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10-22-2012, 01:30 PM #1
Predictions Point Towards Apple Absorbing Quality Control Costs for iPhone 5
A few days ahead of Apple’s quarterly earnings report, analyst Shaw Wu of Sterne Agee says he expects “vintage conservative” guidance from Apple ahead of a big holiday quarter. The reasoning behind this expectation is the fact that Wu believes Apple will partially absorb quality control costs associated with the iPhone 5.
Wu believes that Apple’s near-term gross margins will be between 40.5% and 41.5%, numbers that are lower than Wall Street consensus which is currently between 42% and 43%. The prediction also comes less than a week after an unnamed official with Foxconn said the new iPhone 5 is the most difficult device the company has ever assembled. The complexity behind the design of the iPhone 5 has apparently resulted in low yields, which has led to constrained supplies in the market.
Apple’s margins will continue to be pushed lower by the anticipated launch of a smaller 7.85-inch iPad mini. Wu expects Apple will end up selling its iPad mini at lower margins than the full-size iPad, at least initially, giving the company the opportunity to achieve a lower price point and take on competitors such as the Amazon Kindle Fire HD and the Google Nexus 7.
As far as the September quarter, Wu believes Apple sold between 25 million and 26 million iPhones, which is again slightly lower than the Wall Street consensus of 27 million. He predicts that the iPad sales will be around 16.5 million, below the consensus of 17 million to 18 million. According to him, the Mac will see about 4.8 million units sold which is actually on par with the Wall Street consensus of 4.7 million to 4.8 million. We’ll find out soon enough once Apple’s earnings report is released on Thursday.
10-22-2012, 03:23 PM #2
No offence to the writer but in English what does all this mean :P
10-22-2012, 04:25 PM #3
10-22-2012, 05:15 PM #4
10-22-2012, 05:51 PM #5
10-22-2012, 06:45 PM #6
it means that apple won't have as big a "miss" (they still beat their own projections) when compared to what everyone thinks they'll do in terms of sales and profits. That's if these numbers are correct (won't know till apple releases them).
This directly affects stock prices. Not a mod topic, but certainly an apple one. I'm already waiting with my stock in hand if i wasn't on vacation i would have sold at 700+ but oh well it'll keep going up imo if you give it more time (though i think the 1k mark is still quite a ways out, at least 6 months).
10-23-2012, 01:17 AM #7
10-23-2012, 03:15 AM #8
10-23-2012, 03:22 AM #9
Whenever I see posts like that it reminds me of this person...
I went to England and they spoke American??? Why is this? - Yahoo! UK & Ireland Answers
Anyway, the business lingo basically means that Apple is not likely to reach it's predicted targets because of problems with the iPhone 5 and its supply chain. Increased costs caused by quality control and less sales caused by supply constraints suggest that their profits won't be as high as previously predicted.
However, the sales may move into the next quarter and therefore it may increase the forecast for then (3 months time).
And as VerizonIphone4_help pointed out, most stock trading is performed upon speculation and the rest upon solid figures so this may become further trouble for Apple and their share/stock value. Remember, most big PLCs (Public Limited Companies) care more about their shareholders than their customers.
You may already know some of this but just thought that I'd actually contribute rather than trying to teach you American like some users here >_>
10-24-2012, 05:05 AM #10
10-24-2012, 07:02 AM #11
10-24-2012, 09:00 AM #12
Here to help if I can. If I can't, I know someone who can!
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