Later, Apple releases numbers which suggest that it's selling great (https://www.cnet.com/news/apple-iphone-7-tim-cook-first-quar...)
I think maybe it's time to stop listening to "analysis" on their sales until there are real numbers.
In other words: when you see someone publish a “forecast” that a particular company’s product isn’t doing well, the analysis is usually flawed. If it weren’t flawed, the market price of the analysis probably wouldn’t be “free.”
I’m speaking from experience - I know a quantitative researcher who successfully forecasted Apple’s iPhone sales to a fraction of a percent a few years ago (very clever method!), and I’ve personally done this with Tesla model sales/production.
For Tesla auto sales couldn't you just look at tesla vin numbers?
For iPhones, sample mac address's?
You’ve definitely intuited some of the method, yes :). The rest of it entails:
1) how to get all VINs both authoritatively and legally,
2) how to distinguish between valid VINs and assigned VINs,
3) how to reverse the actual revenue projection from the set of all assigned VINs.
The first requirement is the hardest. Tracking self-reported VIN delivery from users isn’t rigorous enough. You could use an endpoint and scrape from it, but how would you do it legally and reliably?
The second requirement is also difficult. Assuming you’ve found an authoritative source for valid VINs, how do you distinguish which VINs are assigned?
Once you have those two, the third requirement is mostly straightforward. You can implement your own VIN decoder using public NHTSA documentation, map each VIN field to options and prices across models, and track sequential VINs using the distinguishing method of requirement 2 on the data you’re getting from requirement 1.
Naturally, there are other ways to do this that don’t involve VINs at all.
Sometimes it's just good old illegal insider information.
I say “simply” because it doesn’t require any of the infrastructure you mentioned, which is what the public typically associates with “alternative data.” It was actually quite impressive and novel at the time, and inspired other projects of mine.
I can talk about this now because (to my knowledge) it no longer works, though it did for a while. He was in charge of approximately $100M when he was working on this.
Popular thinking can't really wrap its head around risk management.
Supplier A talks to a friend in the media and all of a sudden the story is that Apple has a big problem because their new phone isn’t selling.
What no one is saying (possibly because as we all know Apple like secrecy and repolish them) is that supplier B had a 30% increase in orders from Apple, or supplier C is now coming online when they weren’t involved before.
Since we don’t have the whole picture, it’s hard to know what’s actually going on outside of effectively one rumor.
Or it could be stock manipulation.
The simple fact that they had no idea how it would sell could mean they asked suppliers to be ready at the high-end of expectations.
Tons of money exchanged hands on the stock market because of it.
Shares are down from a high of $180 and pre-hours this morning flat. So consistent with what analyst were saying.
It was not about Q1 but about Q2 guidance.
This happens every year when a new iPhone comes out. Contrarian news drives clicks.
Barclay new price target is $162 this morning. Also a couple downgrades
"Apple gets two downgrades due to ‘dramatically’ slowing iPhone X demand"
https://www.cnbc.com/2018/02/02/apple-gets-two-downgrades-du...
From this morning after releasing results.
Plus Q2 guidance was $60B versus consensus of $66B for Q2.
The analyst and the reports seem accurate. Can you explain?
It was never about Q1 but Q2 - Q4 and guidance.
Apple is down from $180 in 2018 and flat this morning. Barclay new price target this morning is $162.
The problem is that Apple is still the market leader in many respects. For example, in my opinion, Apple's build quality, customer service and trackpad are still so far ahead of the PC industry that I wouldn't buy a non-Apple laptop. I also think touch ID is a great addition. But I don't want the touchbar. Too bad, if I want the latest Mac laptop with touch ID, I'm forced to take the touchbar.
I kinda like my mid-2017 keyboard. It takes getting used to, and is a bit louder than the external or my older 2013 MBP keyboard, but it's quite nice.
The trackpad sensitivity is annoying though. I had to turn off tap-to-click which I'd been used to for decades.
