Rumor Roundup: The incredible shrinking iPhone
This week was a particularly ridiculous one as far as Apple rumors go. The big "news" this week? Apple is launching a cheaper iPhone! Except that it maybe/probably isn't. Also, Apple's manufacturing orders for the iPhone are shrinking! DOOM! Except that maybe/probably isn't what happened at all... and there may be highly nefarious motives behind people making such claims.
Some analyst is full of doom and gloom about Apple's future prospects. He's skeptical that Apple's single-device, high-margin approach to the smartphone market is the right answer, and he holds up Samsung as an example of a company supposedly doing it right.
This guy is a perfect example of the "what planet are you living on?" breed of analyst. Supposedly high market share is all that matters, and profits mean nothing. The fact that Apple earns more revenue and profits than Samsung while holding a smaller percentage of the overall market share for smartphones is supposedly cause for alarm, for some reason never adequately (nor logically) explained.
It's almost like the only job requirement for analysts is, "minimum five severe concussions over the past six months."
Some analyst says the next iPhone will launch in June. Well, stop the presses. "We believe Apple could launch a higher-end iPhone model by the June quarter versus its more typical September/October timing for a new iPhone launch," he says. You believe? Cool story, bro. I believe that I'll win the lottery and become an overnight millionaire sometime within the next twelve months. Does that make me an analyst, too?
This story is sourced from Digitimes and therefore has zero credibility. Moving on.
Oh, juicy! It's in the Wall Street Journal, so you just know it has to be true!
Now Bloomberg is saying the same thing? BREAKING EXCLUSIVE: CONFIRMED: Apple will launch cheaper iPhone in 2013 (developing)Low-cost iPhone seen generating $6.5B in 2013 revenue for Apple (AppleInsider)
Gene Munster thinks a cheap iPhone could sell like crazy, and he backs that up with a bunch of made-up numbers. I don't know how he does it! But I'm guessing it involves tequila.
A different analyst took the opposite stance from Munster and said a cheap iPhone doesn't make sense, would likely hurt Apple's financial bottom line, and the whole idea is probably built on flimsy and stupid rumors. Folks, this is a Rumor Roundup first: for the first time ever, I find myself in total agreement with an analyst. I know, I'm scared too.
Apple's own Phil Schiller (allegedly) said what the level-headed among us knew all along: Apple doesn't give a damn about market share. It cares about making the best products that people will enjoy using, and it cares about making money off of those products. It's that simple.
Yes, Apple could make a cheaper iPhone and go for a market share grab, thus overturning the company's entire history of making high-end, high-margin products. But Daring Fireball's John Gruber makes the same point I'd make: Apple won't make a cheap piece of crap just so it can sell ten terrible products when it could sell three great ones instead.
Look no farther than the iPad mini, a product that made no sense to me at all when analysts and rumormongers were claiming it'd be a cut-rate $200 device designed with only market share in mind. Instead, it turned out to be a device with a $329 entry point and, with the exception of its display, a design that's arguably superior to the full-size iPad.
It doesn't take a genius to think a cheap iPhone might go the same route, which makes the WSJ and Bloomberg's claims look incredibly goofy.
Speaking of incredibly goofy, apparently the original story citing Phil Schiller got changed after the fact, and no one is really clear how or why. All that means is we can look forward to three more months of
winter stupid cheap iPhone rumors.
Some analyst (correctly) says current smart TVs aren't all that great, and he thinks the only way the devices will really come into their own is if Apple steps up to the plate. Whether or not it's in Apple's best interests to do so is an exercise left to the reader. (Hint: hahaha, no.)
Some analyst thinks the next-gen iPads are launching a month and a half from now. His proof? "Checks with industry sources at CES." Yeah, about that... if my Twitter feed last week was any indication, half the people at CES were drunk, and the other half had influenza. Probably not the best sources.
When does an iPhone sell too well? When some analyst says so. Apparently Apple sold so many iPhone 4 units last quarter that the two-year-old handset supposedly hurt sales of the new iPhone 5. This is a strange claim to make weeks before Apple releases its actual sales numbers, but as we'll see, this analyst isn't the only one making numbers up out of thin air.
Here it is, the article that launched 1000 posts this week. Supposedly, according to the Journal, "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." That's the kind of news that you might expect to send Apple's stock into a downward spiral. And, predictably, it did. But what's really going on here?
"In what world did Apple expect to order components for 65 million iPhone 5 handsets in the seasonally soft March quarter?" BGR asks. Valid question. A question just as good: how do I suddenly, and for the first time ever, find myself nodding in agreement with BGR?
Some analyst joins the fray and says "DOOM, DOOOOOM" in an attempt to look as silly as possible hours after Apple releases its quarterly earnings statement.
iPhone 5 order cuts dismissed as 'not news,' simply 'noise' (AppleInsider)
Okay, what's going on here? Where are all these intelligent, rational analysts coming from, and why don't they write about Apple more often?
Another analyst adds to the chorus of people disagreeing with the WSJ's reports of doom and destruction for Apple's iPhone 5 sales.
What is this all adding up to? That's a very good question, and it's one that many bloggers have tried to answer over the past few days. Once again I find myself agreeing with John Gruber; over the past few days he's linked to and commented on multiple pieces pointing to the possibility that the rumors of Apple's demise were greatly exaggerated, and with deliberate purpose: to drive the stock price lower immediately before Apple announces its earnings, almost undoubtedly driving the stock price back up.
It's an age-old game. Buy low, sell high. It's the basis of getting rich off Wall Street stocks. So it stands to reason that if you can find a way to drive AAPL down below $500 when speculation points to the stock being worth 1.5 to 2 times that much, and you can find a way to do that without getting caught, you stand to reap huge financial rewards.
Hence, "people familiar with the matter" making grandiose claims about tanking sales for the iPhone 5, Apple's biggest moneymaker, right before Apple announces its quarterly earnings.
I'm not saying that is what's happening here (end legal disclaimer), but if it walks like a duck...
What AppleInsider calls a "report" I instead call "random daydreaming from some analyst."
Seriously, can anyone give me a rational explanation for why so many blogs parrot analysts' "notes to investors" as if they're actual news?
Another blog plays fast and loose with the word "report" by citing Digitimes as if it's a reputable source.
Some analyst went the extra mile and predicted Apple's product roadmap for the entire year. Normally I'd be disposed to make fun of anyone so obviously overambitious... but A) this particular analyst has been right before, and B) his predictions actually sound entirely reasonable for the most part. Not a single Apple HDTV, smart watch, or toaster/fridge to be found. It's eerie.
This past week of rumors was indeed pretty crazy. I don't know what's weirder: that the Wall Street Journal is starting to sound more and more like Digitimes, or that analysts are finally starting to say things about Apple that make rational sense. I feel like I've fallen down the rabbit hole.
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