Apple Revenue Falls Short Again, iPhone Sales Disappoint

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It looks like Apple's stock is falling after the company missed revenue expectations for the third straight quarter.

The company said on Wednesday it shipped 47.8 million iPhones, a quarterly record that nonetheless disappointed many analysts accustomed to years of outperformance from the device that helped revolutionize the smartphone industry. Wall Street was predicting roughly 50 million shipments, on average. Sales of the iPad came in at 22.9 million in the fiscal first quarter, about in line with forecasts.
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I don't get how this works.

Company makes profit (let's say 24% increase from last year)...but people predicted 25% percent...so stock takes a nosedive. Wait whut.
 
niconx said:
Magic is a very delicate thing.
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I'm not talking about Apple specifically. I remember the same thing with Google a few months ago where they made I think it was 23% increase, but were predicted to have 25%.
 
The simplest way to look at this is growth.

If you buy stock in a profitable company, you don't get any of the profit unless they do dividends, or the company gets sold and buys your shares. Neither situation is super common to the point where you can rely on it, and most dividends are very small requiring you to own hundreds of thousands of shares before it becomes big money.

If the company is growing, it has bigger potential down the road and the stock price will go up. If it's contracting, it has smaller potential down the road and the stock price will go down. Not meeting your growth targets puts uncertainty in the future of the company, and the competency of the management.

This is generally where people diverge into the conversation of how Wall Street ruins business, because being profitable alone just isn't good enough, you have to rape and pillage (layoffs, etc) your company and your market in the name of the stock price.
 
Wall Street speculates on speculation. Derivative goes even further with speculating on what will be speculated on speculated returns. To that end, they employ hopelessly complicated mathematical formula to make it look as if that they're legit...
 
I'm surprised anyone still gets iPhones today. After iPhone 4S it seems impossible to get a Jailbreak for it. Though sure the hackers say it's been done and will be out soon, fact is Apple is winning and hackers are losing. If it takes months to get a jailbreak out, and it needs to be tethered. I hear they're waiting until 6.1 until they release it so Apple doesn't fix the exploit. Even kiosks I hear are exploiting people who are looking for the jailbreak.

So you can't even get emulators on your iPhone without that jailbreak. Apple owns your iPhone and there's nothing you can do about it. Besides switching over to Android.
 
AAPL is a momo stock. That's all you need to know.

The entire market is basically a momo stock at this point but that's a separate conversation.
 
Ashbringer said:
I'm surprised anyone still gets iPhones today. After iPhone 4S it seems impossible to get a Jailbreak for it. Though sure the hackers say it's been done and will be out soon, fact is Apple is winning and hackers are losing. If it takes months to get a jailbreak out, and it needs to be tethered. I hear they're waiting until 6.1 until they release it so Apple doesn't fix the exploit. Even kiosks I hear are exploiting people who are looking for the jailbreak.

So you can't even get emulators on your iPhone without that jailbreak. Apple owns your iPhone and there's nothing you can do about it. Besides switching over to Android.
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The majority of iPhone owners don't give a shit about nintendo emulators and jailbreaking.
 
xIronCrossx said:
I don't get how this works.

Company makes profit (let's say 24% increase from last year)...but people predicted 25% percent...so stock takes a nosedive. Wait whut.
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If they predicted 25%, and it played out to be 26%, then the stock value would consequently go up.
 
xIronCrossx said:
I'm not talking about Apple specifically. I remember the same thing with Google a few months ago where they made I think it was 23% increase, but were predicted to have 25%.
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Funny thing about projection/forecasting, it's not a crystal ball.
 
They have a lot of money laying around. I don't think this is really a big deal.
 
Apple can no longer maintain bi-yearly or yearly incremental upgrades with next to little technology to show for it other than a larger screen, a faster, cpu and still call it revolutionary, magical, and phenomenal. The shine of turd polishing will eventually wear off and the smell will finally get to you. Unless Apple has something truly innovative to offer, this will be a downhill slide and I say this as an original and current shareholder.
 
Outamyhead said:
Funny thing about projection/forecasting, it's not a crystal ball.
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Except of course, that Apple actually tells Analysts what to expect and they choose to ignore it.

Apple guidance was 52 Billion with falling margins from a whole bunch of product intros in the quarter. This is pretty much in line with what happened with 54 Billion in revenue and falling margins.

It is a bit early to start dancing on Apples grave.
 
ICOM said:
Capitalism is greed based.
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I'm not going to get into this with you, but here are some basic definitions. Your statement is misleading.

Greed: Intense and selfish desire for something, esp. wealth, power, or food.

Capitalism: An economic and political system in which a country's trade and industry are controlled by private owners for profit.

Profit: A financial gain, esp. the difference between the amount earned and the amount spent in buying, operating, or producing something.

"Profit" is not synonymous with "Greed." You can have either without the other.
 
