6 ms·

It's possible that this turns out to be a real sign, and I think other commenters have some good reasons why it could be. That said, I have been an AAPL stock o

It's possible that this turns out to be a real sign, and I think other commenters have some good reasons why it could be. That said, I have been an AAPL stock owner and watcher for a few years and have noticed a pattern. Every September, Apple introduces new iPhones. Later in the fall, the articles come out citing weak demand. 2017: "'Anemic' iPhone 8 demand drags Apple shares lower", https://www.reuters.com/article/us-apple-iphone/anemic-iphone-8-demand-drags-apple-shares-lower-idUSKBN1CO1E7 https://www.reuters.com/article/us-apple-iphone/anemic-iphon... 2016: "Apple may be cutting iPhone 7 orders as demand falls", https://www.cultofmac.com/456431/apple-may-cutting-iphone-7-orders-demand-falls/ https://www.cultofmac.com/456431/apple-may-cutting-iphone-7-... 2015: "Apple stock slides on claims of slashed iPhone component orders, weak iPhone 6s demand", https://appleinsider.com/articles/15/12/01/apple-stock-slides-on-claims-of-slashed-iphone-component-orders-weak-iphone-6s-demand https://appleinsider.com/articles/15/12/01/apple-stock-slide... Note that there were articles in those years also suggesting high demand. My point being that articles suggesting soft demand happen every year. Except 2014 when the iPhone 6 came out. Everyone was in total agreement then that demand was insane (and that quarter proved to be very hot indeed for Apple). My point is that we won't truly know what demand looked like for the new iPhones until late January when Apple announces earnings.

