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Post by jeffi on Dec 16, 2012 17:15:56 GMT -8
Wow... Great commentary. Pow!
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Post by tuffett on Dec 16, 2012 17:17:51 GMT -8
Two million in three days in a single country three months post-launch is phenomenal. Looks like there is tons of supply now which should be good for both sales and margins. I would guess sales in China are going to be huge for the rest of the year and should hopefully help Apple handily beat 50M iPhones for the quarter.
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Post by mbeauch on Dec 16, 2012 17:19:37 GMT -8
I love you. I was about to cry with that citigroup downgrade. +100, Thank you Tetra. That is a VERY good number IMO. I read the Citi downgrade and it focuses on calendar 1 orders being cut. It is that typical fiscal/calendar confusion BS. What is also not known is how ell the 4/4S are selling. Tetra, again, thank you for posting that. That should help some.
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Post by jeffi on Dec 16, 2012 17:20:42 GMT -8
Glen Yeung – Citi December 16, 2012 11:10 PM GMT Apple, Inc. (AAPL) NT Cuts Bring Risks Increasingly Into Focus – Downgrade to Neutral Quick Call — Citi Research is downgrading the shares of Apple Inc. to Neutral from Buy. As articulated in our recent initiation (see Experiencing Growing Pains but at Near-Term Trough), our previous Buy rating was trading oriented, reflecting our expectation for a near-term rally (after a substantial sell-off) on strong iPhone5 sales. However, near-term supply chain order cuts, while inconclusive in nature, bring into question the strength of iPhone5 and refocus investors onto risks in the Apple story. As such, we see the likelihood of any near-term rally as diminished, and, in keeping with our original thesis, downgrade the shares to Neutral. Based on the trough analysis in our initiation, Apple shares are approaching valuations when comparables (other 4% of S&P companies, other companies with similar deceleration) were at trough prices. While this argues for an eventual rebound, we expect shares to remain range-bound for the foreseeable future. The Data Points — We have just returned from meetings with the hardware supply chain in Asia. While early in the week, we would characterize the Apple supply chain as optimistic about 1Q13 prospects, by week’s end evidence of Apple order cuts to some suppliers had emerged. In keeping with this, Citi Research cut its estimates for Hon Hai Precision (2317.TW) – see Tech Chain Reaction. We revise lower our Apple estimates as per the summary of model changes section below. Our Take? Some Supply... — While the reasons for Apple’s cut are unclear to the supply chain, we suspect it results from a combination of supply & demand issues. As we wrote on 11/28/12 (see iPhone5 Availability Improving Lending Confidence to Quarter; Mini Yields Set to Improve), supply of iPhone5 has improved. Our checks suggest Apple has seen a 45-50% increase in monthly iPhone5 production output October to December. While some of this increase was anticipated, our discussions with various points in the supply chain indicate yield improved faster-than-expected. Given that Apple would likely double order in periods of low-yield, order cuts as yields improve seem reasonable. As we noted in our initiation, we see execution risk for Apple as it decreases the time between new product introductions on larger volumes each time: we believe this kind of supply chain disruption is indicative of this. ...And Some Demand — But noting that it is unlikely that Apple is cutting orders in a “great” demand environment, (continued below...) ...And Some Demand — (...continued from above) we suspect “good not great” demand is also a factor. To be sure, Apple launched the iPhone5 in 40 countries last week, creating a degree of uncertainty: pre-orders on China Unicom appear strong (300K vs. 200K for 4S) but only good in Taiwan (350K vs. 380K). But when also considering strength at Samsung is still evident from our supply chain checks, we suspect competition is improving, diminishing the hype around the iPhone5. In particular, Citi takes an aggressive stance on Samsung: Henry Kim models 327M smartphones in 2013 (Samsung targets 350M), representing 27.3% market share that year. To be sure, we still see potential for Apple to deliver upside to December quarter iPhone consensus (~47M units), but continue to see risk from competition as articulated in our initiation. We note our proprietary "Device Explosion" survey results published this morning show leading indicators of Apple's competitive advantage in smartphones diminishing and also suggest specifically that well over half of consumers prefer smartphones with screens larger than 4.1", putting iPhone 5 at a disadvantage. iPad4 Cannibalization — As we indicated in our 11/28/12 note (see iPhone5 Availability Improving Lending Confidence to Quarter; Mini Yields Set to Improve), we see continued strength of iPad Mini, at the expense of iPad4. Given that both were produced in similar quantities in 4Q12 (~10M units each), we expect some iPad4 inventory to persist at year-end. Our supply chain checks corroborate this: iPad Mini production is expected to increase to 12M-14M units in the March quarter, whereas iPad4 is expected to decrease to 5M-7M units. In aggregate, this improves our unit assumption for Apple’s 2Q13(Mar) and we adjust our estimates accordingly. In our initiation, we argued tablet numbers have upside: we are seeing evidence of this. But, more broadly, we view tablet innovation as increasingly difficult, opening room for alternative solutions to iPad and creating risk of further market share loss. Our survey here shows that tablets under $300 are driving the majority of incremental demand as compared to six months ago. What’s Ahead? — We look to renewed product cycles to become more constructive on Apple. While we don’t view all of these as meaningful, we see potential for the following: 1) iPhone 5S in 2Q13; 2) iPad Mini Retina in 2H13; 3)iPad5 in 2H13, engineered to compete more with ultrabooks; and 4) large screen iPhone or iPad with phone in 2H13. Must I post the rest?
