• Wall Street Voodoo: Apple’s Stock Continues to Nosedive

    February 11th, 2006

    Maybe it was all the fault of Steve Jobs. When Apple’s stock was above $80, he was reported boasting to employees that the company’s market value, however briefly, had exceeded that of Dell. Maybe he should not have relished the experience and challenged the “fates.” Regardless, now it’s down below $70 a share, and folks are wondering if Apple has begun to lose its luster.

    It probably began to turn bad after Apple’s quarterly interview with financial analysts, their admission that Mac sales had paused in anticipation of the new models with Intel processors. Its sales guidance for the current quarter is quite conservative, with projections that are substantially less than what analysts expected. Since then, it’s been widely reported that the new iMac and forthcoming MacBook Pro are doing well, but that sales of older Mac models with PowerPC processors are floundering.

    Add to that you have skepticism that Apple can continue to sell over 14 million iPods each and every quarter, and you have the ingredients of a falling stock price.

    Understand that there are no official sales figures for this quarter, other than the countdown to one billion iTunes downloads, and there won’t be any until April. The only potential for good news is a new product introduction of one sort or another and when that might happen is anyone’s guess. Perhaps April 1st? Yes, Apple’s 30th anniversary, and it might be a suitable occasion to celebrate the arrival of additional MacIntels and perhaps a change or two in the iPod line. Or maybe something altogether different, but the rumor mills have largely confined themselves to an iBook replacement, the 1GB iPod nano, which made its official debut today, and a lot of uncertainties.

    Perhaps Wall Street’s concerns are also based on the relative paucity of new hardware announcements at Macworld Expo. There were hopes that Apple’s bourgeoning media support, Front Row and the iPod-inspired remote, would gain TV tuner capabilities more in line with Windows Media devices. That didn’t happen, and that’s perceived as a possible negative even if people aren’t exactly beating down the doors to buy such devices.

    Remember, though, that stock prices reside on a tightrope and it doesn’t take much to cause things to fall over the edge. When any company is on a roll, you have to wonder when the excitement will end. After all, nothing is forever, and Apple has already had a far longer run with the iPod that most expected.

    At the same time, you can see legitimate reasons why this quarter’s sales ought to be somewhat lower. After all, the holiday season is over, and, other than Valentine’s Day, there is no compelling shopping event. And that’s a day that’s seems to generate sales of flowers, candy, jewelry and similar items. A new Mac? Maybe, but it’s not so typical. Folks who didn’t get their iPods for Christmas might be tolerating late delivery, but this is the usual occasion for things to settle down.

    At the same time, if you’re looking for a new Mac, you have to fill a little confused right now. Is it worth getting in on the future with a new MacIntel, or sticking with PowerPC, so you get the best possible performance from your legacy apps? What about the death of Classic? Does it impact you somehow? Maybe you depend on an old game or productivity application that’ll never appear in Mac OS X form? Yes, maybe one of those third party Classic emulators will be useful, but it can be discouraging.

    Perhaps you did hope for a MacIntel, but the iMac and MacBook Pro didn’t fit your needs. If Apple introduced a 17-inch version of the latter, I’d be sorely tempted, but right now I’m sitting on the sidelines. What about the Power Mac? Well, Universal binary upgrades for Adobe’s creative apps are six months to perhaps a year away, so why the rush? Maybe Apple will try to speed up Adobe’s development plans, to coincide with the release of the MacIntel version of its professional desktop. And will it really be called the Mac Pro? Inquiring minds want to know.

    All this uncertainty, and I can understand why some of you have decided to sell off your Apple stock and take some profits. Until there’s a new product introduction of some sort that amazes you, I expect things will continue in the doldrums for a while. At the same time, I don’t expect things to suddenly turn bad for Apple, so maybe you should wait for the stock price to bottom out before you buy some shares.

    But with Wall Street, you never know. They may find other reasons to be down on Apple despite evidence that things are moving along just fine, thank you.

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