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Stock briefly dips below $400 USD, analyst predicts earnings miss

After quarters of confounding Wall Street "expert" analysts with better-than-expected earnings, could Apple, Inc. (AAPL) be on the verge of a highly uncharacteristic miss of its own earnings target?  That's what Citigroup Inc. (C) analyst Glen Yeung predicted in his research note, citing supplier information as pointing to weaker-than-expected iPhone and iPad sales.

That prediction has been boosted by Cirrus Logic Inc. (CRUS), which provides audio chips for the iPhone and iPad.  Cirrus warned investors Wednesday in its fiscal fourth quarter earnings results that its margins had weakened and that it was taking a large charge on unsold inventory of audio chips.

Cirrus's chip stock fluctuates primarily with the sales of its largest customer Apple's devices.  Thus the large stock of unsold chips indicates weak sales of Apple's flagship devices.

Vernon Essi Jr., an analyst at Needham & Comp. told The Wall Street Journal, "[The warning] indicates that the recent fears of Apple's lackluster iPhone demand...are warranted."

Since the passing of iconic leader and late CEO Steven P. Jobs, Apple has continued to grow steadily under the quiet leadership of new CEO Tim Cook, but some fear the company is losing its marketing luster.  Apple's faces tough competition from Android rivals -- particularly Samsung Electronics Comp., Ltd. (KSC:005930) and Google Inc. (GOOG) -- who have been more aggressive in updating their products' hardware and software.

Tim Cook
Apple CEO Tim Cook has voiced concern about his company's plunging share prices.
[Image Source: Bloomberg]

Apple, which last year bumped the screen size of its iPhone to 4-inches, has largely been coasting on a "if-it-isn't-broken-don't-fix-it" approach to its operating system.  While sales were strong last quarter, investors hammered the company's stock, concerned about weakening margins (profitability).

For a while it looked like $420 was a solid floor that the stock would resist breaking through.  But amid the supplier warning Apple's stock plunged briefly below $400 USD.  It is currently trading around $403 USD.  Apple has lost over a quarter trillion dollars in market capitalization over the last half year, since hitting a record $700 USD per share last September.

Overall, the tech sector was down on Wednesday, but Apple's stock sunk more than most, dipping over 5 percent on the bad news.  Rival Google Inc.'s (GOOG) stock is trading around $780 USD, down ~1.5 percent.  Google's market capitalization is currently around two-thirds that of Apple, as its stock hovers around record highs of $800 USD per share.

Source: Cirrus Logic [press release]

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RE: Poor, poor Tony
By retrospooty on 4/17/2013 3:46:03 PM , Rating: 4
"OMG! Apple shares are back to above the value they were when Steve Jobs died. This means………er……….not a lot."

The key thing here you are purposely ignoring is that sales are weak and earnings are expected to be lower. Just as everyone has predicted. Again, not that Apple is doomed, but the free ride is over. They need to work for it now.

Meanwhile, Google is firing on all pistons with 1.5 million activations a day =)

RE: Poor, poor Tony
By Motoman on 4/17/2013 4:26:06 PM , Rating: 3
"OMG! Apple shares are back to above the value they were when Steve Jobs died. This means………er……….not a lot."

...what he's saying is that the difference between $400 and $700 is "not a lot." You know...because cutting the company's market cap nearly in half really doesn't matter. I mean, who cares what the company's worth? Like that matters to anybody.

<and for those of you who are retarded.../sarcasm>

RE: Poor, poor Tony
By retrospooty on 4/17/2013 4:40:29 PM , Rating: 2
LOL... Yup, and this is with the latest round of 5 inch Android flagship phones just barely getting to market. Its going to be an interesting quarter.

This really has to burn Tony's sad company driven ego... Its got to hurt when you have so much of your own self worth tied up in a company of all things...

See Tony spin. Spin Tony Spin.

