Apple Outlook Looks Dismal: Shares Hammered - Cuts Orders By 50%

[lomatopo]

Looks like they've peaked. Samsung/Android are just crushing them. Time to hire more litigators, and sell the yacht.

Apple Inc. has cut its component orders for the iPhone 5 due to weaker-than-expected demand, people familiar with the situation said Monday, indicating sales of the latest smartphone haven't been as strong as previously anticipated.

Apple's orders for iPhone 5 screens for the January-March quarter, for example, have dropped to roughly half of what the company had previously planned to order, the people said.

The Cupertino, Calif., company has also cut orders for components other than screens, according to one of the people.

Apple notified the suppliers of the order cut last month, the people said.

http://online.wsj.com/article/SB10001424127887324235104578241051730364998.html

[TheScribe]

Scammers at work again. Boring, boring.

Short the stock, flood the media with negative poop.

Wait for stock to sink a bit.

Then send a bit of positive poop, long the stock and wait for the rise.

Cash in.

The sheep are fleeced again, as ever.

Yawn.

Edited January 14, 2013 by TheScribe

[lomatopo]

Scammers at work again. Boring, boring.

Yawn.

Most expect Q1 (ended 12/31/12) to be great, perhaps as a result of record sales, and some "Channel stuffing", but most of the hundreds of analysts who cover AAPL expect Q2, and perhaps beyond, to be challenging. I sold ~ 50% of my holdings at $650, pre-split price was ~ $3.75, primarily because of potential capital gains tax issues as a result of the 'fiscal cliff' changes. I have no reasons to short.

[nikster]

rumors, rumors, "sources familiar with the matter" said...

I was at one of the HK Apple stores recently, middle of the week in the morning, the place was absolutely packed with people. Easily the busiest store in the mall.

Schiller explained recently that Apple is pretty happy with having the majority profit share in the mobile industry. 75% or so right now. Not sure who's crushing who... Apple makes the most expensive and most desirable handset, Samsung makes all the others.

The day that Samsung sells a more expensive phone than Apple, and in numbers - that's the day they'll crush Apple. But they seem as far from that as ever.

Edited January 14, 2013 by nikster

[lomatopo]

I was at one of the HK Apple stores recently, middle of the week in the morning, the place was absolutely packed with people. Easily the busiest store in the mall.

Schiller explained recently that Apple is pretty happy with having the majority profit share in the mobile industry. Their market share grab happens on the iPad front...

I was in an Apple store, Burlington Mall, Burlington, MA in the U.S. just a few days before Christmas, and it was so full you couldn't even move. I counted 65 blue shirts on the floor, so what, another 20 on break or in the back. Like many have said, Q1 may be a blow out (good), and I think most understand that retails sales are probably only a portion of total sales - vs. stuffing the wholesale channel - so maybe not the best gauge? No doubt the iPad Mini is doing gang busters but that also has quite a smaller margin than the iPad 4/iPhone 5.

Again, this story seems to be more about the future rather than the immediate past, or some individual store? We'll just have to wait until January 24 to get a read on Q2 and beyond. Maybe they'll have top drop prices to "grab" market share, as some think they have saturated their addressable market. Maybe that iPhone 5 Mini is just around the corner, thinner and smaller.

Edited January 14, 2013 by lomatopo

[DaveBKK]

We had pretty much the exact same "story" a year ago with the 4S http://news.cnet.com/8301-13506_3-57321362-17/slower-iphone-4s-demand-making-apple-rethink-supply-orders/

Funny how this comes right before a blockbuster earnings release. This is just hedge fund guys driving the stock down to make a killing.

[nikster]

^ that

http://bgr.com/2013/01/14/iphone-5-analysis-component-cuts-291307/

Apple supposedly halved iPhone 5 display orders from 65 million. Which doesn't make a whole lot of sense since the next quarter is traditionally weak and Apple is expected to sell ~25 million iPhone 5s. If they could most optimistically expect to sell 25M, why order 65M screens. The math doesn't add up. Most likely because it's a load of BS.

So yeah it's the usual dump and pump, pump and dump before earnings releases. Speculators trying to outwit other speculators.

If you want to believe that Apple has "peaked", is "over", or that those $200 Android handsets are cutting into $700 iPhone sales, I don't want to stop you. Who knows. But regardless of how the future might pan out it's pretty safe to say the above story is a load of baloney.

Edited January 14, 2013 by nikster

[Whale]

maybe its as simple as the iphone 5 doesnt attract so many upgraders as thought. I looked at it and saw no reason to upgrade from my current iphone.

