Although the market as a whole has taken a beating lately, the rollercoaster ride has been particularly harsh on Apple stockholders, who've seen their shares fall from a high of $202 earlier this year to just over $130 today. Of course, among the hardest hit was Steve himself, who has over 5M shares of the company -- which is why he may have sent out an email today advising employees to "hang in there." Calling the past week "a remarkable last few days," Jobs pointed to Apple's product pipeline, people, strategy and -- perhaps most importantly -- $18B of straight cash in the bank as reasons to have faith, and said that factors "larger than ourselves" were taking their toll on the stock price. That may be so, but it's still pretty unlike Jobs to comment on things like this -- we suppose taking a $377M hit on paper would probably cause us to say a few things as well.
posted Jan 28th 2008 9:09PM
Should the dvd log be blu ray or something?
logo*
oh please you mean HD DVD right?
Everyone and their grandmother unlocking their iphone, underwhelming MacBook Air, underwhelming movie rentals, and itunes competitors aplenty. The smart people are selling. Apple had better get a nice chunk of wireless spectrum at the auction and run with it. Free wifi everywhere for iphone owners = Steve gets his face on Rushmore.
Everything you listed has nearly nothing to do with Apple's bottom line:
MBA is not meant to be a mass-market computer that will light the world on fire.
AppleTV rentals/sales are meant to be break-even just to drive hardware sales
Ditto for iTunes competitors. The more the merrier...guess what MP3 player people are going to play those files on?
iPhone unlockers: Who cares, Apple already sold them the iPhone. So they miss out on the revenue-sharing. They wouldn't have gotten the sale OR the revenue if the buyer couldn't unlock it! Phones sold to unlockers are icing on the cake, revenue-wise.
DB tell that to the investors.
and since you are one, of course you're going to tell everyone nothing is happening.
obviously even the smallest signs of apple losing their edge will cause people to pull out their money, and Barry just gave a bunch. Jobbs has profits, but he's kind of a jackass CEO, so when Apple isn't profiting endlessly, shareholders don't trust jobbs to invest back in the business. And if he doesn't have legitimate ideas up his sleeve, he's not going to want to invest much. And neither would I.
"Everything you listed has nearly nothing to do with Apple's bottom line:"
Notice we're talking about share price and not bottom line here.
Share prices are based on the perception of the buyer. If the buyer is optimistic about where the company is headed, they're willing to buy/pay a higher price. If they're not, they sell, short, or refuse to buy. So when Apple disappoints and makes people think they're not in touch, they see their share price fall.
People unlocking their phones and taking them to different carriers absolutely hurts Apple. Apple is getting far more from their rev share with AT&T than they get from the price of the phone, and they're basing their forecasts on very few people unlocking. As it turns out, people are unlocking in LARGE numbers. This is hurting Apple's outlook a lot. Bad outlook = share prices go down.
DT, do you get paid for spewing this crap?
You say:
"MBA is not meant to be a mass-market computer that will light the world on fire."
You're kidding right? By that criteria no Apple computer is "meant to be a mass-market computer," so why continue to make them? Notebooks are Apple's best-selling models, and the part of the computer market where they have the best market share. If the new notebook isn't supposed to aid that market, then why are they selling it?
You say:
"AppleTV rentals/sales are meant to be break-even just to drive hardware sales."
Care to back that up with any facts? Both Variety and Hollywood reporter say that Apple is getting 30% of that rental fee, which is more than Blockbuster gets. That sounds like a bit more than "break-even" to me, and just about everyone else in the entertainment industry.
You say:
"Ditto for iTunes competitors."
Once again, care to back that up? Every independent source reports that Apple is getting between 30% to 40% depending on label. IF they lose that business to Amazon, that is a lot of money lost.
And lastly you say the funniest:
"iPhone unlockers: Who cares, Apple already sold them the iPhone."
Apple loses about $500 a year for every person who unlocks their iPhone instead of using it on their exclusive carrier who gives them revenue sharing on every subscription. If the 1 million unlocked iPhone estimate floating around is true, that would be $500 million in lost revenue, every year! You really think that doesn't hurt their bottom line?
You sound to me like someone desperately trying to convince everyone the company is ok, so you don't lose any more on your stock.
"Apple loses about $500 a year for every person who unlocks their iPhone instead of using it on their exclusive carrier who gives them revenue sharing on every subscription."
It's really frustrating when people claim such things result in 'lost' money. They have not lost any money. They might not have earned as much, but NONE is lost.
