Apple is starting to smell a bit

News earlier this morning from the Nikkei Review that iPhone 6 production from Apple may be cut up to 30% in the first quarter:

Apple is expected to reduce output of its latest iPhone models by around 30% in the January-March quarter compared with its original plans, a measure that will deal a blow to Japanese and South Korean parts suppliers.

The U.S. company had initially told parts makers to keep production of the iPhone 6s and 6s Plus for the quarter at the same level as with their predecessors — the iPhone 6 and 6 Plus — a year earlier. But inventories of the two models launched last September have piled up at retailers in markets ranging from China and Japan to Europe and the U.S. amid lackluster sales. Customers saw little improvement in performance over the previous generation, while dollar appreciation led to sharp price hikes in emerging markets.

The news has sent Apple’s share price reeling, down 2.5% in after hours trading and sending a big signal to pattern traders like Peter L.Brandt that not all is well with an ominous bearish head and shoulders pattern fulling formed and ready to break:

applepeter
For perspective though, in early 2013 Apple cut production of its iPhone 5C model in a similar vein, sending the stock reeling nearly 55% before relaunching:
aapl_us_price_weekly.22jul11_to_07feb14
Tread carefully short sellers!

Comments

  1. Our eldest, who is a ‘latest of everything Apple’, is working in a hotel in London and got tipped an new iPhone last week. Two things (1) are they giving them away now! and (2) she was disappointed , because she’d rather have had the cash than a new iPhone……Perhaps even the most brand loyal are getting bored with the product?

      • Jobs wasn’t just an ahole who abandoned his kid, parked his unlicensed merc in handicapped zones, was hated by everyone around him in his company and the industry, and was a known liar and thief from day 1 including colluding to steal stock options etc..

        He was also a complete failure as an inventor or a business man.

        Apple Mac was dead and he had destroyed it from 11% to 2% market share. He had already been gifted the MP3 / rotate dial by USA state dept to try and stop the Asians from controlling that market but Jobs larded it up and screwed up later versions and the iPod started to be uncompetitive in MP3 players as well.

        So along comes USA state dept and after 5 years of espionage, and concerns the Asians are going to own the world of smart mobile digital – and phones Comms could now easily fit into a MP3 portable device – so they fit up the little ahole Jobs and tell him what to do.

        And why Jobs ?

        Coz Gates was already given a similar monopoly of patents and control the USA had fitted up as one of their other stooges.

        So Jobs as a loser and #2 plus already had the iPod MP3 given to him : was their proxy to patent the smart phone in an portable device MP3 player concept and steal it all to be USA control.

        Gates was told to back off and stop the tablets and other stuff they had in train as Jobs was the Depts “boy” on this stuff.

        Everything on the iPod then the iPhone was stolen.

        Everything: the ideas, the integration, the marketing and sales.
        Even the engineers.

        http://www.dailytech.com/Samsung+Apples+iPhone+Started+as+Sony+Ripoff/article25277.htm

        Everything that jobs was asked to do in ‘ marketing’ actually had to be undone or he had to be worked around, or he just wasn’t told.
        It already existed, and he mostly got in the way.
        There is any number of books and then the evidence from the Samsung and other court cases on the false image and myths about Jobs.

        The MP3, the idea of the phone in the MP3 player, the web connect store, the apps like music files, the design, Touch, slide to unlock, gestures, glass front screen, zoom, pinch, gesture, swipe function, battery, external functions – all stolen and given to Jobs.

        Jobs will be seen in the future as nothing more than a front man spiv.

        Just like IBM.. & Thomas Watson, the USA state dept has a track record in this.

        Watson was a crooked salesman who couldn’t sell cash registers and was going out of business. In fact up on charges.

        After the USA used the German Hollerith codification and analysis for the USA census they then looked around for a similar spiv to gift it to and have it under USA control and patents.

        That’s how Ibm was created – all stolen from German Hollerith by the USA state dept in 1900’s.

        Exactly same reason & basis as Jobs in the reason for the USA to steal & control key innovation and then fabricate the myths and ‘heroes’ to justify it.