RE: Poor, poor Tony
By Mitch101 on 4/17/2013 5:28:09 PM , Rating: 1
Not for nothing but Google is capable of Fail also. I see a lot of fainbois touting how poor Windows RT sales were but completely ignore Chromebook sales.

in nearly two years on the market, all of those Chromebooks have achieved a smaller percentage of usage than Windows RT earned as of January 2013

Im not sure Android would be where its at without Samsung and Samsung is getting into a lot of trouble lately.

Samsung HQ raided over alleged theft of OLED technology

Thare many companies saying Samsung is stealing IP not just Apple.

Also being HQ in south korea with north korea close to being at war with the south is not a good position to be in.

My point being without Samsung where is Android then? The point is Google might be on top of the world right now with Android but its also very volatile.

Also Apple and Samsung should Beware of Nokia

Nokia EOS could be first quad-core Windows Phone
And don't forget that mega 41MP camera
The EOS will arrive with a microSD slot - which will be music to a lot of people's ears - plus a microHDMI out and FM transmitter .

RE: Poor, poor Tony
By retrospooty on 4/17/2013 5:44:05 PM , Rating: 2
Nice... I read from a tech blog somewhere that WP8 should support 1920x1080 res by the end of the year too... I would be very interested in a large screened WP8 phone with higher res than 1280x720.

RE: Poor, poor Tony
By Mitch101 on 4/17/2013 8:34:53 PM , Rating: 1
A 5 inch screen doesn't need 1080P its like falling in love with the specs instead of the ability. 1080P video would also consume a ton of memory just a waste.

RE: Poor, poor Tony
By retrospooty on 4/17/2013 8:49:20 PM , Rating: 5
Speak for yourself... 720p on a 5 inch screen is OK, but you can still see pixels and more importantly, I need more screen real-estate to log into servers remotely.

RE: Poor, poor Tony
By Mitch101 on 4/17/2013 9:04:59 PM , Rating: 1
Lies make baby Jesus cry or you hold the phone about 3 inches from your face?

Do We Really Need 1080p Displays on Mobile Phones?

In human eye, closest focus distance is roughly 3 inches. If you take a retina display that close to the eye, you will be able to distinguish pixels. If you do the same test with a super retina display, still you can’t see distinct pixels. In other words you have no way to see separate pixels with naked human eye.

Major Disadvantage of 1080p 5 Inch Displays

After reading above you must be having a wow feeling about super retina displays. But everything comes with a price. They are power hungry and drains out the battery in no time. After all there is nothing to be surprised of. They wrap up same amount of pixels as HD TV in your living room.

RE: Poor, poor Tony
By retrospooty on 4/17/2013 9:16:03 PM , Rating: 2
"Lies make baby Jesus cry or you hold the phone about 3 inches from your face?"

I dont know what your smoking, but you CAN see pixels on 5-5.5 inch 720p phones very clearly and again, 1280x720 in very restrictive when logging into remote servers. is 1080p overkill? Maybe a bit, but there arent any options between 720 and 1080. 1440x900 would probably do fine. Again, if you dont want it, dont buy it.

RE: Poor, poor Tony
By Mitch101 on 4/17/2013 9:18:29 PM , Rating: 2
I have a 110" projection TV and sit 15ft away from it and I cant see the pixels so I doubt a 5" screen held at 15 inches Im going to see the pixels or care. If its quality worth watching Im going to watch it at 110" not 5". You don't see movie theaters handing out 5" screens to watch.

RE: Poor, poor Tony
By retrospooty on 4/17/2013 9:41:19 PM , Rating: 2
If you dont see them and dont care then dont buy one. I need more than 1280x720 for productivity sake 1st... 2nd I like sharper picture quality. clearly alot of people want that, becasue every high end phone announced this year has it, so they can ALL be for me (although, I do have that fantasy)

RE: Poor, poor Tony
By Reclaimer77 on 4/17/2013 9:18:04 PM , Rating: 2
Do We Really Need 1080p Displays on Mobile Phones?

Do we really not want them?

Your question is academic. We've had 1080p screens for a while now, they are here. They're never going away. Debating their usefulness is pointless.