For example, if I set up my computer to download a $10 album then delete it again a million times, the label could not accurately claim they just lost $10,000,000. (Well all know they try, but you see my point, it's obviously accurate. I probably wouldn't have even bought the first copy!)
I'm willing to bet most unlockers would not have been paying 'official SIM' customers if they couldn't unlock. For a start a huge chunk of them *cant* because they don't live in a country where they can actually subscribe!
Others are stuck in contracts or refuse to change provider.
All of these people have paid for hardware which apple have profited on, and many would not have paid for the phone if it could not be unlocked. That sounds a hell of a lot more like money earned not money lost!
Take a basic accounting class, it's called an opportunity cost.
Apple is not losing money on unlocked phones - most of them go where locked phones are not available.
However, Apple could have sold 3x the number of phones they've sold so far if they'd just sell it world-wide, and unlocked. They'd be an instant player in the mobile phone market. As it is, they had a big success considering they did almost everything in their might to prevent interested customers from getting an iPhone.
The locking scheme is a major reason why investors might want to dump AAPL. It's the iPhone killer, home made by Apple.
In a way, it shows that with all its glorious products and mind-boggling design, Apple still has the ability to shoot itself in the foot - with a double-barreled shotgun. In a way this is what Apple does. Other companies would quickly learn, and make unlocked phones available. Adjust. Not Apple. Apple will 'think different' through good times and bad. Investors don't like that very much - I don't like that very much, and I am an investor. Small fry but nonetheless, it's my money on the line.
@L.M. Lloyd:
MBA: Apple sold 2.3 million computers last quarter alone. That's an awful lot. Maybe not mass market, but hey, Porsche isn't mass market either. The MBA is a niche product and everyone knows it. If Apple sells 100k per quarter that's a tidy sum they would otherwise be handing to Sony, et al. If it's not for you, great, Apple has 2 other laptop lines, so they aren't losing any customers there either.
See w00t's response for the iPhone "losing" money. Those weren't Apple's customers anyway, so it's a bonus sale. Might be a problem for AT&T over time, but not Apple.
As for iTunes driving hardware sales, here is a direct quote from their quarterly conference call:
Q: iTunes Rentals goals? Drive hardware sales or profit by itself?
A: ...Goal for iTunes store has been to run it above break-even and use it to drive hardware sales.
And keep in mind that no matter how hard I pump this stock (I could be on every message board on the internet), it moves 45 million+ shares a DAY, and nothing I can say will ever move it. I've made more money on this stock than in my *real* job (even with this decline), so I really don't care if you think I'm personally invested in it.
To both w00t and DT.
No, actually you are quite wrong on the iPhone. For people who obviously think you know quite a bit about trading stocks, I can't believe you don't have this one right. If Apple says they are going to sell X number of units this year, at Y amount for the unit + Z amount for the subscription, the value of the stock goes up based on that revenue projection, and then it turns out that a quarter of those units are only bringing in Y, and no Z, then that is a loss of projected revenue, which causes the value of the stock to be reevaluated. For all intents and purposes, that is projected revenue they lost. They sold a unit, and are getting half the projected revenue from that unit. That is lost revenue, just as much as it would be if someone walked out of the store with an iPhone without paying for it.
As far as the "but all of those are from territories where there isn't a partner service provider," I have two things to say.
1: That is absolute and complete supposition, supported by nothing but guesswork.
2: Even if it were true, given the pathetic sales numbers of the iPhone outside of the US (less than half a million activated iPhone service plans in the entire world outside of the US) 1 million unlocked phones out there make it very, very, very hard for Apple to sign any new service providers to their terms in any new territories. Why sign a special deal with Apple, that requires you to share profits no less, to get an exclusive deal on a phone hundreds of thousands of your subscribers already have?
@L. M. Lloyd, once again:
No, you are mistaken. Using your example, if Apple expects to earn X*(Y+Z), then units that are sold and NOT under a profit-sharing arrangement are just another variable, Q. If Apple manages to sell an iPhone to a Tmobile subscriber, they never would have realized subscription profit from that customer anyway. Sure, it would be fine and dandy if every potential iPhone buyer would switch service to the carrier who Apple has an agreement with, but that's not going to happen. So it is just icing on the cake. For someone who has managed to use a computer to get online and post your opinion, I'm surprised you can't see that.
Oh, and for the "pathetic 500,000" iPhones sold outside the US...I bless you that you should one day sell half a million of anything, let alone a $500 item with an estimated 100% profit margin.
