As reported in Zerohedge today, JP Morgan has cut its estimates for Apple’s iPhone sales for Q1 2016 by 10%. JPM also believes that its Q1 estimates may be too high:
November sales signal signs of early weakness of Phone 6S cycle…1Q16 bears potential downside risks, while 2Q16 Street estimates seem unrealistic: Although the Street has lowered its expectations on the Apple supply chain, we still see downside risk to 1Q16 consensus numbers of 50-55mn units. TSMC saw 10% order cuts in November, which we believe is from Apple business with the impact during the end of 1Q16 or early 2Q. – JPM analyst comments sourced from Zerohedge
Recently several Wall Street banks have been reporting a considerable decline in orders received by AAPL suppliers. This clearly translates into Apple’s expectation for a slow-down in end-user iPhone sales. It was bound to happen eventually. “Eventually” is now.
The Apple iPhone story has been one of the key sources of the helium that has inflated the stock market bubble. Keep in mind that it doesn’t take a big brain to figure out that iPhone sales are slowing. It’s the Law of Diminishing Returns engulfing the iPhone fad. It is also likely that the JP Morgan analyst is taking the lead in lowering the bar for Apple in order to facilitate an earnings “beat,” albeit on lower revenues and earnings.
However, any meaningful slowdown or decline in Apple’s unit sales, revenues and margins will trigger heavy selling by the hedge fund universe. AAPL is one of the primary non-FANG stocks being used by the Fed to manipulate the stock market. Evidence of this is the large position in Apple taken by the Swiss National Bank, likely at the Fed’s encouragement.
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