Technically we don't "need" 1080p televisions either. But viewing things in native res is kinda nice.

RE: Poor, poor Tony
By Mitch101 on 4/17/2013 9:19:59 PM , Rating: 2
Your comparing something that is 5 inches in size. We might as well say we need 4K 5 inch screens just because in a few years that will be the native resolution of our TV's.

RE: Poor, poor Tony
By retrospooty on 4/17/2013 9:54:43 PM , Rating: 2
Clearly YOU dont want or need it, so why dont you just leave it at that. If you are happy with a 5 inch 1280x720 phone, then good for you. Enjoy it. I want something better and I CAN see the difference nad I CAN utilize the extra screen real-estate for logging into work remotely so STFU and minjabidnitz.

RE: Poor, poor Tony
By Mitch101 on 4/17/2013 9:57:34 PM , Rating: 2
LOL Have a good night retro.

RE: Poor, poor Tony
By retrospooty on 4/17/2013 10:02:20 PM , Rating: 2
=) you 22 man...

RE: Poor, poor Tony
By Spuke on 4/18/2013 12:31:39 AM , Rating: 2
so STFU and minjabidnitz
That was funny!

RE: Poor, poor Tony
By Motoman on 4/18/2013 12:34:35 AM , Rating: 2
I've made it eminently clear that I think spooty's full of it on the resolution issue.

But...seriously. Props for "minjabidnitz." I'm so proud!

<sniffs and cries a little>

RE: Poor, poor Tony
By inighthawki on 4/18/2013 2:41:07 AM , Rating: 2
You seriously log into work remotely on a 5" screen? What do you do on it?

RE: Poor, poor Tony
By retrospooty on 4/18/2013 11:28:53 AM , Rating: 3
Check status of server backups, reboot a problematic server, terminate users if a call is sent out to cut off access immediately. Whatever need arises. It's a major asspain to do it with only 1280x720. That and you CAN see pixels on 5inch+ phones. Go look at a Nexus 4, or Note2, or One X or any other phone in that range. It can get sharper, and todays phones are even bigger (except of course the Note2)

I love how so many people are against the fact that I want more than 720p on a smartphone. FFS, every high end smartphone announced this year has 1920x1080 res. Like they all got together and made it all for me. I am the only person that wants higher res. FFS, if you don't want it don't buy it. I do want it and will buy it. If you are buying a high end phone in 2013 or later, your getting 1080p anyhow because that is what it will have.

RE: Poor, poor Tony
By wifiwolf on 4/18/2013 5:36:39 PM , Rating: 2
My galaxy Note is mostly used to be able to see websites without having to zoom a lot and remote login to servers and workstations everyday and I agree just a bit more resolution would be ideal.

RE: Poor, poor Tony
By inighthawki on 4/18/2013 7:02:04 PM , Rating: 2
I think the largest issue is that for 99% of consumers, 1080p is overkill, and having it only drains the battery much faster - requires a much stronger backlight for the same brightness level and more power graphics processing to run the OS smoothly. For people like you this is probably fine, since you are likely aware of these issues, but a great deal of people don't know better. People tend to just see numbers. "Oh this one has a higher res crisper display, it's obviously better," but then may get confused why their battery life is a few hours less than before, or barely lasts a day.

So I think the opposition you are facing is not because people are just against it, but because such a higher resolution display benefits a tiny minority in exchange for a cost that hurts a vast majority, considering most people care more about the battery life on their phone than whether it's 1080p or 720p.

Personally I still have 480p WP7 device, but the text rendering is pretty nice so I rarely actually see individual pixels. 720p might be a nice upgrade, sure, but like many I do not use my phone for tasks like you do, so a super high res isn't that necessary.

I guess I'm the kind of person who would rather have a tablet or laptop for that kind of thing. I use my phone almost exclusively for calls, texting, and checking (rarely writing) email. Occasionally a little web browsing or searching, but usually if I need anything important I will just use a larger device, as I find the web browsing experience on phones of be abysmal at best.

