Tag Archives: Apple

This Time It Matters: Why Apple Is Falling

Preface
Apple Inc (NASDAQ:AAPL) is dropping hard after its event to announce the new series of hardware, in particular the new iPhone 8, 8 Plus and X as well as the Apple Watch 3.

It’s Different This Time
Normally when Apple stock dives on lukewarm product reviews we stand firmly in our position that the stock market reaction is over blown. Our simple thesis for that response is to look at demand, which is hypnotically strong, every time. That is not the case this time.

A New Risk is Not Obvious But is Enormous
Apple announced a more complicated lineup of iPhones this time around. It introduced the iPhone 8 series which is an upgrade to the iPhone 7, and then it announced the highly anticipated iPhone X (pronounced iPhone Ten).

Then the company made the iPhone 8 available this month, but pushed delivery of iPhone X to early November, which pre-orders stating in late October. That has created a risk.

It turns out that Apple hyped the iPhone X so much, and poured so much new technology into it, that it has left the demand for iPhone 8 lackluster in Apple terms. Here’s what we mean.

If you go to the Apple Store, and try to purchase an iPhone 8, the wait time is essentially 1-3 days for the smaller memory version. Here is an image:

That is for the iPhone 8, in Los Angeles, on Verizon’s (NYSE:VZ) network. The other networks are essentially the same. A normal wait time for a new iPhone release is usually several weeks, let’s say 2-4 depending on where you are in the world.

There are also reports that in store lines are much smaller than before, with one report pinpointing Sydney Australia, where only 30 people were camped out for the new release. Reports from China are similar.

Here are links to two stories:

Turnout for iPhone 8 Launch in Australia “Bleak” as Customers Hold Out for Upcoming iPhone X
The iPhone 8 launch in Sydney saw “a bleak turnout,” reports Reuters, with fewer than 30 people lining up outside of the Sydney Apple Store on George Street. In past years, hundreds of people have lined up for new iPhones on release day.

Apple Falls After Analyst Report Indicates Weak iPhone 8 Demand
Consumers pre-ordered about 1.5 million handsets on Chinese retail website JD.com in the first three days, compared with about 3.5 million for the comparable period of iPhone 7 orders.

Tim Cook just said he “couldn’t be happier” with the iPhone release (and Apple Watch 3). While sales are lower than prior models, there is one reason, a big reason, that he may actually be telling the truth.

Is There a Plan?
One of the headlines that surfaced from the Apple Event was that the iPhone X was very expensive, starting at $ 999 and climbing to $ 1,200 based on the configuration.

It’s possible, maybe even likely, that Apple decided to release the iPhone 8 for less to make it appear that it was not forcing Apple loyalists to buy a far more expensive phone by offering a reduced priced new model (iPhone 8).

In fact, it does appear that even in the bearish analyst notes, each tends to comment on the fact that demand reduction for the iPhone 8 is simply a reflection of the outsized demand for the iPhone X.

If that’s true, then Apple will have an average selling price significantly higher than in prior times, and if demand is in fact to the point where Apple also sells more units, then that would bring a windfall of profits larger than any company has ever seen in one quarter. If that sound overly bullish, it’s just the choice of words — Apple already has the largest earnings ever in one quarter, so this would be a breaking of its own record — also known more simply as, “growth.”

Back to Risk
While there is a rather bullish narrative to wrap around this odd iPhone selection, there is also, in earnest this time, a reasonable bearish thesis.

Apple won’t be delivering its iPhone X until well into November, and if demand is very strong, it might not even be able to deliver before the holiday season in the United States. And while, certainly, if all of those sales simply occur later in the year (or early 2018), then that’s fine, but to consider that a foregone conclusion is a step we are not willing to take with blind faith.

Some consumers, perhaps many consumers, will not wait. And while Apple loyalists may stick around for a later date, the all-important “Android switchers” (those smartphone Android owners that switch to Apple) may not — and that is a real risk and worthy of a stock drop, until proven otherwise.

Apple’s market share in the United States is jumping as Android loses market share — an under reported but critical phenomenon. On January 11th, 2017, 9TO5Mac wrote iPhone market share grows 6.4% in USA, takes share from Android in most markets.

