The First Look - Andy Cinko, Bloomberg News
Jan 15, 2013|
The First Look - Andy Cinko, Bloomberg News
Transcript - will not be 100% accurate
Apple Stock took a big slide yesterday it's down again the market hasn't even opened it it's down. What two dollars a share or 99 -- before heard a lot of people tell me if he gets under 500. Look gal Katie bar the door we are joined by -- cinco Bloomberg News in New York Andy are you doing. Good morning very nice to have you back. I -- it's kind of nice to be back. And -- Know. People have been asking me all morning so that -- -- be back -- it well yesterday it was 82 degrees and I went pursuant anyway. I don't know now I really can't appear polar bear hey I'm Apple Stock well. And he took a big hit yesterday it down again today. A lot of people late on Bloomberg and other networks it said if apple breaks 500 look -- bay because it's a slippery slide to three. It. Well I don't know about parade but it certainly -- slippery slide because we've had four occasions in the last couple of months. Where apple has come down to that spot in the dollar level and and at least help support and the more time to come down to 500 and hold the more important that -- becomes. And want to break that level you can be assured that E*Trade is up and down Wall Street across the country. That's individual finance and institutions as well Barry hall looking at five dollars and substantial break there but at a recovery by the close. Which certainly indicate more declined to come and again almost would be more technical -- price based. And not the Soviet fundamentally based. But that being said you know there are times to evade their price action trumps anything else that might happen and so -- of the dollar is very important. Let's talk about fundamentals because I was one of the early users to get an iPhone 5. Came out that day I got and I said this phone is not worth the money. -- a I felt it was over hyped. And it appears now there's significant amount of evidence that not a large percentage of iPhone four users actually made the upgrade to the -- by the didn't think it was worthwhile. And yeah we don't unfortunately have any hard data I was looking around for that. Very piece of information this morning and asking my tech reporters here and Bloomberg we don't think they have very good number for that Barry am afraid. And so we're all sort of left scratching their heads and wondering just how many people did indeed upgrade there are of course anecdotal report. I'm gonna help you out Randy I'm gonna help you out I've done my own. I get tons of information from consumer intelligence research partners they said in the three months after the ball was released. On 50%. Upgraded wearers and on the four it was 73%. So. You had that's a big difference in it and his people are saying. You know what could be made navy the air force still works in -- saying I gave my producer. He said on the way to the six comes out because the five wasn't big enough leap for him to make it worthwhile to invest the money. -- and any concern sort of get to a point where product safety HE. They eat that the support and meet -- you need to know that we need to get tested the about it especially when it's not after nor bigger -- better it's really more -- at the same. You know and and meets -- -- so yeah that's that's not wholly surprising given that what we know about consumer trends and to the product. What do you think about them coming out with -- cheaper -- you know I I read that in the last couple weeks they said hey we're gonna come out with an iPhone 5 that's -- And so you know there it seems like they wanna go head to head with. You know the droids in the Samsung's of the world is that good or bad for the stock. I think it's bat. The reason being is that margin most likely will be lower. Of that product now if you product mix shift from a high margin. Too low margin product then you know it's so effective you've got to print less than earnings -- it's gonna take huge volumes that the cheaper product. To make the same amount of product -- profit from the higher priced products so it. And analysts have been talking about this cheaper cheaper iPhone in just that very same way this could be. Heard -- hindrance to Apple's gross margin which by the way is there if that somewhere between forty and 50%. So and again it wouldn't be the amount to of the hit to the gross margin it would be that the gross margins ball and simply -- direction change. Would not be a positive factor with a company. Very -- -- as always thank you very much for your insight on this story. That's -- cinco Bloomberg News. And that that the thing that jumped off the page region. When the work came out you before in a union Dave I think you buy it you guys both have the force -- I'm the only cool guy in the studio. You'll look real cold and I am. But the the. The number of people in previous generations of phones 73%. Upgrade right to the five. Only 50% -- should tell you something right there I think that. Is having huge impact on the stock. And -- the other thing it's having an impact the fact they're coming out that cheap phone that's that's not a good sign that's -- at the at the beginning of the yen Tuesday Tim Cook. Taking the company clearly taking the company in a different. I just say something to you know maybe folks for the -- like date night which is happy with our products it's not that it was good -- -- -- nothing wrong why should we -- leader like even drop it and break the screen like you know that is correct. Question of the day is do you drink -- how much do you drink in do you believe it should be taxed at a higher rate 68680. Is our text number. We're gonna do some fact checking -- some of the data that we released earlier that's next on the financial exchange.