For those who do not follow the real clockwork guts of the market some of this is going to be confusing. Let me try to make this simple at the great risk of oversimplification:

The stock market in general has very few actual retail investors in it anymore, almost all the orders in the system are millisecond by millisecond battles by computer trading algorithms. A lot of this has happened over the last decade or so but it's been brewing for a while.

The market has become paper thin because of this. Just a little "real" trading in the system can have massive effects as the computers war for equilibrium.

As we face more and more uncertainty in worldwide financial markets there are less and less safe havens for large amounts of money. Many choices for where large firms park money are based on which one loses the LEAST money in a given amount of time.

Now we get to APPLE's part in this. Let's simplify this by saying that when they broke over 300 around a year ago while their business model was kicking arse and taking names an unnatural euphoric frenzy erupted worldwide as many people and firms with lots of money to park, and in particular virtually ALL of the largest hedge funds moved substantial into AAPL because it was virtually the only stock that was both "dependable" and "outperforming". So, we created the largest stock bubble in history.

This is the short answer as to how AAPL ended up above 700. This is also the obvious answer as to why they will not STAY that high. The bubble is deflating right now. It would be completely sensible and expected for the stock to return to the 300s from a year ago, and it would not reflect on the viability of AAPL's business at all. (But people won't see it that way)

So in short, that's why the entire last year was nothing but artificial BUBBLE.

AAPL is running in a "normal" euphoria at 350. That's already MORE than they should technically be worth.

The problem is the apocalyptic destruction that may be wreaked on world markets as they fall back to that level. The destructive forces are more complicated. Remember that many institutions like BANKS will be invested here too. And a lot of THAT money is FED printed as they push liquidity to the world. That massive running of the digital printing press has the end result of inflation at some point, but if a lot of it disappears into an AAPL stock crash we "spent" that forward money and get all the inflation without any of the benefit. Essentially borrowing from a loan shark to gamble then losing it and wondering when Guido is going to break your legs.
 
xIronCrossx said:
I don't get how this works.

Company makes profit (let's say 24% increase from last year)...but people predicted 25% percent...so stock takes a nosedive. Wait whut.
Click to expand...

You don't have to understand how it works. In fact, don't even bother.

The guys who control millions of shares dictate which direction a stock moves.

You just have to trust your gut, buy when you think it's low enough, and hold on tight for the ride.

There is absolutely no rhyme or reason to the stock market. It's all complete bullshit circus, and the analysts are clowns. The big market makers are puppet masters, and can singlehandedly tank a stock.

I have a good chunk of money in the market, and it feels like a game of dodgeball. Analysts are spewing so much bullshit, and you try not to get hit.
 
xIronCrossx said:
I don't get how this works.

Company makes profit (let's say 24% increase from last year)...but people predicted 25% percent...so stock takes a nosedive. Wait whut.
Click to expand...

It is actually really simple.

The price people are willing to pay for the stock right before the the announcement is based entirely on the predictions. So people are already buying and selling it as if it were a 25% announcement. When it is announced lower (24%) the price corrects to what people are willing to pay at that lower profit level.
 
wiseoracle said:
Said by ONLY YOU.
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Actually, most the iPhone users in my office wouldn't even know what an emulator is :)

Most of them are in management, marketing and sales. almost all the techs & developers have android phones.
 
ICOM said:
Capitalism is greed based.
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What's more greedy?
A business producing a product people want to buy, or a government that takes as much as 60% of a person's income through taxes?
 
"Greed: Intense and selfish desire for something, esp. wealth, power, oil, or food."

Isn't that the first line of any politicians CV? Anyway, that one line describes pretty much what modern Capitalism is all about.


...I thought I'd add the oil in there for completeness. ;)
 
wiseoracle said:
Said by ONLY YOU.
Click to expand...

I had an iPhone 3G and 4 and never even thought of jailbreaking it. And emulating a system with a controller on something that has a touchscreen? Meh no thanks.

Granted I went to WP8 - the iPhone may have been a little easier to use, but any geek can adjust to software changes. Most normal people can't or don't want to change their phone habits and that's the only place Apple wins - their UI has barely changed over the years. It will work for awhile, but they're going to go the route of Blackberry if they don't start innovating.
 
Advil said:
For those who do not follow the real clockwork guts of the market some of this is going to be confusing. Let me try to make this simple at the great risk of oversimplification:

The stock market in general has very few actual retail investors in it anymore, almost all the orders in the system are millisecond by millisecond battles by computer trading algorithms. A lot of this has happened over the last decade or so but it's been brewing for a while.

The market has become paper thin because of this. Just a little "real" trading in the system can have massive effects as the computers war for equilibrium.

As we face more and more uncertainty in worldwide financial markets there are less and less safe havens for large amounts of money. Many choices for where large firms park money are based on which one loses the LEAST money in a given amount of time.

Now we get to APPLE's part in this. Let's simplify this by saying that when they broke over 300 around a year ago while their business model was kicking arse and taking names an unnatural euphoric frenzy erupted worldwide as many people and firms with lots of money to park, and in particular virtually ALL of the largest hedge funds moved substantial into AAPL because it was virtually the only stock that was both "dependable" and "outperforming". So, we created the largest stock bubble in history.

