Apple Musings: Disappointing Disappointment

I haven't had time to have super deep thoughts yet on the conference today but here are a couple of reactions:

• First of all the Apple (AAPL) conference today as expected was a bit worse than I expected. I had tweeted about not expecting any big product releases but no front facing camera on the IPod Touch is pretty weak. Also, Steve Jobs looked as unhealthy as I have ever seen. What makes me even grumpier? I sold call spread at the start of the day (175/180) on Apple expecting the performance would be lackluster. It really has not done well despite the nice pull back especially given the stock is excessively popular. The 180 side pulled back a little bit more than I thought it would. I plan to close the 175 on Friday and I may or may not roll forward the long 180 call depending on how cheaply it's trading as a way to add exposure.

• There wasn't even any new screens. How does a Microsoft (MSFT) Zune have an OLED screen but an IPod Touch doesn't. Samsung (SSNLF.PK) has OLED and many others are adding it. Could this be a separation of the IPod touch line (which is really a computer). i.e. We get a new event that launches the IPod Touch line starting at 3.5 inches, expanding to the tablet up to 10 inches and higher? That would make some sense. Perhaps this comes in December - January. There is no way they get us OLED at 10 inches but 3.5 to 7 is quite possible. OLED is just far too expensive still despite being incredibly thin and power efficient.

• No forward facing IPod Touch Video Camera for video conferencing? Come on--there is just no excuse for this other than a nearer term upgrade right around the corner. Some have talked about some technical problems with the camera but I don't think that's the full story.

• I would kill for a foldable OLED that gives me a form factor at 4 inches expandable to 10 inches. Imagine an IPhone that turns into a kindle size book reader with a much thinner screen that folds out.

• Apple finally introduced FM radio tuners -- just in time for the medium to die.

• There HAS TO BE another product some time in December. This space is too competitive for Apple to sit back for too long. Right now it's milking margins and share gains but at some point the market is going to need something more.

The net? Waiting a bit for things to settle down with the stock and using spreads to expand long on a pullback. Positioning for new product introductions in Macbook Pro Line, Tablet in Dec/Jan.

Just for disclosure: Long Apple. Long Calendar spread. Short Septmber -Vertical Spread.

Comments

[Mr C:]

I know these are musings, but dewd you need to relax. How many gadgets do you need in your pocket at any one time. Just wait for it, wait for it....

Sep 10 07:51 AM

[User 332757:]

I think that the lack of camera in the Touch was a technical issue that they're working on. I can easily see Apple releasing Touches with cameras in early November, with Steve being quoted as "people loved the cameras in the Nano and asked up for the same thing in the Touch ... here ya go."

Sep 10 08:33 AM

[davesmall:]

When you talk about September product announcements you're talking about Christmas present purchases. Getting the iPod touch entry price under $200 could be very big in terms of Christmas sales. Loading up the iPod Nano with new features at the $149 price also makes it a probable hit this Xmas (The Nano now comes with a built-in video camera, a microphone, a pedometer, a larger 2.2-inch display and an FM radio tuner. It costs $149 for an eight-gigabyte version). Both of these models provide tremendous functionality for the price.

Hardware features like a camera and an OLED display are nice but none of that compares to the value that the App Store adds to the Touch. It's those Apps that make the Touch an overwhelmingly better choice than the Zune. Microsoft will try to build a software library and copy the App Store but they're way back at the starting line and won't be competitive in this product lifetime.

Sep 10 09:35 AM

[mollytjm:]

Jobs actually looked pretty good for someone who had a liver transplant 6 months ago and his attitude was great and he's obviously still smart.
unlike other companies that make a product and let it lay there for 7 years, Apple keeps innovating and improving. So many people are starting to carry the iPhone and iTouch that Apple has to focus on making them better and better so the experience will be satisfying. They will be the next inventor of whatever is coming later...and I also think there will be more products near the holidays, but Apple has always cared about it's customers and their product experience. The iPhone is a huge deal and rolling out big in China, so they really have to spend development time on keeping it 'new'.
Apple stock will do well in the long run.
Long APPL

Sep 10 09:43 AM

[CHoff:]

The iPod Touch and Nano price points have rendered the new Zune HD irrelevant even before it is available. OLED can't save Zune.