Apple gained 9.1% in the UK, mostly at the expense of Windows phones.

The iPhone grew its market share in Australia, France, Italy, Japan, Spain, the UK and USA, with Android seeing its own share drop in all of these countries bar Italy, where its growth was less than half that of iOS.

Those are Android switchers and Apple may have just put that group, or at least that trend, in serious jeopardy.

Now What?
We believe the iPhone X is going to be a knock-down drag-out mega hit, and the elevated price will make it yet an even larger success. But, the risk that Apple took, as of right now, is hurting the company both with iPhone 8 sales, and potentially, with Android switchers. And that is not a false narrative — it is accurate.

That risk means the stock should drop, and is dropping.

But, we’re not done yet. What we did not show you, and is easily missed unless you are really looking, is how hard Apple is focusing consumers on the iPhone X over the iPhone 8 — in our opinion.

I recorded a 45 second video arriving on the Apple Store and looking at iPhones. I have turned to video to allow you to make your own decision, as opposed to snapshots, which are too selective and an be used to weave any narrative the author likes.

When you watch this video (below), decide for yourself if you feel that Apple is purposefully pointing people to the iPhone X over the iPhone 8. Here we go:

[embedded content]

That’s hardly headline grabbing footage, but we found it noteworthy.

Apple Watch 3
There have been some pretty poor reviews of the Apple Watch 3 surrounding its LTE connectivity and its battery life. This is one of those times where the reviews are meaningless. Demand is strong and that’s all that matters.

Here is a snapshot from the Apple Store for that product:

We see the Watch becoming a runaway success as people learn to use that wearable device as a standalone product — leaving the phone at home on runs, meetings, swims, hikes, and whatever other times such a convenience could be desired.

Conclusion
We maintain our Top Pick status on Apple, but have certainly tempered our bullishness with an undeniable new risk. It might work out very well, but, it might not, and that is a new risk to Apple stock.

The author is long shares of Apple Inc (NASDAQ:AAPL).

Thanks for reading, friends.

Please read the legal disclaimers below and as always, remember, we are not making a recommendation or soliciting a sale or purchase of any security ever. We are not licensed to do so, and we wouldn’t do it even if we were. We’re sharing my opinions, and provide you the power to be knowledgeable to make your own decisions.

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Disclosure: I am/we are long AAPL.

Tech

Apple releases its new TV Remote app for iPhone

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You can put down that awkward Siri remote. Apple just launched a new way to navigate around Apple TV.

Flagged at Apple’s Worldwide Developers Conference in June, the Apple TV Remote app is one of a suite of recent products designed to improve the user experience of Apple TV. Released Monday, the app, which does everything the Siri remote can do, lets you select programs and play games from your iPhone.

Simplifying text entry, the Apple TV Remote app helpfully allows you to enter show names, usernames and passwords with your phone’s keyboard. It also employs game mode to make use of the smartphone’s accelerometer and gyroscope, and lets you ask Siri to help you track down new TV shows. Read more…

More about Apple Tv Remote, Apple Tv, Apple, Tech, and Gadgets


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Apple Loop: New iPhone 7 Leak Reveals Big Changes, Awkward iPhone SE, 3 Year Wait For New iPhone

This week’s Apple Loop includes the unsightly bulge on the iPhone 7, a new battery for the handset, the re-engineered lightning earpods, some thoughts on the iPhone SE’s position, a new research lab in France, a look at Apple’s musical future, the iPhone’s new product cycle, and a potential new franchise for Apple TV.


Cloud Computing

Apple releases 4 new emoji sticker packs for iOS 10 beta users

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Apple recently revealed that its upcoming iOS 10 update holds some good news for emoji lovers: The iPhone’s pictograph palette will soon be more extensive than ever.

The Cupertino company gave a clearer picture of what that new emoji-verse will look like this weekend with the release of four new animated sticker packs for those testing the beta version of the operating system.

Like Facebook Messenger, Apple’s latest software allows third-party developers to add specially designed emoji or gif packs to its iMessage app through an API.