This is the short answer as to how AAPL ended up above 700. This is also the obvious answer as to why they will not STAY that high. The bubble is deflating right now. It would be completely sensible and expected for the stock to return to the 300s from a year ago, and it would not reflect on the viability of AAPL's business at all. (But people won't see it that way)

So in short, that's why the entire last year was nothing but artificial BUBBLE.

AAPL is running in a "normal" euphoria at 350. That's already MORE than they should technically be worth.

The problem is the apocalyptic destruction that may be wreaked on world markets as they fall back to that level. The destructive forces are more complicated. Remember that many institutions like BANKS will be invested here too. And a lot of THAT money is FED printed as they push liquidity to the world. That massive running of the digital printing press has the end result of inflation at some point, but if a lot of it disappears into an AAPL stock crash we "spent" that forward money and get all the inflation without any of the benefit. Essentially borrowing from a loan shark to gamble then losing it and wondering when Guido is going to break your legs.
Click to expand...

You are leaving out the Fed's money printing operation and interest rate manipulation. Both serve to badly distort asset prices.

Nanex does a good job of exposing the HFT traders.

The entire market is a casino detached from economic fundamentals.
 
GoldenTiger said:
Indeed, especially the magic of sheep psychology!
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Has little to do with sheeple. Most stock trade volume is robotrade executed off of algorithms. Odds are most of the shares sold had minimal to no human interaction in their sale.
 
Methadras said:
Apple can no longer maintain bi-yearly or yearly incremental upgrades with next to little technology to show for it other than a larger screen, a faster, cpu and still call it revolutionary, magical, and phenomenal. The shine of turd polishing will eventually wear off and the smell will finally get to you. Unless Apple has something truly innovative to offer, this will be a downhill slide and I say this as an original and current shareholder.
Click to expand...

It also so friggin predictable now that everyone and their mother is able to time the market to buy in and out to score a quick buck. That doesnt exactly help their stock price.
 
The Lurker said:
It also so friggin predictable now that everyone and their mother is able to time the market to buy in and out to score a quick buck. That doesnt exactly help their stock price.
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Ma & Pa at home didn't cause the nose dive, they don't move anywhere near enough volume fast enough especially given Apple's exorbitant share price. Like Advil said up above, this was and is a computer equilibrium war.
 
Steve Jobs is dead so there is little chance he can rescue the company from itself. History is repeating itself. Apple has been great at introducing brilliant concepts but they have failed at evolving those concepts.

Apple will not be able to keep up in the smartphone market because they shot themselves in the foot suing their partner Samsung who is developing new screen technologies that they will either withhold from Apple or charge them out the ass.

Microsoft and Intel is about to steal and dominate the tablet market from Apple. In two years, once broadwell is out you will be able to buy haswell tablets dirt cheap that run circles around iPads. Microsoft has beaten Apple to the punch integrating tablets and smartphones with computers/networks.

The smart money is leaving Apple like rats leaving a sinking ship...
 
thejokker said:
Steve Jobs is dead so there is little chance he can rescue the company from itself. History is repeating itself. Apple has been great at introducing brilliant concepts but they have failed at evolving those concepts.

Apple will not be able to keep up in the smartphone market because they shot themselves in the foot suing their partner Samsung who is developing new screen technologies that they will either withhold from Apple or charge them out the ass.

Microsoft and Intel is about to steal and dominate the tablet market from Apple. In two years, once broadwell is out you will be able to buy haswell tablets dirt cheap that run circles around iPads. Microsoft has beaten Apple to the punch integrating tablets and smartphones with computers/networks.

The smart money is leaving Apple like rats leaving a sinking ship...
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And when their stock rebounds next week like it probably will, are you going to be talking about all the innovation that they did in the last week? I'm no fan of Apple by any means however, you're reading WAAAAAY too much into their stock behavior as of yet.
 
Skripka said:
Ma & Pa at home didn't cause the nose dive, they don't move anywhere near enough volume fast enough especially given Apple's exorbitant share price. Like Advil said up above, this was and is a computer equilibrium war.
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I wasn't being literal. But you cannot deny that the markets biggest players are able to easily forecast what will be happening and as a result are playing against each other.
 
malingjc said:
I had an iPhone 3G and 4 and never even thought of jailbreaking it. And emulating a system with a controller on something that has a touchscreen? Meh no thanks.

Granted I went to WP8 - the iPhone may have been a little easier to use, but any geek can adjust to software changes. Most normal people can't or don't want to change their phone habits and that's the only place Apple wins - their UI has barely changed over the years. It will work for awhile, but they're going to go the route of Blackberry if they don't start innovating.
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There's also the investment issue. People that have had an Apple device for at least a [product] generation along with iTunes and have untold money tied up in apps and music. I have two friends that want an android phone, but don't want to spend money on apps again.
 
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