Apple Bias In The Media Has Simply Gone Too Far, Potentially Hoodwinking Investors Into Believing Apple Has Not Reached Its Zeni

Reggie Middleton's picture

TechCrunch reports: iPhone 5 Sells Over 5M In Opening Weekend, Limited Only By Device Supply

Apple broke records again opening weekend, with the iPhone 5 selling more than 5M in its first three days, compared to 4M for the iPhone 4S.

Wait a minute! Apple's share price was spiking due to speculation that the iPhone 5 debut may double or more the sales of the iPhone 4S, remember? Let's take a gander at some of the bullshit that came out of the press.

  1. Analyst Estimates On iPhone 5 Launch Weekend SalesRange From 3M-10M TechCrunch‎ - 5 days ago Analysts have begun making their predictions about the iPhone 5's odds of success for launch weekend sales, and in fact there's quite a range ...
  2. Blockbuster iPhone 5 launch expected to push Apple stock to $850 Apple Insider‎ - 3 days ago
  3. iPhone 5 Crushes Sales Forecast In First Weekend - Forbes – Apple (AAPL) announced today that pre-orders for the new iPhone 5 have now exceeded supplies, forcing some phones to be shipped in ...
  4. Surge in iPhone 5 sales forecast - Sep 13, 2012 – Apple's rapid international rollout of the new iPhone 5 has prompted many analysts to upgrade their sales forecasts for the smartphone, with ...
  5. Some analysts increase iPhone 5 sales predictions - CBS News Sep 13, 2012 – (CNET) Some analysts expect the iPhone 5 to be so popular that they've recalculated their iPhone sales estimates for September despite a lack ...
  6. Holiday iPhone sales projected to reach 46.5M as pundits ... – Holiday iPhone sales projected to reach 46.5M as pundits 'underestimate' Apple. By Neil Hughes. Tech pundits who find the iPhone 5 "boring" ...
  7. iPhone 5 Sales Projections: 10 Million Units to be Sold Following ... – The iPhone 5 has high expectations upon its release, not just for Apple customers, but the effect it could have for the US economy. Apple began ...
  8. iPhone 5 sales to hit 170 million over next year, predicts analyst And based on past sales, the iPhone 5 will capture around 85 percent of ... Schiller explained the company's ... 

From Business Insider:

Apple sold the iPhone 5 in 9 countries over its opening weekend. It sold the iPhone 4S in 7. It actually sold fewer iPhones per country this year than the last. That's not just deceleration, that's shrinkage:

iPhone Sales per countryiPhone Sales per country

Decelerating growth is not good for a company like Apple, which despite a modest P/E ratio, has one of the most generous trailing 12 month revenue multiples of any hardware company on the public markets.

 As I explained in detail on the Max Keiser show, Google will be a very difficult company for Apple to successfully compete with. The problem is that practically no one seems to understand what kind of company Google is, and hence why Apple will have a nigh impossible time competing....

This thesis has come into its own with Apple's new iOS6 operating system and its exclusion of Google Maps for its inclusion of its own in-house mapping system. The end result? #FAIL, ##disasater!!!

Hacker reportedly ports Google Maps to iOS CNET‎ 

iPhone 5 Problems: Apple Tries to Steal Google Maps Staff to Fix Its iOS 6 Maps Mess PolicyMic

iOS 6 Maps problem, maybe Apple should have called it beta ...

Wrong turn: Apple's buggy iOS 6 maps lead to widespread - The Verge Apple has a maps problem. The major new feature of the company's new ...

Apple Mapocalypse Sends iOS 6 Users Into a Tizzy, Riverbank - Wired

Apple On iOS 6 Maps Flubs: This Is Hard, Okay?

Apple statement apologises for iOS 6 Maps problems | Electricpig

This is what happens when a handset manufacturer attempts to take on the world's largest data company. Now to be fair, Apple had very liitle choice in the matter since its relationship with Google and its OEMs have gotten global litigation level bad, but still this is an area where Apple is sorely outclassed and it will never hav a chance to catch up while maintaining those uber-fat margins that the hedge fund hotel crowd has grown to relay on.
This guy Ben Parr over at Cnet was the only one in the Apple adoring press that seems to have gotten it right, read on... 
Mapping is a core function of any smartphone. Every person who has a smartphone has a need for maps. If Apple removed Maps from iOS completely, customers would start switching to other smartphones. It's just that important.