Funny thing is that I sat down with my boss to troubleshoot some stuff today and he was cursing up a storm about the touchbar keyboard (usually he docks the thing and uses an external keyboard). I've largely gotten used to it, but still haven't memorized the location of the navigation / modifier keys. It's like the iPhone 6/7 -- I've gotten used to the camera hump but it still drives me nuts every single time I put the phone down.
People just like to knock on the #1 guy. It's easy and gets clicks.
And in general that's the case. It's been easy to have point-and-slide control over arbitrary UI laptop elements as long as there've been touchpads. The difference between a touchscreen and touchpad is marginal. At some margins -- particularly the operation of pocket computers with a form factor about the size of a laptop touchpad -- that's been tremendously useful, but I don't see any evidence that anyone's come up with something that genuinely matters for laptops yet.
I do have to flick my eyes down to find the button, but it doesn't bother me---fully understand it might bother others, though.
Once I get farther into the row of function keys, I don't have as much of a memory for them. I'd guess that's at least partly because I don't use the key backlight and playback controls as much (auto key backlighting works very well for me, to the point where I almost never adjust it manually, and the playback controls don't work with much software other than iTunes which I've been avoiding for years now). Maybe mostly that, as in the past I've definitely had a "tap without looking" relationship with F5 for reload (now apparently mentally mapped to cmd-R).
"Having a dedicated position to change often-changing settings is more useful" is pretty much the whole point of function keys, except they do a better job of it than the touchbar does, and quite likely a better job than the touchbar can.
I would not call the touch bar low quality. I would call it useless.
On a related note, the massive trackpad was the first one Apple has produced that bugged me. It got stuck in “drag” mode frequently because my palm would register as a touch point. It also didn’t always register clicks on the right edge. Still better than almost all other trackpads I’ve used.
Disclosure: I work at Microsoft. Was testing the latest MacBook Pro for my own use.
Haven’t had a problem with the massive trackpad either.
But seriously, I agree and approve of your disclosure.
The forecasts in the media were about the absolute levels not relative.
If there are d units demanded and p units produced, and d >> p, then unit sales = p. Next year, if there are d' units demanded and p' units produced, and d' >= p' while p' > p, then unit sales are going to go up. This tells you a little bit about d', but not everything.
People really like believing in rumours.
There was a LOT of chatter about the cancellation of the X in the summer due to low numbers:
In a new report obtained by AppleInsider, acclaimed KGI Securities’ analyst Ming-Chi Kuo says disappointing sales of the iPhone X will lead to the cancellation of the model “with production ceasing in the summer”. This would be the first time Apple has canceled an iPhone model after just one generation since the iPhone 5C in 2014.
Apparently he's been pretty consistent in getting big leaks like this right:
Kuo, who has a long track record successfully revealing Apple’s plans, said lack of interest in China is the main reason. In China big screens are king and the iPhone X’s polarising "notch" is seen by Chinese consumers as removing too much usable space. Especially when the cheaper iPhone 8 Plus actually delivers slightly more.
The news also follows a new survey from Cowan that claims an interest in new iPhones has hit a historic low.
https://www.forbes.com/sites/gordonkelly/2018/01/21/apple-ip...
One day they might be right. Apple can't hit and exceed expectations forever, probably. But so far it's the same old bad rumors every year.
This still makes it a rumour.
OLED screens are in short supply, and that will take a few years to turn around. This November, Apple can either split their limited supply of OLEDs between iPhone X and iPhone Xs (or XI or whatever that winds up being called). And that's not even factoring the likely larger-screen model...
It got distorted through a game of telephone into the iPhone X being "cancelled." Or rather, it got distorted by people looking to gin up a sensational, yet false story.
They made more money, but only because everything they sell is more expensive. Shipped fewer devices this quarter.
Could be related to the above? Most of the publicity I've seen is domestic to US, but it's certainly possible overseas has a much different view on the iPhone X.
Apple's improving their operations every year, so they can ship more units now than they could last year or the year before. Previously, if Apple was completely supply-constrained between launch and the holiday season, they would only earn revenue on the quantity of iPhones they could ship. Now that Apple has improved their supply chain volume, their launch quarter units shipped will go up purely as a function of that, and their revenue will also increase as a function of the higher unit price of iPhone X.
