It's No Big Deal That Apple Is Pulling Out of Macworld 18 comments
Scott Rothbort
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Apple (AAPL) is off $6 after hours. I picked some up to add to existing positions. However, I will sell this purchase and keep my core position if we get a bounce. I think that there is too much reading into AAPL decision to phase out of the Macworld media circus and have someone other than Steve Jobs make the presentation.
Macworld needs AAPL more than AAPL needs Macworld. By having someone other than Jobs speak, it allows the company to show off the talent below Jobs. Yet, traders are interpreting this move as an indication of Jobs’ potential deteriorating health. If AAPL has something new to unveil then it can do so at its own choosing. Having to force the company to meet the schedule of Macworld is plain silly.
Just as General Electric (GE) announced Wednesday that it would no longer provide guidance to analysts, APPL is saying that when it has something to say it will do so but won’t succumb to market pressures to make presentations or spoon feed analysts on a set schedule.
Disclosure: At the time of this Blog entry Scott Rothbort, his family and or clients of LakeView Asset Management, LLC was long shares of AAPL
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This article has 18 comments:
Change of this kind is painful, but few companies do it as well as Apple. Current shareholders lost a bit, but it did create buzz, a buying opportunity, and in the long run this will create huge value for shareholders.
Just wait for the first web streaming Apple Product Announcement that will be watched by millions.
The market will remain pretty stable around present levels with low volatility with aapl folowing suit until macworld which might reveal new imacs but even if it doesnt, expectations are so low the potential for surprise rather than disappointment are in aapl's favour. When Apple reports Quarterly earnings in late January and when Obama is expected to sign a package to help homeowners and create new jobs his first day at work, aapl should pop supported by what I believe will be better than expected sales, including macs. By the middle of February, after Obama euphoria fades, the stockmarket will probably fall back to the October lows or create a new bottom which will should hold. Selling long positions on aapl before end of January would be unwise. 2009 will be a dreadful year for America's economy and most Americans financially, but the stock market will offer a once in a life time chance, by the second quarter, to purchase shares in the future of the Greatest capitalist (we still are the later) democracy in the world at big time bargain prices.
Then of course, there IS the possibility that Steve is not feeling well and knew he would not be up to preparing for the keynote. Whether Steve has a life threatening illness or not, speculation that he does is appropriate until he shows up in public. Knowing speculation about his health would once again surface, Steve could have made the announcement himself. But he chose not to.
Investors and other interested parties are left to speculate why Steve would make Apple's last Macworld the only one he does not do the keynote for while CEO.
1. Jobs is ill when CNBC's Goldman claims he is not. If he was, Apple would have to disclose it.
2. No new products at MacWorld and if they do they will be lame since Jobs has passed the presentation.
3. Mac Sales have stalled and the Apple story is over.
4. Ipods are in decline.
5. The iphone is about to be sold at Walmart for $99 or less.
All this is crap.
What we do know is that
1. Apple does not like releasing on a set date. It allows customers to put off purchases while they wait for new products. Apple noted this on the 4Q conference call in October.
2. Jobs is fine and the author points out that Jobs runs a great ship and the people below him are the geniuses.
3. Mac sales in October were 28% higher than 2007 and flat in November. That is still positive for the quarter.
4. Component prices are dropping and Apple is holding their prices. Margin improvement?
5. Apple is selling less shuffles and more touches. Total units down but average selling price up.
6. Iphones are getting people to leave Verizon as the Storm fizzled. Saw lots of them this past weekend in bars and restaurants.
7. Apple may invade the netbook area but if they do it will be a machine that does the mac experience. Netbooks usually run linux or Windows XP, not Vista. They suck for games watching movies etc so unless you just want to surf the web and not watch Youtube, go for it.
8. The iphone brings people to the mac. Spoke to a guy this weekend who broke down and switched from Verizon and now wants a macbook after using the phone for a week.
Just my 2 cents
On Dec 17 06:00 PM tufdaawg wrote:
> you know, MacWorld had its time. It was a great way for AAPL to release
> new products and get the fan base very excited. (Much like a Palin
> rally.) Now, however, that need is no longer there (again, like a
> Palin rally).