You guys are stupid.
The Macbook Air isn't a laptop, it's a Ultra Mobile PC.
Comparing it to laptops in terms of power and price is unfair.
It'd be like comparing a Molex to a Rolex.
Macbook Air is the most powerful and cheapest UMPC out there. You can't find a better one.
Not to mention it has an amazing interface (multi-touch).
Why WOULDN'T you buy one?
Oh, and by the way, you give me the $50 million for the ad budget, and guarantee me half the press coverage the iPhone got, and is still getting, and I could sell 500,000 boxes of Swarovski-encrusted dog feces! If you really want to rationalize things away by saying it is better than some guy can do in his basement, then feel free, but no matter how you want to spin it, 500,000 phones in the European market is a joke. Nokia sells three times that every single day.
As far as revenue goes, no, at no point did Apple say "we are going to sell 10 million phones, but only realize full revenue on 7.5 million of those (which is how it would work out at the current rate of unlocking), assuming they can get anywhere near 10 million. Investors are now realizing that Apple isn't going to see nearly as much revenue from the iPhone as they predicted they would. You can squabble all you want about whether you consider that revenue lost or not, but the fact of the matter is no amount of semantic bickering is going to replace $1.25 billion yearly shortfall between what investors expected Apple to make off of 10 million iPhones, and what Apple would really make off of 10 million iPhones at the current rate of unlocking.
Well, the thing is that you guys know a lot about Apple business, and nothing they are doing escapes your scrutiny, and it is starting to look predictable (apart from boring).
As much predictable it'll get less speculation will be in place, so for many investors it will be less appealing, therefore only people believing in their bottom line will get in the stock... so doubling value in a year will be out of the question, and the Steve guys will see a limit in the multiples (PER and xEBITDA, and so on) and in the end, Apple stock will have a peace and quiet chart as many others.
That of course will change in MacWorld 2112 when Steve's grandson announces teletransporation (patent pending) and the stock will rocket up the charts and all of your relatives alive at the moment will be filthy rich
Men, Apple TV sucks!
Steve may have a plan B.....
Does it involve kool-aid?
Nice photo engadget.
I'm just amazed that SJ recognized that *anything* is bigger than himself, let alone a set of them influencing the share price. How, umm, "humble" of him...
I am one of those investors, and I'm sorely tempted to get on a plane and SCREAM for Apple to do something with that $18B pile of cash h at the next shareholder's meeting. Apple right now is doing ZILCH to restore investor confidence (this email is a laugh and certainly doesn't do anything concrete). They need to do one of the following:
Announce a dividend
Announce a buyback plan
Announce plans to purchase a company or two
If they just insist on sitting on that mountain of cash, people are going to have legitimate questions about what Apple plans to do for the next few years. You want to restore investor confidence? Do SOMETHING that investors can be comfortable with! Do something that shows Apple is making bold moves in their existing market or moving into new ones! Sitting around and waiting for marketshare growth is not showing enough aggression.
18B will make more money in Apple's bank account vs. any dividend.
18B will do nothing in terms of buy back.
18B is being used to to buy small and important companies, pay for talent, open up new stores, R&D etc.
PS. Microsoft does all those things you want...
You are right that Apple needs to do something, because the reason people are selling isn't because the macbook air is a niche product, it's because the short term investors recognized Apple was not going to generate additional money for them. The huge drop you've seen is not investors thinking Apple is worthless, it's investors thinking, I've gotten as much as I can out of Apple for now. For the long term investor, Apple is a great company, and now's your chance to invest for less. For the short term investor (those who are selling right now) there isn't a game changing product to drive the price crazy over the next year (and Apple's stock price was bloated anyway, in my opinion) so they are going to sell and find a company who may have produce huge gains within the year. Timeframe is extremely important when investing.
iPhone bubble correction
Nice bit of short termism there, DT. That's what's wrong with the Markets today.
Traditionally, a large company buying out a smaller company usually drives the larger company's stock price down. People usually view the small company getting a boost (which shoots the small company's price up) and the large company overpaying for a company that's not going to expand their profits much. Textbook example is AMD with ATI. At this point, Apple buying a company would probably drive the price down.
Most of Apple's stock price was investor speculation (or hope based on previous successes). If you look at the financials, the price is way overvalued. The price was only driven because of the hope that the middle class would maintain steadily loyal and Apple would feed that addiction. Since iPod sales growth has slowed and iPhone sales aren't expanding (as reported from their recent financials), stock price is adjusting to what investors are expecting in future results.