lbacaj 8y ago
I completely agree with the sentiment. I see this as a strategy from Apple. Unfortunately for their supplier's Apple's strategy to destroy Android seems to be somewhat counterintuitive, it involves selling fewer iPhones. It involves doubling down on premium and having these older phones last far longer. By definition that will mean a bigger used market which Apple seems to be embracing especially with the recent iOS update to actually, for probably the first time, make older phones faster for a change rather than slow them down. I think they have realized that their eco-system is far more valuable and having android owners switch to older iphones which seem to be holding up almost as well as new android devices not only does not cheapen their brand but brings in droves to the eco-system which is the thing with the real value at the end of the day. May sound far-fetched but every step they have taken lately points to this strategy, dont be surprised when they post more record profits.
- deleted 8y ago
  [deleted]
- boudin 8y ago
  I would be really surprised that Apple has any intent to destroy Android as they would quickly fall into antitrust regulations. Those would hit Apple really hard. They are much better off Google having most of the market share and having to deal with those issues
  - klodolph 8y ago
    Intent to "destroy Android" is always rephrased in some form like "we want to provide value to customers" and "reach key demographics". I can guarantee you that everyone at Apple (for some convenient definition of "everyone") goes through mandatory training every year on how they should not talk about how they are going to destroy the competition. That, and all the current big tech players spend equally big money on government lobbying, so absent a smoking gun, I don't think US antitrust action against any of the tech giants is likely in the next 10 years. Microsoft, you might recall, did not have government lobbyists and the lesson that everyone in industry took away was "monopolies are fine, but you'll get in trouble if you don't have any lobbyists". So Apple's strategy is to make expensive, high-end phones and capture the bottom end with used phones and older generations. You can phrase this as "destroying Android" or you can phrase it as "providing good value to consumers". The strategy can be the same either way, just be careful when you write that email.
    - deleted 8y ago
      [deleted]
- kalleboo 8y ago
  If Apple cared about destroying Android, they would simply release an affordable phone. They have one of the most optimized supply chains in the industry, they have a massive cash war chest to use to subsidize R&D. Apple clearly chooses high margins and profit over "destroying Android".
- cronix 8y ago
ProAm 8y ago
Did Foxconn plan massive layoffs during the previous 'weak demand' annoucements?
- ksec 8y ago
  Yes. Not the first time they did this. Just not in this scale.
706f6f70 8y ago
There seem to be many unique things to this year though: * Apple announces it will no longer report unit sales. This is a clear shift in strategy. * Orders have been cut not once, but twice. * Suppliers have been slaughtered in earnings reports. * Suppliers have cut staff and are trying to control costs. I agree there is a "cry wolf" element to this, but sometimes the wolf really does show up.
- dangoor 8y ago
  Yes, totally true. Apple did face a relative drop in the iPhone 6s year (2015) because iPhone 6 demand was so insane. It's possible that this year's results will be soft.
- wlesieutre 8y ago
  Apple went on record as making their next environmental push for longer lived devices, now that they hit the 100% renewable energy goal. Given that goal and the performance boost that iOS 12 brought for older devices, lower unit sales are inevitable. On the plus side, we might get a break from the annual IS APPLE DELIBERATELY MAKING IOS SLOW SO YOU'LL BUY A NEW PHONE??? stories, so it's a trade-off. Their plan seems to be making it up on services and pushing app subscriptions over 1-time purchases.
- achompas 8y ago
  > * Apple announces it will no longer report unit sales. This is a clear shift in strategy. Yeah, this is interesting. I wonder if higher prices (to increase device ASP) for better devices (breaking the two year upgrade cycle) mean that we have now seen peak iPhone growth. For the first time in years, I have recommended old/used iPhones to multiple people over new phones. On the other hand, Apple has increasingly emphasized services and complimentary devices in recent years. AirPods, Apple Watch, and Apple Music (to name a few) lock folks into the ecosystem and replace non-Apple alternatives. https://stratechery.com/2017/apple-at-its-best/ https://stratechery.com/2017/apple-at-its-best/
- reaperducer 8y ago
  Apple announces it will no longer report unit sales. This is a clear shift in strategy. I thought that at first, too. Then I read that Apple was an outlier in reporting these figures. I'm OK with Apple not reporting these kinds of numbers if it allows the company to focus on quality of product instead of satiating the salivating stockholders (of which I am one). Orders have been cut not once, but twice. We don't actually know this as a fact. It is pure conjecture. It is what a bunch of so-called supply chain "analysts" say, but they say it all the time, and are almost always wrong. I wish I could be wrong as often as these Wall Street types and still keep my job. The only people who whiff more often than Wall Street supply chain analysts are five-year-old softball players.
mikestew 8y ago
That said, I have been an AAPL stock owner and watcher for a few years and have noticed a pattern. Yup, it's what I told my wife when she asked, "something, something, decreased demand?" and I told her, "welcome to being an AAPL shareholder." We've owned AAPL for, I dunno, fifteen years and in at least the last ten the pattern continually repeats. That said, there do seem to be convincing arguments this time. Then I go look at the 14.8 P/E, and go back to reading Hacker News.
paxys 8y ago
News articles happen every year, but not the stock price dip
Eridrus 8y ago
I haven't been following Apples sales for as long or in much detail, but the last two years those predictions have basically come true, right? The thing saving AAPL is increased unit prices, which seems unlikely to be a good long term strategy.
- dangoor 8y ago
  I guess it depends on the meaning of "saving"? iPhone unit sales have been essentially flat but revenue has been rising because of unit prices and increases in services revenue. Six Colors has a great set of charts to show the trends: https://sixcolors.com/post/2018/11/reminder-apple-financial-results-released-today/ https://sixcolors.com/post/2018/11/reminder-apple-financial-... I'm pretty sure "just keep raising prices" is not Apple's long term strategy. They'll keep releasing a mix of products, and push the high end with more refined features. AAPL right now is at $172.82, giving it a PE ratio of 14.57. Apple is currently valued way below the S&P 500's PE ratio (21.58), so it's like people expect Apple's forward earnings to tank despite having had 20% revenue growth last quarter and 31% profit growth. It's not clear to me that Apple's future prospects are that bleak.

lbacaj 8y ago

I completely agree with the sentiment. I see this as a strategy from Apple. Unfortunately for their supplier's Apple's strategy to destroy Android seems to be somewhat counterintuitive, it involves selling fewer iPhones. It involves doubling down on premium and having these older phones last far longer. By definition that will mean a bigger used market which Apple seems to be embracing especially with the recent iOS update to actually, for probably the first time, make older phones faster for a change rather than slow them down. I think they have realized that their eco-system is far more valuable and having android owners switch to older iphones which seem to be holding up almost as well as new android devices not only does not cheapen their brand but brings in droves to the eco-system which is the thing with the real value at the end of the day. May sound far-fetched but every step they have taken lately points to this strategy, dont be surprised when they post more record profits.

deleted 8y ago
[deleted]
boudin 8y ago
I would be really surprised that Apple has any intent to destroy Android as they would quickly fall into antitrust regulations. Those would hit Apple really hard. They are much better off Google having most of the market share and having to deal with those issues
- klodolph 8y ago
  Intent to "destroy Android" is always rephrased in some form like "we want to provide value to customers" and "reach key demographics". I can guarantee you that everyone at Apple (for some convenient definition of "everyone") goes through mandatory training every year on how they should not talk about how they are going to destroy the competition. That, and all the current big tech players spend equally big money on government lobbying, so absent a smoking gun, I don't think US antitrust action against any of the tech giants is likely in the next 10 years. Microsoft, you might recall, did not have government lobbyists and the lesson that everyone in industry took away was "monopolies are fine, but you'll get in trouble if you don't have any lobbyists". So Apple's strategy is to make expensive, high-end phones and capture the bottom end with used phones and older generations. You can phrase this as "destroying Android" or you can phrase it as "providing good value to consumers". The strategy can be the same either way, just be careful when you write that email.
  - deleted 8y ago
    [deleted]
kalleboo 8y ago
If Apple cared about destroying Android, they would simply release an affordable phone. They have one of the most optimized supply chains in the industry, they have a massive cash war chest to use to subsidize R&D. Apple clearly chooses high margins and profit over "destroying Android".
cronix 8y ago

