The survey that squashed Apple - Part 2
On Tuesday we looked at one part of the ChangeWave survey that helped trigger the largest one-day drop in Apple’s (AAPL) share price in eight years. It showed a falloff in corporate plans to buy Apple computers over the next 90 days. (See here.)
Today we got our hands on the second part — the consumer part. And while it goes a long way to explaining why Apple’s shares were downgraded by analysts on Monday, it also suggests that the bigger problem is a broad decline in spending on consumer electronics — one that will not only color Apple’s guidance when it issues its quarterly report later this month, but could take much of the joy out of this year’s holiday sales.
The good news in the survey is that 23% of respondents — of 4,262 early adopter types contacted between Sept. 16 and Sept. 26 — said they plan to buy an Apple laptop computer in the next three months. Another 17% said they plan to buy an Apple desktop.
The bad news, as you can see in the chart below, is that those numbers are down pretty sharply from the month before — a full 5 points for laptops and 4 points for desktops.
“These are the weakest numbers we’ve seen all year for Apple in terms of future buying,” writes Paul Carton, ChangeWave VP for research. “And the biggest drop in 2 ½ years.”
Carton’s survey of spending over the past 90 days suggests that Apple should have no trouble meeting its sales targets for the quarter that ended Sept. 27. But his findings for the next 90 days suggest that Apple’s guidance — always conservative — will be even more so this time, and could spook already skittish investors.
But what’s really scary is what ChangeWave discovered when it asked those same 4,262 early adopters whether they were expecting to spend more (blue line) on consumer electronics over the next three months or less (red line):
Note that intentions to spend on consumer electronics usually trend up before Christmas — sharply two years ago, less so last year. What we are seeing here, says Carton, is “the weakest 90-day outlook for electronics spending ever recorded in a ChangeWave survey.”
So while we may be looking at a tough three months for Apple, the prospects for the rest of the consumer electronics industry this holiday season could be truly dismal.
Thanks to Paul Carton for talking us through the surveys, and for permission to repost his charts.
From the Changewave Alliance website:
ChangeWave runs a proprietary network of 15,000 highly qualified business, technology, and medical professionals referred to as the ChangeWave Alliance. Alliance members are credentialed experts in leading companies of select industries who spend their everyday lives working on the frontline of technological change. (link)
The whole market took a big hit that day, not just Apple so why not apply this report to it also
So this happens to Apple and they have been on a high regards performance. So what do you think is going to happen to lesser brands? If apple is going to suffer a bit, my bet is quite a few other consumer electronics brands are going to go under. Money will be tight and people are going to be careful in what they spend it on - current times are about squaring off the accounts and paying up or going out. I think Apple is still a good buy - both shares and products.
P.E.D.:
How about a nice post about CNN’s iReport?
ex ped: Nothing here folks. Move along.
Theses types of surveys are self-serving and should be ignored. Despite the so-called economic down turn, people will still be buying as much as they ever did, and the momentum for Apple products is far from over. Millions of people still want an iPhone, iPod, MacBook, etc.. The survey is hardly an indicator, just look at the sample size. It’s pathetic how easy it is to manipulate the market using the web
What’s going on with the stock at this point is that the smart money on the sidelines is staying there. Why buy today at $105 when it’sll be $95 next week. Eventually that sentiment will change, violently.
Long term companies with strong cash positions, brands, and margins weather slowdowns better than their peers.
A slowing economy also puts downward pressure on Apple’s input costs. Apple can use this to keep profits high. But if they’re smart, they’ll use this to promote and discount and gain share.
And Steve Jobs has shown that he’ll use tough times as an opportunity to pick up talent. And this time he has over $20 billion in the bank, so it’s an easier call.
If you care what AAPL’s price is next week, you’re in a world of hurt. If you’re Apple Inc, there is opportunity here.
CNN just turned me on to a new App called “Obama 08″.
It’s free, and if you’re an Obama supporter you’re gonna be VERY HAPPY with this App!
Do a search in the App Store and type in Obama.
Do you really believe the drop in Apple that day was because of a survey? Did they release survey’s on all the other stocks that tanked that day?
ex ped: The survey is what caused RBC Capital’s Mike Abramsky to downgrade Apple on Monday — a day in which Apple shares fell 18% against a Dow that fell 7%. So yes, I do think the survey was a big factor.