Apple's core customer is the middle class and they seem to be the hardest hit as of recently by the poor economy. You're going to see a LOT more slowed Apple growth in the future. It has nothing to do with Apple instilling investor confidence. This is just economics playing out and winning against speculation and blind investing.
what else would you expect with the release of a (mostly) useless macbook air? hopefully in a gen or 2 it will become something useful
LMFAO! One of the Funniest Pictures ever!
Seriously, he wouldn't have to say that if he released the Air as an EEE competitor.
Apple's shares just got as light as the AIR, obviously it had to let go of some stuff!
factors "larger than ourselves" were taking their toll:
AIR
May be all this will Blow over eventually
that's the gayest picture I've ever seen.
yeah. i think they'll be ok. lol
I guess now is a good time to buy, while its low.
Exactly.
Funny, i was getting my MBA in 96. Apple's share price was hovering in the teens (16-18, I bought in the 20s)
Everyone was so smug telling me how Apple was dead... (though few had ever used a Mac for an extended period of time).
Do you think Audi wants to sell as many cars as Toyota? I dont think their supply chains would support it. I certainly dont think their marketing would.
If you think the iPhone and the Air are all Apple has to offer in the near future, you dont know Apple. Even if the Air is another Newton, Apple will be fine.
Anyway, keep pushing the stock down. I need to buy more around 100. Google and Amazon too please.
If Steve's hoping that helicopter has a truckload of Macbook Airs on their way to come save the day he's got another think coming.
the fact I just installed OSx86 on my new PC, without shelling out a single dime for apple software, or hardware probably didn't help either.
If you want to install OS X on your vanilla PC, great, more power to you. But don't boast that you didn't "pay a dime" for Apple software, because you're saying that you pirated OS X. It's cheap, and you couldn't even man up enough to buy a copy of Leopard? That's nothing to brag about.
actually, they don't offer a pc-version of OSX. So even if I wanted to, (which I don't) I couldn't buy it. To STFU Kthanxbye.
Hooray, you stole OSX. You're amazing!
thanks, I was thinking you guys were too stupid to notice how amazing I am, fanboys.
That picture looks wrong in so many different ways.
ahhh, all you fools saying apple hasn't done anything. let's talk about the revolutionary zune. when can i spend 10,000 bucks on a microsoft table? how about we keep releasing pathetic upgrades to the office suite that nobody wants to use. i know, everyone has intranets, let's just release a new version of sharepoint with two new features and charge $120 per seat. oh oh ohhhhh, let's brag about microsoft vista selling WORSE than XP in the same timeframe, even though there are an estimated THREE TIMES as many machines running windows as there were then. that should send the stocks flying. Microsoft had better push out halo 4 REAL SOON. maybe they can make Master Chief the official MS mascot... you know, like Mairo.
I didn't realize this article was about Microsoft.
I can tell you which OS Vista isn't selling worse against, but then you might cry.
The Microsoft stock took a hit consistent with what every company faced during these hard times. Apples didn't. Thats why Apple is sending out memos and Microsoft isnt.
I agree about the Zune, Vista, and Surface, but the new Office really is a great new step forward. The ribbon interface really is innovative.
Wasn't this taken from AppleInsider?
They certainly had it first...
Try clicking the "Read" button.
Only there wasn't a "Read" button at first -- in other words, Engadget took the story without initial credit.
maybe this means MBP updates tomorrow...
maybe not.
LMFAO @ that picture
I think Apple need to find new ways to revolutionize computers and devices, other than aiming for the worlds smallest something all the time. I LIKED it, but they can't go on giving things "cool" names and new revisions forever.
PS. I'm not saying that is the reason for their stock dropping in value, i know nothing about stock
At least, you're honest, when you say "I know nothing about stock."
It's laughable (in a gadget blog) to see people hyperventilating about "OMG $18B in cash" or "dammit, pay dividends" or "hell, do an acquisition" or "why isn't there a stock split" etc etc as though they are, and are addressing, financial experts. (And, presuming to tell a guy like Peter Oppenheimer how to be a CFO.)
"MBA is not meant to be a mass-market computer that will light the world on fire."
-For the sake of their stock, it should have been, and im sure the street wanted it to be. Since its not something that people want, why release it? Apple should have followed the lead of other companies and released a cheap laptop with integration features part of their other devices. Making a "concept" laptop doesnt make you money. Thats why auto makers make their concept cars practical.