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Post by Tetrachloride on Dec 16, 2012 17:24:15 GMT -8
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Mav
Member
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Post by Mav on Dec 16, 2012 17:25:04 GMT -8
Apple doesn't listen. Nope, not now, not ever. It has a tin ear for information vacuums.
Welcome to Apple 3.0: Tim Cook Era, people
oh and 2M iPhone 5s in 3 days sounds pretty OK for a single country albeit a kind of a bigger one and with no lines in front of one Apple Store in Sanlitun
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Post by alice on Dec 16, 2012 17:27:17 GMT -8
Is this the first time Apple made a statement regarding first weekend China launch sales data? Does this statement confirm iPhone 5 demand is OK?
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Post by aapl4kiki on Dec 16, 2012 17:27:22 GMT -8
Apple doesn't listen. Nope, not now, not ever. It has a tin ear for information vacuums. Welcome to Apple 3.0: Tim Cook Era, peopleoh and 2M iPhone 5s in 3 days sounds pretty OK for a single country albeit a kind of a bigger one and with no lines in front of one Apple Store in SanlitunDefinitely a response.
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Post by phoebear611 on Dec 16, 2012 17:30:25 GMT -8
Tetra - thank you and Zerohedge's commentary - if you haven't read it - is priceless (it's up above on my post).
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Mav
Member
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Post by Mav on Dec 16, 2012 17:31:04 GMT -8
Is this the first time Apple made a statement regarding first weekend China launch sales data? Why yes. Yes it is. Apple 3.0
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Post by alice on Dec 16, 2012 17:32:42 GMT -8
Does this confirm iPhone 5 demand is healthy?
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Post by artman1033 on Dec 16, 2012 17:39:00 GMT -8
stks.co/fHQHremember citi and goldman are notorious for doing then opposite of what they post Thank you for the link to the actual Citi letter! It is an interesting read. As I recall: 1) Peter guides to $52 Billion... 2) Tim is a logistics guy 3) Apple just announced it has sold over two million of its new iPhone® 5 in China, just three days after its launch on December 14. That is a great number. 4) from the Citi letter "pre-orders on China Unicom appear strong(300K vs. 200K for 4S) " Let us see what Citi says tomorrow. I don't think the Apple press release about China sales is in any way related to the stock price. Apple management has never cared about the short term price of the stock. Employees will be able to buy shares from their ESOP at a very good share price in January.
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Post by mbeauch on Dec 16, 2012 17:47:11 GMT -8
Is this the first time Apple made a statement regarding first weekend China launch sales data? Does this statement confirm iPhone 5 demand is OK? Alice, earlier this year the 4S tried to launch but Apple kept the doors closed because of the mob outside. Needless to say it did not go as well as Apple hoped. This is much better.
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Post by phoebear611 on Dec 16, 2012 17:48:01 GMT -8
Stocktwits guy just posted a pic of his Reuters screen - seems Morgan Stanley is disputing the Citi findings....let the games begin: stocktwits.com/message/11035240
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Post by aapl4kiki on Dec 16, 2012 17:49:32 GMT -8
Stocktwits guy just posted a pic of his Reuters screen - seems Morgan Stanley is disputing the Citi findings....let the games begin: stocktwits.com/message/11035240Tomorrow is shaping up to be an epic day of trading.
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Post by alice on Dec 16, 2012 17:54:27 GMT -8
Is this the first time Apple made a statement regarding first weekend China launch sales data? Does this statement confirm iPhone 5 demand is OK? Alice, earlier this year the 4S tried to launch but Apple kept the doors closed because of the mob outside. Needless to say it did not go as well as Apple hoped. This is much better. I hope this puts a floor under aapl share price.
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Post by alice on Dec 16, 2012 17:58:00 GMT -8
It is nice and a relief to see support from Apple and Morgan Stanley.
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Post by po1nt on Dec 16, 2012 18:10:21 GMT -8
I just peed my pants! finally we get some good new that could help all this. I wish we knew the 4s numbers from last year... does anyone know how many Apple sold to China last year in the whole quarter?