Just like other individual company, or the economy as a whole, there will always be the so called “business cycle”, but if you look in the long term, Apple, Inc. is sure to be on the bullish side considering their cash flow, trendy innovative products, and strong leadership with young talents.
There may be a temporary slow-down at the current state due to the credit crunch GLOBALLY which limited capital of business so they will purchase this “luxury product” less since many firms are converting their wondows to Apple according to my own experience. Remember that Apple is going Global, and as soon as the market revives in a year or two, Apple will kick it up a notch. Especially the stocks since the balance sheet contains no long term debt which will be a plus for “real” investors, not speculators.
How about we stop listening to all analysts on Apple because every time they are WRONG. EVERY TIME. Why do people listen to these analysts about Apple. They are wrong every single time.
Apple is how the government and other businesses should be run. Be conservative, smart, and don’t over expect.
Until APPLE doesn’t turn a big profit like they always do, just stop writing stuff about them because it just makes the analysts look jealous about this great company.
So…when they report another great year even during the recession…what are you going to do to bring the stock down?
What the writer fails to realize is that there was a time when Apple was looking like it was going out of business and was forced to sell it PDA concept to stay a float. That money was used to complete development of the iPod as well as iTunes and money from the iPod was used to fund it’s computer development. The profits on computer and software is certainly greater than iPods so any increase in market share has significant impact on the company. With the flop of vista, many users, like me who never thought of owning a Mac and were loyal microsoft supporters, decided to move to Apple Mac. What they are finding is that they enjoy using them so much and they are so trouble free tat they a lot more time to do everything else. I personally now say, I will probably no buy anything but a Mac in the future. This is becoming more the norm. With a Mac you can also load XP or Vista, so in reality, even if you are a fan of Microsoft, you can still use it and all it applications an find it runs better.
Like all companies,Apple is doing what it can o reduce costs and try to pass them onto the customer to increase market share and an economy that appears to be entering into stagflation. The first test of that metal will be the release of their next MacBook-expected on October 14, 2008
With respect to the business market, it’s indeed a difficult market to crack and always been difficult. But if you think about it and the industries that use the Mac the most, not a surprise. Apple is doing what they can with the resources they have to seriously penetrate the business market and finding there are more obstacles than they thought-that has always been a very difficult market for Apple to enter and was a reason why the original Apple eventually lost favor to Microsoft and the PC market-but again any gain in that area in market share can represent enormous profits
JH, Apple’s 2008 ended before the stock market meltdown. It was hot, not shot.
You shouldn’t be worrying much about their 2009 either — new product offerings ARE expected.
everyone is waiting for the new imac coming out this month
That’s nothing but Apple hype. Without new product offerings and the US economy effectively in a major recession, their 2008 is shot.
“Change Wave” is hardly a reputable marketing survey company. For years I have followed the commentary of Tobin Smith and his record is less than stellar. I might recommend that you look at his survey testing procedures and look at his previous surveys. It should be noted that “Change Wave” sells its stock picking “advice” thereby putting into question the validity and motive of this survey.
IMHO if Tobin Smith says sell, I buy. If he says buy, I short.
ex ped: Agree that Tobin Smith’s online pitches can be pretty cheesy. But ChangeWave Alliance’s surveys are a separate operation within the organization and have a pretty good track record.
The survey didn’t take into account the new range of Macbooks to be launched in mid Oct. Let’s not forget anything sexy products from this innovative company may prove to be recession-proof.
Apple is also at the end of a two and half year cycle where they have not updated their macbook range, mac desktops or macbook pros. It is logical that we will see a sharp drop off in demand until the new macs arrive. We are expecting something quite special from Apple as was indicated in the last earnings report.
we interest to know the chart data is only counting within USA or WORLDWIDE? Since APPLE products sell all over the world. If data just collect from one or two countries does not seem accurate?
Just like iPhone 3G should count worldwide sales.
ex ped: Good point. As I recall, the group that ChangeWave surveys is something like 75% to 80% U.S.-based.
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Senator Reid “bankrupt” quote sent several insuance co’s lower, where is the accountability on that , shouldn’t he be investigated too