iPad sales estimates may show sloppy research
The wide disparities in analysts’ estimates of Apple pre-sales for the iPad and their estimate for the future sales of tablet computers have thrown the predictions of some analysts into doubt in some quarters.
Differences in estimates for both iPad pre-sales from the Apple Web site and those for overall sales for tablet computers both for the Apple iPad and its competitors, as reported in a column in this space, have set off a controversy about the professionalism of financial research. The issue, depending on your point of view, is either the quality of projections by non-traditional analysts or a pure symptom of the turf war between traditional reporting sources (such as the established financial press) and new media news outlets (such as technical and financial blogs).
An excellent example of the sort of situation in which the controversy arises was reported by an article in The Street. Apparently, a Fortune magazine article contained the following quote about iPad pre-sales: “With three weeks and two weekends left before they ship, I wouldn’t expect much more than half a million in pre-orders and reservations. My best guess would be that they hit the 1 million unit milestone by the second week after it ships.” That quote came not from a large brokerage house, but from a Venezuelan blogger, something that is a sign of the times.
People like MIT Sloan School of Management lecturer John DeTore don’t like this trend, which he ses as the “dismantling” of investment research. DeTore says, “Ten years ago, powerful research teams, both in investment firms and on Wall Street, had a deep understanding of the major public firms. The result was 30- to 60-page research reports with major conclusions. Maybe you didn’t like what the analysts said, but they were informed. Now, we’re left with a bunch of bloggers who just want to know if you meet your quarter or not.”
Is that sour grapes by DeTore and those veteran analysts that agree with him, based on a changing of the guard from old media to new media? Or has the quality level of financial analysis really gone down a notch or two as a part of the changes in the publishing business? One suspects that we will not be able to predict an answer until we have more experience with new media.
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