To each his own.

RE: Poor, poor Tony
By Reclaimer77 on 4/18/2013 7:10:48 PM , Rating: 2
OLED (Samsung) based displays have no backlight. The battery drain difference between rendering 1080p from 720p is negligible. At best.

I think the largest issue is that for 99% of consumers, 1080p is overkill

How magnanimous of you to speak for "99%" of the entire population.

"Oh this one has a higher res crisper display, it's obviously better,"

And they would be right. Newer halo phones with 1080p displays ARE objectively "better" than the last generation. That's kind of how technology works you know?

So I think the opposition you are facing is not because people are just against it

There is no opposition to it. And I'm basing this on sales numbers, a tangible fact that's hard to deny.

What we're hearing are a few holdouts who, for whatever reason, just don't "get it". And are spreading a bunch of FUD and general Luddite talk.

Personally I still have 480p WP7 device, but the text rendering is pretty nice

^Case in point^

If you spent a week with a 1080p smartphone, it would be impossible for you to objectively state you would want to go back to 480p. There's just no way.

To each his own.

Umm didn't you just speak for "99%" of everyone though?

RE: Poor, poor Tony
By retrospooty on 4/18/2013 7:34:32 PM , Rating: 2
"If you spent a week with a 1080p smartphone, it would be impossible for you to objectively state you would want to go back to 480p. There's just no way."

Exactly... I encourage anyone to walk into a Verizon store tomorrow and compare the Droid DNA screen to others. Take a look at any other 720p Android of the same size and throw in the iPhone5 as well. If you cant see the quality difference then please have your eyes checked before driving.

RE: Poor, poor Tony
By Flunk on 4/22/2013 9:07:40 AM , Rating: 2
Are you one of those people who swears they need 100fps in games or they get headaches?

RE: Poor, poor Tony
By sorry dog on 4/20/2013 1:01:02 PM , Rating: 2
Maybe not, but last week wifey's 2 year old HTC phone bit the dust so time for a new one. Now bear in mind that she anti-techy and is into Mommy stuff like playdates with other moms and horse trading purses on the local trading site.

At the T Mob store the new Iphone5 stand and the Galaxy phones were right next to each other. I tried to steer her towards the almost reasonably priced LG phone with a 4" screen, but after briefly handling each phone she of course gravitated to the Galaxy 3. Why?, it had the biggest best screen of course. Her rational being that she could more effectively trade emails with other parents over future plans that include my involuntary labor.

The Iphone wasn't even in the running... 1080P, dual core this, and 1.5 gig that....doesn't matter to a lot of people. It's what their friends have and how it appeals to them in the store.

RE: Poor, poor Tony
By Reclaimer77 on 4/17/13, Rating: 0
RE: Poor, poor Tony
By Mitch101 on 4/17/2013 8:59:22 PM , Rating: 3
So are you posting from the only Chromebook sold?

I think there might be more Apple Lisa's sold and still in use than Chromebooks. So lets mock Microsoft for a product that didnt do well but turn a blind eye to how Surface RT outsold the Chromebook thats been out for a much longer time period and lets not forget how were all using Google TV too right? Another winning product that changed everyones lives cant wait till Google TV2 to take over the world. Lets not bring up those winners but instead focus on Microsoft entering a competing and established marketplace and starting to gain ground in the Mobile Phone sector especially oversees.

Samsung makes a good product I will give you that but without Samsung Android is next to non-existant.

Does the Nokia upset you that the specs will be as high as the Samsung S4 but with a much better camera and probably a few better bells and whistles? You say you dont worry about it but Im sure you will have a lot to say about the device when it comes out.

Is solar charging coming soon to Nokia Lumia handsets?

You should be afraid of Nokia they hold all the patents and are innovators.

