“It feels like there is something fishy going on here.”
Excerpts from the notes I’ve seen. More as they come in:
Wamsi Mohan, Merrill Lynch: Media reports Apple iPhone 13 order cuts, slower demand. Bloomberg recently reported that Apple has informed its suppliers that demand for iPhone 13 is slowing. Earlier, it had reported iPhone order cuts of 10mn (vs. initial plan of 90mn); however, now, as per Bloomberg, Apple believes that some of the demand may be lost. While we have not confirmed independently of any supply cuts, we note that our iPhone estimates are already below Street estimates (79mn vs. 82mn for the Dec quarter, and 46mn vs. 56mn for the Mar quarter). As such, we leave our iPhone estimates unchanged. Neutral. $160.
Chris Caso, Raymond James: Thoughts on iPhone Demand. The nature of the article is much more ambiguous than typical Apple supply chain reports. Historically, the best gauge of demand has been the production forecast, and whether that forecast is increasing or decreasing. The article doesn’t mention changes to the production forecast, but only that Apple has reportedly told suppliers that demand had slowed, which is a more ambiguous statement. Our own checks haven’t uncovered significant changes thus far. Given the supply constraints facing Apple at the start of the quarter, it would certainly be surprising if Apple were to cut production, and we would view production cuts as a negative read on demand. Outperform.
Mark Cranfield, Bloomberg: Tech Bears Being Burned Before Cautious Despite Apple Warning. There has been a bit of head scratching among tech investors in Asia at the limited reaction to Apple’s warning about falling iPhone demand. Nasdaq futures and the shares of some Apple suppliers are subdued after the report. That could be because traders don’t want to be burned again by selling too early… In the meantime Asian investors will have to wait for U.S. traders to log on later today to get a clearer read on the response to Apple and tech stocks more broadly. But, if the problem really is dampening demand, it will be hard to put a positive spin on that.
Neil Cybart, Above Avalon: It feels like there is something fishy going on here. One can’t help but wonder if some funds either front ran the report (i.e. they knew this information, regardless of its accuracy, was going to be given to Bloomberg and reported on) or if the information was provided to Bloomberg by certain parties after the runup in shares on Tuesday. The former seems more likely… The way this strategy would work is that a fund(s) began buying Apple shares on Tuesday morning with the intention of kicking off a momentum-fueled move higher in price. It takes a surprisingly small amount of demand to temporarily get AAPL shares moving higher before additional demand quickly enters the market. As AAPL shares shot higher, more players jumped in with algorithms picking up the stock’s outperformance. The fund(s) that kicked off the initial move higher sold their shares (making a profit) and then went further by shorting the stock (selling shares that they don’t currently have) as the stock continued to soar. The plan is to buy the shares needed to close out short positions at a lower price, say, after a questionable report about iPhone demand was published. AAPL shares traded down as much as 7.3% from the top put in on Tuesday to the low earlier today. Similar strategies involving options are also possible.
You can imagine the same for me growing up in the 60’s and 70’s during the Vietnam war and being quite noticeable among only 20 Asians in a class of 600.
Estimated delivery for iPhone is December 13. Estimated delivery for MacBook Pro is December 28.
The regular 13 is available with seven days, or next day sometimes.
Demand as usual is skewed to the Pro and Pro Max models for launch, with some people now being given February or even March delivery windows.
Isn’t Bloomberg the same source that said Apple was taking chip supply from iPads to use for iPhones ?
Hmmmmm……..
The article was ambiguous with no substantiation and no named sources.
The article may be exaggeration or even fiction. Apple may have cut back some component orders due to shortage of others. Some models, the lower-end models apparent have met demand.
Apple’s suppliers may have exceeded expectation.
“The article was ambiguous with no substantiation and no named sources.”
We’ve seen 20 years of this – all it does is provide more squabbling doomsayers to step on as a stairway to a higher PPS. AAPL is an expert hillclimber at climbing the wall of constant worry created by the dead bodies of gloomy analysts (and in the past paid Microsoft shills) who have fallen in a heap one after the other as the stock accelerated away from them.
Long may they moan!
I remember writing at length at the launch of the iPhone about the half-full screen showing space for missing icons being a dead give-away about an upcoming iPhone SDK in what I called was likely to be the biggest software development opportunity since the advent of the PC! What a long time ago. I’m glad to hear my musings helped you profit.
I did get out of trading almost altogether yes … it was more about being fed up with the ride which at the time was torturous, and I had written non stop day in and out about AAPL for almost 10 years. I actually have an archive of my 48,000 posts (I wasn’t joking) which I occasionally skim through for context on current moves and announcements to draw parallels and extrapolate echoes of the past to see how they correlate with the present.
Several people asked if I’d take funding to start a private AAPL trading board back in 2011/12 but I was largely out of the game except for core holdings then (something I regret a bit in hindsight) but I’d found an incredibly fulfilling and exciting career with a new business venture at the time and work/life balance had begun to really mean something. Writing AAPL everyday in the UK with the time difference meant working through until midnight sometimes, so my time was up.
I have often thought about re-starting intra-day and swing trading posting in the form a blog with a walled section for real-time commentary but every time I do, I browse 3.0 and decide PED is doing such a good job I’d rather just post here occasionally instead. The urge is strong though, but often fades away. AAPL is a bit like crack – it’s a hard habit to kick when you’ve been in it since 2000 (not speaking from experience of the latter, just for transparency) ^_^
I’m convinced the Cube “debacle” was an orchestrated behind-the-scenes PR effort on the part of the Wintel community to bury Apple.
The “issue” was reported as “cracks” in the plastic case. There were no cracks, what there were were ‘nit’ lines caused in the plastic injection process wherein cooler plastic material came into contact with warner material. This always occurs when flowing molten material turns a corner.
Once the media got hold of the story they were like a dog with a bone, they wouldn’t let go, despite all that Apple did to explain the “cracks”.
If it looks like a crack, it’s a crack in the narrative which at the time hinged on the idea of paying an absurdly high price for supposed perfection. It was a good lesson in humility for Apple.
I haven’t parted with any of it, and certainly have zero plans to diversify away from AAPL at the moment.
This is just the typical manipulation that goes on all the time. Annoying? Yep. Predictable? Yep.
Every time we have a big reaction like the past few days, and people say “At last! People are seeing the light, and that’s why money is flowing in” I’m like, nope, it’s just more games being played by people. You honestly think that after all this time people are just going to “get it”? A few will, here and there, but if the past few years have proved anything, stupid is everywhere. All the time.
I think I hadn’t posted anything for 6 months as I ignored the markets during the carnage and focused on getting fit and healthy having sold out a lot in summer 2008, when CNBC had interviewed me and I’d said “sell everything.” They told me the segment was too “hysterical” and controversial so it never ran, but I swallowed my own advice and liquidated 50% of everything, luckily.
IIRC I popped on to the old Apple Finance Board and posted “sell your grandmother and mortgage your house, go all in on AAPL right now” at about $78 which I think is one of the few times I nailed the bottom to almost the last cent and the exact hour of the rebound from a multi-month decline. Obviously nailing bottoms is easier than knowing when to book profits though, especially when you get greedy, which I was most certainly guilty of on occasion.