Dullsville: Nobody likes iPhones


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Yesterday Apple revised down its guidance for the fourth calendar quarter, admitting that—due to a variety of factors—the company had “fewer iPhone upgrades than we had anticipated.” Apple now expects its revenue to be down about 5 percent from the same quarter the previous year.

Congratulations, nay-sayers! You stuck with it for… [checks calendar]… ten years of iPhone shipments and you’re finally a little bit right. This quarter will not be a record. It’ll “only” be Apple’s second-best in history.

Speaking of nay-saying, writing for the Forbes contributor network and Chiclets Brand School of Dentistry where every solution is to replace all your teeth with Chiclets, Jon Markman says “Apple Struggles With Demand For Dull Devices.” (Tip o’ the antlers to Gary.)

Well, Apple is struggling a bit with demand, so he’s at least half right.

I have been a reluctant Apple bull for a long time.

A bull. Really. Did many bulls back in 2016 write pieces entitled “Apple’s Problems Are Worse Than You Think” in which they compared Apple to BlackBerry? Don’t get The Macalope wrong, there’s definitely some “bull” going on here, it’s just not what we usually associate with Wall Street’s use of the term.

I’ve had misgivings about its lack of innovation, along with the recent hypocritical privacy rhetoric.

You will be shocked to learn that Apple uses the fact that it protects the privacy of its customers to market its products. At long last, Tim Cook, have you no shame? Please, do not speak to us of the advantages of your products like someone who is selling us something. How gauche.

The key is selling iPhones.

Apple actually hopes that’s not the case as smartphone sales have pretty much topped out. Growth is gone. At least Apple, more than any of its competitors, has squeezed more money out of the market by giving users more options at the high end of the market and selling services. That’s how it managed to have record revenue quarters while unit sales have been almost flat up until last quarter.

It’s relying less on innovation and more on brand. The idea is to charge more for less.

At 6.5 inches, the iPhone XS Max is literally more for more. As someone still holding on to his iPhone SE, The Macalope frankly wishes the company would charge more for less.

[The iPhone XR’s] bezels, relative to more expensive iPhones, make the device look like a kids’ phone.

Kids' phones have slightly bigger bezels! Everyone knows that! Duh!

Fundamentally, the stock trades at only 10x forward earnings, which is cheap.

Fundamentally AAPL is a steal right now, but this mix of bones and sticks I just threw and interpreted based on the position of the planets makes me leery about the company’s future.

It’s [sic] market capitalization, far in excess of $2 trillion months ago, has fallen to $760 billion.

Wow, it’s fallen by more than 50 percent?! Well… no! It hasn’t! Apple’s market cap was over $1 trillion months ago, not $2 trillion. (Markman has since corrected the error.)

I am an investment adviser…

Personally, The Macalope will take Apple’s 5 percent correction over Markman’s 50 percent correction any day.

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