“The buzz on its wildly popular digital music box and swank storefronts mask an ebbing bottom line,” Stephen Gandel writes for MONEY Magazine (subscrption required for full article). “For Apple CEO Steve Jobs, these are triumphant times. The iPod is more than the most successful digital music player ever: It’s a cultural phenomenon — on a par with Sony’s Walkman — radically altering the way we buy and store music.
“This apparent success has lured many investors to jump on the Apple bandwagon. Its shares have risen 51 percent in the past year to a recent $23. If you love the company’s products — and what’s not to love about their ease of use and elegant design? — you might be tempted to buy Apple’s shares,” Gandel writes. “But behind the hype and buzz surrounding the iPod and Jobs, there are problems stewing at Apple.”
iPod and iTunes are “masking an ebbing bottom line, noting reduced CPU sales (resulting a shrinking marketshare), decreased profits (in part due to the lower-margin iPod and little-to-no profit at the iTunes Music Store), failure of the iPod to drive CPU sales, failure of the retail stores to increase marketshare, hidden retail store costs, no operational income, and little value in the stock,” MacNN reports.
Full article here.
MacDailyNews Take: We weren’t aware that the time limit had passed for iPod to drive Macintosh sales. Gee, and we thought it would take a bit longer. Silly us. Sure, Apple had hit a stagnant period (thanks, Motorola), but we see the company finally emerging from the doldrums. Watch and see.