chinacat
Moderator
AAPL Long since 2006
Posts: 4,426
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Post by chinacat on Jul 23, 2016 7:27:56 GMT -8
Ahhhh...Earnings Report week! Can't you just feel the excitement building? I find it somewhat ironic that the huge success of the much requested plus-sized iPhone 6 is IMHO the cause of much of the current malaise. I haven't run the numbers, and perhaps I am wrong, but if the sales figures for the 6 and the 6S were reversed, then talk of "iPhone sales figures falling off a cliff" might have never gained traction.
Meanwhile, Apple Music has inserted itself into the top of the battle for leading the streaming music industry, yet its $15B revenues get a big ho-hum in the shadow of the iPhone juggernaut.
Sometimes I think that AAPL is the victim of Apple's success.
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Ted
fire starter
Posts: 882
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Post by Ted on Jul 23, 2016 9:27:51 GMT -8
[You win, Chinacat. I'll put this here too. How do I delete the weekend thread I created already?]
Well, this seemed a good way to open the weekend thread - with a very positive post from an old friend of this board, Gregg Thurman. I see his posts on the Mac360 site sometimes. He certainly hasn't lost any faith in the company. Skeptics, feel free to go to town on this one . . .
"Gregg_Thurman • 7 hours ago
WS's insistence for new features/design to drive YoY sales growth is grossly misplaced.
Smart phone buyers do not upgrade on a yearly basis. They upgrade on a 24 to 27 month cycle. By definition iPhone users owning an iPhone more than 27 months old are not upgraders to new models, instead are primarily purchasers of used models, and will "upgrade" to a newer , albeit pre-owned, model. If you average the Yo2Y growth rate for the prior 3 December quarters, then adjust that average downward by 2 Standard Deviations and 8% FX headwinds you arrive at an effective Yo2Y growth rate of ~25%.
Applying a 25% Yo2Y growth rate to FQ1/14 results you get 93.5 Million iPhones sold during FQ1/2017. The delta between purported iPhone7 order and that number are sales of iPhone 6/Plus, iPhone 6S/Plus (sold at discount) and iPhone SEs. Historically this latter group accounts for about 20% of total iPhone sales during any given quarter. Deducting 20% from the calculated 93.5 Million total iPhone sales for FQ1/2017 yields 74.8 Million iPhone 7/Plus sales, right in the middle of the purported iPhone 7 order of 72 Million to 78 Million units.
I believe that 93.5 Million iPhones sold during FQ1/2017 may prove to be conservative. depending on the sales performance of the, until recently, supply constrained iPhone SE. I'm modeling an ASP of $635."
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,426
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Post by chinacat on Jul 23, 2016 9:57:29 GMT -8
[You win, Chinacat. I'll put this here too. How do I delete the weekend thread I created already?] Thanks for graciously combining our threads. Greg's analysis is definitely more informative than my random musings.
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Post by firestorm on Jul 23, 2016 13:01:03 GMT -8
[You win, Chinacat. I'll put this here too. How do I delete the weekend thread I created already?] Thanks for graciously combining our threads. Greg's analysis is definitely more informative than my random musings. I recommend taking Thurmon's analysis with a grain of salt, based upon past performance. He might be right; he might be wrong.
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Post by Luckychoices on Jul 23, 2016 15:44:01 GMT -8
I'm not posting this as a negative on Tesla, I'm doing it because I believe he's correct_ perspective is important. And I hasten to add that $6 billion in revenues is only a guesstimate on someone's part. From Horace Dediu: Perspective on the Apple watch: $4 billion Tesla 2015 revenues $6 billion Apple watch 1st year revenues "One is a flop the other an unstoppable success" tinyurl.com/zlx...