"AppleTV rentals/sales are meant to be break-even just to drive hardware sales"
-For a certain amount of time, until they get enough people to own the Apple TV so that they turn a profit on rentals and video purchases. But if theres no compelling reason to get an Apple TV, no one will buy the hardware. If theres isnt a planned profit to be made with the device, then why would stock holders have any confidence in the stock.
"Ditto for iTunes competitors. The more the merrier...guess what MP3 player people are going to play those files on?"
-Well, iTunes (for a while) forced people to stick with iPods. If there are other online purchasing options, then it will open them to other players. This is never a good thing.
"iPhone unlockers: Who cares, Apple already sold them the iPhone. So they miss out on the revenue-sharing. They wouldn't have gotten the sale OR the revenue if the buyer couldn't unlock it! Phones sold to unlockers are icing on the cake, revenue-wise."
-Thats completely false. A percentage of those in the 1/3 of owners would have picked up an AT&T plan because they really wanted an iPhone, thus making Apple money above and beyond the hardware sales, while the others would never get one to begin with (possibly due to them having an existing contract that their happy with). The amount of money that they could have made from residules would easily make up, if not surpass the money they made off of those 1/3 hardware sales alone.
Well said - I agree that it's no joke to suggest that Apple needs more products that set the mass market on fire to justify their (once) sky-high valuations. The explosive growth they've seen in Mac sales would never happen without the breakout hit of the iPod. With everybody's free-with-contract phone handling ever more sophisticated media, anyone relying on a media player to drive business is putting themselves in a precarious position.
That said, I think investors are severely undervaluing the potential for the Touch, which I expect to go from a niche offering to a revolutionary PDA for the masses as capacities increase (I think even the mass market wants 32 gigs) and the SDK lets kids play games on it. I think Apple will reign in people's pockets - now I wish they'd get serious about the living room and put a tuner and DVR into the still lackluster Apple TV.
Now we know for sure Jobs is gonna unveil something to bring the stocks up.
Folks the edge iPhone is just seedcorn for the 3g version. Folks are going to buy the new version and if they want 3g speeds they will have to use Att. No worries.
ENRON!
Dammit! I'm pissed. For one of the strongest companies going, they're taking a hell of a beating from WS. The loyal keep talking about deferred profits and how glorious it is. It's too bad there's only about five people in the world that understand that mumbo jumbo. All the other investors just want to dump Apple shares.
I've made money, but I still keep seeing that 34% drop from $200 dancing in my head when I believe the rest of the market has gone down, only 10%. If there was ever a phoenix to rise from the ashes, it had better be Apple. Of course I have to hang in there. Doggone sure I'm not dumping my shares while they're in the toilet.
A month or so ago I thought I'd be doing an Apple victory dance after earnings and now I feel that somebody tap-danced all over my face. Dammit banks, dammit mortgage companies, dammit U.S. economy. Oh, I'm so pissed off!
Just relax, and take a deep breath. Exhale. You are obviously wiser than you think. (Put the stock aside, don't think/worry about it, and see where it is a year from now. I am reasonably certain - of course, nothing is 100% - that forums such as these are going to be commiserating along the lines of "darn, I wish I had bought t $130).
Factors "larger than ourselves?"
What does that mean? Consumer dissatisfaction and middling business plans?
Yeah, I'd say those are larger than you Jobso. Its okay though, just have "faith" that people will continue to buy the brand.
**** happens all the time in the stock market, but if old Jobs wanted to make things better he could release a 3G iphone. Just sayin
All Jobs needs to do is cast a Reality Distortion Field Spell.
Hmmm...I need to meet more women.
Wow! 41 comments and not one highly slanted, negative remark by "Vista" Mike.
Gates must have given him the day off.
:-D
Sold my shares the future prospect of apple is shaky.
I dont see any substantial money flow coming in with the macbook air and the apple tv which means apple is left with the same business motto they have had for the last couple of years which = same revenue with a slight increase. I see apples attempt to pull customers into the whole itunes capital since thats their main cash crop but the macbook air will/is a failure as i see it and who really cares about apple tv and rentals? nothing ground braking there.
holy hell. apple just released a revolutionary device for sale not even a year ago and people are honestly upset because they didn't churn out another instant smash hit at this macworld? how often does a truly amazing new device come around? what was the last big thing apple (or anyone for that matter) released before the iphone? people get their expectations set way too high, IMO.