So if you're Tim Cook, you have two choices. You can either A) let your enemy Google continue to power your default Maps application, or B) you can build your own Maps app and kick Google to the curb.

This is the decision that Tim Cook and his team faced when they decided to jettison Google Maps as the default mapping application for iOS. Instead, Apple decided to build its own Maps application, powered partly by data from TomTom.

As many of you know by now, Apple Maps has been under fire since its release. The complaints are numerous: Maps doesn't come with transit directions, mislabels cities and other landmarks, forgets rivers and thinks farms are airports. There's even a popular Tumblr dedicated to the mistakes iOS 6 Maps makes.

iOS 6 Maps, while a beautifully-designed application, clearly wasn't ready for prime time. This shouldn't come as a surprise: Google Maps is more than seven years old, and Google employsmore than 7,000 people on it, including the thousands of drivers who make Street View possible. Apple, on the other hand, is frantically hiring engineers to fix the gaping holes users have uncovered in Maps.

Let's go back to the original question: did Apple make the right decision with Maps? It's easy to say in hindsight that Apple should have stuck with Google or waited another year to release its own Maps app. However, consider the factors that Apple had to deal with:

  • Allowing Google to control a key piece of iOS was unacceptable. If Apple had no alternative to Google Maps, the search giant could have made high demands that Apple would have had to accept. Having no default Maps application is unthinkable for a major smartphone.
  • The longer Apple took to release its own Maps app, the more entrenched Google Maps would be.
  • The only way to test a new map application at a large scale it to release it to users. They will be able to find holes quicker than a small team of engineers.
  • A mapping application can only go so far without large amounts of user-generated data.

....iOS 6 Maps is a disappointment any way you slice it. I have friends who refuse to upgrade to iOS 6 because of Maps. But Apple wasn't going to learn anything keeping Maps locked away for another year, and there was no way it was going to let Google control its mapping technology for a minute longer than it had to.

Apple's taking some serious blows for its buggy Maps app. But it made the right decision releasing it. Now it's just a question of how quickly Apple can fix iOS 6 Maps' many flaws and stem the negative press it has generated. Apple's probably going to be feeling the pain for a while.

I clearly called Apple's problem in the Max Keiser interview above. Google is light years ahead of Apple in cloud/distributed computing/applied data tech, experience and capabilities. This maps fiasco is merely the beginning, for Apple TV will face a real challenge from YouTube once it becomes an actual network in lieu of simply a platform (witness and reference the push for new, original content) and Google's many cloud based apps start making the iOS functionality appear as dated as it is. Apple has a very, very slim chance of catching up, and if it does it will because it spend a LOT of money, chopping up those margins.

Hence the prophetic, yet lonely and controversial piece from two years ago - Apple on the Margin, as well as Evidence Of Apple's Margin Compression Crops for its tablets.

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matrix2012's picture

Long Live iJoy, iMusement, iEverything...



Aldous Huxley vs. George Orwell: "Amusing Ourselves To Death"


“Amusing Ourselves To Death” is a very cool infographic showing a comparison between Aldous Huxley’s view of the future from “Brave New World” and George Orwell’s fears or vision expressed in “Nineteen-Eighty-Four”. Enjoy!

It looks like that Huxley, not Orwell, was right!

Btw... violence and pornography are both rated R in the movies. Triviality and captivity are one and the same. Quoting The Usual Suspects “The best trick the devil ever pulled was to make us believe he doesnt exist.” Triviality conceals its intentions of having us captive day and night in an iPad, PC, Android, etc. Both books are great. 1984 laws of Ignsoc are brilliant. Ignorances is strength, War is peace, Slavery is freedom. It all comes down to that.

fiddler_on_the_roof's picture

I will sell Apple stock when Reggie finally says to buy.

Apple is going to destroy google, once it rights it's map and finds an alternative for youtube/google.


Reggie has to think about how the "new aple fanboys" started. we were fed up with buggy/slow Windows till 2007.

Then we had a chance to try iphone and never want to go back to anything else - we had been traumatized enough. Then I tried the Mac after the iphone introduction and loved it too. Now we love the walled garden - "it just works". Maps will be crowd sourced and fixed soon. I like the turn by turn in apple maps compared to no such feature in old google maps.

alien-IQ's picture

My favorite thing about GOOG is the truck-load of money they're gonna have to shell out to VRNG.