      • Jobs was a credit hog.

        And totally ignorant of the market.

        It took a long time for consultants to make him agree that he should allow iTunes to be installed on Windows.

        He only wanted iTunes available on Mac.

        Mr Satya has recently allowed Office to be installed on iPads. But then Satya killed off MSN messenger.

      • Apple Mac was dead and he had destroyed it from 11% to 2% market share.

        Jobs wasn’t at Apple during its decline in the ’80s and ’90s. He left (well, was pushed out) in 1985.

        I imagine the rest of that jumbled mess fails similar basic sanity tests, but I’m not going to try and decipher it.

      • “He was also a complete failure as an inventor or a business man.”

        Apple sales 1997 (year when Jobs returned) – USD$7 billion
        Apple sales 2011 (year Jobs died) – USD$108 billion

        A clear failure.

      • Apple is a one trick pony like the majority of corporations. Jobs built Apple around a single set of ‘pivotal technologies’ and now they have run out of ideas. They don’t have a new set of pivotal technologies to continue innovating and offer new products. Apple won’t be going away but other companies have infused the Apple approach and without new products Apple will decline. They have $200Billion cash but seemingly no idea what to do with it.

      • Apple sales 1997 (year when Jobs returned) – USD$7 billion
        * Bill Gates cash injection *
        Apple sales 2011 (year Jobs died) – USD$108 billion

        here’s the missing link 😉

      • * Bill Gates cash injection *

        Yes, I’m sure his $100 million investment made a massive difference to Apple, knocking on the door of bankruptcy as it was with only a couple of billion in the bank. 🙂

      • Kmmao Pixsar saved Apple….

        Pixar Animation Studios

        In 1986, Jobs acquired the computer graphics division of Lucasfilm Ltd. and renamed it Pixar Animation Studios. He remained CEO and majority shareholder at 50.1% until its acquisition by The Walt Disney Company on May 5, 2006. Jobs became Disney’s largest individual shareholder at 7% and a member of Disney’s Board of Directors.

        Skippy…. Toy Story saved him from oblivion…. only to create a walled garden cult…

      • Sparky,
        not sure why is it difficult to scratch below the surface.
        You would not put $100mil into something you had a chance to squash but suddenly decided not to, only to let it fail later and kiss g-bye your money, wouldn’t you?
        Or maybe you would?

        $100mil (dunno exact figure) is only a cherry on top of the whole deal.

        And since when is the nominal sales indication of a nominal profit/cash held?

      • You will need to speak more plainly if you want to have a discussion.

        If you don’t, carry on.

      • “Apple sales 1997 (year when Jobs returned) – USD$7 billion”
        * Bill Gates cash injection *
            *
        “Yes, I’m sure his $100 million investment made a massive difference to Apple, knocking on the door of bankruptcy as it was with only a couple of billion in the bank.”
            *
        then my comment that nominal value of the sales does not have to equate to any particular nominal value of the profits. They can have $100billion in sales but cold owe $101 billion they spent to make the sale. Why was Apple on the verge of collapse if they had billions in the bank.

            *

        6. Aug. 1997: Apple Rescued — by Microsoft

        1997: Microsoft rescues one-time and future nemesis Apple with a $150 million investment that breathes new life into a struggling Silicon Alley icon.

        In a remarkable feat of negotiating legerdemain, Apple co-founder Steve Jobs got needed cash — in return for non-voting shares — and an assurance that Microsoft would support Office for the Mac for five years. Apple agreed to drop a long-running lawsuit in which they alleged Microsoft copied the look and feel of the Mac OS for Windows and to make Internet Explorer the default browser on its computers — but not the only choice.

        the deal gave Jobs the running room to make Apple a 21st century powerhouse, which, after 18 months of losses, was hardly a forgone conclusion. On the strength of the deal Jobs — still a mere adviser to the Apple board — got himself hired as “interim CEO.” Fired in 1985, Jobs would return at Top Dog. He would receive no pay, and he could quit at any time.

