Will Wall Street EVER get Apple?
The past week has seen so many negative reports on Apple’s ‘dismal’ quarter that each story must now start with “AAPL is Dog of Dow.” Since when did earning $10.5 Billion in a single quarter become a bad thing? It’s not, unless the company earning it is Apple.
Sure, iPhone sales declined for the first time ever. The iMaker ‘only’ sold 51 million handsets. What the experts conveniently forget to mention is that those 51 million iPhones generated more than 90% of all the profits of the entire smartphone segment. Not only that, but Apple achieved this result while watching its smartphone market share decrease to 15%.
The entire ‘Apple is Doomed’ narrative has been offered up every quarter since the sales failure of the award winning Power Mac G4 Cube. After pricing the computer more as a status symbol than an affordable headless iMac, Apple posted its last quarterly loss. The iMaker has been on a historic run up to becoming the world’s most profitable and valuable company ever since. Sooner or later, the company had to run up against the forces of the market. Last quarter was it.
Clearly, Apple had a less than stellar quarter, at least compared to its own insanely high standards of success. Even though softness was experienced in Mac and iPad sales as well, all things are relative to Apple itself, and the rest of the market. Lost in all the ‘Apple is Doomed’ hysterics, people should remember that Apple still reported quarterly sales of more than $50 billion. That was Apple’s second best 2nd quarter EVER!
And look at that profit report again. Earnings exceeded $10 billion, making the quarter Apple’s 10th best ever. If that’s being doomed, I’ll sign up for doom like that very day. Samsung shipped more than twice the number of iPhones Apple sold and barely earns any profit on them. In fact, Samsung is a case study all by itself on why one should never pursue unprofitable, bottom feeder market share for the simple sake of market share. You can go out of business doing so.
Wall Street seems to think that Apple needs a blockbuster product in order to survive the latest crisis Wall Street naysayers have decided the iMaker finds itself mired in today. Really? I don’t think so. The so called experts on Wall Street seem to think Apple churns out the hits faster than MoTown did in the ’60s. That just ain’t so.
Take a look at the major blockbuster products introduced during Steve Jobs’ Second Act at Apple. In 1998, Jobs introduced iMac in May. Shortly thereafter, Apple acquired a digital jukebox product then known as SoundJam. The digital music player was the foundation of what would become iTunes.
It wasn’t until more than three years later that Apple would introduce what would become its most important product to date. Jobs announce ‘A thousand songs in your pocket’ at the iPod launch in Orctober of 2001. It’s pretty safe to say that iPod, and all its subsequent siblings, changed Apple and the entire music industry forever.
iPhone did not see the light of a Steve Jobs MacWorld Keynote until January 2007. The world’s most important smartphone would go on sale the following June. The iPad would show up three years later in October of 2010. Forgotten in all of this is that each of these two product categories owe the lineage to the iPod. After all, iPhone and iPad are two of the best iPods Apple has ever made.
Wall Street pundits will continue to dust off their archived articles calling Apple Doomed no matter how well Apple performs. When your only competition is your own past performance, that’s a good place to be. Way to go Apple. Keep up the great work.
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