Zero-risk bias's picture

Personally, not picking any sides at this stage. Going forward, I can see a number of value issues with both.

matrix2012's picture

N--S--A is the ultimate winner, whether it's AAPL or GOOG that sells more iStuff or Android stuffs... both parties make it easier for tighter control and wider tracking...

The agency won't be happy to see such national network erected by Iran... a bad example for other nations!

SoundMoney45's picture

Stock valuations are driven by market share, product market momentum, stock market momentum, PE ratios, product barriers to market entry, and emotion.  Google and Microsoft are pulling all the stops to gain share against the iPhone, including seemingly unlimited blogging budgets.  The carriers also do what they can to limit iPhone market share.  

So for product sales, on one side we have Apple, and on the other, Google, Microsoft, and the various carriers. Consumers then choose a product.

You have to admit, it is humorous when customers ignore the bloggers and buy the iPhone, causing the bloggers throw a fit.  

Isn't it a bit odd that a bank analyst is attempting to analyze consumer product features?

TicoTiger's picture

Years before the first Iphone arrived on the scene Mac chipped away at the Windows overwhelmingly dominant market position by developing a far superior operating platform not dominated by the underlying DOS dinosaur that Windows kept going for so long. Many professional users (esp. graphic designers) left Windows years ago. Luckily for Windows, there are still many more computer sheeple than intelligent users. Speaking of operating systems, don't look now but Linux is catching up slowly with more than 1-million programmers working to support a truly Open Source, rather than a proprietary operating system like either of the two current giants. Does that bode well for a never-ending Apple stock rise?  

Regarding the newest IPhones, they are very beautiful and still very fine but my personal opinion is that Samsung Galaxy III is now the better device technologically speaking, and their market share is reflecting this. Reggie's comments regarding Google and the Apple maps app are correct. There are other problems as well under the hood of that shiny gadget, and that takes time and lots of money to correct. Technology may or may not be happy to remain unchanged while Apple catches up with the world.

Of course, Apple evangelists need only say over and over again "My Apple, right or wrong." Technicals are more important than fundamentals in the short term and since I no longer play in what is laughingly called the stock market, I don't really care how high Apple stock goes. I stick with fundamentals like food, metal coins, and farm land.

Smiddywesson's picture

For one moment, let me be serious:

#1:  On the front end of a trend, fundamental arguments don't work before the fundamentals can be known.  Unfortunatley, at the bottom, only insiders and big sugar daddies like Peter Lynch's Fidelity Magelan get that information before it's released in a company report.  In that case, you have to rely upon technical analysis to gauge what the insiders are doing.

#2:  Once that information can be known, fundamental analysis works just fine in taking known facts and discovering where convential wisdom is wrong.  This is where fundamental analysis is king (for people who aren't named Warren or Peter, they get the data at #1).

#3:  Fundamental analysis also doesn't work on the back end when the public is pushing a stock, because they are all jackass momo chasers and can keep a stock moving up as long as they believe what they believe.  Technical analysis is king here, because the fundamentals don't matter to the public, and numbers are most likely to be manipulated at the end of the run when companies are the most desperate (Enron, Global Crossing, etc.)

I think Reggie's critics are ignoring the obvious.  Reggie is an expert at #2, taking known facts that are being ignored by the public and figuring out what's really going on.  Unfortunately, we are already in situation #3, where his talent is being wasted, because convential wisdom being wrong IS WHAT IS DRIVING THE STOCK.   


williambanzai7's picture

"Hence the prophetic, yet lonely and controversial piece from two years ago"

I don't own Apple Stock. I do own Apple products.

But I recommended the stock to a few happy people a little over two years ago for reasons having nothing to do with hedge fund behavior. Market experts are now saying the "Apple opportunity" was a once in a lifetime kind of stock pick, unlikely to be replicated any time soon.

Hmmmmmm. I'll put that one on my mantle.

Just an update. The iPhone 5, is drawing a grey resale mark up of 2-3000 HK in the box. That is insane. The amazing thing about it is Chinese don't typically view luxury goods made in China as status symbols.

dogbreath's picture

iphone 5 smells like windows vista

golfrattt's picture

Just another bullshit rant from this idiot, and typical

Typical glut of information we don't need, self serving garbage..