        “The message was clear,” Frank Rose wrote in a new introduction to his 1989 history of Apple, West of Eden. “Apple needed him more than he needed Apple.”

        and then concludes:

        While another suitor or White Knight may have emerged instead, the Microsoft deal provided a number of things: a cash cushion, the neutralization of Apple’s chief tormentor, continued independence and — perhaps most important — a way for Jobs to make his Phoenix-like return and assemble the small inner circle that still runs everything at One Infinite Loop.

        And without the alignment of these particular stars it is anyone’s guess if the iRevolution — iMac, iTunes, iPod, iPhone — would have ever happened.

        source: Google “bill gates apple bail out” – About 412,000 results (0.44 seconds)
        http://www.wired.com/2009/08/dayintech_0806/

        What I said is that the [$150mil] cash was just what was on the surface with much much more being in the deals:
         ”$100mil (dunno exact figure) is only a cherry on top of the whole deal.”
        and the comment”
         ”not sure why is it difficult to scratch below the surface.”
        and the fact that Gates had a huge chance to close Apple but instead of a gamble he chose to enterprise which I am sure paid back multiple times in multiple areas.
        Here’s more to support and theres sheetload more on the web:
        http://www.cnet.com/news/microsoft-to-invest-150-million-in-apple/

        This is more than 18 years old news that even sparrows and swallows know by now (other then a few odd Apple hard core fanatics who deny all this)

        Perhaps you can break a sweat and do your homework if you want discussion?
        (rhetorical question, my discussion on this topic here ends right now)

      • Why was Apple on the verge of collapse if they had billions in the bank.

        […]

        This is more than 18 years old news that even sparrows and swallows know by now (other then a few odd Apple hard core fanatics who deny all this)

        Perhaps you can break a sweat and do your homework if you want discussion?

        Maybe you need to reconsider your premises and entertain the possibility that a) Apple was not on the verge of collapse and b) I may actually already have some knowledge on the subject from watching it happen 18 years ago.

        What you said, that I replied to, was:

        Apple sales 1997 (year when Jobs returned) – USD$7 billion
        * Bill Gates cash injection *
        Apple sales 2011 (year Jobs died) – USD$108 billion
        here’s the missing link

        Your implicit claim here was that “Bill Gates cash injection” was a critical factor in Apple’s last twenty years of success, without which they would have been out of business. It’s complete bollocks.

        Gates/Microsoft did not “rescue” Apple from bankruptcy, or anything else. They had a couple of billion in the bank (cash – nothing whatsoever to do with sales, feel free to “break a sweat” and look it up). “The deals” – of which the hundred-odd million and commitments to produce office were only an initial part – were the result of a fairly significant patent infringement lawsuit settlement in Apple’s favour (something to do with Quicktime IIRC – can’t be arsed looking it up for you).

      • An extensive relationship with the “Your implicit claim…” followed by an exclusive interpretation of what was implied ‘henceforth nothing else matter’, is well noted and experienced.

      • An extensive relationship with the “Your implicit claim…” followed by anexclusive interpretation of what was implied ‘henceforth nothing else matter’, is well noted and experienced.

        *yawn*

        As is you coming back after the fact and trying to pretend you meant more than you really did.

        How else can one interpret:

        Apple sales 1997 (year when Jobs returned) – USD$7 billion
        * Bill Gates cash injection *
        Apple sales 2011 (year Jobs died) – USD$108 billion

        Other than the exclusive causative relationship between “Apple sales 1997 (year when Jobs returned) – USD$7 billion” and “Apple sales 2011 (year Jobs died) – USD$108 billion” of “Bill Gates cash injection” ?

        Oh, look, from the CNet article you linked:

        “Apple, which ended its third quarter with $1.2 billion in cash, will use the additional $150 million to invest in its core markets of education and creative content, Anderson said. He added that the company expects to gain a higher percentage of its revenues from software and services in these core markets in the future.”

      • How else can one interpret:

        Exactly why i said:
        exclusive interpretation of what was implied ‘henceforth nothing else matter’

        Pity, the written word cannot be wrought so easily after a few responses.

