It Can’t All Be True

http://daringfireball.net/linked/2013/04/22/lg-wsj-reuters

by shawndumas • 13 years ago

63 45 13 years ago

Perfect example of just how crazy reporting on Apple has gotten.

In this specific case, yes... but stepping back, isn't this just as likely to be different 'journalists' doing the same non-Apple-specific thing -- skewing their reporting to suit either their assumptions or biases -- as it is to have anything at all to do with Apple?

podperson• 13 years ago

I agree that it's mainly just the usual incompetence / laziness / sensationalism / narrative bandwagon jumping we see in all aspects of press coverage magnified by Apple's increased prominence, but there's also some kind of weird press interest multiplier effect possessed by Apple.

jluxenberg• 13 years ago

So Tim Cook's response to media predictions about the build can be reduced to two words; "no comment"

schiffern• 13 years ago

If you're going that far, why not reduce it to zero words?

127001brewer• 13 years ago

My interpretation is that it's (nearly) impossible to predict a company's revenue based on the various, and sometimes disparate, signals in the supply chain.

It's like asking a single potato farmer to predict how well Utz potato chips will sell this summer.

endersshadow• 13 years ago

As somebody who's built analytics around a few massive-scale consumer goods companies, let me tell you: If you think you understand a company's supply chain as an outsider, you don't know the first thing about supply chains.

StevenRayOrr• 13 years ago

I think that Tim Cook's response is more akin to "respect the complexity of what we're doing here". And could further be taken to speak to the complexity of what any tech company is doing. It's probably hard enough for someone in Tim Cook's position to know the consequences of bumps in the supply chain, let alone some random commenter on HN...

gfodor• 13 years ago

No, more like "ignore analysts."

mattmaroon• 13 years ago

If I were an Apple shareholder that statement from Cook would make me feel worse. "iPhone sales are up over a year ago" or something concise, factual, and upon which I could base a lawsuit if it turned out to be untrue would be great. What he gave was a non-response that would make Donald Rumsfeld proud.

moakleaf2• 13 years ago

They report # of phones sold for each quarter, so not much point in repeating "sales are up".

Reporting stock sensitive information (like "sales are up") should also be done via a formal press release.

I think he did the right thing; He tried to dismiss all current and future rumors with one statement.

TC may not seem like the most convincing speaker, but he is not stupid, and he is a brave man for walking in Jobs' shoes, firing Scott Forstall (father of iOS), apologizing for the Apple Map issues etc. I wouldn't change places with him.

Right now the investors are trying to figure out if some of his risky actions are generally smart or stupid... That's why the stock is down. Risk!

qdog• 13 years ago

It could be true, it's just poor writing. LG had declining profits, Apple is still buying screens in some quantity. The first article on mentions tablet screens, the second article groups both ipad and iphone screens. This supplier might be seeing an increase in ipad screens and a decrease in iphone screens.

In other words, not enough information in either snippet on DF.

btilly• 13 years ago

Remember, journalists are always biased for the story. Given a piece of information, it is the journalist's job to come up with an exciting interpretation of that event, and present it in a way that will make their audience respond.

The raw facts are rarely exciting enough, and therefore journalists always put a spin on it. Which way, doesn't matter. But a journalist can be depended upon to have somehow spun it to be more exciting. (All the while pretending to be neutral.)

adventured9• 13 years ago

I think Gruber is in denial over the weakening fortunes of Apple. The writing over Apple hasn't gotten crazier in my opinion, just more negative (and I think it's appropriate).

They were the world's most valuable company and they run it like a black box. They do a terrible job of communicating with shareholders. I think that has been responsible for some of the $300 billion in value Apple is missing these days (and the 9 pe ratio).

The market wants to know: what is Apple going to really do about competing with Android / Samsung / Kindle Fire / very low cost, high value smart phones and tablets.

Can Apple retain a healthy ecosystem (apps, music, media) with 5% of the global market? 10%?

Android has become a near monopoly in smart phones, squeezing Apple into an increasingly smaller corner of the market. The same thing is going to happen in tablets, if only due to price / selection alone. Eventually this compression will begin stealing value from the company and not just slowing down their growth rate. Most forecasts are pegging them to declining profits and drastically slowing sales. Is that crazy writing? No, it's a negative view on the company's prospects.

mwfunk• 13 years ago

"Most forecasts are pegging them to declining profits and drastically slowing sales."