Christ, listen to Cheynos, Bass, even that Cramer idiot. It takes them 10 seconds to present a case to explain their positions and why

Reggie, you're just typical of your fellow brotherman that I run into every day in inglewood and Compton

Just selling your crap, nothing more. I'll never forget seeing you on Cnbc. You sat there like an idiot who had walked into the wrong room and knew he didn't belong there. You're just a traveling salesman that found the Internet. Yo, Reggie. Wassup??

Smiddywesson's picture

Apple is going to produce enough shiny white gagets to reflect the sun's radiation and end global warming. 

Of course, that will start a new ice age, but think of the market share in iSnowshoes, and iDogsleds! It's a whole new paradigm.

If you liked Apple at $700 a share, you'll love it at $1400.

falak pema's picture

I love RM in his role of champion for the intelligent underdog.

Only question is : Are Google, Microsoft, Samsung, Amazon underdogs? 

We are seeing the makings of a huge Internet and mulitmedia personal gadget market fisticuffs that will be the benchmark for the post industrial information age feudalista monopoly play, as to who is Pope and who is heretic. 

Smiddywesson's picture

Yes, yes, yes, but when?

On the one hand, Apple has a heck of a lot of cash and seemingly no end of customers who want its products.  On the other hand, I agree this is ridiculous, but that is also irrelevant.

VHS beat out Sony Beta, which was a superior product, so I don't want to hear that there are other, better products out there than Apple's.  Apple goes down when the bubble gets pierced, and that has nothing to do with common sense.  Facts are irrelevant in the land of skittles and unicorns.

mogga71's picture

Blinkin heck Reggie ... put a sock in it ... this is getting embarassing.

The other day you were harping on about how poor the new iphone's screen was in comparison to an Android phone in that it wasnt even 1080p...... hello ... 1080p on a 5 inch screen ....... like you are ever going to notice the difference.

And what low and behold ... today an independant review comes out which say the iphone 5 has the clearest display ever on a phone.

You have been complaining about Apple being overpriced from about $450 ... when they collapse at $800 you will likely say 'told you so'


alien-IQ's picture

Reggie warned it was over priced at $450, now that it's at $700 he has been proven right...on his planet.

It is indeed a dizzying intellect that can arrive at such a conclusion.

GFORCE's picture

Keep tearing these bums apart Reggie!

adr's picture

When a company adds about $400 billion in market cap over the hype for its next phone, and that phone doesn't sell as well as its last device over the same time period. I'd say that warrants complaint.

mrktwtch2's picture

reggie.your blog is usually very informative but you totally blew it on apple have been preaching doom in this stock since it was 500 and now its 200 pts in your face..just admitt you missed this one and move on to the

alien-IQ's picture

are there really no other bones to chew on bowzer?

surely there are companies far more fucked up and less profitable than AAPL for you to rampage against.

This has breached comical and entered into the realm of surrealist farce.

Spastica Rex's picture

America loves a winner, especially a winner who succeeds through marketing and brand identification. Remember Microsoft about 15 years ago?

oddjob's picture

Google Bias in your blog Has Simply Gone Too Far, Potentially Hoodwinking Investors Into Believing the stock market is a safe place to invest.

alien-IQ's picture

with this AAPL/GOOG diatribe, Reggie has become what he so often rants against: Just another "analyst" talking his book.

Shevva's picture

Hey the phone maybe inferior in every way but it still has an apple icon on the back so what more do you want? high speed broadband with flash?

Temporalist's picture

Reggie don't you know that Apple is going to save the world?  It will raise GDP and all boats with it.  It will cure cancer and solve world hunger and then poverty followed by war and autisim and heart disease and climate change and make pest resistant crops that aren't genetically modified and also return all the money/equity/savings/income lost over the past 40 years plus it will also make people smarter and better looking as well as thinner and more interesting to converse with.


Or didn't you hear that on CNBC, Doomborg, Fox, NBC, ABC, CBS, CNN like the rest of the world?

Skateboarder's picture

Something tells me that despite all failure, we will see a NASDAQ rebalance as AAPL magically shoots past 24% somehow. Maybe Q1 FY13, if we don't all perish in December from alien takeovers or someshit like that.

buckethead's picture

" I fight back with the Anti RDFun (Reality Distortion Field Ultimate Nullifier)"


I had one of those made up by a guy with a 3D printer at a Star Trek convention.