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That’s the question of the day for Apple followers as the company’s fans on Wall Street lick their wounds from last night’s disappointing earnings report. The stock fell 12.4% today to $450.50. That’s the company’s worst one-day performance in about four years, and puts Apple shares right where they were about year ago. The company’s market value of $423B is still impressive, but a far cry from late September around the time it released the iPhone 5. Back then, investors thought it was worth more than $659B. To put this into perspective, the drop in the perceived value of Apple over the last four months amounts to more than the value of Comcast, Disney, and Viacom combined.
The most popular explanation for Wall Street’s souring view of Apple is that investors are disappointed with iPhone sales — even though the company sold a record 47.7M in the last three months of 2012. That was short of expectations, and it follows recent reports that Apple is cutting back on orders. The fear is that Android phones are catching up in features and overall coolness, just as Microsoft’s Windows 8 phones begin to make headway with some fans and Research in Motion prepares its bold revamp for its Blackberry phones. There’s also a lot of demand for handsets with screens that are larger than the iPhone’s. Meanwhile, Apple’s iPads face tough competition from Amazon’s Kindle Fire and other Android-powered models. While Apple boasts about its products’ features, rivals “are using price as a lever to get traction in the market,” says BGC Financial’s Colin Gillis.
No wonder Apple fans are so eager for it to introduce another revolutionary product — possibly the much-discussed TV that would make it far easier for viewers to find and handle conventional programming and Web content. CEO Tim Cook told analysts yesterday to stay tuned, observing that it’s a topic of “intense interest for us” and that “there’s a lot we can contribute in this space.” If he can, then Apple’s stock will look like a bargain. If he can’t, then look out. Apple still has a long way to fall.
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What people don’t realize is that Steve Jobs has already used Apple’s revolutionary time travel device from the years 2098, where he was unthawed, to travel back to 2013, where he is hard at work in the garage of a guesthouse in Altadena, inventing a pocketwatch that will GIVE YOU DOMINION OVER ALL OF RECORDED HISTORY… iTime, bitches!!! Linear time is so PC. Think different, humanoids!!!!!!!!!!!!!
This is more about Steve Jobs not at the helm and Tim Cook not being able to keep the heat going with new products. The iPad mini and iPhone5 are just different iterations of old products. Not introducing the Apple TV soon after it was covered in the Jobs biography makes people feel like its late because of problems. They should spend the 100+ billion on exciting acquisitions or that stock will keep sliding.
Regardless, still a brilliant company.
Ha ha ha. That’s what you get for selling crappy product. The iPhone 5 sucks. The camera on it sucks. The purple haze, the scratching, Apple Maps, trying to synch with Address Book/Contacts on computer. It all sucks.
All Apple cares about is selling product, rather than developing good product. And the millions who ran to the store and jumped online to pre-order their iPhone 5 are seeing that now, as well as the investors. And Apple has no problem exploiting sometimes to their death Chinese workers so Apple can make it’s millions in profit.
Ha ha ha. Karma’s a biz-itch.
Right…Apple has a monopoly on exploiting foreign workers to their death so (blank) can make money.
I wouldn’t say crappy, but no longer innovative. They are still playing catch-up to Samsung, HTC and Motorola. They just make incremental improvements to their older products where they used to make innovative products. They seem to be more focused on suing their competition rather than produce better products.
Apple is showing Steve Jobs was the brains behind their innovative products and are now looking like the next Motorola, RIM, Kodak, Nokia or Yahoo. Tech companies that thought a little improvement was enough to keep people using their products. Microsoft changed the game with Windows 8 and when people can vet a full fledged tablet computer for $600 the iPad doesn’t seem too on top of things and heather does the company that makes it. The Surface RT might not have sold a lot out of the gate but Microsoft is waiting for their marketplace to be fully developed, then they will lower the price and eat into iPad sales like no other device has and then Apple’s stock will grisly take a hit. That’s without the Surface Pro and Nexus tablets that will also take market share.
Jobs had that “Cult of Personality” thing going for him. He was thought of as a visionary and Apple Fanboys ate it up. Cook doesn’t have the charisma or vision to keep the sheep happy for long!
God the investors are utter idiots.
Apple even at its stock high had one of the lowest price/ per earnings ratings of any Nasdaq stocks. One of the highest ratios of cash to stock value of any major traded companies.
