Apple is not releasing any new products this week. Nevertheless, this will be one of the biggest and most important weeks in recent memory for Team Unicorn, because this week Apple reports its earnings for the holiday quarter.
Earnings are always a big deal, and earnings for the holiday quarter are always an even bigger deal, but this time it's even more bigger, as the kids say.
Because the numbers that Apple reports this week are not just numbers. They are a measure of Apple's magic.
For more than three months Apple stock has been in a massive swoon, dropping from just over $700 in September to $500 today. At first we all figured the stock was getting hit because investors who had made a fortune on Apple shares were dumping them in late 2012 to capture the profit before tax rates changed in 2013.
But lately people seem to be thinking that decline is also based on fear that the party may be over for Apple.
The thinking goes like this: Sure, Apple has had an amazing ride since the introduction of the iPhone in 2007. But nothing lasts forever. Steve Jobs is gone, and Tim Cook is no Steve Jobs.
And consider what's happened on Cook's watch:
- He brought in a Brit to run retail, then tossed the guy out after he turned out to be a train wreck. Right now there's nobody running retail, but Apple is doing a job search. As the search drags on, a senior vice president who supposedly wanted the top job got sick of waiting and bailed out. His job was filled by guy who used to be a VP of Finance. So, yeah. Good luck with that.
- Cook booted out Scott Forstall, in part to squash a mutiny led by other execs (I'm looking at you, Bob Mansfield) who threatened to quit because they couldn't stand working with Forstall. Design boss Jon Ive, Mansfield's ally in the anti-Forstall guerrilla campaign, took over software design.
- Forstall ran iOS software, and apparently he was so busy waging mean little wars against his colleagues and promoting himself in the press that he neglected Apple's software. Apple, which pioneered the smartphone space, now has fallen behind Google, whose software doesn't just work better, it also looks better. How did Apple ever let that happen?
- The Maps fiasco. Forstall got the blame, but come on. This happened on Cook's watch, and Cook acts like the whole thing came as a surprise to him, as if he had no idea, before Maps shipped, that the stuff didn't work right. Meaning he'd never even looked at it and just trusted the software guys to get it right. Imagine Steve Jobs shipping a huge new product and never looking at it himself. I can't.
Is Apple Still Special?
Here's the deal, in a nutshell. If Apple beats expectations, all is well and the stock will surge. If Apple hits targets but doesn't exceed them, expect the stock to keep going sideways. If there are cracks in the foundation - if sales of iPads or iPhone come up short, or if sales are good but earnings are weak, look for the stock slide to continue.
But if Apple really blows it - if Apple really comes up short - well, if that happens then things are going to get ugly.
Because if mighty Apple can't deliver on a holiday quarter, this will prove what a lot of investors seem to be feeling in their gut already - that the iPhone is no longer special, no longer coveted, no longer in such huge demand. Or as Darcy Travlos writes in Forbes, that Apple may be losing its "brand equity."
It's not purely a matter of market share. By that metric Apple has already lost the fight, since Android now has 75% share and Apple has 15% in smartphones.
What worries Wall Street is something that's a little more difficult to quantify. It's the emotion around Apple products. For example: When the iPhone 5 came out last year, yes, there were lines outside Apple stores, but the whole thing felt a bit contrived. Some of the people weren't even there for the phone; they were there because they'd been paid by companies to stand in line wearing T-shirts with their logos on them. They were human billboards.
On the other hand, virtually all of my neighbors (I live in a suburb of Boston) carry iPhones. Virtually everyone I work with at Say Media, a groovy tech-forward company based in San Francisco and New York, carries an iPhone. So who knows? Maybe the magic is still there.
The Numbers
In case you're keeping score, here are the numbers that Wall Street is looking for and the ones you need to watch on Wednesday.
Apple previously told analysts it is expecting revenues of $52 billion, net income of $11 billion, earnings per share of $11.75.
But Apple has a track record of sandbagging its earnings, predicting a low number then reporting a "blowout," which sends the stock skyrocketing.
So analysts have started expecting better than what Apple tells them. In this case they're looking for $54.7 billion in revenues and earnings per share of $13.41. But some are higher. An analyst at Credit Suisse expects Apple do to $57.2 billion in revenues. Some on Wall Street are expecting $59 billion.
The classic Apple move, the one we've become accustomed to over the past few years, would be to blow past all of those numbers and report $60 billion in revenues, or even more, based on moving a gazillion units of iPhones.
Will that happen? Frankly, despite all the craziness I mentioned above, I would not be surprised. Apple remains an incredibly powerful brand. There seems to be huge demand for the iPad Mini.
That's why there's so much suspense building up for Wednesday.
For what it's worth, here is what Apple's stock looks like over the past six months:
Stock chart from Yahoo. Lead image courtesy of Reuters.
0 komentar:
Posting Komentar