ProAm 8y ago

Did Foxconn plan massive layoffs during the previous 'weak demand' annoucements?

ksec 8y ago
Yes. Not the first time they did this. Just not in this scale.

706f6f70 8y ago

There seem to be many unique things to this year though: * Apple announces it will no longer report unit sales. This is a clear shift in strategy. * Orders have been cut not once, but twice. * Suppliers have been slaughtered in earnings reports. * Suppliers have cut staff and are trying to control costs. I agree there is a "cry wolf" element to this, but sometimes the wolf really does show up.

dangoor 8y ago
Yes, totally true. Apple did face a relative drop in the iPhone 6s year (2015) because iPhone 6 demand was so insane. It's possible that this year's results will be soft.
wlesieutre 8y ago
Apple went on record as making their next environmental push for longer lived devices, now that they hit the 100% renewable energy goal. Given that goal and the performance boost that iOS 12 brought for older devices, lower unit sales are inevitable. On the plus side, we might get a break from the annual IS APPLE DELIBERATELY MAKING IOS SLOW SO YOU'LL BUY A NEW PHONE??? stories, so it's a trade-off. Their plan seems to be making it up on services and pushing app subscriptions over 1-time purchases.
achompas 8y ago
> * Apple announces it will no longer report unit sales. This is a clear shift in strategy. Yeah, this is interesting. I wonder if higher prices (to increase device ASP) for better devices (breaking the two year upgrade cycle) mean that we have now seen peak iPhone growth. For the first time in years, I have recommended old/used iPhones to multiple people over new phones. On the other hand, Apple has increasingly emphasized services and complimentary devices in recent years. AirPods, Apple Watch, and Apple Music (to name a few) lock folks into the ecosystem and replace non-Apple alternatives. https://stratechery.com/2017/apple-at-its-best/ https://stratechery.com/2017/apple-at-its-best/
reaperducer 8y ago
Apple announces it will no longer report unit sales. This is a clear shift in strategy. I thought that at first, too. Then I read that Apple was an outlier in reporting these figures. I'm OK with Apple not reporting these kinds of numbers if it allows the company to focus on quality of product instead of satiating the salivating stockholders (of which I am one). Orders have been cut not once, but twice. We don't actually know this as a fact. It is pure conjecture. It is what a bunch of so-called supply chain "analysts" say, but they say it all the time, and are almost always wrong. I wish I could be wrong as often as these Wall Street types and still keep my job. The only people who whiff more often than Wall Street supply chain analysts are five-year-old softball players.

mikestew 8y ago

That said, I have been an AAPL stock owner and watcher for a few years and have noticed a pattern. Yup, it's what I told my wife when she asked, "something, something, decreased demand?" and I told her, "welcome to being an AAPL shareholder." We've owned AAPL for, I dunno, fifteen years and in at least the last ten the pattern continually repeats. That said, there do seem to be convincing arguments this time. Then I go look at the 14.8 P/E, and go back to reading Hacker News.

paxys 8y ago

News articles happen every year, but not the stock price dip

Eridrus 8y ago

I haven't been following Apples sales for as long or in much detail, but the last two years those predictions have basically come true, right? The thing saving AAPL is increased unit prices, which seems unlikely to be a good long term strategy.

dangoor 8y ago
I guess it depends on the meaning of "saving"? iPhone unit sales have been essentially flat but revenue has been rising because of unit prices and increases in services revenue. Six Colors has a great set of charts to show the trends: https://sixcolors.com/post/2018/11/reminder-apple-financial-results-released-today/ https://sixcolors.com/post/2018/11/reminder-apple-financial-... I'm pretty sure "just keep raising prices" is not Apple's long term strategy. They'll keep releasing a mix of products, and push the high end with more refined features. AAPL right now is at $172.82, giving it a PE ratio of 14.57. Apple is currently valued way below the S&P 500's PE ratio (21.58), so it's like people expect Apple's forward earnings to tank despite having had 20% revenue growth last quarter and 31% profit growth. It's not clear to me that Apple's future prospects are that bleak.