“This week, you can bet the true believers around Apple’s Cupertino headquarters are thinking back to 2001, while loading up on some suddenly discounted shares. Talk about an after-Christmas bargain: Apple stock is trading at about $140, 30 percent off its December 28 high of $202.96. That’s about the same place where Wall Street valued the stock six months ago, before it became clear that the new iPhone would sell nearly 4 million units in 200 days,” Jon Fortt writes for Fortune.
“The most recent ding to Apple stock came Wednesday, after the company turned in the best quarter in its history. The stock dropped nearly 11 percent. Depending on whom you ask, the stock got hammered because of soft iPod growth, tepid revenue guidance, or plain old investor fear,” Fortt writes.
“But there’s also plenty of reason to believe Apple can innovate through this downturn like it did the last. First is stability. Apple has stockpiled more than $18 billion in cash, giving it more than enough cushion to think big, take risks, and make mistakes,” Fortt writes.
“Second is the iPhone. Like the iPod before, it’s a hit — even though it is solely distributed through AT&T in the U.S. and through other exclusive carrier arrangements abroad, it seems to be gaining traction… Apple sold about 300,000 iPhones in just the first two weeks of 2008. If that pace keeps up — and it easily could as Apple expands the iPhone’s availability in Europe and Asia — then Apple could sell as many iPhones this quarter as it did during the holidays, an impressive feat,” Fortt writes.
“Last is the iPod touch. Largely glossed over in Apple’s earnings announcement was the executive team’s emphasis on the fact that the company doesn’t view this thing as just an iPod — it’s a wireless computer. And the iPod touch will fully come into its own at the end of February, when Apple opens the door for outside developers to build software for it. What the iPod touch becomes then is an open question,” Fortt writes. “Will Apple invent a way for it to become a viable gaming platform? Will clever engineers come up with cooking programs, GPS attachments, video recorders, or other ideas to spark demand for the gadget?”
“If so, watch out. Sales of the iPod touch and iPhone might just push the stock price higher again — and if so, Apple executives will relish the chance to tell the story of how investors, once again, underestimated Apple,” Fortt writes.
Full article here.
In my opinion, some of that 18B should be used for stock buyback. Not sure why they just sit on it all the time.
That $18bn helps make Apple a gold standard company. Jobs wouldn’t settle for anything less…
“Apple executives will relish the chance to tell the story of how investors, once again, underestimated Apple”
I couldn’t agree more!
“cooking programs” ???
WTF???
The second half of OS X (ie. 10.5 and on) is about incorporating touch technology. I think OS 11 will bring this into a 3-D space.
Who are these ‘naysayers’? Just because a few clear thinking pundits tell the truth you MAC lemmings get your panties in a bunch and start calling these realists names. Sometimes the truth hurts.
And as far as $18,000,000,000 in cash goes, they’re gonna need it to stay afloat after the glossy screen lawsuits, MAC Book Air debacle and Microsoft’s introduction of the Zunephone. Buh-bye Apple.
Your potential. Our passion.™
Don’t forget the Mac. 50% growth from last year. The iPod as we know it may be over, but “the first 30 years were just the beginning”
18 billion allows you to be “master of your own domain”
And in the call the other day, either Steve or Oppenheimer said that the $18B was for use for “acquisitions”. So they’re looking at buying somebody – at some time in the future. And $18B will buy a pretty good sized somebody.
Step 1: Absorb Bento into iWork
Step 2: Include iWork on all new Macs
Step 3: Include iWork Express on iPhone and iPod Touch
The phone/pods will never be ideal for creating content, but make it easy for people to update, present and share from them and you’ve got something VERY useful.
Cubert,
Cookbooks are among the best selling books perenially.
18 billion allows you to be “master of your own domain”
My web hosting service allows me to be “master of your own domain” for $5 a month.
Apple is paying too much!
I like your ideas about iWork, Bento, and integration into mobile devices. Props.
@Zune Tang®
Your stupidity, my amusement!
I bought a Touch in December and thought it was a great iPod. Then the update came out and I’ve changed my mind: it’s a fantastic little computer. The map function works great. I live in the greater Minneapolis/St. Paul area. My daughter has a GPS device in her car. It still routes you over what was the I-35W bridge that collapsed. Not my iPod Touch! If I need directions I input them while at home and follow them. It’s always right so I don’t need to get new directions while on the move. I suppose if I did I’d just stop in the parking lot of McDonalds or Starbucks; they’re everywhere.
“And $18B will buy a pretty good sized somebody.”
The American unit standard is measured in “ballmers.”
The metric equivalent is in “helús” which replaced “bransons.”
Solution to fears that your retirement plans, courtesy of AAPL, have crashed and burned, do this:
By more AAPL… and, hope Steve has learned the lesson of what matters – it’s not toys and gadgets, it’s world class computers and not just those that meet the standard of being better than the worst.
Last chance to buy AAPL at below $135… again.
Oh, the weather widget on the Touch also works great. When I woke up it was a minus 16.5 F. It’s warmed up now, it’s only minus 6.5 F.
So Apple is supposed to bounce back on opening the iPhone and Touch to developers? I suppose it’s possible if someone creates an anti-recession fears app. I don’t believe Apple has control of the market and are just waiting. I think time will fix it as long as Apple doesn’t make any major mistakes (expensive movie rentals and a skinny, expensive lap top for no demographic seem to be out of the way.
“Apple primed to shock the naysayers yet again”
That’s what happens when you don’t ground the chassis….
silverhawk: What planet are you on? Wow, that Touch has some great range!
Democrats are diseased!
“expensive movie rentals and a skinny, expensive lap top”
It must really suck to be that poor. Would you like government vouchers to help you out?
Stupid me,
I bought more shares when the stock dropped to $180. I thought I was cashing in. Oh well.
@Ampar
Silverhawk is obviously from my former home, the Arctic Wasteland of Canada, where minus 16.5° F is just a balmy spring morning.