Why start a blogpost about Apple, the most impressive company in the world right now, with a children’s nonsense rhyme? Well, some people seem to think about Apple in that way, as if you could count them out with just pointing out a couple of bad things, and that will be it.
The thing is, development doesn’t happen like ”Apple, papple, pirum, parum”, it takes some time to count Apple out, and I’m not even sure that we have seen the beginning of that, even though the price of the Apple shares for sure has been a bit sad to follow during this autumn. I agree with the pessimists who say there will come a day when Apple won’t be on top, but I don’t think we have come that far yet. Maybe it will happen in five or ten years, maybe later, maybe it won’t happen until twenty years from now? But it isn’t happening right now.
Apple has been amazingly successful; no one can argue against that. I think it’s a natural development that a company’s huge success reaches a point where it has to adjust. In Apple’s case, it’s about gaining control and building trust. They can’t trust Samsung or Google, so they look for other solutions when it comes to finding subcontractors for the crucial parts in Apple devices, and they also take the brave decision to use their own maps. Okay, the maps revealed a lack of organisation, so they also fired Scott Forstall, who was responsible for them; the maps were a failure.
This might look a bit shaky from the outside, but in fact, they are dealing with their problems, and as far as I can tell, that means they will get stronger.
Then we have the headlines about the devices. Some people try to convince their audience that Apple is losing its hotness. Okay, but they are still selling A LOT, right? Apple’s customers are still more loyal than any other brand, right? And that’s because they like (or even love) their Apple devices A LOT.
So, why has Apple’s share price decreased this autumn? I thought it was very strange until I learned that many funds had to sell out their shares because they had become too valuable. Yes, you read that right. Too valuable. If you are responsible for a fund that has rules about how many per cent a single stock can hold, then you have to sell off if it gets too valuable. (It makes me wonder about how clever the concept funds are?)
Another factor is the US tax system and some uncertainty about what new rules will be introduced (if I got that right, feel free to help me out here!), so many shareholders want to sell before 2012 ends.
Conclusion 1: Apple has made (and continues to make) changes to become stronger. That is good. The funds and the shareholders have made their financial moves“because they had to”. Apple is still Apple.
I expect Apple to report strong earnings in late January and for the stock exchange rate to rise. I think it might be a good thing if the upcoming rise is somewhat slower than in 2012, because it might get a bit too dramatic when the hoard of shareholders runs up and down to increase their earnings.
Conclusion 2: Apple causes a lot of buzz. I think that’s a good thing, except that the stock market’s reaction is a bit hysterical.
