The Facts, Speculation and Truth About Apple’s Stock Dropping

It’s getting kind of crazy in the world of Apple, as the stock drops the sky falls. That’s actually a loaded statement and a glass half empty point of view. Apple’s stock is dropping, as a matter of fact recent numbers show it’s as low as it’s been in the last year. Apple opened up at $430.27 this morning and is trending upwards at about $450 at the time of this post. That’s definitely a far cry from it’s 52 week high of $705.07

The Facts: (According to Apple Press Release)

On January 23, 2013—Apple announced financial results for its 13-week fiscal 2013 first quarter, which ended December 29, 2012. The Company posted record quarterly revenue of $54.5 billion and record quarterly net profit of $13.1 billion. These results compare to revenue of $46.3 billion and net profit of $13.1 billion in the 14-week year-ago quarter. Gross margin was 38.6 percent compared to 44.7 percent in the year-ago quarter. International sales accounted for 61 percent of the quarter’s revenue. Average weekly revenue was $4.2 billion in the quarter compared to $3.3 billion in the year-ago quarter.

Apple sold a record 47.8 million iPhones in the quarter, compared to 37 million in the year-ago quarter. Apple also sold a record 22.9 million iPads during the quarter, compared to 15.4 million in the year-ago quarter. The Company sold 4.1 million Macs, compared to 5.2 million in the year-ago quarter. Apple sold 12.7 million iPods in the quarter, compared to 15.4 million in the year-ago quarter.

The Speculation: (According to John Koetsier of Venture Beat)

The only problem? Wall Street’s consensus numbers were $54.58 billion (Apple just beat that), 50 million iPhones (Apple actually sold 47.8 million), 23 million iPads (Apple just about made it, selling 22.9 million), 12 million iPods (under Street estimates), and 5 million Macs (well under Street estimates).

The Truth: (According to Me)

The truth of the matter of why Apple’s stock is dropping is because of all of the late adopters and bandwagoner’s expecting Apple to deliver apples, oranges, strawberries and the moon. An even greater truth about why Apple’s stock is dropping is because there’s no Steve Jobs.

No matter how you slice it, Steve Jobs wasn’t only the visionary leader for Apple, his name and face were as iconic as the Apple logo itself. Anytime there was a new release of a project, device, operating system or whatever during Apple’s World Wide Developer Conference, everyone was tuned in with great anticipation. As a matter of fact “Steve Jobs” would trend on Twitter often times before “Apple” would.

Don’t get me wrong, I’m not naïve to believe that there are not great people behind the scenes that are actually the folks making things happen at Apple; however I’m also not naïve to believe that the Steve Jobs’ persona (or lack thereof) plays into the the thoughts and decisions of the speculators. The facts don’t lie… Apple is in great financial shape, having more cash on hand than the US Treasury. As other companies are downsizing, Steve Jobs’ visionary leadership set Apple up well to live beyond him and continue building the faithful Apple Tribe. This simple mantra is the catalyst for Apple’s continued success:

“A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.” ~Steve Jobs

Steve Jobs was actually a big deal, so much so that his name was synonymous with the brand. On the other hand, the majority of people that own Apple devices, and many of you reading this post, don’t even know the new Apple CEO’s name.

That’s The Truth!

What do you think?

  • Tim Cook. 🙂

  • “The truth of the matter of why Apple’s stock is dropping is because of all of the late adopters and bandwagoner’s expecting Apple to deliver apples, oranges, strawberries and the moon”

    No, Apple’s value is bombing for clear reasons which are readily apparent to investors and everybody else.

    E.g. Apple’s financial results are overwhelmingly dominated by, and dependent on, one product: iOS. But iOS is very old news, now, and consumer trends are consistent with a growing realization that there are superior products available at an equal and often lower price.

    E.g. Apple is losing market share in by far their most important segment, mobile, which defines the company and it’s success in recent year. And again, their quarterly results are dominated by mobile.

    E.g. Apple is not an essential aspect of Apple products. Other companies like Samsung make their components — all the cleverest stuff is from outside Apple. All Apple does is essentially put a shiny case on it and stamp on their designer-label before selling it to you.

    E.g. Apple’s success was achieved under Steve Jobs. He is now gone forever, and it is already abundantly clear that Apple is not the same company without him. Apple is no longer perceived as cool, except among the last remaining die-hard supporters comprising middle-aged men and women, Generation X and older Millennials. Ever since Jobs went, Apple has been making one serious mistake after another.

    E.g. Apple is consistently the most expensive way to buy a product or service, from MP3 files and MP3 players with iTunes to tablets with iPad. Like its stock, Apple has been over-rated and over-valued, and a correction is long overdue.

    E.g. Apple is stuck in the naughties, locked in a work-out pattern of releasing slightly upgraded versions of the same old products. Early fears that Apple has nothing more to offer the world are proving justified. Tech is moving on, leaving Apple behind. The company is now just ticking over — it’s boring to watch.

    E.g. Apple engaged in unpopular and immoral practices, including avoiding $1 BILLION tax per week in the US alone, failing to create jobs domestically or even in its most important market territories, unacceptable conditions for off-shore factory workers, to anti-competitive practices, to patent trolling, etc, etc.

    E.g. Apple has a track record as a fringe player. After all these years, Mac has still barely scraped past 5% market share against Windows.

    Hence, recent estimates value Apple as a $200 share.

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