Not going to help Apple as total industry phone profits plunge. Certainly hasn't helped Apple increase its earnings over these past 5 quarters.
Besides, since nobody breaks out profits by product, this is just a guess by an analyst with roughly the same credibility as the success of his overall buy and sell ratings. I'd say Tavis McCourt, who came up with the 87% figure, qualifies as a permabull, since he had a buy rating on Apple's stock at $700. He was also a permabull on Blackberry, back in the day:
Analysts can make repeated bad calls for years — with no consequences. They just keep covering a company and pull big money for themselves from their investment bank. Nobody even calls them on their bad track record. Why do these guys deserve to keep their jobs in this situation? And some of them even get to go on TV continuing to espouse their lousy point of view.
Last Friday, I was watching Bloomberg TV and have to commend them for calling out one analyst. The analyst in question is Tavis McCourt of Morgan Keegan, based in Nashville, TN, who covers Research in Motion (RIMM). Jon Ehrlichman says: “Please correct me if I’m wrong but I was looking back over the Bloomberg and it says you’ve had an outperform rating on the stock since September 2008. That’s during period in which RIM has lost half its value while the S&P has fought its way back to even. Can you clarify that?”
Tavis’ response: “… No, that’s accurate… um… some stocks go up, some stocks go down. They’ve done much better internationally than what I would have expected and much worse in the US.”
Betty Liu: “Right, but I think Jon makes a good point that you’ve had this outperform rating for a long time on RIM. What would it take to make you change that?”
Tavis: [now angry and somewhat dismissive of the direct criticism] “yeah yeah, look… this would be an easy job if we all just looked backwards…. But, we don’t… and, uh, and, uh, so… you know, I think what it would take would be if there was any meaningful slowing in RIM’s international growth.”
“This would be an easy job if we all just looked backwards.” Well, Tavis, I think the point was that you’ve done a really bad job looking forward for over 2 years now. And it’s not like he upgraded the stock and then back-tracked. He just did nothing. He kept saying RIM was an “outperform” for the entire ride down to a loss of half the company’s market value. And now he says it’s still an “outperform.” What is any investor supposed to make of that?
Uh, Zhang, Tavis is not the only one that has shown Apple with the lion’s share of profits in the cell phone industry. . . And you can dance all you want. It’s not going to change the picture any but a couple of percentage points. Analysts are nobodies. But data is data. Apple reports actual sales. Everyone else reports “product shipped into channel. . .”
You can dance all you like, but that’s all it is. . . Dancing.