fred hickey(@htsfhickey):I've posted the lead story in the Wall Street Journal tonight below. The caption was: "Apple Beat Wall Street Expectations With Boost From Higher Prices," but after the (poor) conference call guidance, it's now changed (more accurately) to: "Apple's Growth Machine Is Slowing. High Prices Might Not Save It." I slogged through the first part of the conference call where Apple's CEO mentioned the growth percentages for segments where Apple's results were strong, but somehow neglected the percentages where they weren't so hot (iPad revenues -10% Y/Y, Wearables -8% Y/Y, Services (slight miss). The first part of the call was all spin & propaganda - "thrilled" and "excited" etc. I even learned the important fact that Apple is using more recycled components in their products to protect the earth (I almost needed a barf bag). But as usual, the truth had to come out with the guidance: significantly lower revenue growth in the current quarter, further deterioration in Service business growth - partly due to lower fee rates in "certain countries" (which will only worsen with time), lower product margins (that are still supported - for now - by lower cost "carry-in inventory"), and an "unprecedented impact" from memory price hikes which will negatively impact current quarter results and continue into 2027. As usual, analysts did their best to support the Apple (and Wall Street) cause, asking softball and leading questions - with no one even mentioning the Duo (foldable phone) screen cracking problem or the poor yield rates at their Chinese manufacturers that are the primary cause of the Duo's long lead times. The problem for the Apple spinmeisters is that the stock is priced for perfection and this guidance is far from that. A quote from the WSJ story: "Oppenheimer analyst Martin Yang noted that Apple stock trades at 36 times next year’s expected earnings, a premium to the overall market, even though its earnings are only expected to grow 1%, which is slower than its tech peers." The so-called stock market's "safe haven" is a very dangerous place for investors to hide.

2026.11.03 00:45

I've posted the lead story in the Wall Street Journal tonight below. The caption was: "Apple Beat Wall Street Expectations With Boost From Higher Prices," but after the (poor) conference call guidance, it's now changed (more accurately) to: "Apple's Growth Machine Is Slowing. High Prices Might Not Save It." I slogged through the first part of the conference call where Apple's CEO mentioned the growth percentages for segments where Apple's results were strong, but somehow neglected the percentages where they weren't so hot (iPad revenues -10% Y/Y, Wearables -8% Y/Y, Services (slight miss). The first part of the call was all spin & propaganda - "thrilled" and "excited" etc. I even learned the important fact that Apple is using more recycled components in their products to protect the earth (I almost needed a barf bag). But as usual, the truth had to come out with the guidance: significantly lower revenue growth in the current quarter, further deterioration in Service business growth - partly due to lower fee rates in "certain countries" (which will only worsen with time), lower product margins (that are still supported - for now - by lower cost "carry-in inventory"), and an "unprecedented impact" from memory price hikes which will negatively impact current quarter results and continue into 2027. As usual, analysts did their best to support the Apple (and Wall Street) cause, asking softball and leading questions - with no one even mentioning the Duo (foldable phone) screen cracking problem or the poor yield rates at their Chinese manufacturers that are the primary cause of the Duo's long lead times. The problem for the Apple spinmeisters is that the stock is priced for perfection and this guidance is far from that. A quote from the WSJ story: "Oppenheimer analyst Martin Yang noted that Apple stock trades at 36 times next year’s expected earnings, a premium to the overall market, even though its earnings are only expected to grow 1%, which is slower than its tech peers." The so-called stock market's "safe haven" is a very dangerous place for investors to hide.