No, the problem is that the "revolution" ended up selling less than the Blackberry, even though it was billed by every news source as the "breakout hit" that would finally make smartphones a mass market item, instead of a niche device. If the iPhone had turned out to be as big a revolution as it was supposed to be, no one would care about the Air. The reaction is to the fact that it wasn't even the best selling smartphone, much less a breakout hit that got out of the smartphone ghetto.
I don't recall ever hearing jobs declare the iPhone to outsell the blackberry (deeply enchrenched device) in its first year, or even that a gen 1 iPhone would truly be mass market.
Get your facts straight, RIM never sold 4 million units or made in just over 6 months of Blackberry release. In fact RIM's revenue for the entire year when Blackberry came out in 1999 was just 46M and in 2001 when the cellphone Blackberry came out it was 221M, a far cry from about 1.7B iPhone made in half the time. In fact, name one cellular device, smartphone or not, that made more than the iPhone in its first 6 months. I don't know if there was ever such a thing, I don't have time to look it up so I'm curious.
But I betcha that you compared current RIM revenues with iPhone revenues. Yeah, that makes perfect sense. RIM's 2007 revenues were about 3B, in their 8th year of Blackberry sales, which is indeed more than iPhone made IN HALF THE TIME! But it was actually more than half of that, and although I don't know exactly what the Blackberry numbers are it looks like iPhone sales may trump Blackberry sales it its first year! So even when comparing "Apples" with watermelons like you have, your argument may still be moot.
No Mr. Smith, what I did was compare iPhone sales to Blackberry sales IN THE SAME PERIOD OF TIME. If you want to have some ridiculous academic argument about the relative success of the iPhone in the current market, vs. the first RIM device (which wasn't even called a Blackberry, by the way, and didn't even use cellular technology) when it came out, then knock yourself out. All I was comparing, was exactly the same thing Steve Jobs compared in his keynote, which is the sales of the iPhone vs. other smartphones in the period of time since its launch, and in that time, it hasn't sold as many units as the Blackberry.
Right now, and since launch of the iPhone, Blackberries are selling better than the iPhone. It is as simple as that. You can talk all you want about how amazing you think the iPhone is, you can talk all you want about how you think it is revolutionary, but the fact of the matter is it has thus far failed to do any better than any other niche smartphone, and in fact is not doing as well as the industry leading smartphone. That does not live up to the hype Apple, and sites like this, made about how this was going to be the breakout device that would put a smartphone in the hand of every person in the world. This thing was hyped as though it was a given that it would do for smarphones what the iPod did for MP3 players, and so far it is selling exactly as one would predict from just another smartphone, with no real signs of dominating, or substantially growing the smartphone market.
I'm sorry if that offends your awed worship of the device, but it is just the fact, and now that investors have seen that sales-wise it is just another smartphone, they are not as excited about it, or the company that makes it, which is why the bubble that built up around it has popped.
Oh, and by the way Mr. Smith, where do you come up with this stuff? You don't know if any phone ever has made as much money as the iPhone? Here is a tip, Nokia made $23 billion last quarter alone! Seriously, any hot phone makes far more than the iPhone has! The mobile market is big, big, business. Even Steve Jobs, with his almost limitless bravado, only hopes to get 1% of that market, but you somehow think the iPhone might already be the most successful phone ever? Wow, you are out there.
Well, unaccustomed as I am to being on THIS side of the Apple discussion...
First off, stop looking at Apple in isolation from the rest of the market - which, in case you've not looked past www.apple.com lately, is in pretty rough shape.
Jobs seems to forget that the problem with showmanship - pulling the rabbit out of the hat - is that you have to constantly top yourself. That gets harder and harder every time... it's what ends up crushing magicians.
Dell, HP... even Microsoft have set expectations at slow, steady improvement over time. No exciting MacWorld or WWDC moments, but no real disappointments either. Even Vista, which all of the MS haters are desperate to call a flop, is actually a financial hit for all of its problems.
No shocks is boring - but surprisingly - that's what the market likes. Exciting causes ripples - boring causes slow steady growth.
So Apple has to take *some* of the blame for their current stock valuation problem - but not all by a long shot.
Hey computer people, you know how much you hate it when non-computer people pretend they know what they are doing with PCs? Yeah well that's how people that understand the stock market feel when you start posting about stocks. This is more than likely down to short term investors dumbing stock and making a tidy profit.
