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I’m Not Here to Bury Apple

January 24, 2013

Any semi-regular reader of this blog knows that I’m not the biggest believer in Apple.  I’ve been saying for a couple years that Apple and Google are currently locked in a battle for eyeballs, and I put Apple in the lead as long as Steve Jobs was interested in Apple.  Clearly, he’s interested in other things now, so I’m not surprised by the fact that Apple hit a peak and started down from a stock perspective.  The latest earnings have not enamored the market much, and the whole market today appears a little nervous as a result.

Apple’s stock has been on a steady decline for months. In fact, shares have plunged more than 35% from their all-time intraday high of $705, reached Sept. 21, 2012.Since then, Apple’s stock has dropped in value by nearly $230 billion, with its valuation slipping to $430 billion in just four months.

Almost exactly one year ago, Apple nudged out Exxon Mobil (XOM, Fortune 500) to become the most valuable publicly traded company in the world.

Well, I’m not here to say that Apple’s done.  Sure, the bloom is off the rose, and I question some of their potential strategic moves, but it’s still a battle for eyeballs between Apple and Google… and don’t forget Microsoft lurking in the background.  Courtesy of the Register, let’s look at how those earnings really look:

May your humble Reg reporter take this opportunity to point those Wall Street moneymen at some of what Apple CEO Tim Cook rightly called “a lot of impressive numbers” during his conference call with reporters and analysts after the Q1 2013 number were released?

  • Quarterly revenue of $54.5bn, up 17.7 per cent from the $46.3bn earned in the same quarter last year
  • iPhone unit sales of 47.8 million, up 29.0 per cent from the 37.04 million sold during same quarter last year
  • iPad unit sales of 22.9 million, up 48.4 per cent from 15.43 million year-on-year
  • Reserves of $137.1bn, up 40.4 per cent from the $97.6bn it held in cash, short-term, and long-term securities at the same time last year

Even the most rock-ribbed Apple-hater must grudgingly agree with Cook that those numbers are indeed impressive.

Yep.  Let’s also not forget that Apple has north of $137B in cash on hand.  Sure, that’s setting them up for a couple massive lawsuits… anyone with that much cash has lawyers salivating.  But there are very few companies who have the opportunity that Apple does with that much cash to ride out the storm, or advance in new areas.

So I’m more interested in what Apple does in the next year to see how it holds off Samsung in terms of innovation.  I won’t be surprised to see Samsung grow in phone market share.  Apple has never been a market leader.  They skim the quality off the top with innovative products, and their innovation is what makes them a powerhouse.  Let’s see how the eyeballs drift based on features and quality… and let’s watch Microsoft and their new stuff to see what happens there as well.

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