They are comparing ti’s performance versus last year, where with one less week it managed a razor thin increase in profit (again breaking the record for 2nd largest profitable qtr in US history, and doing so with one less week of sales. Investors worrying about declines in sales! Idiots, they do understand that sales increased, and increased 30% again with one less week of sales. Their ipad line also showed double digit increases with again one week less of sales. Mac sales were disappointing, but they sold them as fast as they made them, as wait times during the quarter were typically 3 to 6 weeks. With each major product besides the ipod line, having problems meeting demands.
The problem with Apple is it’s a two trick pony….nothing new. It’s products mature very fast. And — it doesn’t have a lock on enterprise server systems, like Windows. Businesses still depend on Windows and networking. Until Apple can crack that coconut open, it’s a goner.
Apple’s stock was trading on the idea that Apple could maintain, and release future products that were market leading volume and market leading margin.
They caught lightning in a bottle with the iPhone and the iPad. The problem is if someone is doing incredibly high volume at incredibly high margin, there is always a competitor who can come along and be very happy with high volume and lower margin. It is inevitable.
So the stock was pushed too high.
Apple is a great company. This isn’t about Jobs or Cook. It is about investors pushing the stock too high with expectations that a company (any company) could maintain ridiculous volume with market leading margin.
Now the truth has settled in. A company cannot maintain both market leading volume and market leading margin. They will have to relinquish at least one. And Apple has always been willing to sacrifice volume and maintain margin.
A good company, making a good product and making good money. But not one that can forever tilt the free market and maintain market leading volume and margin.
Apple without Steve Jobs is like an aircraft carrier without navigation or steering. The problem with Cook is that he is trying to preserve the house that Jobs built, when he should be building new floors. Cook should be throwing tens of billions into R&D. Instead, he’s stalling. By the time the iTV arrives, there will be cheaper alternatives that will have most of the same features. Apple is no longer setting the pace. Microsoft were able to successfully reinvent themselves and are steadily encroaching on Apple’s market share. Apple desperately need another game changing device to stay ahead. Jobs dreamt up the future, Cook is clinging onto the past.
iTunes 11 is an unusable mess. Everyone I know has scrambled to find alternate mp3 players and management software.
The stock drop is a clear indication of the concern that nothing new & great is on it’s radar right now.
If Jobs were still around, I doubt that they would have released Apple maps a year before it was ready.
Lot of ignorant folks commenting here. All these products have a long development time, so people claiming Apple can’t innovate anymore because Jobs died last year don’t understand timelines in a realistic fashion. Whether Apple can innovate under Cook remains to be seen.
Also, anyone who expects Apple to release truly revolutionary products every year or two years is also unable to grasp the nature of development reality. And I don’t see anyone expecting Google or Samsung to create any truly revolutionary products in the smartphone or tablet space. All they come up with are incremental improvements, and yet the Apple haters act like those products are something special. They’re not, and the double standard is pathetic.
The iPhone 5 is the best smartphone that exists, as evidenced by so many of the initial reviews. I laugh at the faux hipsters who claim they’re “disappointed” in the iPhone 5. I always ask them what did they expect it to do? Make ham sandwiches for them?
They splutter for a bit and then eventually come up with an answer that’s — yep, you guessed it — a merely incremental change. Nothing revolutionary.
Bill Gates will have statues erected in his honor after his death celebrating all the good he has done for his world. Steve Jobs will be forgotten, and his name will not be remembered as time passes.
This is a matter of fact.
AAPL is a favorite of the retail investor. As I write this after the HFT flash dump of AAPL in the last second of trading today, it is clear that the retail investor is being raped by the bankers while the SEC quietly watches. This is classic pump and dump. NFLX is the next retail slaughterhouse.
Since it’s launching of the ipod, apple has been riding the Media Darling wave becoming the most highly valued company in the world. At least, Wall Street believes so… the value is stock is simply determined by the price the next person is willing to pay. The management of their product development and release of Next Generations seems to be fueled by the one-man-race to finish line. If panavision can develop underwater film cameras, shouldn’t Apple be able to develop a phone that can with stand a little water? Literally, an act of congress was required to force companies to establish industry standard phone/data jacks. Apple is approaching a plateau… for long term investments, my money is on Microsoft.
I had the chance to sell my ? APPL stock @ $680 ….. but, my ” financial advisor ” told me that they were still on a buy. I am only saying this to tell you, think for yourself. Be in control of your money, or someone else will.