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Post by Luckychoices on Jul 23, 2016 17:17:54 GMT -8
How long before this small China protest is exaggerated by the Apple naysayers? Loved reading about the woman who admitted to not really smashing her iPhone but using a photo of a smashed iPhone she got online. Apple weathers anti-U.S. demo in China, where patriotic protests snowballHONG KONG (Reuters) - Apple Inc (AAPL.O) found itself on the receiving end of a small, short-lived anti-U.S. protest this week in China, the tech firm's biggest overseas market and a country where foreign firms have suffered damaging boycotts following international spats. A handful of unofficial Apple stores were picketed and social media users encouraged each other to destroy their Apple goods, in a rare instance of the tech firm being targeted as a symbol of perceived injustice following an international ruling against Chinese territorial claims. Though the protest was small, observers have expressed concern about the impact on Apple in the long term, citing the roughly year-long slump in sales of Japanese cars after a diplomatic dispute that prompted large protests and boycotts. "There's not much Apple or any other foreign firm can do to prevent such patriotic protests," said analyst Nicole Peng at researcher Canalys, who sees no impact to Apple's sales from the recent protest. "These incidents happen every few years." Apple did not immediately respond to a request for comment. China is the world's biggest smartphone market and Apple is increasingly reliant on its growing middle class as it competes with domestic makers of cheaper phones such as Xiaomi Inc [XTC.UL] and Huawei Technologies Co Ltd [HWT.UL], in a climate of weakening consumer spending and slowing economic growth. Adding to Apple's challenges are brushes with regulators. Its online book and film service was blocked earlier this year, and last month its iPhone designs were ruled to have infringed a local firm's patent. Apple's sales in China fell around 25 percent in January-March from the same period a year prior. On Tuesday, it is scheduled to announce April-June earnings that are widely expected to be lackluster due to a dearth of product launches. SHALLOW PROTEST Apple was targeted in the latest protest by virtue of its country of origin, which in turn was regarded as the root of a perceived affront. Earlier this month, The Hague said it found no legal basis for China's claim to most of the South China Sea, prompting local media to call the Court a "puppet" of external forces, and accuse the United States of turning the Philippines - which filed the case - against China. About a week later, on Tuesday, over 100 protesters picketed four unofficial Apple dealers in Suining in the eastern province of Jiangsu for about three hours, urging customers not to buy the genuine Apple goods on sale. "They chanted, 'boycott American products and kick iPhones out of China,'" store owner Zhu Yawei told Reuters. "But nothing really happened: no fights, no smashing."A video of the protest went viral on Chinese social media, with anti-Apple comments flooding microblogging site Weibo and pictures of what users described as their smashed iPhones - a luxury product in China widely considered a status symbol. However, among the vitriol was just as much support, with state-controlled media also calling for restraint. "It's cheap nationalism and outright stupidity," said Shan Mimi, a 23-year-old assistant at a Shanghai law firm. "But if you were to offer me an (upcoming) iPhone 7, then I would gladly smash my iPhone 6!"One young Chinese woman on Weibo said she had smashed her iPhone, accompanying her comment with a photo of a damaged handset. She later told Reuters she had lied.
"I didn't smash my iPhone. All I did was find a photo (of a smashed handset) on the internet and let off some steam," said the 21-year-old, calling herself L-Tin. "Boycotting Apple would only make Chinese people lose their jobs - many work for Apple."
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Post by sponge on Jul 23, 2016 17:48:32 GMT -8
[You win, Chinacat. I'll put this here too. How do I delete the weekend thread I created already?] Well, this seemed a good way to open the weekend thread - with a very positive post from an old friend of this board, Gregg Thurman. I see his posts on the Mac360 site sometimes. He certainly hasn't lost any faith in the company. Skeptics, feel free to go to town on this one . . . "Gregg_Thurman • 7 hours ago WS's insistence for new features/design to drive YoY sales growth is grossly misplaced.Smart phone buyers do not upgrade on a yearly basis. They upgrade on a 24 to 27 month cycle. By definition iPhone users owning an iPhone more than 27 months old are not upgraders to new models, instead are primarily purchasers of used models, and will "upgrade" to a newer , albeit pre-owned, model.If you average the Yo2Y growth rate for the prior 3 December quarters, then adjust that average downward by 2 Standard Deviations and 8% FX headwinds you arrive at an effective Yo2Y growth rate of ~25%.Applying a 25% Yo2Y growth rate to FQ1/14 results you get 93.5 Million iPhones sold during FQ1/2017. The delta between purported iPhone7 order and that number are sales of iPhone 6/Plus, iPhone 6S/Plus (sold at discount) and iPhone SEs. Historically this latter group accounts for about 20% of total iPhone sales during any given quarter. Deducting 20% from the calculated 93.5 Million total iPhone sales for FQ1/2017 yields 74.8 Million iPhone 7/Plus sales, right in the middle of the purported iPhone 7 order of 72 Million to 78 Million units.I believe that 93.5 Million iPhones sold during FQ1/2017 may prove to be conservative. depending on the sales performance of the, until recently, supply constrained iPhone SE. I'm modeling an ASP of $635."Debating him by email and in person on these numbers. I am the biggest bull when it comes to Apple. Just don't see us going from -16% iPhone sales to positive 25% in 2 quarters. Sure it can happen but data at this point does not supports such a big jump. The S models show a drop in the rate of growth and the feature model have followed a similar pattern.
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Post by nagrani on Jul 24, 2016 4:47:03 GMT -8
I'm not posting this as a negative on Tesla, I'm doing it because I believe he's correct_ perspective is important. And I hasten to add that $6 billion in revenues is only a guesstimate on someone's part. From Horace Dediu: Perspective on the Apple watch: $4 billion Tesla 2015 revenues $6 billion Apple watch 1st year revenues "One is a flop the other an unstoppable success" tinyurl.com/zlx... Let's circle back In a year and see where tesla is compared to apple from a stock appreciate perspective.