[LaoPo]

Well, it took Samsung 2,5 years (since launch in June 2010) to sell 100 million pcs of it's Galaxy series.

http://hexus.net/ce/...ion-unit-sales/

But wait until Apple can sell their mobiles to China Mobile, the world's largest carrier with more than 650 million subscribers...(650 Million...!!)

The Chinese adore Apple and although Samsung is a big brand, also in China, "cool" youngsters want an APPLE iPhone/iPad/Mac...!

China Mobile, back in July 2012, had already 15 million iPhone customers without having signed an official deal with Apple yet and that number is growing every day FAST.

BUT...Apple should pay attention to their design.

An Italian designer would do a better job than the present design "looks" apart from the fact that the iPhone is a lot heavier than a Samsung, not to talk about the brightness of a Samsung...

(I have an iPhone4)

Edited January 15, 2013 by LaoPo

[muratremix]

Its funny how Chinese phone looking Samsung Galaxy 3 and Note phones is going to crash Apple. There are so many Samsung phone clones sold at half or less than half price of Samsung with IPS screen. Build quality of Samsung is pretty bad, comparable to those of chinese. If you want android so bad, there are so many others you can choose from, or go chinese phone route.

[nikster]

But wait until Apple can sell their mobiles to China Mobile, the world's largest carrier with more than 650 million subscribers...(650 Million...!!)

That number always blows my mind. I was going to mention the China Mobile deal - and it's a big deal because Tim Cook flew over to China personally to negotiate it - but remembered something about 300M subscribers and thought... nah, that can't be. Too lazy to look it up so I didn't mention is. 650 Million subscribers?? That's just crazy.

Anyway just popping back to this thread. Anybody remember the movie Wall Street? I always thought the market worked that way, insiders doing business, but now the press is involved too. Watch this clip - Cramer explaining stock market manipulation at hedge funds. And I mean...

.. after watching this, think about it. If I am running a hedge fund, with $Bns at stake, wouldn't I bend the rules a bit? Wouldn't I do anything to make a profit? As Cramer says, either you do these things, or maybe you shouldn't be in that business.

Here's some bullet points from the clip, actions hedge fund managers take:

- Create a negative market trend by buying some puts in strategic places. Tell your friends about it to help. Costs maybe $10M in capital, but well worth it for the payoff

- Further the negative trend by dropping information at news outlets, WSJ, CNBC and so on

- With Apple, particularly easy because the press loves to write about Apple

Add to that another interesting fact: This story co-incided with the silent period before an earnings release. The SEC requires that companies don't talk for 30 days before an earnings release. Apple usually doesn't comment on rumors but in this case even if they wanted to, SEC rules would prevent them. They can't.

There's more info on the net as to why the story is bogus but I'll leave it at that.

All I can say as a small investor, don't listen to anything. You are being fed lies.

Edited January 16, 2013 by nikster

[lomatopo]

Apple below $500: Give the bears their due

MARTIN MITTELSTAEDT

The Globe and Mail

Published Tuesday, Jan. 15 2013, 7:48 PM EST

For years, Apple Inc. shares were a one-way ticket to riches, with the stock going from strength to more strength. But lately, shares of the world’s most valuable company have been taking an uncharacteristic beating. They fell below the psychologically important $500 (U.S.) mark in trading Tuesday for the second session in a row, and had their first close below that level since last February.

It’s a far cry from Apple’s all time high of $702, reached as recently as September, when some in the analyst community were predicting the shares were on track to approach the $1,000 mark, thanks to the soaring popularity of the company’s iPads, iPhones and other electronic devices. The downdraft over the past two days follows reports that Apple is cutting component orders for its new iPhone5 because of weaker than expected sales, rattling investor confidence.

But the longer term decline that started last fall is raising a question: Might the few lonely bears on Apple stock actually be right for once? Being a contrarian on Apple has definitely been a solitary occupation. Of the analysts Bloomberg tracks, 53 say the stock is a “buy,” eight rate it a “hold” and only two are telling investors it’s a “sell.”

http://www.theglobea...article7376495/

Edited January 16, 2013 by lomatopo

[lomatopo]

Apple falls below $500

By Ben Rooney @CNNMoneyInvest January 15, 2013: 4:16 PM ET

The sell-off in Apple stock continued Tuesday, with shares falling below $500, amid concerns that demand for iPhones may be waning.

Apple (AAPL, Fortune 500)'s stock price fell 3.1% to end the day at $485.92 a share. It was the first time Apple closed below $500 a share since February 2012.

