A bad reputation for reporting
After a year of strikingly awful iPhone analysis, you could imagine that the financial press might view analyst claims with slight skepticism. In the past year, iPhone X was launched as the best-selling smartphone from Apple and stayed there his most popular model since then every quarterDespite its hefty entry price of $ 999, and fierce competition from Apple's other very good, cheaper iPhone models.
Despite this reality, the technical media and their counterparts in the financial press claimed that the iPhone X was a "disappointing" product, reported that it was selling poorly, and claimed that it was inherently unable to generate broad interest due to its price – and maybe even because it was not "innovative".
This idea was repeated over and over again by financial blogs, technical blogs and even highly respected newspapers, including the Wall Street JournalIn Japan Nikkei and Bloomberg.
Hammering that iPhone XS balls beyond the limits
Right from the start gate, a new story cycle of the iPhone fault begins, based on a ridiculous data source that channel checks seem almost legitimate in comparison.
Rosenblatt's analyst bases his idea of weaker new iPhone XS question "on his analysis of waiting times for the iPhone", Emily Bary remarked Market.
For anyone who has ever used Apple & # 39; s estimated waiting times for pre-orders, this is insane. Apple does not provide an accurate-to-the-day estimate for shipping. It presents a large window period, usually of several weeks.
Apple's production consists of building tens of millions of devices per week and the estimates change enormously because it adjusts production and shipping costs for placed orders. You may be told that your phone needs to be sent within a few weeks and that you can see the shipment the next day. There are no reliable data to estimate shipping estimates. They are a baseball field to manage the expectations of consumers.
Bary's piece has indeed noted that Jeffrey Kvaal from Instinet disputes the idea that demand was weaker this year than last time. However, Market used the more sensational Rosenblatt-Zhang prediction as headline and pluralized his idea to sound as if it came from multiple analysts, rather than being so controversial that the writer could not even find two people to quote in accordance with this analysis .
Kvaal actually told Market that Apple "does not seem to be planning for" sleek availability "of any of the three phones it introduced last week," making it even more difficult to use "waiting times" as a functional measure to meet the relative demand from the iPhone to estimate buyers. You only have to wait when there is a limited stock.
Of course, with the improved XS plus the larger and even more expensive XS Max in the channel now, and the more affordable iPhone XR soon, it is impossible to make direct comparisons with the previous year, even if you had significant real data on shipments or unity mix. Last year, iPhone X was completely new and sold largely in competition with a very different, much more conventional series of iPhone 8 and iPhone 8 Plus.
Analysts have no reliable access to Apple's actual shipments or product mix and are forced to depend on estimates that are largely made only by other analysts or research firms that sell data they invent.
Analysts were unable last year to check all their channel control, data modeling and guesswork setup that iPhone X would outsource Apple's entire line-up, including the much cheaper iPhone SE and iPhone 7 that reached low prices where analysts For years, the key to Apple was to bring its iPhones to a wider audience with a high volume.
This happened all before
Bary's current coverage of Zhang's "waiting time" checks presented an alternative perspective from a peer analyst, but did not seem to verify whether Zhang's "waiting time" analysis for Rosenblatt Securities had yielded valuable insights about Apple's iPhone sales. It certainly was not last year.
A quick search in October draws a report from Philip Elmer-DeWitt from Apple 3.0, who noted that Zhang had just issued a note to Rosenblatt stating that preorders for iPhone X were strong, but that Zhang "had persistent concerns regarding the durability of this pace." We believe that the number of orders taken before the first day fell rapidly, which can be attributed to long waiting times. "
The Zhang waiting time method therefore predicted earlier that the orders for the iPhone X would expire soon after the launch. They did not do it.
Furthermore, Zhang specifically attributed the strong pre-orders observed in China to "smaller retailers who might use software to quickly pre-order the iPhone Xs with plans to resell to the end-user market," again implying that strong pre-orders are not a reliable unit of measurement. of the question; but that in one way or another the divination of "waiting times" published by Apple.
In other words, Zhang said Do not believe what you see, listen to the irrational nonsense I make up.
