Warning: The iPhone X Could Be A Problem For Analysts

WARNING: Angry critic of Apple’s critics ahead. Proceed with caution. You have been warned!

On April 30, 2018, Daniel Howley, wrote: “The iPhone X could be a problem for Apple.”

Rhetoric

First, let’s discuss the rhetorical device used both in the author’s headline and throughout the article. The author says the iPhone X “COULD” be a problem for Apple. Well, chocolate chips COULD be a problem for pancakes. Probably won’t be, of course. In fact, they’ll probably make the pancakes DELICIOUS. But they COULD BE a problem. So lets all panic right? Right?

Wrong. Here’s a new rule of thumb for all you aspiring Apple analysts. If you start your article with a headline that says that something “could be a problem”, that could be a problem, and you probably shouldn’t start your article.

Could

And since iPhone sales still make up the bulk of Apple’s revenue, any hit to that could be a problem for the tech giant.

“Could” again, huh? Not hedging our bets much, are we? Why don’t you just write an article that says: “Anything could be anything. We just don’t know.”

Correlation vs Causation

Apple’s stock price has taken a hit in recent weeks, as reports point to lower demand for the iPhone X.

You know who else’s stock price took a hit in recent weeks? Everybodys. The whole market dropped. So are we saying that lower demand for the iPhone X brought down the whole stock market? Or are we saying that the author of this article doesn’t understand the difference between correlation with causation?

The stock market predicts the future in the same way that a weather vane predicts the direction of the wind. So if you think you can tie Apple’s stock price to any one rumor, then you really, really, really need to keep your money out of the stock market.

Supply Chain Pain

Those reports come as Taiwan Semiconductor Manufacturing, which makes chips for iPhones, reported lower than expected guidance for the next quarter

Hmm. A report of lower than expected quantities being ordered from one of Apple’s suppliers. Well, THAT’s never happened before. Oh, wait. It happens all the time.

Lower than expected guidance could mean that Apple is seeing decreased demand for the iPhone X.

There’s that “could” word again. Lower than expected guidance from a single supplier of hardware “could” mean decreased demand. Or it “could” mean that Apple was shifting to a new supplier or using slightly different parts in their new iPhone models.

NAH, that’s just crazy talk!

Iteration

(T)he fact that the iPhone 8 and 8 Plus featured relatively few big changes from the iPhone 7 and 7 Plus, and you can begin to understand why analysts and investors are on edge.

Gee, where have I heard that the newest iPhone “featured relatively few big changes from” its predecessor? Oh, I  know. Every single year since the iPhone debuted.

iPhone iteration is like climbing a mountain. The uphill climb seems painfully slow, but when you look back, you realize that you’re a long, long way from where you started and that the device you’re now holding has scaled some pretty impressive technological heights.

I Don’t Think

“I don’t think the X is doing as well as [Apple] would have hoped,” explained Gartner personal technology analyst Tuong Nguyen.

Well, that’s cool and all, except that you don’t know what Apple’s expectations were, and you don’t yet know what the actual sales are, which makes your speculation, well, not really very cool at all.

Rumors

“The reason I believe that is based on a lot of the rumors I’ve been reading about what they’re planning for the next iteration [of the iPhone] later this year.

Oh, I heard a rumor. Now THAT’s some great reporting. Because rumors about Apple are ALWAYS true. So long as you define the word”always” as “almost never.”

The Price Is Right

Nguyen said he believes that while Apple has been able to steadily introduce new devices at slightly higher price points, $999 is too high for consumers to justify spending on a smartphone —especially one that doesn’t change the market as monumentally as the original iPhone did.

What? What? What?

Well, first off, NOTHING is going to change the market as monumentally as the original iPhone did. Asking Apple to come up with another iPhone every year — or any year — is like asking Ford to introduce the original Model-T every year. The iPhone was a major paradigm shift in technology. If you’re expecting Apple — or anyone — to come up with something as big as the original iPhone any time soon, then you seriously need to lay off the shrooms.

Secondly, consumers have ALREADY shown they’re willing to spend the kind of money Apple is asking for in order to buy an iPhone X. How do we know this? Because THEY BOUGHT THE PHONE X, that’s why. Were you not paying attention when Apple announced that it’s been their best selling iPhone since it was introduced? Just a suggestion here, but perhaps it’s not the best of ideas to write articles that say that customers are unwilling to do what customers have already willingly done.

You Can Never Go Home Again

(Apple) might be considering bringing back the Home button and lowering the price to make it more palatable.

(Spits coffee on screen).

Say what now? You think — for even one second — that Apple is going to bring back the home button? Okay, that’s it. Turn in your analyst cap, collect your severance pay at the door, and don’t let the facts hit you where the Good Lord split you on your way out the door.

Average Sales Price

The best way to determine how well Apple’s iPhone X is selling is to watch for the iPhone’s ASP. A higher average selling price could mean that consumers did indeed opt for the high-priced iPhone X. A lower average selling price, though, would mean that fewer consumers spent their money on the X and instead went for the iPhone 8, 8 Plus or previous generation models like the 7 and 7 Plus, 6s and 6s plus or SE.

This is the first bit of analysis in the article that actually makes sense (except for the “could” part). So — and I’m just spitballing here — how about we wait UNTIL THIS AFTERNOON to find out what the ASP is before writing what meandering stock market prices, unreliable supply chain changes, and unsupported rumors mean to Apple’s iPhone future?

Nah, who am I kidding? That’s never going to happen.

A Nice Problem To Have

Look, you don’t have to be a seer to see Apple’s future. All you have to do is to look at the iPhone X, talk to the people who actually own one and you’ll know that you’re already looking at the future. The iPhone X’s signature feature is its ability to recognize your face. It’s a wonderful feature, with endless potential and it will be YEARS before Apple’s competitors have anything like it.

While Daniel Howley — and so many like him — think that “The iPhone X could be a problem for Apple”, I’m predicting the iPhone X could be a problem for them. Why? Because there isn’t a company in the world that wouldn’t want a “problem” like the iPhone X, proving — once again — that when it comes to Apple, these naysayers haven’t got a clue.

Published by

John Kirk

John R. Kirk is a recovering attorney. He has also worked as a financial advisor and a business coach. His love affair with computing started with his purchase of the original Mac in 1985. His primary interest is the field of personal computing (which includes phones, tablets, notebooks and desktops) and his primary focus is on long-term business strategies: What makes a company unique; How do those unique qualities aid or inhibit the success of the company; and why don’t (or can’t) other companies adopt the successful attributes of their competitors?

1,210 thoughts on “Warning: The iPhone X Could Be A Problem For Analysts”

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