wont compare to GS4 or Note 3 and everyone knows that.
38. gallison1983 (Posts: 41; Member since: 19 Dec 2012)
Says the person that has oversight for both Samsung and Apple.
8. phil2n (Posts: 466; Member since: 30 Apr 2012)
in the product process the apple stock is in the state of MAD DOG. To be disposed soon.
10. jroc74 (Posts: 4720; Member since: 30 Dec 2010)
One one hand.....as a former rookie stock market player.....I wish they would go low enough for me to buy back in at a low price. But....would they ever go back to the $700's, 600's or 500's again if they dropped all the way down to the $100's?
Based on this and Zynga....I'm glad I dont play the stock market anymore. I may again if I get bills in order and money saved up again.
11. fanboy1974 (Posts: 1195; Member since: 12 Nov 2011)
I'm no financial wiz kid but I seen this coming a mile away. If you introduce a cheaper smaller iPad it's going to eat at the more expensive larger model. I highly doubt that Apple is going to release a Retina iPad mini at $329. How many people here would by a $500 9.7" ipad over a $329 with the same resolution? Apple would be dumb to release a better display on a cheaper device.
If I was Tim Cook I would introduce a larger iPhone with higher resolution, slightly faster processor and charge a $100 premium while keeping the 4" around. iFans and a few Android deflectors would by a phone like that.
13. zig8100 (Posts: 120; Member since: 13 Dec 2012)
So 300 for a 16 gig with a 4.5 inch display, 400 for 32 and 500 for 64? On a 2 yrs contract? They really going to fail. They would push everyone right into Samsungs open arms.
25. fanboy1974 (Posts: 1195; Member since: 12 Nov 2011)
No. More like 5" (or larger) for $300. Apple will need at least a 1920x1080p screen and putting that into a 4.5" doesn't make sense. Don't forget about the faster processor and larger battery.
Apple would have no problems selling a 5" $300 1920x1080p phone while keeping the 4" iPhone 5s at $200. iFans are spending $100 for only a 16gig jump on the current model. So I know for sure they would do the same for a larger iPhone.
37. gallison1983 (Posts: 41; Member since: 19 Dec 2012)
The only ecosystem that has systematically been brute forcing software with beefy hardware is Android. I'm starting to see reviewers from all over remark how Android just doesn't seem to be as fluid on 1 GB of RAM. Either you are cramming loads of brilliant new features into your system that require massive number crunching or your OS is the victim of bloat.
16. -box- (Posts: 3779; Member since: 04 Jan 2012)
This is easy predictions coming to fruition. It's not even close to over yet, either. Can't wait to see it drop below $100.
17. lyndon420 (Posts: 1731; Member since: 11 Jul 2012)
Absolutely dead on. It would be awesome if apple could just come out with some cool new and amazing tech. Must be boring to be looking down at pretty much the same looking device for so many years now. Even a cool new gadget that would help to avoid having to look at it as much would help.
47. InspectorGadget80 (Posts: 6380; Member since: 26 Mar 2011)
They won't come up anything new. All they do is cut a few inches off their products & a inch higher for their iphone ios will still look their same
48. InspectorGadget80 (Posts: 6380; Member since: 26 Mar 2011)
They won't come up anything new. All they do is cut a few inches off their products &have a inch higher for their iphone ios will still look the same
18. blingblingthing (Posts: 429; Member since: 23 Oct 2012)
These investors must have been at CES 2013.
22. rusticguy (Posts: 2826; Member since: 11 Aug 2012)
No wonder Apple was trying to hijack the same with stupid rumors fed to press .... which didn't work :)
19. rusticguy (Posts: 2826; Member since: 11 Aug 2012)
If apple is not going into 10 billion dollar stocks buyback even at this level it means the stocks will crash further. This is after getting lot of governmental buying support in US of A of their devices Stock could be headed to below 300
21. someones4 (Posts: 619; Member since: 16 Sep 2012)
$400 something is still far from the point of no return. I hope everyone else will work hard to drive the prices down further. The 137 billion will be slowly eaten up by inflation....
23. Edmund (Posts: 654; Member since: 13 Jul 2012)
google's numbers were absolutely pathetic, but for some reason analysts didn't label them "disappointing" ??? Just shows how manipulated the market is.
Either way, I think we're in for a huge stock market correction.
50. jroc74 (Posts: 4720; Member since: 30 Dec 2010)
Difference is.....this is Apple. They are put on a higher pedestal by the users and the analyst. And this is one reason why ppl shouldnt put companies on such a high pedstal.
I read an article today where analyst were off by 1 million on iPhones and iPads shipped and/or sold....and that was deemed disappointing. I think some stock investors looked at the anaylst predictions and went from there.....which is a mistake IMO. They post record profits....yet again...and are deemed a disappointment because they were 1 million off from analyst predictions?
Btw...Google stock hasnt dropped in probably a year...not like Apples anyway.....I havent even checked...and I predict Google is over $700. Google has been on a steady rise....Apple's is on wild swings up n down lately.