Apple's only hope in Asia would be future products, according to Zhang, including new iPads with Face ID, cheaper iPhones, a cheaper HomePod and a red iPhone. The only one sent for this year was a Product (RED) iPhone 8.
iPhone X led Apple's sales and profitability, and it was services, not new iPads or cheap devices, which led to a rise in Apple's share price this summer that completely missed the Rosenblatt effects.
A year ago, as Apple 3.0 listed in October, Zhang had a neutral price target of $ 150. Meanwhile, Apple rose to a high point ever and a market capitalization of one trillion dollars. Yesterday Rosenblatt raised his price target for Apple sheepishly to $ 200, below the current current closing price of the company, far above $ 217.
Bizarrely, after Apple's rebate was corrected this summer in response to investors finally seeing Services as Apple's path to strong growth (alongside new hardware categories including wearables), these analysts are returning to a short-sighted iPhone evaluation shipments and go back to an old photo painted in the dark, without considering how massively new iPhones that last for many years sustain a critical mass of ongoing app sales, cloud services and subscriptions, along with the peripheral sales of Apple, AirPods and other connected devices.
Doubling of a false claim that "iPhones do not sell in Asia"
A few months later, in March, Zhang was again in the headlines because he claimed that "new iPhones do not sell in Asia," a run of CNBC who did not provide data to support the idea that new iPhones were not sold, except that Zhang claimed that iPhone X continued to disappoint and that it "did not sell well during the Chinese New Year" and that "we are not surprised by the rapid cooling [sic] from selling iPhone X, "along with its share of" 5.5 million "units of its own internal estimate.
Within two months, Anita Balakrishnan, the author of the same report, turned and quoted Apple's chef Tim Cook as noting that the new iPhone X & # 39; last quarter was the most popular smartphone in all of China & # 39; adding that & # 39; the company's performance in China are particularly impressive because total smartphone sales fell in the first quarter. "
Which CNBC report pointed out that "the iPhone maker reported $ 13 billion in revenues from Greater China in the second fiscal quarter – an increase of 21 percent over last year," and that "China is one of the most important and competitive markets of China. Apple is ".
Outside China, the report stated that "Apple also showed strong sales growth in Japan, with a year-on-year jump of 22 percent." Revenue in North and South America rose by 17 per cent in Europe grew by 9 per cent and sales in the rest of Asia Pacific grew by 4 per cent, "all but striking that just two months earlier the same writer for the same publication a megaphone provided an analyst who claimed "new iPhones do not sell in Asia".
Zhang was not only unequal to the demand of iPhone X. He also told everyone who last September that the pre-orders of the iPhone 8 were "substantially lower" than the previous iPhone 7 and iPhone 6 levels, apparently with the same data modeling which was used to claim that the iPhone X was a week later, and that iPhone XS model were weak this year.
And last summer, he insisted that the iPhone 8 should not only be sent later than expected due to delivery problems with Touch ID (based on the completely false idea that Apple tried to integrate Touch ID behind the screen), but also claimed that full production was not complete until the first calendar quarter of 2018.
How wrong can you be before you lose all credibility?
The overall outlook for Apple's iPhone sales in the past year was excellent. Prakhar Tripathi wrote this typical take, full of unfounded claims and explanations why things that did not actually happen, probably took place:
"Over the past few weeks, analysts and research firms have evaluated how Apple Inc. has hit the bottom with the lukewarm reaction of its latest flagship iPhone X," wrote Tripathi. "Although the world was intrigued by the design and technology of Apple's first-class handset, sales remained slow: the mighty iPhone X could not lure the crowd because of the high price tag."
He cited "controls of supply chain resources" by analyst Mehdi Hossein of the Susquehanna Financial Group, who incorrectly claimed a "73 percent drop in sales of iPhone X compared to the previous quarter" and claimed that "buyers prefer the older model of iPhones, and just do not go for the latest and best, "another error-free prediction, presented by an analyst as fact and by a blog pampered as unverified truth.
Despite being consistently wrong, asinine presents analysis of ridiculous pseudo-scientific analysis of "waiting time" estimates or completely unlawful "channel checks" that have been proven to be incorrect year after year, but tech writers continue to call analysts like Zhang without their to write terrible track records – or even the predictions they were just before Apple announced the earnings data that blew their dubiously historically incorrect claims.