On Apple Analysts and Their ‘Research’

Financial analysts are a funny thing in the Apple rumor world.

With increasing media coverage of everything Apple, as well as the impressive growth of their stock, it seems financial analysts are covering Apple in increasing detail and frequency.

I won’t claim to know the business side of these analyst publications, but they have become a frequent topic in the Mac rumor world since analyst reports frequently predict Apple’s future plans.

However, from a rumor-analysis standpoint, these analyst reports tend to offer very little new information and introduce a fair amount of confusion.

My major problem with analyst reports is that they never cite their sources and intermix speculation into their predictions. It then becomes impossible to determine the original source of the information and its credibility. Frequently it seems they are simply reciting information that has already been reported on the internet. This may not be important to financial customers (admittedly, their target audience) but from a predictive standpoint, makes their information next to useless.

A few examples:

In May, Gene Munster of PiperJaffray reported after Apple’s shareholder meeting that an iTunes video rental would likely be available in 2008:

“Timing of this is difficult to determine, but we would expect [iTunes video rentals] sometime in 2008″

This interpretation and 2008 target date was apparently derived from this rather vague sequence of events:

When a shareholder asked Jobs for high-definition video content on iTunes and asked if his Apple TV could allow him to rent movies, the CEO smiled. “One never knows,” he said cryptically.

In a more recent report, Munster reports that he believes that the MacBook Pro is coming at WWDC and an iMac “possible” as well. These expectations echo reports posted by ThinkSecret (MacBook Pro, iMac) in May.

Is it possible that Munster obtained this information from his own sources? Possible, but without ever citing his sources, it’s difficult to trust information that has likely been recycled from existing reports.

Of interest, our analysis of ThinkSecret’s MacBook Pro report documents a 182 average update length for the MacBook Pro which is tracked in our MacRumors Buyer’s Guide.

In the same report from Gene Munster, he demonstrates that he also uses MacRumors Buyer’s Guide for part of his research:

He notes that on average, the Cupertino-based company has updated its professional notebooks every 182 days, with the most recent generation having launched 209 days ago. Similarly, he said, iMacs have traditionally seen updates every 168 days but the current generation is now a whopping 257 days old.

These numbers correlate exactly to the Buyer’s Guide averages. Some have asked couldn’t he have come up with these numbers on his own? It’s possible, but exceedingly unlikely as he would have had to choose the same releases (2002 PowerBook, 2003 iMac) to start counting in order to achieve the exact same averages.

My intent wasn’t to single out one analyst in particular, but just to show the problems with using their reports to potentially corroborate existing rumors.

This entry was posted in Apple, Mac Web, MacRumors.com. Bookmark the permalink.

17 Responses to On Apple Analysts and Their ‘Research’

  1. Harald Koeppen says:

    Bravo! What does this mean for the future? Analysts (and bloggers) will have to learn the basic priciples of journalism.

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  3. longofest says:

    Arn, I want a new title at MacRumors: I no longer want to be an editor. I want to be a Senior Apple Analyst.

    Oh wait… that would be degrading myself, wouldn’t it? Nevermind.

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