That’s the general gist of today’s headlines regarding Apple, Inc. Uh, what? Wait. When did that happen? Wasn’t it just a few months ago that Apple posted the company’s best revenue on the highest sales in history, and the most profit ever by a company anywhere in the world. Ever. What happened?
Near Sighted And Senile
Creatures from another planet who came to earth to study humankind would think the vast majority of the dominant creatures (no, let’s not count ants and cockroaches; that’s a different kind of dominant) on this pretty blue rock in space were completely senile, and mentally near sighted.
The perfect example of that myopic perspective must be Apple, Inc., the little company that could, did, did again and again, and now is being crucified in public because executives cannot control the world’s economy, let alone gravity and math.
Headlines throughout the blogosphere ask for CEO Tim Cook’s head on a platter a mere 90 days after Apple’s best financial quarter ever. This is the same Tim Cook who ran Apple when co-founder Steve Jobs could not. The same Tim Cook who presided over the company’s largest growth period– revenue, profits, and stock price– ever. The same Tim Cook who has managed to turn Apple into an adult after a few decades of childhood and adolescence.
What went wrong?
The Doomed Meme Gene
Math. Gravity. Expectations. The math is simple but a bit convoluted if you carry the 3 and divide by 6. No company posts that kind of revenue and profit growth forever. Apple won’t be the first because Does. Not. Happen. Gravity comes as a shocking reality to those in the stock market. Stocks go up, stocks go down, so buy low and sell high, and don’t complain when you bought high and the stock is now low. That’s your bad.
As to expectations, who could not have seen the iPhone’s fall from grace coming from the future? Really? You did not see that coming? Market anal-lysts, commentators, critics, and members of the technorati elite politburo have predicted exactly such a fall for what, 40 years? Every year. Every quarter. For 40 years. The Apple is doomed meme probably has its origins in the Hebrew scriptures. Where’s the surprise with Q2?
Except for one little thing. Apple is not doomed. By comparison to almost any measurement except the recent holiday quarter, the company is doing just fine, thank you; not perfect, still with a list of flaws and imperfections, but sitting in a position that any Apple competitor would love to sit. Unlike much of the competition, Apple makes money everywhere and that has not changed, despite a fall from grace. A bad quarter is not $10-billion in profits, folks.
Math Is So Overrated
How does that compare against competitors Google, Microsoft, Samsung, Amazon, and toss in Facebook just for fun? Apple made more money than any of them and more money than all of them combined. But Apple is doomed? Well it must be because most of Apple’s profits, over 60-percent, come from one product, the aforementioned iPhone. Hmm. There’s that pesky math again, right?
Except that more than 90-percent of Google’s profits come from search engine advertising; just as it always has. Google is neither as diversified nor as profitable as Apple. But Google is growing, right? There’s that pesky math again. Google missed Wall Street’s expectations. Microsoft missed Wall Street’s expectations. Amazon exceeded Wall Street’s expectations and made half-a-billion dollars in profits. Roughly 1/20th of Apple’s profits from a miserable quarter.
What’s wrong with that comparison?
What I want to know is this? Where is the lame stream media’s insightful analysis of Apple situation vs. competitors vs. reality vs. the space time continuum as we know it? Headline after headline decries Apple’s lack of leadership, executive miscues, and the need for a Steve Jobsian visionary to replace Tim Cook. Why not just replace math?