Piper Jaffray is an investment bank that specializes in business growth.  On their website they list that they have great experience in their fields which make investing and business growth easier… you get the picture. The normal name behind their mobile technology reports is Gene Munster. Recently Munster has been making some interesting claims. First if that Apple will sell 6 Million smaller iPads this year… The problem with this is that right now Apple has not announced any plans for a new smaller tablet. Yes there are rumors running rampant all over the internet, but for an analyst that is supposed to help with investments… well I think banking on rumors is a little unprofessional. It would be one thing if there was any indication of this, but right now there is not.

Munster has also predicted that Apple’s stock will hit $1,000 per share by 2014… Again that is a tall order considering where it is sitting near the mid-point of 2012. Right now Apple is sitting at $606.94 and is on something of a decline from its starting point today and has also shown instability over the last few months. One item that did help increase the value was the announcement by Time Cook of a return to paying investor dividends.  Of course consumers do not care about the value of stocks, but to investors… well by predicting a stock’s increase you can actually artificially raise the price which is what has happened with the announcement of dividend payments and also with the prediction that Apple would hit $910 in the short term (which did not happen).

At the time Munster made the statement; “Driven by an ever expanding portfolio of innovative products, a growing integrated digital grid, unmatched aesthetics and a brand that is able to touch the soul of consumers of all backgrounds, Apple fever is spreading like a wildfire around the world and we see no end in sight to this trend,"

What Munster did not expect was to see Samsung emerge as the number one handset maker in the world. This happened mere days after Munster made the prediction that “we see no end in sight to this trend,”. Unfortunately for Apple is has stopped and could continue to fall as we see the number of Android based phones increase (they already have a 61% market share) while Apple pulls in at a relatively low 20.5% (according to IDC). So we cannot see how Apple fever is spreading especially considering that Apple’s market share was around 25% last year at this time.  

Anyway, back to the original rant. Munster decided that a survey would be a great idea to find out if Apple is growing. He decided to poll 400 people from Minnesota, New York, California, China and South Korea. We originally thought that it was 400 people per location, but it is not. This is like looking at 1% of the sky and claiming you know everything about stars…

Still Munster was not deterred; he has released their findings which interestingly enough show bias in the first bit of data. In the sampling 208 people owned iPhones. This is very disproportionate to the actual numbers in play in the market. It gives iPhone owners 52% of the vote in the results (despite them only have 20.5% of the global market). You can see already that our results are statistically unlikely to be accurate.  The report goes on to claim that of the 400 people polled 65.5% will buy an iPhone as their next smart phone, with 51% of those saying they will wait for the iPhone 5. Only 19% said they were going to get an Android Phone…. Wait an Android phone. Last time I checked there was not really an “Android Phone” So we have an issue here again. By giving Apple a name brand for their questions (we imagine they gave the choices) they increase the likelihood of someone choosing that. I do not own an Android Phone, I own a Samsung Galaxy Nexus. The report is now flawed in two vital ways, but it does not stop there as you can see. They went on to ask what size screen you prefer with the options “Big” or “Small” and followed this up with a question on perceived value another nonsensical number considering the range of phones running Android max out at $299 while Apple’s iPhone goes all the way up to $399.So what they asked was “how much did you pay for your phone?”. This is how the majority of people will hear “what is the value of your phone?”.

Source CNN Money

In short the poll was invalid when Munster chose to ask only 400 people on the five markets. It was further compounded by the questions asked (not differentiating the brands of phones) and wrapped it up with a misleading question. All in Munster’s new claim that Android will lose “33 per cent of current users to the iPhone” is exceptionally far-fetched and not what we would expect from an investment firm. It looks like they are trying to stack the deck to meet their prediction of $1,000 per share and are willing to do quite a bit of spin (although nothing illegal) to get that stock there. We expect the iPhone 5 to do well, but we do not see it grabbing 33% of Android sales when it hits

Discuss this in our Forum