Apple shares drifted below $500 on Monday, following reports the company had cut orders for certain iPhone parts due to weaker-than-expected demand for the latest version of the popular smartphone.

The selling continued Tuesday after analysts at Nomura Securities lowered their earnings estimates for Apple and warned that profit margins on the iPhone "are unsustainably high and will fall."

http://money.cnn.com/2013/01/15/investing/apple-stock/

[lomatopo]

Apple stock bubble continues to deflate

Matt Krantz, USA TODAY10:42p.m. EST January 15, 2013

(Photo: Kimihiro Hoshino, AFP/Getty Images)

Shares of Apple punished 31% from its high

Apple's declines make some say it's following the playbook of a fallen bubble stock

Supporters say the stock is cheap but are unclear on how the darling stock will do without momentum

The value of the world's most-valuable company, Apple, is sinking fast as investors scramble out of what was last year's "must own" stock.

Shares of the electronic gadget maker fell $15.83 Tuesday to $485.92. The collapse has been fast and breathtaking, in that the nation's most-popular stock is now down 31% from its high. Apple shares, which soared more than 30% last year, are now down nearly 9% this year, falling behind the Standard & Poor's 500 3.2% gain.

Analysts say the deflation of Apple-stock mania is following the classic playbook of other bubble stocks that got too popular then collapsed. "This is what happens with momentum stocks," says Kim Caughey Forrest, portfolio manager at Fort Pitt Capital Group. "Now there's a fear (Apple's growth) is not keeping pace."

http://www.usatoday.com/story/money/markets/2013/01/15/apple-stock-bubble-fall/1837043/

[lomatopo]

Ex-CEO Sculley says Apple needs to focus on cheaper iPhone

John Sculley tells Bloomberg Television that the iPhone maker needs to revamp its supply chain to make cheaper smartphones.

by Steven Musil January 15, 2013 9:55 PM PST

Former Apple CEO John Sculley says the company needs to focus on making a cheaper iPhone.

As rumors resume that Apple is readying a less expensive iPhone, one of Apple's former chief executives believes the company needs to revamp its supply chain to meet demand for cheaper smartphones. As developed nations hit the smartphone saturation point, Apple will have to turn its attention to customers in developing nations that can't afford high-end handsets, John Sculley said today in an interview with Bloomberg Television. "Apple needs to adapt to a very different world," said Sculley, who served as Apple's chief for 10 years in the 1980s and '90s. "As we go from $500 smartphones to even as low, for some companies, as $100 for a smartphone, you've got to dramatically rethink the supply chain and how you can make these products and do it profitably."

http://news.cnet.com/8301-13579_3-57564207-37/ex-ceo-sculley-says-apple-needs-to-focus-on-cheaper-iphone/

[lomatopo]

A positive article, explains any cut-back in component orders.

Sticking With Apple's $700 Price Estimate Despite The Market Noise

After peaking at $700 in September 2012, Apple has declined by almost 30% in four months and is now trading below $500 for the first time in almost a year. A big reason for the current dip has been multiple press reports about Apple cutting component orders for the iPhone 5, which have fueled concerns over a possible slowdown in iPhone demand. Considering that the iPhone is the single biggest driver for Apple and accounts for over half of the company’s value by our estimates, the intense market nervousness is understandable. However, while cutting orders may mean that Apple is starting to see competitive pressures on iPhone demand, it is not necessarily the only reason why Apple may have wanted to slow the production.

Firstly, Apple could have placed a huge manufacturing order for the iPhone 5 initially anticipating supply chain bottlenecks and that the smartphone may have been difficult to manufacture with good yields initially. As yields improved over time, however, Apple may have decided to cut orders to avoid channel overfill and manage its working capital better. Secondly, coming off a potentially strong holiday quarter, iPhone demand is naturally expected to see a slight slowdown in the next quarter. Thirdly, there has been speculation that Apple could release a new iPhone every six months instead of its usual yearly cycle. If so, it would make sense to cool down manufacturing in the quarter ahead of the new phone’s launch.

http://www.forbes.com/sites/greatspeculations/2013/01/15/sticking-with-apples-700-price-estimate-despite-the-market-noise/

[lomatopo]

Apple Is Kinda Hosed

Jay Yarow | Jan. 15, 2013

Apple Is Getting Seriously Nuked Today

Apple has gone from being a sure-thing rocketship to a train wreck, as far as stocks are concerned. Some people want to cry "stock manipulation," but the stock is down 30% since the end of September. It's hard to totally fool the market. Something is amiss with the company.