The new sets — old-school Mac icons, three-dimensional smileys, heart animations and hand signs — were available in the iTunes app store as of Friday night, according to 9to5Mac. Read more…

More about Ios 10, Apple, and Tech


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Apple announces app development accelerator in Bengaluru to start Tim Cook’s India visit

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As part of Apple CEO Time Cook’s first visit to India, the company has announced that it will open a new iOS app design and development accelerator in India’s Silicon Valley Bengaluru by early 2017. 

The new centre is a major step towards Apple’s attempt to expands its share in the world’s fastest-growing smartphone market. The new centre will attract and encourage the country’s developers to make apps for iOS.  

“India is home to one of the most vibrant and entrepreneurial iOS development communities in the world,” said Tim Cook, Apple’s CEO. “With the opening of this new facility in Bengaluru, we’re giving developers access to tools which will help them create innovative apps for customers around the world.” Read more…

More about Business, Startup, Bengaluru, Apple, and India


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Apple Music May Be Showing Off a Major New Look in June

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Apple Music came late to the music-streaming party and has been trying to play catch up to services such as Spotify. But it doesn’t offer too much over competitors and could use a few fresh features.

Now, the Apple rumor mill suggests Apple is expected to announce an Apple Music overhaul at its Worldwide Developer’s Conference in June, according to Bloomberg. Meanwhile, tech blog 9 to 5 Mac reports the updates will be coming with iOS 10.

If the rumors are legit, Apple Music will be getting a new interface to make the service more intuitive, an expanded online radio footprint and improved integration between streaming and downloading music. Read more…

More about Spotify, Apple Music, Apple, Tech, and Apps Software


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Apple devs: Don’t let Apple’s Xcode validation scare you

The Apple App Store has long enjoyed a sterling reputation for screening out malware. But last weekend, the company pulled apps infected with XcodeGhost malware from the Chinese Apple App Store — infected apps that had apparently been created with a counterfeit version of Apple’s Xcode IDE by unsuspecting developers.

As a precaution, Apple emailed its developers on Tuesday, recommending that they validate their installed version of Xcode using a simple procedure to ensure it wasn’t a hacked version. The email also contained a reminder to “always download Xcode directly from the Mac App Store, or from the Apple Developer website, and leave Gatekeeper enabled on all your systems to protect against tampered software.”

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Apple releases iOS 9.0.1 with numerous bug fixes

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More than a week after the frenzy surrounding iOS 9 and its rocky start, Apple is already releasing an update.

When iOS 9 was released, users received error messages saying the software update failed, while others had success downloading iOS 9 via iTunes.

During the installation of iOS 9, many users got stuck on the “Slide to Upgrade” screen. The iOS 9.0.1 update addresses that issue as well as multiple other bugs. Here’s what you’ll get:

  • Fixes an issue where some users could not complete setup assistant after updating

  • Fixes an issue where alarms and timers sometimes failed to play Read more…

  • More about Apple, Tech, Apps Software, Dev Design, and Mobile


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    Apple drops iCloud prices, matches rival storage services from Google and Microsoft

    For the second year in a row, Apple reduced prices for its expanded iCloud storage plans, putting costs in line with rivals like Google, Microsoft and Dropbox.

    Apple announced changes to iCloud extra storage pricing earlier this month at the event where it unveiled new iPhones, the larger iPad Pro and a revamped Apple TV.

    Although the Cupertino, Calif., company did not boost the amount of free storage space — as Computerworld speculated it might — and instead continued to provide just 5GB of iCloud space gratis, it bumped up the $ 0.99 per month plan from 20GB to 50GB, lowered the price of the 200GB plan by 25 percent to $ 2.99 monthly, and halved the 1TB plan’s price to $ 9.99.

    To read this article in full or to leave a comment, please click here

    InfoWorld Cloud Computing


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    Apple will host Xcode on Chinese servers following malware attack

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    Apple’s developer software Xcode will soon be available to Chinese developers.

    First spotted by Apple Insider, this news comes on the heels of a malware attack on apps in the App Store.

