How to bullshit like an industry analyst

Apple's tablet, when it finally comes, will prove one thing: if you predict something often enough, eventually you can say you got it right.

Here's Piper Jaffray analyst Gene Munster's latest dance around the maypole, from Wired:

"Between indications from our component contacts in Asia, recent patents relating to multi-touch sensitivity for more complex computing devices, comments from [chief operating officer] Tim Cook on the April 22 conference call, and Apple's acquisition of PA Semi along with other recent chip-related hires, it is increasingly clear that Apple is investing more in its mobile-computing franchise," Piper Jaffray analyst Gene Munster said in a research statement issued to clients. Apple's next step in mobile computing will likely be the release of a touchscreen tablet featuring a 7-to-10-inch display sometime in the first half of 2010, Munster predicts.

The attention this received from the blogosphere speaks more for our collective anticipation than for any facts, of which Munster explicitly disavows having any knowledge. It differs only in details from a prediction he made in January 2007, reported by Mac Observer:

Piper Jaffray's Gene Munster took a look at the pre-Macworld Expo rumors, and offers his odds on what Apple Computer will surprise us with on January 9. ... Mr. Munster added "Another possibility is that of a touch-screen tablet Mac. Rather than marketing the tablet computer to business users (like tablet PCs), we believe that a tablet Mac would be targeted at home users desiring to wirelessly control media content."

Then in October 2007, reported by AppleInsider:

Investment bank Piper Jaffray said Monday it believes there's a "high" likelihood Apple will announce an ultraportable Mac sometime in the next 4 to 6 months. ...

"The move could take place in the form of an smaller laptop and/or a tablet device using the iPhone's multi-touch technology," Sr. Analyst Gene Munster explained in a report issued to client investors. "Although we do not have firm evidence, either product would be a strategic extension of Apple's current technology base." ...

He said an ultraportable product from this category would likely be a tablet device similar to, but slightly larger than, the iPhone.

Mike Arrington deduced likewise in fall 2008, but Gene was there all along. Here he is, back in April 2008:

Expecting the lower-cost model to hit stores by the end of January 2009, Munster suggests that by that point Apple will have three distinct smartphones in the iPhone range, one of which will be the 3G iPhone and another the company's attempt to move beyond the $400 price point.

Gene Munster makes this prediction over and over again because it's easy, and because he knows he will eventually be right. By the standards of his profession, his record is pretty good. More interesting is what the eruption of hype yesterday says about the quid-pro-quo relationship between analysts and reporters. Analysts are identified in print as experts, bolstering their credibility with private clients. And reporters use them to dress rumors as credible, multiple-sourced news stories.

Fun fact: Gene Munster is the target of the internet's worst ever attempt at a "Fake Steve Jobs"-style alter ego blog.

There's another good reason to ignore what analysts say about Apple. CNBC's Jim Cramer, exposed on Jon Stewart's The Daily Show, revealed that analysts bullshit to manipulate the financial environment around a company's stock, and get away with it because "because the SEC doesn't understand it." He uses Apple as his example. Why? Because the enthusiast press that follows it is hungry for secrets: "It's easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple, but [you know] Apple isnt going to comment."

Published by Rob Beschizza

Follow Rob @beschizza on Twitter.

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  1. This one kinda smart dude once said “if analysts were ever right, they wouldn’t be analysts. They’d be consultants” but I can’t remember who. 😉

  2. Glad you’ve finally figured out that “industry analysts” of any sort are simply windbags. They’re as completely unable to predict the future as the average Labrador Retriever puppy.

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