It reports earnings next week. In theory, that could help clear some of the confusion around the company. But in practice, it's unlikely. Sterne Agee analyst Shaw Wu points out in a report this morning that Apple's tendency to "sandbag" its guidance could blow up in its face this time. Wu is calling for "vintage conservative" guidance for Apple. Ben Reitzes at Barclays is also calling for super low guidance — "several billion" under consensus revenue. Unlike in the past, the market might not react so well to low guidance.

Apple was known for setting comically low guidance then miraculously destroying that guidance. Lately, it's not destroying its guidance, it's just beating it. And lately, Apple's stock has been crashing as investors lose faith in Apple.

http://www.businessi...da-hosed-2013-1

Edited January 16, 2013 by lomatopo

[lomatopo]

Sterne Agee: Here's The Real Reason Apple Cut Its Supply Orders

Jay Yarow | Jan. 15, 2013

The Wall Street Journal sent shockwaves through the Apple world when it said Apple cut its order of iPhone screens in half because of weak demand. Shaw Wu at Sterne Agee says weak demand is not a problem for Apple. In a new note he says, "As far as we can tell, iPhone 5 demand remains robust."

He explains the cuts in orders as such: "(1) much improved yields meaning lower component builds and (2) supplier shifts."

So it sounds like Apple put in a gigantic order for iPhone screens assuming they would be hard to make. When they weren't that hard to make, Apple cut back on the order. It also may be shifting its suppliers and thus one supplier may be getting cut and blabbing to the press.

[lomatopo]

This article suggests the cuts in iPhone 5 (and Touch) displays may be due to a transition to IGZO displays.

http://blogs.barrons.com/techtraderdaily/2013/01/16/aapl-production-cuts-about-move-to-igzo-not-demand-says-global-equities/

Trip Chowdhry of Global Equities Research today writes that the worries about rumored supply-chain cuts in Apple‘s (AAPL) iPhone production are overdone because the cuts pertain to a change of technology, not a change in demand patterns, in his opinion.

Chowdry, reiterating an Overweight rating on Apple shares and a $650 price target, argues Apple has been shifting from using traditional displays to instead use the emerging technology “IGZO,” a compound semiconductor made up of indium, gallium, and zinc-oxide.

Based on our discussions with technologists at these conferences, here is the converged view we got: Apple cut LCD orders by 40% to 80% not because the demand has declined by 40% to 80% but probably because Apple is shifting to IGZO (Indium Gallium Zinc Oxide) display techology

[watcharacters]

This article suggests the cuts in iPhone 5 (and Touch) displays may be due to a transition to IGZO displays.

http://blogs.barrons...lobal-equities/

Trip Chowdhry of Global Equities Research today writes that the worries about rumored supply-chain cuts in Apple‘s (AAPL) iPhone production are overdone because the cuts pertain to a change of technology, not a change in demand patterns, in his opinion.

Chowdry, reiterating an Overweight rating on Apple shares and a $650 price target, argues Apple has been shifting from using traditional displays to instead use the emerging technology “IGZO,” a compound semiconductor made up of indium, gallium, and zinc-oxide.

Based on our discussions with technologists at these conferences, here is the converged view we got: Apple cut LCD orders by 40% to 80% not because the demand has declined by 40% to 80% but probably because Apple is shifting to IGZO (Indium Gallium Zinc Oxide) display techology

In the last 24 hours it's gone up about 25 USD.

[nikster]

following it that closely is a waste of time IMO

same as watching Bloomberg news on stocks - I love it how professionally the presenters act as if there was any rhyme or reason behind this rise or that fall - in reality the insiders are making the bucks, and if they're not making them then they for sure are trying - and fake news, fake non-news, and fake rumors are their bread and butter. Then it's on TV and they pretend it's real news.

I think it would be much more accurate if instead of saying "The Dow fell on investor worries about _______ (fill in the blanks)" they'd say "The Dow fell because some speculators thought they'd make money that way. Others disagree. More on this story later."

Edited January 17, 2013 by nikster

[nikster]

Check out this article, written in Nov 2012:

http://seekingalpha.com/article/1002601-buy-apple-on-january-18

The short: Insiders have bet $Bns on AAPL getting low on Jan 19th (expiration date of Jan 13 call options) and then to go up from there.

Thing can't be explained? Cui Bono - Look at who profits.

[lomatopo]

Most hedge funds/institutional investors would balance puts or calls with an on-going outright share purchase/sale.

The dip in the share price over the last three months is, I think, due to a lot of longer term profit taking and year-end concerns about potential capital gains tax changes in 2013. Much of the dip came well before any negative rumors started.

