AAPL - Has the Apple finally started to go rotten?

[Ridn2lo]

Hey everyone. I wanted to get some threads going on some of the plays that could potentially turn out pretty big for earnings this week. One of the big boys for this earnings week is Apple (AAPL) on 01/27/2022 in after hours.

Apple’s last two earnings to me are very telling due to the correlation of the stages of the pandemic. The Covid boom is at an end, and because of that Apple only met expectations on their last earnings with a slight miss on revenue. In comparison to their previous earnings, that’s a pretty lackluster performance. And I can’t really come up with a reason why this earnings report should be any better.

When it comes to any retail company, Google Trends is one of my favorite tools to utilize to look at how said companies and products are being viewed over time. And as I assumed, searches for Apple and their products can fallen steadily over the last few months.

Apple in their last earnings spoke of all their newest products in development and releasing soon, but they are just as prone to the chip shortage as other companies are that is still ongoing. I expect sales to be down due to issues with manufacturing delays. Their Apple Watch sales apparently have been terrible, and I’m now curious what other products they’ve been having issues with.

As we all know, Apple has a huge bearing on SPY. Even if Apple reports earnings above consenus, I still don’t think it’s really going to help them much in these times of uncertainty in the market, and possibly just add to the slow bleed of SPY even more.

Apple looks like it has a decent line of support around $137 - $138, so I’m looking for it to come down and test that area here soon. Whether is bounces or breaks through is going to the the interesting thing to watch for.

Personally, I absolutely hate Apple products. Their following is almost borderline cult-ish to me (the run up on the Apple car news was absurd), and I find their products boring so my opinion of them will always be more negative than positive. I’m probably going to be looking at the $130 puts for Apple on their earnings.

This is not financial advise. Please do your own research. Any counter arguments, or additional info, to this post is much appreciated.

[Easytarget]

No idea if this article makes a difference on the play, but this was just posted.

Monstrous Earnings Ahead: IBM, Microsoft, Intel, Tesla, Apple, Visa in Focus,...

[Ridn2lo]

Sounds like analysts are even unsure of Apple right now as far as trying to give it a price target. Current market turmoil and future guidance are going to have a major effect I believe more so than the actual numbers they report.

[Easytarget]

Plus the supply and chip shortage. I don’t see how any tech stock could do well with earnings coming up.

[macromicrodick]

Supposedly air tags are used to stalk people and it’s been a thing for awhile.

Apple AirTags - 'A perfect tool for stalking'

Surprised stories like this aren’t gaining more traction. One of Apple’s few redemptive qualities was that it took privacy and security more seriously than it’s competitors. That one of their products could be used as a tool to pierce that protection is surprising to me.

[bajillion]

I would disagree with the headline. They aren’t a perfect tool for stalking. There are much better tools that use precision GPS and that don’t ever notify the person that they are there and have existed on the market for years that are much better for this nefarious purpose. In fact, the reason these stories even exist is because Apple built protections into their system so unknown AirTags will notify the person they are “moving with” after a certain amount of time. Is it perfect? No, but I suspect Apple will continue to update the software to make them better at earlier discovery in the future.

[GodOfLegit]

And guns can be used to kill people. Extreme comparison I know, and I get your point, but let me try to elaborate on mine.

Privacy and security is something that Apple has been a bit shaky on lately, here I’m especially thinking of the iCloud image scanner that would introduce both privacy and security concerns, but which they’ve been very quiet about for a while now.

Focusing on AirTags, there are many competitors ( here are some of them 7 Best Apple AirTag Alternatives You Can Buy in 2022 | Beebom ) so lets try taking Apple out of the equation for a moment and focus on the core issue of tracking devices by exploring these two cases:

A) Lets say we have a good willed person who would never dream of tracking other people but uses tracking devices to easily find his wallet, keys etc… One day this person goes out in the town and wouldn’t you know it their wallet is gone! Turns out the wallet has been stolen, but fear not the wallet has a tracking device in it and the person was able to locate the wallet and report it to the police!

Well here is a case of the person having inadvertently tracked another person’s movement without that other party knowing. Is this wrong? Or is it justified as the wallet was stolen?

B) In the other end of the spectrum we have the bad willed person who plants an tracking device on a person and is watching their every step without that person knowing. The bad willed person can use this tracking to rob the tracked persons house when there is no one home, track down a cheating spouse, or something more sinister such as kidnap or even kill said tracked person.

Clearly not a great use for tracking nor an image any company that sells tracking devices wants.

If we rule out not having the devices at all (That ship has sailed) well with case B the solution seems obvious, have the person being tracked be notified that they are being tracked! Well not only does this ruin Case A (As the thief will be informed that they are being tracked and may just get rid of the tracking device) if this is not properly handled then people at you office may start getting notifications on their phones that they are being tracked simply because they are close to e.g. your car keys (not a great user experience).

I believe that the middle ground that Apple has made with informing users within a certain period of time that they are being tracked is a good middle ground and it is also why I don’t think that there is more backlash against this product (Not to mention their running adjustment of how this service works), furthermore there is something to be said about people getting used to being tracked by their smartphones even though that form of tracking is less likely be used by people with bad intentions.

In fact try taking case A and B and substitute a generic tracking device with a smart phone whose GPS you can use to track the device remotely then the core principle issue is the same as a person with bad intentions could plant a small smartphone on another person, so should phone GPS tracking be disabled as well? (And yes I know that smartphones are more noticeable due to their size, are more expensive, and generally don’t hold a charge for very long, but this just a thought experiment).

[macromicrodick]

Yeah I wasn’t trying to railroad this thread with discussions of privacy and security. I can see all points. My bad. I was just trying to point out its really bad PR for one of the few new products Apple has released. Maybe we could see some metrics or google searches on air tags to estimate if it’s even been a sales hit or not?

[Omachi]

If Apple does miss earnings and tank, that would probably tank a lot of other tech stocks also, since they already in a bad place, and a lot of them are strongly correlated with apple. There might be put plays on other tech stocks with less IV that could work out nicely also to indirectly play Apple’s earnings.

[Ridn2lo]

Big run up in searches for Apple AirTag before Christmas holiday.

[G700]

Disclosure: no positions

I agree. I got burned 3 or 4 cycles ago when their sales for every device was spectacular besides for the iPad and that killed the stock. I think we will see a repeat of this again. The iPhone 13 sales hit a record high in China for two months in a row.

I strongly believe they will do well this earnings, but when filtering it out based on individual products - I do see this causing issues for the stock.

Edit: I’m also very much surprised we didn’t see a rally into the earnings which AAPL historically has shown. Generally see a 15-20 point gain heading into their ER.

[DarKnight]

Twitter sentiment/purchase intent mentions is neutral from Likefolio: