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In the love affair between Apple and investors, there is no bad news

Apple design guru Jony Ive and Apple CEO Tim Cook

One of the great 21st century love stories continues to unfold between investors and Apple. It is a tale of nearly unquestioning romance in which there is no bad news that can not be spun into a positive.

Take this latest story from Reuters, for instance:

Apple Inc’s older iPhone 7 models are outselling the recently launched iPhone 8 ahead of the early November debut of the premium iPhone X, broker KeyBanc Capital Markets said, citing carrier store surveys.

This would seem to be bad news to the casual observer. Apple took an unprecedented risk this year by releasing a new flagship phone that would not go on sale until November. It did release two new versions, the iPhone 8 and 8 Plus. But it seems that consumers are not excited and instead are going with the iPhone 7, which was discounted.

That’s completely logical, given that there weren’t radical changes between the 7 and 8. As such, this would seem to be bad news for Apple earnings in the quarter ending Sept. 30 (Apple’s Q4 2017) and the current Q1 2018 that ends Dec. 31. The new phones tend to only to be on sale the last week or two of Q4, so they don’t have a huge impact on earnings. Still, if the new iPhones didn’t stoke impact and consumers are buying a much cheaper one, that would seemingly have some impact, no?

Even more so, that sluggishness, according to Reuters, is carrying over to this quarter. Apple will have at least one month where consumers are favoring a cheaper phone in Q1 2018. And based on previous reports, when the iPhone X does go on sale, it’s going to be constrained in terms of availability. Which would seem to spell trouble for the holiday quarter, which is always Apple’s biggest.

So what do analysts say? No sweat. They assume people are just holding off and waiting for the iPhone X next month:

“Worrying about any small down-tick in margins from the sale of the iPhone 7 or 8 is a wrong-headed way to look at it as iPhone X is really the flagship device where we’re going to see a strong upgrade cycle,” said Jason Ware, chief investment officer of Albion Financial Group.

And:

Separately, KeyBanc’s Andy Hargreaves upgraded the stock to “overweight” from “sector weight” and set a price target of $187.

Because of course. News reports indicate trouble on the horizon. So assume the best and raise price targets. It is the latest indication of the kind of charmed existence the company, which has seen almost no revenue growth over the past years, continues to have on Wall Street.

If that were Microsoft or Amazon or Google, one could imagine the stock crashing amid wringing of hands and demands to changes in strategy. This being Apple, naturally, the stock continues to trade near its all-high.

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