1. The funds believe they are having a hay day.
2. Jobs appears looking fatter than Schiller who has lost just a little weight to make himself presentable.
3. Introduces Schiller and runs.
4. Schiller talks at length about Snow Leopard.
5. Introduces a new Mac Mini that will work with the new LED Cinema Display.
6. Forgets something
7. Remembers something
8. Introduces an entirely new compact Snow Leopard platform that automatically senses and saves a profile of available services (phone, wi-fi, printing, DVD/CD re-writer, discs and whatever else) in each destination location (e.g. Home, Office 1, Office 2, Hotel 1 etc)
9. Price - two bags of shrimp.
10. Available April Fools Day
One week later.
1. Announce Incredible results.
2. Credible forecast
3. Funds are screwed.
A wild, wild dream? Well no more so than any of the speculation surrounding a simple situation of Apple exiting its last major Trade Show participation just as it chose to end Apple Expo Paris before the last event (2008) which has been followed up with Reed International's announcement today about the cancelation of the 2009 Paris Event.
Guess who presented the Keynote at the last Paris event?
Forget about "who will replace Jobs"; I want AAPL to get busy replacing the press release team.
The CEO does a pretty good job as well by many accounts.
If you can say it, I might believe it, but I'm not hearing it yet.
Just calling them bad doesn't mean that you could do it better.
SJ: At first I was concerned. But SJ gives great keynote because he invests a lot in the presentation. Not worth it if there isn't big news. In fact, having SJ give a presentation without big news just sets everyone up for a letdown. And Apple really tries to underpromise.
For a typical CEO a 2 hour presentation takes 2 hours. For SJ, it is days of presentation.
And yeah, your #1 marketing guy ought to be able to give a keynote.
Now they can bring Steve out for emphasis... like pointing out that non-GAAP accounting (meaning iPhones booked as if a mac or an ipod) DOUBLED the GAAP results. It was stunning.... yet most of Wall St is still valuing AAPL on GAAP P/E. Totally misses the iPhone. Steve needs to come out and do the next earnings call as well.
Sorry do not share your optimism about the economy. Currently we are still laying off more people each month than the month before. On top of that the banks still have no money to loan, and no one wants to borrow anyway. (Final item is a long term positive actually.)
When Obama takes office, it will take some time for legislation to pass. My guess is that some quick emergency bills will pass in the first 2 weeks. These will give money to states to start infrastructure projects that are already planned, Still, they will need to be bid and work won't start on any significant number of them until May. Overall the economy will continue to spiral down until at least the end of 2009, and lay out a very long bottom through all of 2010, with perhaps a little "light at the end of the tunnel" in Dec 2010. And this IF WE ARE LUCKY! After that we will not have a "bounce back" end. Although with infrastructure construction in total boom, it may begin to pick up a little steam.
In terms of the stock market -
- the hedge funds and other leveraged funds still have losses to unwind
- companies will continue to have lower profit / higher losses
- people will continue to pull money out for another year
So 2009 will see more losses.
Apple shares will continue to be depressed by the overall market conditions, though I think it will start to slightly outperform the market (i.e. go down less). When things star back up again in 2011, people will finally realize that an iPod sold is still $600 even if they only take 1/8th each quarter. It will rocket. But short term it will only be the doldrums unless they totally blow out sales expectations. So hang in there for a long dark ride ladies and gentlemen as we enter the Great Republican Recession (depression??).
my 2 cents
And if you look at it, there are loads of people who alway say it was a letdown simply because they don't have a fraction of the vision of an SJ..
Apple skyrocketed after the close of MW Boston, and the doom and gloom prognostications surrounding it. The same people that constantly stir FUD and innuendo about all things Apple will do it about the MW cancellation, but the difference is, this will be the last time they can say that MW was a 'letdown' etc...
Now AAPL can unleash updates to the iPod and their consumer Macintosh products in September/October and people will buy them confident that they're getting the latest and the greatest. Of course, that may well make calendar Q1 even weaker for Apple than it has been traditionally...put AAPL would probably rather have the money in their greedy little hands a quarter earlier. ;-)
reinharden