A band of Apple most bullish fans on Wall Street are growing increasingly bearish over concerns that holiday iPhone sales have been weak and that the company needs new breakthrough products to fend off rivals Google and Samsung.
At least five analysts have cut their price targets for Apple since December 16, with some saying Apple's purchases from suppliers indicate iPhone and iPad sales may not meet projections. Because the two products are Apple's largest sources of revenue and profit, any slowdown in demand would bode ill for growth prospects.
The reports from Citigroup, Pacific Crest Securities, Mizuho Securities USA, BMO Capital Markets and Canaccord Genuity mark a reversal from earlier this year, when analysts were racing to issue upbeat predictions, with at least two saying Apple would top US$1,000. Instead, the shares have dropped more than 25 per cent from a September record amid speculation the iPhone is saturating the market, ratcheting up pressure on Apple chief executive Tim Cook to introduce a new hit product.
"Apple is feeling the heat," said Michael Obuchowski, a portfolio manager at North Shore Asset Management, which owns Apple shares. "There is a lot of pressure on Apple to bring new magical devices to the market, and that has not happened in a while." He said the latest iPhone and iPad mini are incremental improvements on previous devices.
Glen Yeung, an analyst at Citigroup, wrote in a note on December 16 that Apple's Asian suppliers have been reporting cuts in orders, raising questions about the iPhone 5's strength. The bank reduced its rating on Apple's stock to neutral from buy and cut its price target to $575 from $675.
With Apple projected to have won 230 million iPhone users by the end of the year, the company's customer growth will start to ebb because it is approaching a saturation point, said Andy Hargreaves, an analyst at Pacific Crest Securities. He scaled back his prediction for new iPhone customers in 2013 to 62.4m from 84.3m.
"Global consumer demand for iPhone 5 is not as strong as we anticipated," Mr Hargreaves said in a report, in which he cut his target price for the stock to $565 from $645. "Although we believe iPhone 5 remains the best-selling high-end smartphone on the market and is likely gaining significant share right now, a combination of market saturation, weak global demand and incremental innovation that has surpassed consumer demand" are probably hurting iPhone sales, he wrote.
China, a country where many investors have been looking for Apple to generate growth, also is presenting challenges, according to BMO Capital Markets. While Apple said yesterday it sold 2m of the iPhone 5 in the device's first weekend on sale in China, the company is not likely to team up with China Mobile, that country's largest wireless carrier, until the second half of 2013, BMO technology analysts wrote in a report. It also reducing their estimate for iPhone sales to 165.5m from 171.5m for fiscal year 2013. Samsung, which uses Google's Android software and is Apple's biggest smartphone rival, is advertising heavily in the US as well as in Asia, according to the report.
Still, many analysts remain optimistic. Brian White of Topeka Capital Markets maintained his prediction that Apple's stock will reach $1,111, citing prospects for iPhone growth in China.
* Bloomberg News
THE BIO
Favourite car: Koenigsegg Agera RS or Renault Trezor concept car.
Favourite book: I Am Pilgrim by Terry Hayes or Red Notice by Bill Browder.
Biggest inspiration: My husband Nik. He really got me through a lot with his positivity.
Favourite holiday destination: Being at home in Australia, as I travel all over the world for work. It’s great to just hang out with my husband and family.
Company%20Profile
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Kamindu Mendis bio
Full name: Pasqual Handi Kamindu Dilanka Mendis
Born: September 30, 1998
Age: 20 years and 26 days
Nationality: Sri Lankan
Major teams Sri Lanka's Under 19 team
Batting style: Left-hander
Bowling style: Right-arm off-spin and slow left-arm orthodox (that's right!)
Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
COMPANY%20PROFILE
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Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
More from Aya Iskandarani
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
About Krews
Founder: Ahmed Al Qubaisi
Based: Abu Dhabi
Founded: January 2019
Number of employees: 10
Sector: Technology/Social media
Funding to date: Estimated $300,000 from Hub71 in-kind support
ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
A%20Round%20of%20Applause%20
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COMPANY%20PROFILE%20
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EA Sports FC 25
Developer: EA Vancouver, EA Romania
Publisher: EA Sports
Consoles: Nintendo Switch, PlayStation 4&5, Xbox One and Xbox Series X/S
Rating: 3.5/5
PRESIDENTS CUP
Draw for Presidents Cup fourball matches on Thursday (Internationals first mention). All times UAE:
02.32am (Thursday): Marc Leishman/Joaquin Niemann v Tiger Woods/Justin Thomas
02.47am (Thursday): Adam Hadwin/Im Sung-jae v Xander Schauffele/Patrick Cantlay
03.02am (Thursday): Adam Scott/An Byeong-hun v Bryson DeChambeau/Tony Finau
03.17am (Thursday): Hideki Matsuyama/CT Pan v Webb Simpson/Patrick Reed
03.32am (Thursday): Abraham Ancer/Louis Oosthuizen v Dustin Johnson/Gary Woodland
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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How to keep control of your emotions
If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.
Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.
Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
MATCH INFO
Uefa Champions League semi-final, second leg
Roma 4
Milner (15' OG), Dzeko (52'), Nainggolan (86', 90 4')
Liverpool 2
Mane (9'), Wijnaldum (25')
How Islam's view of posthumous transplant surgery changed
Transplants from the deceased have been carried out in hospitals across the globe for decades, but in some countries in the Middle East, including the UAE, the practise was banned until relatively recently.
Opinion has been divided as to whether organ donations from a deceased person is permissible in Islam.
The body is viewed as sacred, during and after death, thus prohibiting cremation and tattoos.
One school of thought viewed the removal of organs after death as equally impermissible.
That view has largely changed, and among scholars and indeed many in society, to be seen as permissible to save another life.
The%20Genius%20of%20Their%20Age
%3Cp%3EAuthor%3A%20S%20Frederick%20Starr%3Cbr%3EPublisher%3A%20Oxford%20University%20Press%3Cbr%3EPages%3A%20290%3Cbr%3EAvailable%3A%20January%2024%3C%2Fp%3E%0A
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
THE DETAILS
Director: Milan Jhaveri
Producer: Emmay Entertainment and T-Series
Cast: John Abraham, Manoj Bajpayee
Rating: 2/5