The only difference, if there truly is one, will come in the next quarter or two. If a product is supply-constrained, there's a backlog of demand for it that only gets met down the road. If the product isn't supply-constrained, there isn't as much backlog and consequently, unit sales and revenue won't be as high. But that doesn't affect the launch quarter because the launch quarter is completely limited by supply.
If iPhone X was a total flop, of course, that would have shown up by now. But "iPhone X less popular at launch than iPhone 6" is a hypothesis we can't judge yet.
Edit: It's also really, really easy to tell whether a product is supply constrained. Just go to apple.com and see how long it'll take to ship. See if people are scalping them on Craigslist for a premium over the retail price. These kinds of things happen with major console launches and used to happen with Apple's product launches, but Apple is one of the biggest consumer electronics brands in the world, has some of the best operations in the world, and contracts with the best high-volume electronics manufacturer in the world, so it's more than possible for them to overcome the supply constraints that "plagued" previous launches.
iPhone has an installed base of 1.3 billion users. That's more than 1/6 of the world population. At this point, there probably aren't even enough people in the world who can afford smartphones for demand to grow as fast as supply. If Apple's operations and supply chain can grow faster than the global middle class, they're going to get past their supply constraints, and apparently they already have. That's not necessarily a reflection on this year's iPhone.
It probably has become lackluster in some countries thus giving those reports. Definitely true in Singapore, there were plenty of IPX stocks available in Dec unlike previous years. But it's doing very well in China so overall it's a win for Apple.
When the iPX first launched the narrative was "holy shit this phone is flying off the shelves", since then OLED stock has been falling (really good time to buy tbh), apple cuts back production, and the narrative has gone sour.
What gives?
1. highest revenue ever from a new iPhone lineup
It's also the most expensive. Simply put, they could sell fewer iPhone Xs and still make more revenue simply because of the increased price.
So even with the highest revenue, it could still be lackluster in quantity sold, as well as what the profit is like.
2. [iPhone X] has been our top-selling iPhone every week since it shipped in November
It simply needs to sell more the other iPhones during the same time period. This makes sense, as it was released later than the iPhone 8. You could make the assumption that the majority of everyone that wanted an iPhone 8 would have bought one prior to the iPhone X being released.
For here, a better comparison would have been units sold of a new iPhone and if it beat that.
Again, I'm not suggesting it's a failure or a success, merely trying to look at the quote objectively and what it says, and what that really means.
As noted by @rjones [1], 2Q total units sold historically range between 50-52M.
If Apple had originally placed orders in Q218 for 40M iPhone Xs, then either a) iPhone X is 80% of all iPhone sales, which is hard to believe because of the current lineup diversity, or b) Apple expects total unit sales for 2Q18 to be above 80M, which is hard to believe because of 1Q18 guidance.
The better explanation is that Apple probably cut production for any number of reasons, but nowhere near as drastic as 50%. 20M is 40% of 51M, which would point to the iPhone X selling very well through 2Q18, and continuing to be the best-selling iPhone model.
Apple issued guidance for this quarter that they expected revenue to be $60-62b. Analysts expected revenue of $65.9b.
Stocks are priced on the expectation of the future, so the change in the expectation has probably had a negative effect on the price. As an individual investor (disclosure: I own a little AAPL) I think it is foolish to worry quarterly earnings and revenue forecasts. Yet it is what people write about. It is easier to write about quarterly earnings then it is to write about industry trends, in the same way it is easier to write about polls than it is to write about policy.
https://www.bloomberg.com/news/articles/2018-02-01/apple-for...
I'm pretty sure China alone made the X worthwhile.
You just were looking for such opinions.
This is interesting, as the majority of the publicity I've seen about the iPhone X has painted it as lackluster.
> The Company posted quarterly revenue of $88.3 billion, an increase of 13 percent from the year-ago quarter and an all-time record, and quarterly earnings per diluted share of $3.89, up 16 percent, also an all-time record.
As much as I see people deride the touchbar or the iPhone X notch, it seems consumers are at least willing to take a chance and try out something new.