RE: Poor, poor Tony
By Reclaimer77 on 4/17/13, Rating: 0
RE: Poor, poor Tony
By Mitch101 on 4/17/2013 9:47:31 PM , Rating: 1
Everything google does is BETA or a lark its a poor excuse for we didn't fail because we didn't take it seriously excuse. Your making excuses for Chromebooks and Google TV and everyone knows Google wanted Google TV to work its like Apple saying Apple TV was a hobby but realistically both would die to own a major piece of that Market and neither will admit they have failed to capture the market.

Windows is not the only product Microsoft makes so what if they don't win in one category who cares heck you can say Microsoft failed at MS Money beating out Quicken. Rarely can you say Microsoft got beat in a category. Even when Android Wins so does Microsoft because they own the patents and before someone cries about that Google would do the same so quit fooling yourself that google would play fair with Patents heck just look up Motorola which is Google Patent trolls for mobile.

Windows 8.1 allows you to boot into the desktop nearly eliminating the Metro GUI so Windows 8 will redeem itself in the end just like they redeemed themselves over Vista with Windows 7 if Microsoft lost actual major market share in the desktop then its a disaster but they didnt so please dont act like Windows 8 is the downfall of Microsoft because there is nobody taking up more marketshare in the PC market space.

Sorry your not aware Windows Phone is gaining ground very small in the US but oversees its getting bigger and in several markets outselling iPhone and taking marketshare from Android. Sorry if you wont acknowledge that either it wont be until Microsoft is number one that you acknowledge it even then you will be in denial and yes Nokia is Windows Phone because just like Samsung the figured out how to make devices right if the rest of the manufacturers took the high road instead of the cheap poor quality road looking for dollars they would reap similar rewards. You might be surprised by how much Samsung has to pay Nokia as well as Microsoft.

Sorry there are Millions of us Windows Phone users and soon you might be a generation of hardware behind us. Im looking forward to when Verizon launches a high end Windows Phone and what you will be claiming then?

RE: Poor, poor Tony
By Spuke on 4/18/2013 12:34:32 AM , Rating: 2
You did sound like Pirks there for a minute Mitch. :)

RE: Poor, poor Tony
By Pirks on 4/18/2013 4:06:38 PM , Rating: 2
And that's a gooood thing ;)

RE: Poor, poor Tony
By Reclaimer77 on 4/18/13, Rating: 0
RE: Poor, poor Tony
By Weeblie on 4/18/2013 10:55:11 AM , Rating: 2
No it's just the only one that makes them real money /shrug

Windows isn't even the product that makes Microsoft the most money. The company would still be profitable without a single license of it being sold.

RE: Poor, poor Tony
By Da W on 4/18/2013 10:41:50 AM , Rating: 2
You know you sound like a 12 years old trying to hang out with the cool kid? I mean seriously?

Making fun of apple and Microsoft and being pround of google. seriously? I mean, come on, are you the founder? A shareholder? not even? just a geek with an android phone? yoi know everybody has a Samsung phone right? what makes YOU special then? clone.

RE: Poor, poor Tony
By TakinYourPoints on 4/17/13, Rating: -1
RE: Poor, poor Tony
By Mint on 4/17/2013 7:02:02 PM , Rating: 5
Sorry, but I'm calling BS. I had a conversation with you right here on DailyTech about it being the time to short AAPL when it was $650-700. You actively engaged with me and took the opposite stance.

I'm trying to figure out when to short AAPL.

There may be a bump in the stock price after the iPhone5 announcement or after the initial sales spike, but maybe not. One thing's for sure: The Fire HD is going to put negative pressure on Apple's obscene margins. They won't die, but they'll come back down to earth.

I don't know what this has to do with my post. I'm not saying Amazon is going to make a bundle.

I'm saying that AAPL is going to soon find that it can no longer sell iPads at >50% margins, because they don't have any unique technology. The last major fabless tech company to have huge margins, IIRC, was NVidia. Once ATI released the HD 4000 series, NVidia's margins plummeted back down to reasonable levels. That's what's going to happen to Apple in the coming years.