Most analysts are still highly positive (strong buy, out-perform) on AAPL, with year-end targets in the $700 range.

Al Gore looks to have done pretty well. A (potential) net profit of 29 million dollars.

http://appleinsider....d-at-over-29.6m

Edited January 18, 2013 by lomatopo

[LaoPo]

Most hedge funds/institutional investors would balance puts or calls with an on-going outright share purchase/sale.

The dip in the share price over the last three months is, I think, due to a lot of longer term profit taking and year-end concerns about potential capital gains tax changes in 2013. Much of the dip came well before any negative rumors started.

Most analysts are still highly positive (strong buy, out-perform) on AAPL, with year-end targets in the $700 range.

Al Gore looks to have done pretty well. A (potential) net profit of 29 million dollars.

http://appleinsider....d-at-over-29.6m

Your link about the 29 million doesn't exist anymore....

Error 404 Content Not Found

"Rest assured though, that the party responsible for your current predicament will be punished most severely!"

[lomatopo]

Story is still on the sidebar.

http://appleinsider.com/articles/13/01/17/al-gore-buys-59k-shares-of-aapl-stock-valued-at-over-296m

[lomatopo]

That $2.3 bn AAPL poured into Sharp to keep it afloat last year was necessary, but...

EXCLUSIVE – JAPAN’S SHARP CURBS IPAD SCREEN OUTPUT AS APPLE MANAGES DEMAND SHIFT-SOURCES

TOKYO/SEOUL | Fri Jan 18, 2013 - Sharp Corp has nearly halted production of 9.7-inch screens for Apple Inc’s iPad, two sources said, as demand shifts to its smaller iPad mini.

Sharp’s iPad screen production line at its Kameyama plant in central Japan has fallen to the minimal level to keep the line running this month after a gradual slowdown began at the end of 2012 as Apple manages its inventory, the industry sources with knowledge of Sharp’s production plans told Reuters.

Sharp spokeswoman Miyuki Nakayama said: “We don’t disclose production levels”.

Apple officials, contacted late in the evening after normal business hours in California, did not have an immediate comment.

The sources didn’t say how much of the slowdown was due to seasonal changes in demand or consumers opting for the smaller iPad mini and were unable to characterize Apple’s overall tablet sales.

Macquarie Research has estimated that iPad shipments will tumble nearly 40 percent in the current quarter to about 8 million from about 13 million in the fourth quarter, although Apple’s total tablet shipments will show a much smaller decrease due to strong iPad mini sales.

http://dawn.com/2013/01/18/exclusive-japans-sharp-curbs-ipad-screen-output-as-apple-manages-demand-shift-sources/

[lomatopo]

Analyst pegs 'iPhone Mini' price at between $299 and $349

Roughs out possible cost to make lower-priced iPhone aimed at emerging markets and as counter to possible carrier revolt over subsidies

Gregg Keizer | Computerworld US

Apple may be able to build a cut-rate iPhone for $144 (£90), which would let it price the device between $299 and $349 (£168-£218), hundreds less than the unsubsidized price tag of its flagship smartphone, an analyst said today.

A lower-cost iPhone would be a major strategic shift by Apple, which has rigorously held the price line, and may signal that it believes real growth will be found only in emerging markets, said Sameer Singh, who covers the mobile industry at his Tech-Thoughts blog.

"I think the primary driver would be their position in emerging markets," said Singh in a Thursday email reply to questions.

http://www.macworld.co.uk/ipad-iphone/news/?newsid=3421210&pagtype=allchandate

[LaoPo]

Story is still on the sidebar.

http://appleinsider....ed-at-over-296m

I'm happy, I was already afraid you were to be sent to prison.... the party responsible for your current predicament will be punished most severely!"

[nikster]

[double post due to connectivity issues]

Edited January 19, 2013 by nikster

[nikster]

Most hedge funds/institutional investors would balance puts or calls with an on-going outright share purchase/sale.

The dip in the share price over the last three months is, I think, due to a lot of longer term profit taking and year-end concerns about potential capital gains tax changes in 2013. Much of the dip came well before any negative rumors started.

AAPL closed at exactly $500 on the options expiry date.

End of this story.

If you think that's a co-incidence than no one and nothing can help you.

I do not claim to know who did this, or how - I imagine it's less of a secret meeting in a darkened room and more a gentlemen's agreement amongst the big boys.

But what is for sure is that it has absolutely nothing to do with the performance, market situation, profits, PE or anything else related to the business of Apple, either positive or negative.

It most certainly has nothing to do with fantasy rumors about component orders or suchlike. I called BS on this from the beginning and BS it most certainly was.