“Imagine, just imagine, that Apple had to take a one billion dollar write-down to cover repairs for the iPod or the iPhone. And, no, I’m not saying anything of that sort has ever occurred. But if it were to happen, you can bet it would be a headline story, carried on all the major, and not-so-major, media outlets around the world,” Gene Steinberg writes for The Tech Night Owl. “If you think Apple’s stock price was somewhat low now, such a development would have vindicated all of those who claimed Apple was in deep trouble, and that they’d never regain their luster now that Steve Jobs was no longer piloting the ship.”
“Yet in 2007, Microsoft took a write-down of that amount to deal with repairing the Xbox, many of which suffered from premature hardware failures. It was reported in the media for a short time, but mostly ignored thereafter,” Steinberg writes. “Things happen, and Microsoft was large enough to sustain such a loss without suffering seriously. We forget that, these days, Apple is larger.”
“Now segue to 2013, where Microsoft takes another write-down, to the tune of $900 million, because the heavily promoted Surface tablet is an abject failure. The stock price, after falling for a few days, is increasing again,” Steinberg writes. “Clearly Wall Street wasn’t perturbed that much by Microsoft’s inability to make a dent in the tablet market. This is the future of PCs, after all, and the company that dominates the operating system business has been unable to demonstrate that the vision of PC anywhere has any basis.”
Steinberg writes, “And, again, if Apple took a comparable write-down because they couldn’t sell, say, the MacBook Air, you can’t imagine how much bad publicity the’d get. Microsoft? Well, that’s just business. Sure, Microsoft didn’t meet analyst estimates for revenue during the last quarter, but it’s no big deal. Maybe they’ll do better the next quarter, or perhaps the quarter after that.”
Much more in the full article – recommended – here.
Because Apple is the R&D department. If they fail, it causes ripples. No one expects perfection from anyone else.
Apple is as hated as the Jock that gets picked first for a game while the fat kids are sitting down. Everybody hates him, but wishes they were him.
Yes collective myopia. Sadly that is a very bad sign for the American economy as companies like MS become a stagnant norm sitting on past glories and declining relevance. The fear of change holds back true innovation and financial commitment to it and eventually companies willing to take the risk. Car industry and civilian aircraft are already suffering in that way, so scary if the rest follow suit.
This reminds me of the video by no more kings with the original Johnny from Karate Kid.
And in other news the Ponzi scheme known as Amazon loses 7 cents a share, well below expectations, and makes a new all time high today. Insanity.
But the future is bright for Amazon. Analyst know what lies ahead for Amazon so no surprise exist. Apple is secret and analyst have no idea what might be next so they worry the future is bleak. Wall Street is about the future not the past. Being able to see the future brings comfort to their ‘insanity’ as you put it.
A bright future in an industry with the shittiest margins? Yeah I read many times that Amazon plays the long game. So long, in fact, by the time they reach their true potential, the human race would no longer exist.
And Amazon supports resellers selling unlicensed knock offs of Apple connector cables and power cubes whiCH might electrocute the user. E.G. http://www.amazon.com/s/ref=nb_sb_noss_2/188-1914384-7866332?url=search-alias%3Daps&field-keywords=IPHONE%205%20CABLE
Along with all the Android phone with stolen IP.
And Apple is always focused on what they can design and build for people right now. That’s why no one knows what they are going to do next.
Wall St. (and most people) has difficulty “pricing in” disruptive technology. If you are introducing incremental upgrades every year (think car industry), the value going forward is somewhat predictable. If you are introducing products that, to paraphrase Steve Jobs, “no one knew they wanted or needed until we gave it to them”, it is difficult to predict how that will affect a company’s revenue going forward. Wall St. is scared of overpricing the ability of Apple to continue to innovate, and then after the fact, doesn’t reward the stock price because they don’t believe it can happen again and the revenue/market share won’t last.
There is no way to prove those analysts or hedge funds know the future. Amazon’s future profits are far ahead in the distance and anything can happen before then. War or gasoline shortages for instance. How about the death of Jeff Bezos? Do you believe that Jeff Bezos is so powerful that he couldn’t come down with cancer? Analysts can believe anything they want but please don’t call it “a sure thing.” There are many sure things that have backfired in history. Even now, Amazon could be undermined in a number of ways if a company that had plenty of money wanted to go up against it in several areas. Take cloud services, for instance. Amazon gets a contract by greatly undercutting a rival in price and Wall Street cheers. Jeff Bezos is stretching Amazon paper-thin and I question how long he can do it without Warren Buffett’s deep pockets.
Amazon misses numbers slightly, no big deal. Shares can stay flat, but when target prices suddenly head for the sky, I’m sorry, but there’s just something very odd that Jeff Bezos can run a company with impunity from investors. These investors must think they see some huge gold ring they’ll be able to grab years from now. I think Jeff’s backers are using smoke to mask any possible problems that might set off investor alarms.
Yes that -1400 PE ratio and 1% operating margin is very ary attractive.
Absolutely thinking the same thing. Freak’n Amazon and a PE ratio that is mind boggling.
I won’t invest in a company that doesn’t make money. It’s just an ego trip for the owner. Oh yeah, you know that billionaire democrate that paid barely any personal income tax last year.
Yeah, good guys there. Let the flame replies start.
The people who love amazon are the ones buying on a dip and selling on a surge. The bigger the dips and surges, the more money they make…… or lose.
Yes the stock market or should I say the anal-ists do not go by what a business is doing anymore. They go by who they like or dislike for whatever reason. It doesn’t matter if you have new products or old products or no products. If they like you your stock will rise. As for Apple right now they are not liked and the anal-ists have an excuse for anything you tell them to make the stock go down. Even when a new product is introduced it won’t matter because the anal-ists will have an excuse to bring the stock price of Apple down. There full of SHIT!!! PERIOD!!!1
I like Gene and his podcast, especially when they have Daniel Eran Dilger on.
I think Gene was also an Art Bell fan – the ambience on his show is very similar so I like Gene even more.
Yep. Informative podcast, and I like DED’s commentary especially.
When the others fail, it is just a copy failure. Most copiers fail and know one expects there to be 100% jam free or clear copies.
Same goes for master pieces in the art world. You only need one master piece and then millions of posters can be sold for each and every home and out house.
Oh, sorry, we are talking about Apple. It is the same in the IT world when the ripoff houses of Microsoft, Samsung, Google, … see a master piece. They are just sitting around now looking for the next master piece from the master of IT in Cupertino, CA!
Apple DID take a $1 billion write down in 1997, thanks to their marketing morons overstocking $1 Billion in customer rejected Mac Performas. And what was the result?
“Apple’s gonna die!” ranted over and over for years on end. And Apple didn’t die. It thrived.
The tech press RARELY understands Apple. Whenever they’ve bet against Apple they’ve LOST. And apparently they never learn.
Sure, Microsoft didn’t meet analyst estimates for revenue during the last quarter, but it’s no big deal. Maybe they’ll do better the next quarter, or perhaps the quarter after that.”
That’s the same story Microsoft always uses for providing reliable software. “The next version will do it.”
HA !!! Absolutely correct. Isn’t it astounding how Bomber can get on a stage, spew 45 minutes of complete and utter un-intelligible jibber-jabber and the media calls him brilliant. Cook gets on stage and speaks for five minutes and takes a ration of media lies, put-downs, distracting idiocy and untold lies for weeks …. Humm.. Makes you wonder where or who has any brain cells left !!
When Microshaft files for Chapter 11 next year, we’ll see who has the last laugh… A billion at a time…