I dont know. Ive read a quite few stories about reduced confidence in Apples ability to earn large profits due to a lackluster MacWorld (i.e. Potential future profits due to new products and new segments) and increased competition in all the markets they are involved in. This is primarily for this coming year, and not a permanent thing, i might add.
That is one hell of a cash-out, though.
I don't think everything is roses, I agree in fact but I do think the fanboys need to start to get a grip on themselves. The slightest bit of news is jumped on and will be used as a weapon for the whole year, this really isn't the end of the world and I think a lot of people might be kicking themselves in the coming months when they didn't pick up some Apple stocks at a lower than normal price.
Apple sells luxury items at a premium price. when times get hard as they are these days, people tend to cut back on the purchase of luxury items. Not good news for Apple.
For example if you want to buy a laptop for your kid who needs to surf the web and do e-mail you can get a decent Dell for $599, the cheapest Apple laptop is $1099. No reason to give Steve and Co $600 when you can use it for the kids books.
Apple is tanked because investors realize this very thing.
I'd say the number of people in your scenario are tiny.
Who buys Macs?
College students, who are paying through the nose anyway for tuition etc, so what's a couple hundred bucks when your everyday computing experience is at stake? (BTW, they are a GREAT demographic for future buyers for the home)
Home users: Penny-pinchers are not Apple's market. While they might realize some extra sales when the economy is robust, people who have been buying Macs are likely in the demographic to continue to buy Macs, even if it means an extra couple hundred bucks over the life of a computer.
Flashy corporate-types: Aren't too badly affected by this downturn. They'll keep buying Macs like they keep buying Ferragamo.
Video/photo pros: Have been using Macs forever and won't stop now.
There are plenty others, but you get my drift. Apple's growth is not in the low-end of the market, it is in the high-end, which is less affected by a mild economic downturn.
I don't understand why so many seemingly "smart" people here defend Microsoft. They've controlled the market for too long and continue to flood it with less than mediocore products. I mean come on, look at Vista, that was epic fail in a box. Microsoft acolytes seem to have this passionate blind monotheistic faith in which they believe all other technological companies are inferior. It's like they're afraid that there is something out there that actually can compete or be better than a Microsoft product. What makes them even more afraid is when people "make the switch" to something else and enjoy their new product better than Microsoft's. Hmmm...sounds a bit like Christianity...
None the less, calling someone an Apple "fanboy" is completely hypocritical because you, the Microsoft acolyte, is ready to defend you're leader as much as "fanboy"s are ready to defend theirs. The difference is that "fanboys" went outside of their box to realize that something else was out there other than what they've known or grew up with their whole life. I suggest the Microsoft acolytes learn a little something about change because it happens second of your life.
Epic fails usually dont sell.
Vista is selling pretty well, considering its a disaster.
And why was this mentioned in a post about Apples memo to employees and shareholders telling them to "hang in there".
Lets try to keep things on-subject.
nice speech. Too bad I'm one of those fans of microsoft and I grew up using macs my entire life through high school. I used to love macs even into my freshman year of college but lately(within the past 2-3 years) I've seen Microsoft releasing new innovating products and pushing individuality with them and apple sticking to the same old stuff with nothing really new and refusing to give their customers any way to make it how they like it. So I made the switch to MS and haven't looked back.(btw, yes I was impressed by the iphone, at least until the weeks following its announcement when they started telling everyone all the little things it can't do.)
I'm not a fan of Apple products but as a business I'd say if they really have 18B (yes, that's a B) in reserves I'd think I'd hang in there. How many nothing companies are out there that people love to buy? Too many. The iPod and iTunes franchise is the cash cow and they could go years without a blockbuster product and still be a solid long term investment (People looking for short term investing should look to Vegas or commodity futures.). Now if I had 2 bits to rub together let alone invest I'd be looking for the bottom of the Apple slide and then buy myself a nice piece of the pie.
Thats the issue.
iTunes and iPods are not as safe as they once were. Competition in those markets are fierce now, and Apple is going to have to fight to keep ahead of the curve.
Alot of people were expecting something big at this MacWorld, and while Movie Rentals are a good revenue service, there are not alot of people that want to tie themselves to hardware to get those rentals (just like all the other devices that have and are being released and are/will be sitting on shelves, save the 360 which doesnt break records in movie rentals).
