Going up or down Apple?

Why start a blogpost about Apple, the most impressing company in the world right now, with a children’s nonsense rhyme? Well, some people seem to think about Apple in that way, like 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 when they say that there will come a day when Apple won’t be on top, but I don’t think we have come that far right now. 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 huge success gets to a point when a company has to adjust itself. In Apple’s case it’s about getting control, building bonds of trust. They can’t trust Samsung nor Google and that’s why they search for other solutions when it comes to find subcontractors for the crucial parts in the Apple devices and also taking the brave decision to use their own maps. Okay, the maps revealed a lack in their organization, so they also fired Scott Forstall because he was responsible for the maps and the maps was 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, it means that they will get stronger.

Then we have the headlines about the devices. Some people try to convince their audience that Apple is losing it’s 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 have the Apple shares value decreased during this autumn? I thought it was very strange until I learned that a lot of funds had to sell out their shares because they got too valuable. Yes, you read that right. Too valuable. If you are responsible for a fund that has rules about how many percents 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 of what new rules they will come up with (if I got that right, feel free to help me out here!) so a lot of shareholders want to sell before 2012 has ended.

Conclusion 1: Apple has performed (and is still performing) some changes in order to get stronger. That is good. The funds and the shareholders have done their financial moves ”because they had to”. Apple is still Apple.

I expect Apple to present some good earnings in late January and that the stock exchange rate will rise. I think that it might be a good thing if the coming rise will be at a somewhat lower speed than during 2012, because it might get a bit too dramatic when the hoard of shareholders ran 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 effect on the stock market gets a bit hysterical.