Apple is Doomed (Again)!
Apple, after reporting a less than 1% sales drop against the same quarter last year the investment pundits who, only days ago, were claiming iPhone X sales were catastrophic are now re-focusing their advice (bullshit), painting the minor miss as the beginning of a slide into obscurity.
Inability to read basic reports
These so-called experts (In Australia we’d call them Galahs – A parrot noted for incessant squawking) demonstrated an inability to read reports and do even the most basic math. The same quarter last year was 14 weeks, while this year is 13. Adjusted for the fewer sales days in this latest quarter, sales ACTUALLY INCREASED. This was clearly stated in Apple’s call, yet went over the head of most of the ‘experts’. Add to that, profits soared as a result of the success of the supposed flop iPhone X. Average selling price for Apple rose to $796 on the back of the outstanding sales of the iPhone X ‘flop’.
Add to that, Apple’s guidance for the current quarter had the ‘Galahs’ running in ever decreasing circles (you know what happens next!) claiming Apple is doomed if it does not radically change its product mix. The lower guidance is still significantly higher than the same quarter last year, just not the unrealistic ‘supercycle’ the pundits hyped themselves to expect.
Competition in free-fall
One thing apparent from the latest market research, while Apple are holding firm on sales and increasing significantly in profit, the competition is in free-fall in most markets and especially China.
Apple needs a $250 phone to compete! (No it doesn’t)
Serial idiot Neil Mawston at Strategic Analytics states if Apple wants to expand volume in future it needs to push down into cheaper (unprofitable) end of the pricing curve.
Why would a company that sees it’s average selling price rise by $100 and revenue and profits surge, delve in the unprofitable low end of the market? Yes, they could sell more devices, with reduced average selling price and potentially reduced profit.
Apple’s prime differentiator is that it DOES NOT play in the cesspit at the bottom end of the market, preferring to focus on profitability above volume. That’s what SMART companies do!
Multiple Billion Plus Segments
Of note in the figures is that Apple has multiple $Billion plus market segments. Each one, performing far better than many competitors most strategic businesses. Apple can point to Mac, Wearables, Services as outstandingly profitable product segments. Even the iPad managed a slight growth, while the rest of the tablet market plummets. Microsoft has been forced to admit their Surface line only achieved $1.3Bn in sales over the Holiday period, a pathetic result given the range of product that covers tablet, notebook and convertible and the incessant predictions Surface would kill iPad and MacBook.
Apple is Doomed (Again)
While Apple’s profits surged and sales on a comparable basis increased across all market segments, Apple shares tanked, down from $175 to $160. In a measure of market stupidity, companies with far lower profits and significantly less potential upside, remain solid or rise. While this is significant ‘correction’ hopefully when the full significance of Apple’s profit growth and solid prospects sinks in, it’s share value will return to growth.