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Investor update on quarterly guidance

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Re: Investor update on quarterly guidance

#41

Post by tsmith »

crazygringo wrote: post #40

This doesn't seem to have affected the stock price today, including in after-hours trading. So either it's been gradually priced-in, or... ...is this actually expected to affect Apple once the year is over? Presumably people will just wait a couple months to buy a new phone, and below-average sales now will be matched by a wave of above-average sales afterwards? The need to upgrade your phone doesn't go away. And wou…

> This doesn't seem to have affected the stock price today

The market is closed today (Presidents Day). We won't find out the effect until tomorrow.

Re: Investor update on quarterly guidance

#42

Post by beachwood23 »

dangus wrote: post #30
dang-its-dumb wrote: post #22

I've heard that our quest for incessant optimization in warehousing and inventory management means this pandemic is catching everyone flat-footed. The McKinsey consultants of the world have pushed for more and more "turns" (how many times your inventory turns over completely in a warehouse - most orgs aim for 3+ turns a year) and minimizing your "cash to cash" cycle (you pay for manufactured inventory, you need too t…

Then again, all those people who can’t buy these products now due to temporary shortage aren’t going to just forget that they wanted to buy a new iPhone. I believe there was a similar reason for the auto industry to come back so strongly after the 2008 financial crisis. All those people who held off on car purchases in hard times exited the crisis with aging vehicles that needed to be replaced. I would think that thi…

I'm not so sure. So much consumption these days seems to be discretionary.

For your example in the auto industry, one large reason the industry bounced back was because of the Cash for Clunkers program. The US government spent $3 billion to make sure the auto industry would "come back strongly."

Without similar stimulus here, I don't see how the bottom line of Apple and other companies will escape being affected.

Re: Investor update on quarterly guidance

#43

Post by totalZero »

dangus wrote: post #30
dang-its-dumb wrote: post #22

I've heard that our quest for incessant optimization in warehousing and inventory management means this pandemic is catching everyone flat-footed. The McKinsey consultants of the world have pushed for more and more "turns" (how many times your inventory turns over completely in a warehouse - most orgs aim for 3+ turns a year) and minimizing your "cash to cash" cycle (you pay for manufactured inventory, you need too t…

Then again, all those people who can’t buy these products now due to temporary shortage aren’t going to just forget that they wanted to buy a new iPhone. I believe there was a similar reason for the auto industry to come back so strongly after the 2008 financial crisis. All those people who held off on car purchases in hard times exited the crisis with aging vehicles that needed to be replaced. I would think that thi…

Sure they will.

Consumers in China who wanted a new iPhone would probably rather stay at home than go out to buy a discretionary consumer device like an iPhone. Many will have less income with which to get by, meaning they wouldn't be able to afford an iPhone even if they were willing to go buy one. And with Apple stores closed in China, it's kind of tough to buy an iPhone there.

Meanwhile, people who really need a smartphone elsewhere will take this opportunity to buy a different phone.

Economic shocks have long-lasting aftereffects. Don't assume that the result of this hit to iPhone production is simply a phase shift of Apple's product cycle and consumer demand. For example, Apple will probably take cash away from its next stock buyback in order to cover the upfront costs of this hit to its revenue. And they may not be able to provide the kind of pricing and incentives that they were planning to provide before the virus hit.

Re: Investor update on quarterly guidance

#44

Post by totalZero »

dano wrote: post #15

The Chinese New Year, Jan 17 through Feb 8, is also a period where less manufacturing activity normally occurs. Why I know this? I had to plan our inventory and sales logistics around this period every year for seven years. We would order production so that it would be completed and shipped to us prior to Chinese New Year, or start production immediately after. We never wanted production to occur across the three wee…

One problem Apple faces is getting factory workers who went to their hometowns back to the factories. Apple had actually planned to ramp up production starting in the end of February. So this interruption is a larger hit than you might expect at this time of year.

https://www.reuters.com/article/us-apple-iphone/coronavirus-...

Re: Investor update on quarterly guidance

#45

Post by totalZero »

georgebarnett wrote: post #17
georgebarnett wrote: post #16

The best part of this is watching very smart people discover that their highly optimised spreadsheets aren’t anti-fragile.

Interestingly, a literal rerun of the hard drive motor shortage due to flooding in Thailand a few years back.

That shortage took many quarters to work itself out.

Re: Investor update on quarterly guidance

#46

Post by biql »

huherto wrote: post #9

I am surprised the stock market is holding up while the virus can have a big impact in world trade. Any guesses ?

My guess would be people don’t see the virus as something threatening to the businesses long term, but rather as a temporary inconvenience.
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