52. jroc74 (Posts: 4720; Member since: 30 Dec 2010)
Oh...I decided to check...lol
Google is at $753...Apple is at $450. Apple has been on a steady decline the past 6 months. It is what it is.
24. Aeires (unregistered)
So where are all those analysts who repeatedly said AAPL was going to be $1000 a share?
$641.57 average per iPhone sold, that's lunacy right there. Why people continue to purchase this device blows the mind. I could see if it was leading the pack with options and features, but it's two years behind in both those categories.
29. thunderbolt (Posts: 76; Member since: 10 Jan 2013)
Yes and they take pride in accepting that they are willing getting duped ...
34. blingblingthing (Posts: 429; Member since: 23 Oct 2012)
I get the feeling that the increased sales and the fact the average selling price is lower proves that it is the older iPhones selling even more.
26. Edmund (Posts: 654; Member since: 13 Jul 2012)
lmfao.. No one can sell a phone for $300 and make a profit on it, not even samdung. Ever wonder why LG and google only manufactured 350,000 Nexus 4 devices or why it's taking so long to re-stock ?? Because neither company is making a profit on the handset, so why would they bother with it.
28. thunderbolt (Posts: 76; Member since: 10 Jan 2013)
I wouldn't feel happy on knowing that a company is making criminally high profit by offering me something so outdated ... how do i gain if LG makes 300$ profit per phone?
27. ilia1986 (unregistered)
Ah what a great way to start the day! :D
32. Nathan_ingx (Posts: 3007; Member since: 07 Mar 2012)
Apple needs to do something now...Cook need to fertilize their tree.
I believe the new iPhones in order will not save them until they release it soon, with a overhauled OS.
33. xfire99 (Posts: 480; Member since: 14 Mar 2012)
Stocks = Rich powerful peoples game. The rich peoples just earn more money now, sell when appl at high, make it goes down to 446US and buy back. Suddenly theirs wealth have just grown bigger in just 1-2 days.
35. gallison1983 (Posts: 41; Member since: 19 Dec 2012)
The stock price is about as overinflated as gas prices are. The only reason Apple was up was because of speculation. The only reason they are down is because of speculation. The same goes with gas. Both are still here.
Comparing stock prices to actual product is meaningless. Did any of you actually sift through the earnings reports to find out what they actually said? Year over year, iDevices have increased instead of decreased. Traditional Mac sales are falling. I suggest that you guys check what the overall tech sector is doing as well. Intel's earnings are showing shifts in computing trends. AMD's earnings are showing what ACTUALLY happens when a company fails to innovate in the right areas (as in AMD's lack of interest in anything substantial in the mobile tech sector. Apple has been ahead of the curve for a while and what I expect to see is a little bit more pushing of market saturation while Microsoft and Google make their moves in the market. Personally, I think Microsoft has the right idea and I would expect them to flourish as they start to implement more top-down development.
36. gallison1983 (Posts: 41; Member since: 19 Dec 2012)
Basically the investors expected something because speculation lined their own pockets. The speculators are trying to sell in an attempt to beat the market before enough speculation erodes their investment. Anyone out to honestly place an investment in a company does not do so based on speculation.
53. jroc74 (Posts: 4720; Member since: 30 Dec 2010)
I agree with this. Most of this in this article and some of the posts are over my head....but I agree with the last sentence alot.
I just posted how analyst were off by 1 million on iPads and iPhones shipped/sold and that was called a disappointment. I know many companies would love....maybe even kill...to have the numbers Apple shipped/sold.
40. Edmund (Posts: 654; Member since: 13 Jul 2012)
There's no way the galaxy s4 will have an "octa-core" processor or even a new screen with "diamond shaped" pixels (I LOL'd when I read this one). This is just empty fanboy talk.
A more likely scenario:
Quad core chip (contrary to popular belief, big.LITTLE is reserved for tablets)
5" 1080p screen
42. TylerGrunter (Posts: 905; Member since: 16 Feb 2012)
To get this:
5" 1080p screen
you need teh diamond shaped pixels.
As for the Chip, I'm not sure. I would expect a big.LITTLE with a dual core, but Samsung may decide to go octa just for the marketing.
My personal opinion is that two A15 are more than enough for performance.
41. martinlosha (unregistered)
Android time has come...
46. InspectorGadget80 (Posts: 6380; Member since: 26 Mar 2011)
Why should we care bout their stock
49. Aeires (unregistered)
51. ddeath (Posts: 160; Member since: 14 Apr 2012)
Closing share price at $450.50. A ~12% fall. The people who bought the shares must be cursing and swearing now.
54. jroc74 (Posts: 4720; Member since: 30 Dec 2010)
I bought in a year or 2 ago at $600+.....just to say I had some. My rookie stock market experience didnt last long...Zynga starting to fall scared the hell outta me...and I closed my account before I lost too much on Zynga....and made a profit overall based on other stocks I also had.
So glad I did now....lol. I can only hope and dream that Apple gets around $100 - $200 again.....so I can get in on the low side...