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Post by lovemyipad on Dec 16, 2012 18:13:13 GMT -8
Lovey, a share price can fall without much selling. AAPL has had several flash crashes. +1 We don't know all the unvarnished ways that a flash crash may occur, both in trigger and the avalanche, not to mention the ups and downs in pre-market trading. Volume doesn't matter as much as price. Easier to manipulate-- er, move prices on low volume, thus we can melt up on low volume, and we can melt down on low volume. Flash crash ---> feedback loop of buyers holding out for lower prices and sellers accepting lower prices Can include popped stops and margin liquidations. Maybe accepting is a misleading word since I mean it to include forced selling (and buying).
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Post by lovemyipad on Dec 16, 2012 18:24:46 GMT -8
remember citi and goldman are notorious for doing then opposite of what they post +1 EOs!!!!!!!!!
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Post by mbeauch on Dec 16, 2012 18:28:33 GMT -8
I just peed my pants! finally we get some good new that could help all this. I wish we knew the 4s numbers from last year... does anyone know how many Apple sold to China last year in the whole quarter? LOL, they did not get it until January and that was one carrier. The other did not come until March. The compares are not very comparable.
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Post by lovemyipad on Dec 16, 2012 18:30:44 GMT -8
As best I can figure it, sentiment drives the stock price. The balance of greed/fear and the "perception" of what the future holds drives supply/demand. Supply/demand drives the stock price. And the stock price drives the technicals. sentiment (greed/fear) ---> supply/demand ---> stock price ---> technicals I think the hardest thing for me to understand (because it defies logic) is that fundamentals don't drive sentiment as much as greed and fear. IMHO, behavioral finance (crowd psychology) runs the show. Don't forget liquidity. You may want to buy more, but because of factors relating to available cash on hand, you may be forced to sell. Yes, yes, yes! And forced buying/selling fuels feedback loops!
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Post by Tetrachloride on Dec 16, 2012 18:43:47 GMT -8
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Post by lovemyipad on Dec 16, 2012 18:45:46 GMT -8
Speaking of forced buying/selling... Guess whose turn is coming up...? We haven't seen these short interest levels since...well, you look... Plus a snapshot: AAPL - Short Interest
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Post by appledoc on Dec 16, 2012 18:49:16 GMT -8
The end is coming. SOON. I believe this now more than ever.
Do the opposite of whatever Citi, GS, etc. says publicly.
Get ready for a wild ride. Up, for a change.
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Mav
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Post by Mav on Dec 16, 2012 19:00:22 GMT -8
*cough* short interest could still go higher *cough*
But anyway! Things are looking up for Apple this fiscal Q1. We'll see if there's any (up)waves to catch starting next week. Choppy surf, though, as long the fiscal slope issues persist (and if Euro worries either pop up again, get used as excuses to tank the market, whatever).
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Post by po1nt on Dec 16, 2012 19:05:21 GMT -8
I just peed my pants! finally we get some good new that could help all this. I wish we knew the 4s numbers from last year... does anyone know how many Apple sold to China last year in the whole quarter? LOL, they did not get it until January and that was one carrier. The other did not come until March. The compares are not very comparable. So let me get this straight. Last year we sold 37m iPhones. With no China and a bunch of other countries. We sold 4m in the first weekend, domestically. This year we sell 5m in the first weekend, have a 100 country rollout (including china), and report "record" first weekend sales...... how do we not absolutely crush the 37m number from last year again?
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Post by Tetrachloride on Dec 16, 2012 19:05:25 GMT -8
Futures are green. Nikkei at 9900. Nasdaq +9.5. HangSeng 22570.
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Post by phoebear611 on Dec 16, 2012 19:07:30 GMT -8
The end is coming. SOON. I believe this now more than ever. Do the opposite of whatever Citi, GS, etc. says publicly. Get ready for a wild ride. Up, for a change. The GS thing is always bad - they are forever notorious but these guys at Citi made their initial call 3 weeks ago...in their note today they say they have been on a trip through China. They knew when they originally made the announcement that they had a trip scheduled. Why not wait until they came back to give the world a thorough analysis. Instead they put something out there and then 3 weeks later practically retract what they said. Was there a sudden epiphany? These people are the worst - seriously. Their management is already being questioned and may be under investigation with respect to the manner in which they fired their ex-CEO. That whole firm is so rotten...and what is it the French say, "The fish rots from the head...." they must have had Citi in mind when they came up with that.
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Post by jdrizzo89 on Dec 16, 2012 19:14:21 GMT -8
LOL, they did not get it until January and that was one carrier. The other did not come until March. The compares are not very comparable. So let me get this straight. Last year we sold 37m iPhones. With no China and a bunch of other countries. We sold 4m in the first weekend, domestically. This year we sell 5m in the first weekend, have a 100 country rollout (including china), and report "record" first weekend sales...... how do we not absolutely crush the 37m number from last year again? Great question. My guess= first weekend sales were greatly a reflected of limited supply. Could have been much bigger roll out. Have only caught up to demand last few weeks. Plus no three weeks of china last year.
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