There seem to be two schools of thought on Apple’s iPad. It’s either, “I want one because it’ll change the world.” Or, “the iPad will be a big flop and Apple is doomed.”
There is one school which hasn’t weighed in on the iPad divide—actual iPad customers. Time will tell what customers actually think about the iPad, but one thing is sure, according to some—Apple’s string of successes is about to come to an end. Oh, and the company is doomed.
Apple On Top Of The Mountain
How is it possible that the darling of the tech world and stock market could have a product flop? After all, Mac sales are at record levels, and Apple owns the highly profitable $1,000 and above market segment.
The iPod has been a rousing success for Apple.
Not only has the iPod given the company hundreds of millions of new customers, the halo effect helped to sell more Macs. The iTunes Store dominates online media sales.
The iPhone and iPod touch, along with the App Store, gave the cell phone world a new smart phone, and Apple got tens of millions new customers. Do the math. $40-billion in the bank. Growing market share. The highest customer service and satisfaction ratings in the industry.
Apple sits on top of the mountain. Steve Jobs has a golden touch. Apple products are hip, chic, trendy, and highly profitable. What could possibly go wrong?
Barbarians At The Gate
Some pundits point out that Apple has a few problems that no one is talking about. Are they so serious that now is the time to get rid of Apple stock? Is the end nigh? Scott Moritz in TheStreet.com:
It’s inevitable. The life cycle of tech giants is brilliant and brutally short. Today’s consumer electronics leaders are tomorrow’s fossils… Cool is the whipped confection that Jobs has built the Apple kingdom on, but even the sweetest empires fall.
In other words, Apple, according to Moritz, is doomed because, well, just because. Because every company that goes up also goes down. And, if Apple is up, what’s next? Down, right?
Why? Moritz points out that you can buy two Windows 7 PCs for the same price as a Mac. Hmmmm. That’s a song I’ve heard before, yet Apple continues to sell more Macs than ever.
Other pundits point out that, yes, the iPhone and iPod touch are hot sellers, generating perhaps 80-million customers already, and nearly 60-percent gross margins, but Google one-upped Apple and gives the comparable Android operating system away for free.
Already Android smart phones are on the market with more features, bigger and brighter screens, thousands of apps, and lower prices. How can Apple compete against free? And, with just a few models, how can Apple compete against many dozens of Android smart phones and lower prices?
Moritz is sure that it’s Mac vs. Windows all over again. Apple’s smart phone bet looks good now, but the numbers don’t look good for the future. Or, do they?
The iPad Sky Is Falling
While Apple’s Mac, iPod, and iPhone business has no place to go but down, the savior, according to some, is the Jesus Pad. The iPad is the most expensive of netbooks but does less. It’s a very large iPod touch. Moritz knows the future:
The iPad is a disappointing effort that fails to live up to the hype. The iPad is both an oversized iPod Touch and an under-powered netbook.
Clearly, Scott Moritz belongs in the school of thought that says the iPad will fail and Apple is doomed.
Apple shares fell 7.6% in the two days after the company unveiled the iPad. It’s clear that thousands of people want a thin, color-screen reading tablet, but it’s not clear that millions need it.
That surely must mean the sky is falling. Of course, Moritz was under the weather and out of touch with reality last week when Apple’s stock scored all time highs—again, and again, and again.
In essence, Moritz argument is basic—Apple thrived, but that was then and this is now, and nobody stays on top forever, so it’s Apple’s turn to fall from grace.
Two Things Everyone Seems To Forget
Two schools of thought. Is it one new product that will revolutionize computing for the masses? Or, is it one new product that will cause Apple and the company’s high flying stock to fall from the stratosphere?
I’ve been reading Scott Moritz’s opinions, perspectives, and analysis for years. Seriously, a chimpanzee, a dart, and a stock market dart board could provide more accurate market predictions. That’s generally the case for most technology pundits from John Dvorak to Rob Enderle to Moritz. The gurus of the gadgets have a number of things in common.
First, they make outrageous predictions designed to increase page views and advertising impressions on their articles.
Their publishers and editors love it, so they’re given free rein to pen the ridiculous, knowing pundit watchers will line up to read their trash, then trash them for pleasure, and come back next week for more.
Second, the pundits never, ever compare their current prediction with their past predictions, which, remarkably, are almost always outrageously, ridiculously, ludicrously wrong. They do what they do for the money, the fame, the glory, the quote. Like a chimpanzee, they’re entertaining and almost as intelligent.
What two points are being forgotten by most of us?
The first is easy. Technology and market pundits who create grabber headlines are almost always wrong. When it comes to stocks, I think you could make more money by doing the exact opposite of what they recommend. The second is easy, too. Technology and market pundits are not average gadget buyers or typical users. Remember, these are the same clowns who dissed the iPod, and then the iPhone, and now the iPad.
The one group that has not weighed in on the value and pleasure and experience of the iPad—whatever it may be—are actual iPad customers. They vote the best way possible—with money.
As to whether Apple is doomed and the stock price is about to fall to earth, I honestly don’t know. Steve Jobs could have serious health problem relapse. That would deflate the stock price. The iPad could have a serious problem and cause retinal burn and blindness in anyone who uses it for more than an hour. That would deflate the stock price. For me, my money is on the experience of owning and using an Apple product. If the iPad is good, customers will love it, and they’ll tell others—just like they do with the Mac, and the iPod, and the iPhone.
If not, well, maybe the sky is about to fall.