      • Another projection of implied?

        I did not disagree with AB, never said here Jobs was a failure as an inventor or a businessman.

        Oh, wait, “implicit” disagreement.
        I mean… how else can one interpret?
        /sarc

      • And apparently you also agree with me that Microsoft’s 100 million or whatever didn’t make much difference to Apple’s survival.

        Which brings me back to, crikey, you’ve expended a lot of words to agree with us.

      • Another projection, again?
        In the very second post I clarified that 100mil was not the ONLY thing that saved Apple:
        “$100mil (dunno exact figure) is only a cherry on top of the whole deal.”
        But you missed this through “exclusive implicit implied implications” and a bucketload of red herrings.

        See above.

        There’s no “us”.
        AB never responded and that is his prerogative.
        I respect that.

        Apple sales 1997 (year when Jobs returned) – USD$7 billion
        * Bill Gates cash injection *
        Apple sales 2011 (year Jobs died) – USD$108 billion
        here’s the missing link

        This has gone too far.
        over an out.

      • In the very second post I clarified that 100mil was not the ONLY thing that saved Apple:
        “$100mil (dunno exact figure) is only a cherry on top of the whole deal.”
        But you missed this through “exclusive implicit implied implications” and a bucketload of red herrings.

        Er, no. That was the part where I asked you to speak plainly if you wanted to have a discussion. Y’know, so I wouldn’t have to make inferences about what your vague statements *might* mean and waste everyone’s time trying to nut out what you *actually* meant.

        Then you made some rather entertaining – and incorrect – assumptions about what I did and didn’t know, and proceeded to go on a rant.

        What you could have done was elaborate about the other aspects of “the deal” you thought might have “saved” Apple. The commitment to continuing Office development for example, or the extensive cross-licensing of patents. You might have explained why you thought Microsoft would have had a desire to “close” Apple. I would have explained why I think all of those are wrong. We might have been able to have a civil discussion about it. But instead you decided to be an obnoxious arsehole.

    • “Perhaps even the most brand loyal are getting bored with the product?”

      Who knows but I’d wait until we actually see sales figures drop before getting too excited. Last quarter’s iPhone sales were up 22% from the year before. The Christmas period sales figures will be key.

    • I think they’re just reaching the “good enough” stage. Same thing happened to computers (a few times, really).

      Most previous iPhone upgrades have delivered good advantages – the 3GS delivered 3G, the 4 a better screen, the 4S a much faster processor, the 5 a bigger screen and 4G.

      Going from a 5 up to a 6 or 6S though – except for weirdos who hanker after phablets – doesn’t really deliver a whole lot (I have a 6 through work, but only because my 5 broke – would be happy to still have the 5).

    • Naah Janet! Tell her it’s like the property game – they don’t seem to make more of that anymore. Better get them Apples quick before they all run out!

  2. I’ve been expecting sales of iPhne to do this when iPhone aficionados all have their large screens, though if it causes the stock to crash is something I wont be testing with my money

  3. Wait until actual sales numbers come out. Stories of Apple cutting production happen nearly every year and always end up being mis-truths due to Apple having dozens of suppliers and ultra-tight control on inventories.

  4. My calc’s put AAPL at market cap of $570b, less $140b cash (+$30b odd from the December quarter??) = enterprise value of $430b give or take.

    Last year NP of $53b = PE of ~8. Last year operating cash flow of ~$81b = P/OCF of ~5. Is there anything else in the market priced this low? AAPL will be buying back its own stock with ears pinned back.

    The market is pricing a significant downturn, which is pretty unlikely to come in the next couple of years.

  5. Maybe the absurdity of queuing up for last year’s tech already available in other makes, is beginning to dawn on isheep?

  6. Been playing this story for a while. It is as simple as the Apple addicts having waited for a bigger screen and hence the volumes on the 6 were massive and completely unobtainable on YOY comps.

