Stock was down 8 days in a row.
Apple’s shares had 8 down days in a row until this past Tuesday. The shares were at $107.13 on Wednesday, April 20, and closed at $93.64 on Monday, May 2. For the week the shares were down $1.02 or 1.1% to $92.72. The S&P 500 was down 0.4% and the NASDAQ was down 0.8% for the week.
At $92.72 the close was below the August 7, 2014, close of $94.48, slightly above the August 24, 2015, intra-day low of $92.00 and slightly below the recent February 11 close of $93.70. The shares have technical support at its current price (see chart below) but if it breaks lower then the next support levels look to be in the mid-$80’s and then the low-$80’s.
Apple’s share of China’s smartphone market down year over year
From Linda Sui, Director at Strategy Analytics, “Apple posted a soft quarter in China, slipping to fifth position with 11 percent smartphone market share. Mixed demand for the iPhone 6s and stronger competition from OPPO and others were among the key factors for its lackluster performance.”
Apple Loses Trademark Case In China Setback
While it should only have a marginal negative impact on Apple’s iPhone sales in China another company has the right to make leather products branded iPhone. Check out Forbes contributor, Casey Hall’s, note for details.
Apple has a significant share of higher priced smartphones in India
According to IDC’s Monthly City Level Smartphone Tracker, the leading 30 cities of India made up approximately 51% of the entire smartphone market in the December quarter last year. While Apple only had 4.6% of those cities smartphone market it did regain the top position in above $300 smartphone’s with 42.1% share with the launch of iPhone 6S & 6S plus in addition to the price correction for iPhone 5S, 6 and 6 Plus.
However India not allowing Apple to sell used iPhones
Apple was dealt a blow in India per a report from Bloomberg that the government is rejecting Apple’s request to import and sell used iPhones in the country.
iPhone SE lead-times stay elongated
At the 5 week mark post launch the iPhone SE’s 2 to 3 week lead-times in the US and China are the same as the iPhone 5s (which didn’t improve until about 7 ½ weeks post launch). The iPhone 6 was at 7 to 10 business days in the US while the 6 Plus was at 3 to 4 weeks. For the iPhone 6s it was at 3 to 5 business days at 2 weeks with most of the 6s Plus models at 2 to 3 weeks.
Apple lost some tablet market share in the first quarter
Apple saw its share of the tablet market falling from 27.2% to 25.9% in the first quarter. IDC’s take is “Apple's dominance in the overall market is unsurprising. iPad's future will be largely relegated to replacements – of older iPads or PCs—rather than net new additions. The latest iPad Pro 9.7" and more enterprise friendly storage options for the slightly older iPad Pro 12.9" are healthy additions to the iPad lineup. The recent price drop on the iPad Air 2 should help sway those who were previously undecided to upgrade their older iPad 2s.”
Apple and
Apple and SAP announced a partnership to “revolutionize the mobile work experience for enterprise customers of all sizes, combining powerful native apps for iPhone and iPad with the cutting-edge capabilities of the SAP HANA platform. This joint effort will also deliver a new iOS software development kit (SDK) and training academy so that developers, partners and customers can easily build native iOS apps tailored to their business needs.”
While this is a positive step for Apple with large customers I don’t think Apple’s partnership with
Apple Watch Slips to 52% Global Smartwatch Marketshare
Rajeev Nair, Senior Analyst at Strategy Analytics, said, “Global smartwatch shipments grew a healthy 223% annually from 1.3 million units in the first quarter of 2015 to 4.2 million in the first quarter this year. Global smartwatch growth is being driven by consumer demand for Apple, Android Wear and Tizen models across North America, Western Europe and Asia. On a sequential basis, global smartwatch shipments fell 48 percent from 8.1 million in the December quarter 2015 to 4.2 million, due to seasonality trends.”
Neil Mawston, Executive Director at Strategy Analytics, added, “We estimate Apple Watch shipped 2.2 million units and captured 52 percent smartwatch marketshare worldwide, dipping from 63 percent share in the December quarter.
When I run the numbers for the Watch after you estimate the non-Watch revenues for the Other Products segment I estimate that Apple sold between 1.7 and 1.8 million Watches in the March quarter, below Strategy Analytics 2.2 million.
Gross margins were the lowest in seven quarters
Warranty accruals negatively impact gross margins. Over the past two years they have been in a tight range which is positive given the large number of new iPhones, iPads, Macs and the Watch being launched. For an overview of their impact this is a note I wrote about them.
Android ecosystem is very fragmented
From the Verge “two weeks shy of Google detailing the next big revision of Android at its annual developer conference, the current Android version is still struggling to make its way out to devices. Android 6.0 Marshmallow is currently running on just 7.5 percent of active Android devices that have access to the Google Play Store.
The rest of the field is dominated by 2014's Android Lollipop at 35.6 percent, 2013's KitKat at 32.5 percent, and 2012's Jelly Bean at 20.1 percent. 2011's Ice Cream Sandwich still clings on to a stubborn 2 percent and the immortal Android Gingerbread (version 2.3!) accounts for 2.2 percent of Android smartphones.”
In contrast iOS 9 is on 84% of Apple’s devices.
Roundup of Apple consumer oriented news
Ewan Spence rounds up the rest of this week's consumer news from Cupertino in Apple Loop here on Forbes.
Stock’s valuation
At a closing price of $92.72 the shares are at a PE multiple of 11.2x on fiscal 2016 EPS of $8.30 from the 17 sell-side analysts notes I reviewed and 10.2x on fiscal 2017 EPS of $9.12. When you take into account my estimate of how much excess cash of $19 per share the PE multiples become 8.9x and 8.1x.
What Apple has paid for its shares
This is a note analyzing that what Apple has paid for its stock is essentially what the stock it is currently selling for.
Apple 3 year chart. Needs to hold current price.
StockCharts.com shows the shares are still in a very oversold position based on its RSI (Relative Strength Index, the top third of the chart) of 24.94 (last week was 21.57) and on its MACD (Moving Average Convergence Divergence, the bottom third of the chart) of -9.189 (last week was -10.677). While the stock could see a dead cat bounce these are only short-term support.
Bespoke’s chart also shows Apple’s share very oversold
Bespoke’s chart through Apple’s close on Monday, May 2, shows how oversold the stock is trading “more than two standard deviations below its 50-day moving average (bottom of green shading). As recently as three weeks ago, the stock was trying to break above it’s 10-month downtrend channel and was actually at extreme overbought levels.“
