Wall Street Punishes Apple’s Success
Wall Street’s immediate reaction to Apple’s earning report reminds me of a parent being upset by a kid who brings home a report card with all As but is disappointed that they weren’t all A pluses. Shortly after it released its earnings report, its after-hours stock price dropped by more than 10%.
I’m not a financial analyst but I do follow tech and from where I sit Apple is doing awfully well. It sold a record number of iPhones and iPads last quarter and it posted record revenue and a record net profile of $13.1 billion.
Considering the fact that Apple is up against some pretty stiff competition, selling 47.8 million iPhones and 22.9 million iPads in one quarter strikes me as not too shabby. Sure, the growth rate might not be what it once was but Apple is now playing in a mature market, selling products that are evolutionary improvements over their predecessor as opposed to blazing new ground and creating new categories of products as it did in 2007 when it introduced the iPhone and again in 2010 when the iPad came out.
I’m far from an Apple fan-boy. I’m not gaga over their current line of products and I don’t necessarily recommend them over their competitors. I continue to be impressed by the latest Android products from Samsung and others and I’m even reasonably impressed by some of Microsoft’s recent innovations. Even though I own an iPad mini, I regularly use my Amazon Kindle Fire. I bought my wife an Android phone and I’m quite impressed by the Samsung Galaxy SIII. Still, you have to give Apple credit for coming out with incrementally better products year after year and continuing to set records in the number sold and the revenue earned.
In some ways, Apple is victim to its own success and its own hype. It continues to get incredibly high expectations for its products and even though customers rewards its innovation and marketing by buying them in droves, their numbers may not be as high as some would hope. But lets put this into context. At a time when many companies are staggering, any company that reports record sales and profits has to be admired for being good at what it does and even though Tim Cook is no Steve Jobs, he’s still doing a great job running Apple.
I haven’t invested in Apple stock, but — in addition to owning competing products – I have invested in an iPhone 5, an iPad mini and a MacBook Air and, unlike Wall Street, I’m pretty happy with my returns.