An interesting discussion with Apple analyst Horace Dediu has appeared today in which he warns against giving too much credence to the opinions of well-paid analysts, especially those who are new to Apple.
For example, he states that: "Anyone suggesting Tim Cook should be fired is a neophyte." (For those without a dictionary, that's basically a novice).
Dediu, who manages the Asymco blog and consultancy, warns that we should be suspicions of what highly paid analysts say. "The opinion of those who are highly paid should be treated with suspicion," he told The Next Web in an in-depth and interesting interview.
Be wary of analysts who work for financial services, notes Dediu, their paychecks "are not tied to accuracy of foresight".
Even analysts at research companies like Gartner or IDC "can be forced into a blunder by suggesting that Apple or any other company behaves like any other," Dediu states.
Another issue is the fact that the number of people providing commentary on Apple has risen along with the number of people new to Apple's products. As a result of this, he notes, a lot of people are writing about Apple who never wrote about Apple before its ascent. "Therefore the current dip in share price is the first they've ever observed first-hand. They give it disproportionate significance," he tells The Next Web.
There are some insightful observers however. The bloggers and people who have worked in the industry. They can make "informed opinions" and their motivation is to establish "credibility and reputation", from an audience that is "not expected to pay for their work," explains Dediu.
Speaking as someone who has watched Apple for some time, Dediu mentions that there have been "massive declines in share price in the last decade." He notes that his "rule of thumb" is expect a 40% drop in Apple shares "at any time and for no reason".
He notes that one reason for these unexpected drops is the fact that "there are too many institutional owners," something we have recently noted. For example, Apple's share price plummeted in the fourth quarter of 2012 because four of the biggest hedge funds dumped billions of dollars of Apple stock.
Apple, the iPhone and emerging markets
Another interesting point made by Dediu was regarding ownership of smartphones in emerging markets such as China. Dediu points out that the real issue isn't the provision of the handsets, but the provision mobile broadband. "The economics of providing bandwidth are out of sync with the economics of providing terminals that can consume it," he said, noting that those smartphones won't be used for mobile data and will hence be dumb.
Sign up for CIO Asia eNewsletters.