On the iPhone/iPod Touch, Apple is driving hard for platform marketshare in the post-PC era. Market share with a consistent hardware and software platform will fend off even the best me-too devices. The current 50MM unit installed base is great. When it is at 120MM in 2010, it will be an unassailable moat that draws even more developers & users. Why would developers target Palm, RIMM, Nokia, or Windows Mobile with their few million mobile devices? Market share (not luxury features) seems key for Apple to win in mobile computing as Microsoft/Intel won with PCs.

Sep 10 11:00 AM

[joejanko:]

Regarding the iPod touch and camera: Read David Pogue's interview with Steve Jobs in the NY Times. Jobs stated the Apple views the touch as a game machine and their goal is to keep the price down. Adding a camera will only add to the price without improving its "game-ness".

Sep 10 12:05 PM

[Ron Mertens:]

Foldable and 10" OLEDs are still not available... but "regular" OLEDs are not so expensive:

www.oled-info.com/isup...

Just 8% more on the display (half a dollar) for a 2.6" OLED vs a regular LCD. I think Apple should start using this for their smaller displays.

Ron

Sep 10 12:54 PM

[mrl14:]

Another "journalist" who was mes
meri
zed by all the RUMOURS. Nothing wrong with the announcement. It's September. It's when Apple always updates it's iPod product line.
You'll get your tablet when Apple feels ready to release one. Until then, stop spreading bad news because you missed the run up in the stock from $13 to $200 over the last 6 years.

Sep 10 02:14 PM

[waterman:]

I wouldn't think that any company would introduce a product in December - too close to Christmas, Channukah, etc.

Apple has in the past made introductions of new products in October. I also don't think they would bring something to the stores in November.

An upgrade to the iPod Touch with a camera is possible based on earlier rumors regarding possible technical problems (this was for 5 megapixels cameras).

Sep 10 03:54 PM

[herd mentality:]

It would be interesting to watch apple have to deal with a rapid dollar devaluation.

Sep 11 01:51 AM

[herd mentality:]

The Zune HD will be popular amongst teens and 20 somethings that view the iPod as the establishment. Just look at the user interface... the style and interactivity is clearly aimed at the hip hop type crowd and youth culture in general. I happen to be working on some stuff for M$ zune right now and have been analyzing their brand positioning. Isnt this a role reversal where apple is the "establishment" and microsoft is the upstart. I will say straight up that I think the ZuneHD is a compelling device with perhaps a superior UI to the iPod touch. However as stated above. The App Store is the real killer app. You really can't touch Apple's position because again... they captured the space before anybody knew it needed to be captured. The Zune HD is probably superior on a few points from both a hardware and UI standpoint but it just doesnt do enough to be competitive - yet. However, if they want to make it a loss-leader and subsidize it for 2-3 years... perhaps they can catch up by courting developers... especially game developers. They did it with Xbox - look how they have put the hurt on Sony. See Microsoft can't innovate - but they are good at this brute force - economy of scale incremental copy cat thing.

Sep 11 01:58 AM

[BlindReason:]

The key thing guys---is I thing the IPod Touch and Tablet will be positioned as portable computers. So a separate product launch and upgrade from the music players. Leaves room for new event.

Sep 11 09:47 AM

[peter02l:]

"I haven't had time to have super deep thoughts yet on the conference today, ... "

And it really shows!

Sep 14 06:25 PM

[leftnotracks:]

It's kind of hard to get past the first sentence, where the writer claims he expected the conference to be worse than he expected.

Sep 25 01:58 AM