Very good points. I think it's great there are more outlets for music by the song for around a buck. It's a great model. But even with increased competition they still make really nice players at relatively competetive prices (in contrast to their computers). And those players work with their software that is integrated into their store. It's a nice lock and people are loyal (if not resistant to change). Their foothold in the market and lexicon is strong enough to warrant security for the products unless they really do themselves in with stubborness and bad decisions. I have confidence that they'll evolved their content scheme (the 24 hour limit is already gone isn't it) and compete with the newcomers.
quick release iphone 2.0!
99 dollar 4 gig iPhones would be huge for them.
Toss on another 100 for 8 gig.
And finally 16 for 299.
And force contracts to even take the phone at that price. isn't this an obvious step?
HANG IN THERE!!! Or, how they said in Portuguese (Brazil, of course!!!)
"Segure-se no pincel que vou tirar a escada!..."
Something like:
"Hold in the brush that I will take off the stairs..!
At those prices, they'd be selling below cost price. That can only lead to Apple grabbing a bigger share of revenue from the service provider.
Um, that's a fake email.
You guys love posting un verified stuff dont you?
(engadgt)
All the more to make $$$.
Your rep takes a dive though if you post unverified rumors.
Honestly folks, Apple makes some kick-ass, cutting edge portable products, however, they charge a substantial premium for them, and employ communist-like control over their software, raking their vendors and "partners" over the coals just for the privilege of association.
They also deliberately leave out features so you'll want to buy their next product -- iPod Touch has no Bluetooth, iPhone is without 3G, etc.
Maybe this strategy works for a time, but eventually consumers and partners look elsewhere.
Sony finally gave them the middle finger and took their entire music catalog to Amazon.
Plus, the whole stock market is DOWN! Why should Apple be any different?
Amazon is a bit different - I switched to Amazon b/c I need DRM free. If it wasn't for that, I'd stick with iTunes.
It's not Apple's fault the labels don't give them DRM free deals - though it looks like Apple will need to be nice with the labels or they'll just lose.
Where they did dig their own grave is the locked locked iPhone. That was dumb.
In a way all Apple'd need to do to totally wipe out the competition is to not be evil. So simple, yet so hard... leave ripping off/not ripping off the music buying public to the evil labels, don't get involved. Same with movies. Leave ripping off cell phone customers to the evil phone companies - don't get involved. How hard is it?
The non-1080P-capable AppleTV was the warning shot, but I think the MBA may be the product where Apple jumped the shark. Apple is going off in the wrong direction. They can not keep self-crippling their products and upscaling commodity hardware in the face of cutthroat competition forever. At the very least, they need to release a budget tower MAC like yesterday! They used to show a lot of restraint in the past because they didn't have deep pockets. So they couldn't take any risks. Everything had to be a sure thing with a big profit payback per unit sold. Now they do have a warchest and although they will never be like Dell, they CAN easily sell cheaper products.
The stock value was just bloated from the Jobsonian hype. Everyone was expecting something revolutionary from Macworld, but u cannot come out with an iphone caliber device every year. Things were bound to sink eventually, not to mention general market uncertainty
I think the analysts should take into account the quotes about the NASDAQ dropping are probably calculated off the closings, the price in this article appears to be calculated off the high/low's (take it as you will as I have no NASDAQ data).
APPL has a beta of 1.6 (which I would remind, is an average), and as the market goes its natural for people to open up into defensive stocks, tech stocks are as everyone knows historically vulnerable. and I dare say without any real research - I highly doubt apple is a lone wolf in this scenario.
and @ the guy complaining about the guy not attending accounting classes, attend a finance class and you'll realise its not an opportunity cost but a sunk cost.
Mac has partly been affected by the volatile market, however even though the release of the MacBook Air adversely affected the stock I feel that this product will catch on and eventually boost the stock prices. Furthermore, Mac is the digital music leader and this industry has been growing steadily in part thanks to Mac for years and will continue for years to come.
Stop calling MBA - UMPC... even a 10incher is pushing the UMPC monicker.... (calling something "ULTRA mobile" has to mean something, don't abuse it for a freaking 13" diagonal)
ya gotta be shitting me. Apple as a long term investment? These guys have crashed 3 times now... Apple has always been a miracle company - means make your money and LEAVE WITH THE MONEY as soon as they level; and wait for the next "miracle"... leaving your money with apple is the dumbest advice I've ever heard.
Dude, what are you smoking?
spam spam spam
Vista Mike where are you? This story was made for you!
Apple simply has to change the habit of "lowballing" the quarterly forecast from now on and produce some real numbers.
"larger than ourselves"?
I didn't know there was anything larger than Jobs' ego.