The Fire HD is just one part of it. Clovertrail tablets will unquestionably also put negative price pressure on the iPad within a year, as manufacturers have built <$300 Atom PCs for a couple years (add screen costs, subtract keyboard costs, and it'll be a wash). With phones, Nokia has the best camera (plus WP8 is looking great), Samsung has the best screen plus they're innovating like mad with stylus integration, apps have virtually caught up on Android, etc. Apple will have a hard time selling such high volumes at a premium. They won't die, of course, but their margins are going down.

You said this:
I think we're years away from potential of the scenario you describe happening. iPad sales will cross 100 million by the end of the year, easy. The iPhone will be the highest selling phone going through the holidays.

Don't fight the trend, not until serious signs of a reversal show. Apple stores are more packed than ever and sales growth for iPhones and iPads have only accelerated.

AMZN is at a scary place right now, especially since it just hit all-time highs.

I dunno, you tell me which companies are overpriced here.
When AAPL was mentioned in response to this last quote of yours, you snarkily dismissed it. As for your worries about AMZN, it was 259 then and is 267 as of this writing. And now you continue to predict its demise.

Now you're trying to save face and act like you made money off AAPL's demise when you were one of its biggest cheerleaders.

As for me, I'll admit that I didn't make money. With all the $1000 talk, I was waiting for $750 before making my move, and chickened when it fell before I bought my options so I thought I missed my chance :(

RE: Poor, poor Tony
By retrospooty on 4/17/2013 8:14:50 PM , Rating: 5
"Now you're trying to save face and act like you made money off AAPL's demise when you were one of its biggest cheerleaders."

Sounds eerily familiar... You can almost always count on the fact that when someone spends this much time on the internet defending a company as many do here, they are very likely full of s$%t.

RE: Poor, poor Tony
By TakinYourPoints on 4/22/2013 7:25:08 PM , Rating: 2
Coming back to this late because retro pointed me to it.

I sold against AAPL by selling call option spreads, but I didn't short the stock because trying to call a top or bottom is insanity. Fighting the trend is a losing battle most of the time.

I didn't short AAPL stock but I did short call option spreads that profited when the stock declined, or more importantly the calls didn't expire with any value. Positions like that can profit even if the stock doesn't go down at all, only goes sideways, or even goes up (which it did during my first AAPL position).

Here were my first trades against AAPL. Both were made about 5 weeks before their respective expirations:

Sold August 665/670 call spread for .70, a 16% return in 4 weeks since it expired worthless with the stock at around $650.

Sold September 720/725 call spread for $1, a 20% return in four weeks.

Note that both of those trades against AAPL profited despite the stock going up. This is why I said I had no idea when to short the stock, but I was still able to profit on it stagnating or make an easier profit if it did turn around.

I made two other trades against AAPL on the way down, one in November and another in February, avoiding it in October and January because I generally don't like to trade around earnings. Both were selling call spreads and not shorts on the stock.

And since you brought up AMZN, I traded against it twice, once in September (sold 275/280 spread) and again in January (sold 300/305 spread), both 15% returns.

I also don't dare short actual AMZN stock. The market can stay irrational far longer than one can be solvent, and AMZN with no earnings is one of the most irrational stocks around.

RE: Poor, poor Tony
By semiconshawn on 4/18/2013 8:15:43 AM , Rating: 1
Wow $15K. Gonna retire on that lie?

RE: Poor, poor Tony
By BRB29 on 4/18/2013 9:00:31 AM , Rating: 1
WTF? 15k? That's pocket change in a stock account. No wonder why you embrace your apple devices so dearly. It's not rocket science to figure out the tech industry if you keep up with the products and news. I made 120k(before tax) from buying AMD at 5.20, 3.65, and 2.12 and selling all my shares at $10.00.

That is a small amount compared to what i made off buying AIG when they were pennies.

You sir are not just full of shit but also poor.

RE: Poor, poor Tony
By TakinYourPoints on 4/22/2013 8:38:37 PM , Rating: 2
15k is pocket change in a stock account. Do you REALLY want to know my total profits last year, or do you expect that I put all my eggs in one basket when I trade?

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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