Citation needed, and sensationalist analysts don't count.

adventured9• 13 years ago

How about the entire industry, does that count?

"The average earnings estimate among the pros this quarter is $10.01 per share, 19% below last year's $12.30. The indies are looking for $10.55 (down 14% year over year). The median EPS: $10.10 (down 18%)."

http://tech.fortune.cnn.com/2013/04/21/apple-earnings-revenu...

moakleaf2• 13 years ago

Android is not becoming a monopoly...

Android's market share is larger than the iPhone, but iPhone's market share is still growing(!), and it is still quite significant.

I think a lot of the negative sentiment comes from the fact that people think that the iPhone (as a platform) was number one at one point, and is now number two in market share. At the same time people think Android is one phone. Neither of these statements are true.

The best selling phones are still iPhones.

Android is not a single device or company but a highly competitive market by itself. It is really really hard to compete on that market, because you need something to stand out of the crowd. It is also really really hard to be innovative, because everyone has access to the latest version of Android OS, and in today's market, pretty much everybody has access to the underlying hardware. The only thing that matters is if you can squeeze your supply chain enough to get a large enough profit. This is where both Samsung and Apple have reputations of being very strong -- For different reasons.

In reality, most customers don't really care that much about megapixel count, number of CPU cores, memory, etc.

So as an Android phone-maker, the only place to really distinguish yourself is by custom "home-screens" and exterior design. Exterior design is difficult.

A couple of months ago Samsung was the only company profiting from Android phones. Apple still takes the majority (more than half) of the smartphone profit. I don't know if either of that has changed in the last quarter (we'll see).

But Android is not a monopoly it is a lot of different manufacturers fighting over around 50-70% of the market share with very similar products. Samsung has the majority of that market.

The currently only major alternative to Android, iPhone, on the other hand is made by one company.

adventured9• 13 years ago

Android is becoming a monopoly in the same respect that Windows ever was. It's no different for Android running on multiple hardware vendors, ala Dell / HP / Compaq / Gateway / etc etc back in the day. It's the market consolidating around a standard.

Android is going to take 85%+ of the global smart phone market. There's absolutely nothing that can or will stop that from happening at this point. It's going to be the obnoxious standard that everybody is going to complain about for the next decade.

The iPhone's market share will stop growing this year. Android and the iPhone have squeezed out most of the serious competition, and now their market share lines are going to run head to head. Android will win that battle, and begin pushing the iPhone's market share backwards within four quarters.

Apple's approach was always going to guarantee it got boxed into a corner. It's a +/- to their approach that they can start new markets, and then lose them fairly quickly.

That's my opinion.

sneak2• 13 years ago

Yes, we all read DF too. A for comprehension, B- for essay.

LekkoscPiwa2• 13 years ago

You said:"The market wants to know: what is Apple going to really do about competing with Android / Samsung / Kindle Fire / very low cost, high value smart phones and tablets."

Somehow, the answer is obvious to me. Continue making superior products. Apple creates expensive better desktops and laptops than Win/Linux/Lenovo/Samsung that do it at very low cost. That's how it won that market. That's how it's going to win smartphones/tablets. I switched from iPhone4s to Galaxt S3. Can't wait to switch back. If I can compare the experience to anything it would have to be akin to switching from Mac OS X back to Windows Vista/7/8/whatever. After 4 years of using iPhone I wanted a change. Now I just want a smartphone that doesn't suck. And it's not only me. People will keep buying BMWs even though there are cheap/better alternatives like Toyota. Once you got spoiled by BMW handling or iPhone user interface, you won't simply go back. Unless you're tired of buying product from the same brand all the time, so you will switch, get disappointed (like me!) and then switch back again. Look at S4 sales and reviews. People just wanted the change and Samsung did a great job with marketing S3 and got lucky with timing too. At that point last year people were just tired of iPhone, they wanted something new. They got it. They discovered it sucks. And big news for you - they will go back to Apple. There is now way in the world I'm going to purchase an Android device in the near future. And there is no way I'm going back to Toyota.

adventured9• 13 years ago

I believe Apple can absolutely hold onto some market share with their model, assuming they keep making great products.