    Sellside useful idiots were never going to have the stones to put a negative comp into their clients largest holdings. Like and Aussie analyst putting a sell on CBA and BHP.

    Forget shorting AAPL though – the suppliers are far easier – SWKS has been working well.

    Got stopped out of AVGO but will look to re-enter.

    CRUS and INVN also worth a look.

  7. Well Apple products will lard up and die under its own complexity and arrogance / until the USA state dept gifts them the next wave of stolen ideas innovation from some other country to place under USA control.

    Jobs wasn’t just an ahole who abandoned his kid, parked his unlicensed merc in handicapped zones.

    He was hated by everyone around him in his company and the industry, and was a known liar and thief from day 1 including colluding to steal stock options etc..

    He was also a complete failure as an inventor or a business man.

    Apple Mac was dead and he had destroyed it from 11% to 2% market share.

    He had already been gifted the MP3 / rotate dial by USA state dept to try and stop the Asians from controlling that market but Jobs larded it up and screwed up later versions and the iPod started to be uncompetitive in MP3 players as well.

    So along comes USA state dept and after 5 years of espionage, and concerns the Asians are going to own the world of smart mobile digital – and phones Comms could now easily fit into a MP3 portable device – so they fit up the little ahole Jobs and tell him what to do.

    And why Jobs ?

    Coz Gates was already given a similar monopoly of patents and control the USA had fitted up as one of their other stooges.

    So Jobs as a loser and #2 plus already had the iPod MP3 given to him :
    That’s why Jobs was their proxy – to patent the smart phone in an portable device MP3 player concept and steal it all to be USA control.

    Gates was told to back off and stop the tablets and other stuff they had in train as Jobs was the Depts “boy” on this stuff.

    Everything on the iPod then the iPhone was stolen.

    Everything: the ideas, the integration, the marketing and sales.
Even the engineers.

    http://www.dailytech.com/Samsung+Apples+iPhone+Started+as+Sony+Ripoff/article25277.htm

    Everything that jobs was asked to do in ‘ marketing’ oftenhad to be undone or he had to be worked around, or he just wasn’t told.
It already existed, and he mostly got in the way.

    A sweaty little egomaniacal creep in a faux polo neck being told his lines and coached by the USA state dept before he goes on stage.

    There is any number of books and then the evidence from the Samsung and other court cases on the false image and myths about Jobs.

    The MP3, the idea of the phone in the MP3 player, the web connect store, the apps like music files, the design, Touch, slide to unlock, gestures, glass front screen, zoom, pinch, gesture, swipe function, battery, external functions – all stolen and given to Jobs.

    Jobs will be seen in the future as nothing more than a front man spiv.

    Just like IBM.. & Thomas Watson, the USA state dept has a track record in this.

    Watson was a crooked salesman who couldn’t sell cash registers and was going out of business. In fact up on charges.

    After the USA used the German Hollerith codification and analysis for the USA census they then looked around for a similar spiv to gift it to and have it under USA control and patents.

    That’s how Ibm was created – all stolen from German Hollerith by the USA state dept in 1900’s.

    Exactly same reason & basis as Jobs in the reason for the USA to steal & control key innovation and then fabricate the myths and ‘heroes’..

  8. Imagine if Apple allows photos to be sent from one phone to another using Bluetooth!

    Like Android has allowed for the last 5-10 years.

  9. Point is simply that Jobs was a copier. Yes he he had been booted out when it went to the wall first time – but later on the history is that he never invented the smart phone or many of the concepts in what became the iPhone and resurrection..
    it was stolen, gifted or he was under instruction by a USA state dept driven to have foreign invention and innovation being put under USA control & jobs was just a proxy.

    Apple again & again lards up any invention it copies or what is gifted by the USA state dept to have under USA patent control – with complexity and bureaucracy.

    Look at the iPhone – anything really good or new about it last 6 years ? Bigger form factor and a better camera. Same price.
    USA / Apple Patents & monopoly deny choice & block others being able to compete.
    We all end up paying way too much and being denied the real value of evolution of ideas and innovation.
    That’s jobs legacy.