How Apple might weather the financial storm

“Violent waves are tossing about the world’s largest financial institutions like toys made of balsa. The dark skies ahead can’t be anything but a recession. Sheets of cold rain have already been smacking the retail sector. And yet, at the helm of the good ship Apple, all seems well,” Randall Stross reports for The New York Times.

“No battening down the hatches or throwing on the storm gear there. In the teeth of what may be a once-in-50-years storm, Steven P. Jobs calmly keeps the company on the same course it has been following since the skies were clear,” Stross reports. “Premium prices for premium products — surely this is a formula most unsuited for frugal times. But the analysts with whom I spoke aren’t particularly concerned; all, it seems, list Apple as a buy.”

“We’ll soon get a glimpse of what Mr. Jobs and his colleagues see: on Tuesday, the company will release its earnings report for the quarter that ended Sept. 30,” Stross reports. “The numbers will undoubtedly document Apple’s momentum in taking market share from Windows-equipped PCs. Yair Reiner, an analyst at Oppenheimer & Company, wrote earlier this month that he expected sales of Apple’s desktop models to grow 13 percent, to 4.3 million, in the 2009 fiscal year and notebook sales to increase by 12 percent, to 6.76 million. Even if the industry suffers a downturn, he expects that Apple will suffer less than its competition and will still gain market share. ‘The upshot is that even against a very bleak macroeconomic backdrop,’ Mr. Reiner said, ‘Apple should be able to continue growing.'”

Stross reports, “If hard times do arrive, Apple has a perfectly clean balance sheet, with $20.8 billion in cash and no debt. The biggest problem that its corporate treasury faces is what to do with the cash, which Shannon Cross, of Cross Research, estimates will grow to about $30 billion by the end of 2009.”

More in the full article here.


  1. The new laptops are very appealing, not to mention LEADING EDGE, so much so that this writer is going to buy a new 15″ MacPro even though he doesn’t really NEED one. The point is that Apple’s products fill WANTS, not NEEDS, and those who have CASH NEED to have what we WANT.
    That’s why Apple is depression-proof.
    Apple should pay dividends to its long-suffering shareholders, who are afraid that it will do something stupid with its cash hoard, and concentrate on what it does best. There is no competition in their arena.

  2. From all the weather language in this guy’s article it sounds like Apple should start selling umbrellas on the street corner like those dudes who show up out of no where when it starts to rain.

    Cell phone charges and incense?

    Those Muslim bean pies?

    DVD’s and CD’s? (“see it’s still in the plastic so of course it’s real”)

  3. In the last recession, fallout from the dotcom bubble, Steve said he would innovate his way out of it, by spending more than his wallet-clutching competitors, and it worked. We got OS X out of it, the iPod and Titanium Powerbooks.

    This time, while I think the market for PCs will stagnate, Apple will still grow by taking share from its competitors. No need for a rising tide to raise all boats, which is the easy way to grow, but rising against the tide requires clear differentiation and that’s what Apple is offering to customers.

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