But how much market is that? 5% won't facilitate the network scale they need to encourage developers to focus on their app ecosystem. And as the iPod sales continue to evaporate, Apple will lose its music dominance to the smart phone market (which would remove another key moat in their overall ecosystem).

The question in my opinion is, how much of the smart phone market can Apple retain. If it's 5%, they're screwed. If it's 15%, I think that would work.

sinnerswing2• 13 years ago

Android is the new Blackberry/Nokia. Lots of "worthless" market share. Apple earns more revenue selling accessories than Google earns with Android.

"Google-Oracle trial: Android revenues revealed"

http://www.guardian.co.uk/technology/2012/apr/26/google-docu...

"..after the costs of sales, marketing, engineering, product management and legal expenses were taken into account, the overall Android division was not expected to become profitable until 2011, by which time it was forecast to generate nearly $500m in adverts."

"Apple's iTunes & accessory sales now greater than every other phone vendor but Samsung"

http://appleinsider.com/articles/13/02/11/apples-itunes-acce...

http://appleinsider.com/articles/13/01/28/apple-now-collecti...

"...For all of fiscal 2011, Apple is now noting that it actually collected...$4.47 billion from accessory sales. "

adventured9• 13 years ago

I would wager that within two years Samsung will be making more money on smart phones than Apple. Apple's profits are going backwards now, while Samsung is growing very quickly. I believe that's a trend that will continue.

Microsoft earns a lot more selling Windows and Windows server and surrounding products than all of the Linux vendors make supporting Linux combined (Redhat makes a mere $100m a year in profit for example).

Does that inherently imply anything about Linux? No.

What you're talking about is today (regarding Apple's profits). What I'm interested in is the trend of Android taking most of the market and what that'll mean in five years for Apple and the Android vendors. What it'll mean is: much like PC sales, Android sales will be dominated by 2 or 3 primary companies, with dozens of other vendors attempting to compete.

My opinion is that Apple is about to get hammered as the iPhone's market share collides with Android and loses. I believe within eight quarters their profit will fall from $40x billion to $25 billion annually, and they'll lose 1/3 of their existing market share while margins also keep falling.

cscurmudgeon4• 13 years ago

As a business, Apple is in a neat spot.

http://techland.time.com/2013/04/16/ios-vs-android/

The Time says it best.

So who is winning — iOS or Android? Android if you’re talking about market share; iOS if you mean financial success. So far, this is a strikingly different market than the PC business back in the 1990s, when market share translated directly into financial success.

Repeating myself again.

Don't compare the smart phone market with the PC market. The PC market is completely different... any analogy here does not rest on sound financial first principles. Market share by number of units has not translated to market share by profit. The former is useless.

adventured9• 13 years ago

That's today. And I believe it's a false sense of context because markets are momentum driven and the reading is all going by what Apple made in the last 4 to 8 quarters (rather than what's about to happen in the next few years).

Does the profit machine hold so well if you have a declining market share? (in which case there are dramatic follow-on consequences in pricing power with suppliers, margins in dealing with carriers, in app ecosystems, you name it).

I don't think it will hold up. I believe there's very likely a market share line in the sand, that if Apple gets pushed below it, there will be terrible profit consequences.

collypops2• 13 years ago

What excellent advice. Let's just trust that we're getting balanced statements about Apple from the CEO of Apple.

fusiongyro• 13 years ago

That's not what's being said. What Cook is saying is just that their numbers are not easy to guess from maker-of-subcomponent-A's numbers. Finding Apple untrustworthy doesn't somehow make gossip suddenly trustworthy.

collypops2• 13 years ago

> Finding Apple untrustworthy doesn't somehow make gossip suddenly trustworthy.

I wasn't implying otherwise. The point I was trying to make is that, although Apple undoubtedly know more than any journalist looking to spin a yarn, it doesn't mean that public statements by their representatives share any of that insight.

stephen_g• 13 years ago

It's pretty sensible advice really (don't make simplistic extrapolations from reports of probably inaccurate estimates of order changes in an incredibly complex supply chain).

Seriously, journalists and analysts have been jumping on these kind of reports for years, claiming that they prove Apple is "losing their lustre" in whatever market, and most of the time Apple have reported record profits for that quarter... Traders seem to be taken in by them hook, line and sinker but I'd take it with a grain of salt...

It Can’t All Be True

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