As most of you know, in his off-the-record conversation with a reporter at The New York Times, Steve Jobs supposedly laid to rest ongoing concerns about his health and ability to continue to perform his duties as Apple’s CEO. Yet, Apple’s stock price continues to take a beating as of early this week, so you have to wonder how much more the Street needs to feel reassured?
Understand that I think Jobs is totally wrong in his behavior. