Apple’s fail: And now a word from the Twittersphere

There’s wisdom in the crowd, but you have to know where to look.

Post-revised guidance tweets culled from Techmeme:

@saschasegan:   Apple sacrificed actual sales on the altar of raising ASP. They have successfully found out how high ASP can go.

Mark Gurman / @markgurman:   Tim Cook is hosting an all-hands meeting with all employees tomorrow about today’s news, taking questions etc.

Alex Stamos / @alexstamos:   Tech journalists talk a big game about how the public tech giants should be willing to forgo money to “do the right thing”, but whenever one misses a quarter they write it up as a scandalous failure. Maybe it’s ok for Apple to just make good products and a ton of money?

Vlad Savov / @vladsavov:   Those who said Apple could sell a $1,000+ iPhone were right. Those who said that wasn’t a sustainable long-term strategy were also right.

Tom Warren / @tomwarren:   I think Apple is hitting a difficult iPhone period. People are upgrading less, carrier subsidies aren’t enough, and $1,000 phones are making consumers pause and consider. Mix that in with fears of a recession, and 2019 could be challenging for Apple and many others

Jason Snell / @jsnell:  Yikes! Back in November Apple felt that the holiday season would be its best quarter ever. In the cold light of 2019, it turns out that it’s going to be down $4B year over year, and most of the reason is iPhone sales.

Seth Weintraub / @llsethj:  GOOG now $50B more valuable than AAPL

Nilay Patel / @reckless:  This is the harshest truth. Apple’s services narrative rests upon iPhone lock-in. None save iMessage are better than competitors, and iMessage is locked to the iPhone

Christina Warren / @film_girl:   It feels safe to say, without breakout sales data (RIP), that the XR hasn’t met expectations. I can’t speak specifically for China, but in the US this indicates a larger issue I’ve been commenting on for two years: the growing price to be in the Apple ecosystem.

Kif / @kifleswing:   This was the most surprising part of today’s news to me — Apple is partially blaming weak iPhone sales on customers taking advantage of the $30 battery replacement offer

Mark Gurman / @markgurman:   Two letters missing from Cook’s letter today: XR.

Ben Bajarin / @benbajarin:   Tim Cook’s tone on CNBC and in his letter to shareholders highlights the most interesting things happening for Apple are many things not named iPhone.

Matthew Panzarino / @panzer:   it should be mentioned that 38% margins in consumer tech is hilariously, stratospherically high.

Joe Weisenthal / @thestalwart:   All those tech companies blocked from doing business in China feeling pretty smug right now.

Paul Thurrott / @thurrott:   “Categories outside of iPhone (Services, Mac, iPad, Wearables/Home/Accessories) combined to grow almost 19 percent year-over-year. ” Too bad those categories add up to less than 1/2 of the iPhone in revenues. 🙂

Lucky Lindzon / @howardlindzon:   If $aapl is warning…imagine the emergency board calls going on now in Fortune 1000 companies

Seth Weintraub / @llsethj:   Lot to unpack here: $AAPL down almost entirely because of lagging iPhone sales in China – largely due to trade war. Other interesting bits: Carrier subsidy removal exposes higher priced iPhonesCheap battery upgrades hurt? Still $84B in revs with 38% margins not too shabby

M.G. Siegler / @mgsiegler:  Don’t sleep on Apple Pay. The car is too far away. The glasses won’t be big enough any time soon (again, relative to iPhone). So Apple can either try to become an oil company, or a bank.

Jay Yarow / @jyarow:   This is a legit problem for Apple. The iPhone was the greatest business of all time. It was always going to end. Not easy to figure out a follow up act.

Matthew Panzarino / @panzer:  Trade wars are dope

19 Comments

  1. Rick Raphael said:

    Let’s have a big round of applause for “Tariff Man” and everything he’s done to help not only Apple, but the broader market in general!

    4
    January 3, 2019
    • Ralph McDarmont said:

      I respect PED for keeping politics off his lawn but it sure is hard not to launch a 10,000 word comment on the Don.

      0
      January 3, 2019
  2. Jonny Tilney said:

    In a couple of years time I expect to hear a lot of folk saying “why didn’t I buy AAPL when it was knocked so low in Jan “18”…

    5
    January 3, 2019
  3. Fred Stein said:

    While I’ve always praised Apple for delivering a high value product – durable hardware and bundled “free” sw support even for older models, they (and us investors) pay the price. Ordinary consumers don’t NEED to upgrade. Used iPhones address much of the demand. About 1/3 of all iPhones sold are used ones from third parties.

    Ironically, Apple may pull a page the auto industry playbook. Decades ago, ‘certified pre-owned’ cars became part of the automakers’ business models. Apple could use this strategy to build relationships and sell more services.

    Don’t expect quick turnaround.

    1
    January 3, 2019
    • Dan Pallotta said:

      I’m hoping for + 200 a year from now. Apple should stop posting iPhone full purchase prices on their website and in their stores. They should post monthly payments only and sell all of them on a pay-over-time basis, unless the customer specifically requests otherwise. We all buy and pay for lots of products and services — Netflix, for example — that way. If Netflix charged us $399 for a three-year subscription, it would affect adoption. I’ve never understood, since 2007, why Apple would force consumers to look at the full cost of their phones when carriers always articulated pricing to them on a monthly payment basis.

      2
      January 3, 2019
      • Dan Scropos said:

        This is a brilliant concept and an even better question.

        0
        January 3, 2019
  4. Gregg Thurman said:

    Obviously, those posting on Twitter don’t have a clue about what’s happening worldwide.

    The Chinese especially and the European economies, in general, have been in a gentle swoon since last January. This has resulted in an imbalance among currencies with the US$ gaining value relative to all the others, leading to higher prices caused by the weakening of those foreign currencies.

    The trade ‘war’ has exacerbated the problem in China but is not the cause of China’s weak performance.

    Until the world’s economies rebound and its respective currencies regain value against the US$, all US export firms will be having difficulties in future quarters.

    The world’s economy is coming off a record expansion. It is not unusual for it to slow in order to catch its breath so to speak.

    A trade deal with China will help those two countries but won’t be the final solution. That will take time (9 months?) as economies are slow to react to stimulus.

    More clarity from the FED as to its intent to raise (or not) the discount rate will be of importance as well. I think the last rate hike was overdone, at least the narrative that accompanied it was. Any indication that the Fed is pulling back from its previously stated commitment to raise the discount rate more this year would be a big boon to US firms.

    0
    January 3, 2019
    • Turley Muller said:

      The Fed always over shoots. They underestimate the lag it takes before the impact is observable, and by that time it’s too late. The purpose of the the right hikes is to ward off potential inflation, but the tariffs are taking care of that as they contribute to a global economic slowdown, All our economies are linked. Punishing the 2nd largest economy punishes us all.

      0
      January 3, 2019
  5. Dave Ryder said:

    As low as it has become, I just sold a bit because I expect AAPL to sag some more.

    0
    January 3, 2019
  6. Ralph McDarmont said:

    $4 billion or $10 billion. No big deal to me. Apple is rock solid and has been for a long time. China will resolve, upgrades will occur, services and ancillary products will continue to soar. Then, as mentioned in one of the tweets, everybody will kick themselves for not buying into this spectacular opportunity to go long.

    1
    January 3, 2019
  7. Kirk Burgess said:

    Wow there is a whole lot of stupid in most of those twitter comments, unsurprisingly from a bunch of people who know close to zero about company financials.

    To put things into context – Apple is still going to earn close to $20 Billion in net income from the December quarter. Which will make it either the 1st or 2nd most profitable quarter in US corporate history (alongside last years December quarter)

    2
    January 3, 2019
    • Ralph McDarmont said:

      Worth noting: $300+ billion in cash

      0
      January 3, 2019
  8. John Konopka said:

    Adding to the problems in China is that it is easier for customers there to switch than elsewhere. Most people use WeChat which is cross platform making it easier for them to switch.

    0
    January 3, 2019
  9. Peter Kropf said:

    ” …So Apple can either try to become an oil company, or a bank.”

    I think Apple will have its iPad Pros displace Wintel to a significant degree. (And Microsoft, Adobe, et al will help out as they make profits on providing full function and Wintel compatible apps to iPad.

    Care to imagine Apple’s revenue/profit figures as iPads take over much of the corporate notebook and desktop computing segment?

    0
    January 4, 2019

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