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Post by Luckychoices on Jul 24, 2016 10:18:39 GMT -8
I'm not posting this as a negative on Tesla, I'm doing it because I believe he's correct_ perspective is important. And I hasten to add that $6 billion in revenues is only a guesstimate on someone's part. From Horace Dediu: Perspective on the Apple watch: $4 billion Tesla 2015 revenues $6 billion Apple watch 1st year revenues "One is a flop the other an unstoppable success" tinyurl.com/zlx... Let's circle back In a year and see where tesla is compared to apple from a stock appreciate perspective. I reread the two sentences I included to see where I went wrong and don't see how I could have been more clear. As I said, the post was not a negative for Tesla, but an indication of how critics have been so dismissive of the Apple Watch and its contribution to Apple revenue. Billions in revenue from an initial release of a product is somehow a flop? My apologies if you took it as a slam against Tesla or its investors. It was not.
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Post by davidstevenson on Jul 24, 2016 13:09:49 GMT -8
I'm not posting this as a negative on Tesla, I'm doing it because I believe he's correct_ perspective is important. And I hasten to add that $6 billion in revenues is only a guesstimate on someone's part. From Horace Dediu: Perspective on the Apple watch: $4 billion Tesla 2015 revenues $6 billion Apple watch 1st year revenues "One is a flop the other an unstoppable success" tinyurl.com/zlx... Let's circle back In a year and see where tesla is compared to apple from a stock appreciate perspective. If Tesla adds an additional $4 billion in revenue (to $8 billion) next year (which I doubt but could happen), Tesla stockholders will be gratified and justly rewarded. If Apple adds an additional $6 billion in revenue (on top of the the 1st years revenues to its corporate $200+ billion now) due to the Apple watch alone (which could easily happen), nobody will notice or care. (Actually, developers might care, some of them, maybe).
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Post by davidstevenson on Jul 24, 2016 13:28:04 GMT -8
[You win, Chinacat. I'll put this here too. How do I delete the weekend thread I created already?] Well, this seemed a good way to open the weekend thread - with a very positive post from an old friend of this board, Gregg Thurman. I see his posts on the Mac360 site sometimes. He certainly hasn't lost any faith in the company. Skeptics, feel free to go to town on this one . . . "Gregg_Thurman • 7 hours ago WS's insistence for new features/design to drive YoY sales growth is grossly misplaced.Smart phone buyers do not upgrade on a yearly basis. They upgrade on a 24 to 27 month cycle. By definition iPhone users owning an iPhone more than 27 months old are not upgraders to new models, instead are primarily purchasers of used models, and will "upgrade" to a newer , albeit pre-owned, model.If you average the Yo2Y growth rate for the prior 3 December quarters, then adjust that average downward by 2 Standard Deviations and 8% FX headwinds you arrive at an effective Yo2Y growth rate of ~25%.Applying a 25% Yo2Y growth rate to FQ1/14 results you get 93.5 Million iPhones sold during FQ1/2017. The delta between purported iPhone7 order and that number are sales of iPhone 6/Plus, iPhone 6S/Plus (sold at discount) and iPhone SEs. Historically this latter group accounts for about 20% of total iPhone sales during any given quarter. Deducting 20% from the calculated 93.5 Million total iPhone sales for FQ1/2017 yields 74.8 Million iPhone 7/Plus sales, right in the middle of the purported iPhone 7 order of 72 Million to 78 Million units.I believe that 93.5 Million iPhones sold during FQ1/2017 may prove to be conservative. depending on the sales performance of the, until recently, supply constrained iPhone SE. I'm modeling an ASP of $635."I am not a skeptic on his conclusion. However, I think his methodology is flawed (for the next year or so). He is applying a (linear?) extrapolation based on data from an extraordinary data set (the launch of the 6, which was ahistorically high, and the 6s which was therefore ahistorically low (there's a graph on Above Avalon which demonstrates the ahistoricity of iPhone sales in the last two years). I think that's why he tacked on (without explanation) the 2 SD downward adjustment (why 2? not 3? not 1.117). I expect it will be at least another year before average growth rate can be used to project forward (barring another ahistorical event). To be constructive, if I were doing this, I'd use TTM rather than quarters to smooth out the quarterly fluctuations, then I'd use 2.5 years rather than 2 years for extrapolating, but even then there'd be the 6-launch anomaly to deal with. By the way, I do enjoy reading Greg's analyses over the years. I'm glad he's still at it.
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Post by tuffett on Jul 24, 2016 17:19:11 GMT -8
A conservative 93.5 million iPhones? I'd like some of what he's smoking.
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Post by rickag on Jul 24, 2016 18:15:05 GMT -8
A conservative 93.5 million iPhones? I'd like some of what he's smoking. Wouldn't matter, it would just create the next YOY compare FUD.
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