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Friday, November 2, 2012

Apple Inc. (NASDAQ:AAPL): Sterne Agee’s analyst rushes to the stock defense


Apple Inc. (NASDAQ:AAPL) share prices were getting significantly lower recently, especially after the mixed response which the new iPad Mini has been gathering. The shares had yesterday closed below $600, which is a low point, considering the fact that this has happened for the first time since the month of July this year. The new, smaller tablet has garnered a lot of criticism, which have lead the shares to drop a little, but Shaw Wu, who is an analyst from Stern Agree, rose to the company’s defense.

Despite criticism centering on the high price range as well as the complaint about sub-average screen resolution, Wu attacked the people who have been making such comments, by saying that if anything, Apple is a threat to all competitors because of the high quality product which the company gives out. He said that the accusations towards Apple are baseless, but not surprising, since people will always manage to find flaws if they go around specifically looking for them, which is something they have been doing with Apple, because of the standards of quality which the company has set. The Apple-bashing, he says, has become more of a habit for other corporate companies. He also says that the criticism is stronger because of the threat which the new tablet continues to the PCs, which are fast becoming unpopular anyway.

He pointed at the iPod Mini and the iPod Nano, both of which had received complaints about high pricing, but they still happen to have made brilliant sales. Wu suggests that the critics and the customers differ at these essential points, because the customers are generally not hesitant to pay a little more for products which do not compromise on quality. The two above mentioned products went on to sell quite admirably, despite the criticism. For a product which is mid-range and of very good quality, the pricing for the new tablet it not at all unreasonable, he argued. He said that PCs and Windows face the greatest threat, and he also pointed out to the high prices of the Surface Tablets which have the touch keyboard.

10 comments:

  1. Shorting aapl is the trade of the year. Even my barber is in on the "pin action" this week, he sold 10 weekly calls and pocketed a small fortune this week. Time to start listening to the guys who are making $$ on aapl not the permabulls who are losign their shirts!

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    1. I prefer the shoe-shine boy. Me I buy on dips and sell on rallies. My latest was a $15k purchase at $575 and sale at $700. So that makes a nice couple of grand without leverage. There are risks with APPL, but apart from this sentiment driven volatility the fundamentals are solid. No iPad minis are available for me to buy from my 10 nearest stores, and its Saturday, the mini was released yesterday. Thats what I call fundamental. Businesses are successful when they deliver what customers want, and that is what Apple does.

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  2. "He said that the accusations towards Apple are baseless, but not surprising, since people will always manage to find flaws if they go around specifically looking for them, which is something they have been doing with Apple, because of the standards of quality which the company has set. "

    --------------------
    So in other words, Apple has released a sub-standard product.

    Thanks for the clarification.

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  3. "Wu attacked the people who have been making such comments, by saying that if anything, Apple is a threat to all competitors because of the high quality product which the company gives out. "

    Mr Wu, quality product does not mean only Aluminium, but solid and useful applications working flawlessly... With all problems iPhone 5 raised lately, I am sorry to say, but the iDevice is anything else than "quality product"...

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  4. Mr. Wu has invested too much into AAPL, unfortunately. His words won't drive the stock back up.

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  5. "He said that the accusations towards Apple are baseless, but not surprising, since people will always manage to find flaws if they go around specifically looking for them, which is something they have been doing with Apple"

    Basically Wu confirmed that is a substandard product, Wu is very frustrated since has way to many stocks on AAPL and he sees the night coming, however if he doesn't see it, he will lose too much.

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  6. I happily use an iPad 2 and also own an iPad3. I find the resolution of the iPad 2 perfectly adequate and prefer its thinner form factor to the iPad 3. I also own a Nexus 7 with its 'better' screen resolution. This is a nice product as well, but feels cheap. Squeeze the casing and it creaks. Then the apps are poor and it isn't great for web browsing, the viewing area is too small and the wrong shape. Once one removes pure Apple bashing uninformed comments like the above and focuses on factual analysis, Apple wins every time on quality.

    Oh, and far from concluding that the fact that hairdressers can make money shorting this stock would make me think of copying them (I'd prefer a shoe-shine boy thanks), I'll stick with my long positions. Apple remains the company to watch in this space, very odd that people take against them so much as all they do is make nice stuff.

    Still, there are people who just plain don't like success, they like to knock it because they can't do it themselves.

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  7. Oh how fickle people are! Apple's share price has just dropped below its 200 day moving average as it generaly does around this time every year. Then what happens after that?????????????????

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  8. Nearly everyone thinks Apple will rebound and that this is the bargain of a lifetime. That alone is a reason not to buy. There is a fundamental shift happening, namely that Apple used to release superior products and therefore people were more than happy to pay the premium prices, giving Apple massive margins and profits. Now that they are releasing products that are inferior but still at premium prices, consumers are wising up and Apple is losing market share. They will need to cut prices soon to stop the bleeding. Look at the iPad Mini. It costs 65% more than the Nexus 7, but it has a lower resolution screen with an inefficient aspect ratio, can't be held easily in one hand, easily scratched anodized cover, expensive incompatible charger, and lacks GPS and decent maps. Apple has jumped the shark and might go back to 2011 valuations in short order.

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  9. The iPhone 5 and iPad mini are gorgeous products. Anyone calling them "inferior" is just blowing smoke. Tell me, where is Apple losing market share? Bleeding? Pul-lees. Incompatible charger? Oh my God. The cable has a different connector. BFD. The new connector is really sweet by the way. Small, non-directional, and clicks into place.

    Something interesting: this website seems downright hostile to iPads. Incompetence or is that by design?

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