    Last week, security researchers at Palo Alto Networks discovered the infected apps and publicized an analysis report detailing the malware’s spread and impact. Xcode is a set of software tools developers use to create iOS apps, but a modified version of Xcode containing the malware, dubbed XcodeGhost, made its way into the App Store.

    As Palo Alto Networks explains, the standard Xcode installer is nearly 3GB, which means it could take even longer to download large files from Apple’s servers in other countries. In response to this, some Chinese developers choose to download the software from other sources or obtain copies from colleagues. It’s also hard for developers to detect malware like XcodeGhost because it’s deeply hidden. Read more…

    More about Iphone, Apple, App Store, Tech, and Apps Software


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    In pictures: Apple faithful already forming lines in front of Friday’s iPhone 6s launch

    Marcus Barsum waits outside the Apple store in central Sydney Thursday. Reuters/David Gray

    Yes, it’s that time again, when the Apple faithful/crazy line up way early to buy the next version of the iPhone, this time the iPhone 6s and 6s Plus.

    This year, people are standing out in the elements — and sleeping there overnight — to buy a phone that looks identical to the one they already have, but with, um, an updated camera and a new kind of screen press.

    Here are the lines, in cities around the world.

    New York

    Screen Shot 2015-09-24 at 10.53.45 AM

    Above: Waiting in line in NYC (Eli Blumenthal ‏@eliblumenthal)

    Apple fans line up at the "Church of Apple" in New York to buy an iPhone 6s Friday.

    Above: Apple fans line up at the “Church of Apple” in New York to buy an iPhone 6s.

    Image Credit: Eli Blumenthal ‏@eliblumenthal

    San Francisco

    Screen Shot 2015-09-24 at 11.58.58 AM

    Above: (Justin E. Harris @envisionwithj)

    Periscoper Justin Harris reported that around 16 people were already camped out at the downtown San Francisco Apple Store Thursday night. Check it out here.

    Boston

    (Image: MacRumors)

    Above: (Image: MacRumors)

    Hamburg, Germany

    "Oh man wie arm ist das denn. Wegen einem Telefon?" Daniel Knott ‏@dnlkntt )

    Above: “Oh man wie arm ist das denn. Wegen einem Telefon?” (Daniel Knott ‏@dnlkntt )

    Sydney, Australia

    Marcus Barsum waits outside the Apple store in central Sydney Thursday. Reuters/David Gray

    Above: Marcus Barsum waits outside the Apple store in central Sydney Thursday. (Reuters/David Gray)

    This buyer, a media exec in Australia, sent a robot proxy to wait in the line. (photo: Mashable)

    Above: This buyer, a media exec in Australia, sent a robot proxy to wait in the line. (photo: Mashable)


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    Apple removes apps as App Store hit in malware attack

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    Dozens of iOS apps in Apple’s App Store were infected with malware in recent days, including hugely popular Chinese social networking apps, in what appears to be first major case of hackers breaching Apple’s highly controlled mobile software ecosystem.

    Apple said Sunday it had removed apps from the App Store that were known to include the malicious code, but not before apps like WeChat, which has hundreds of millions of Chinese users, had been distributed with malware that could attempt to steal users’ passwords and other information.

    More about Apple, Malware, Ios, Tech, and Apps Software


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    Apple rewards CEO Tim Cook with $58M for bang-up job on Wall Street

    Apple CEO Tim Cook earlier this week was awarded 560,000 shares, worth approximately $ 57.7 million, receiving the full amount of a grant due him because of Apple’s performance on Wall Street over the last two years.

    As it did in 2014, Apple withheld just over half of the total shares — 290,836, worth about $ 30 million on Monday — for tax purposes.

    The half-million shares were this year’s allotment under a revised schedule designed at Cook’s request in 2013. Then, Apple’s board modified the executive’s vesting plan, which had set two large stock handouts for a massive 1 million-share grant — after last year’s stock split, equal to 7 million — when Cook assumed the lead role at the Cupertino, Calif. company just weeks before co-founder Steve Jobs’ death.

    To read this article in full or to leave a comment, please click here


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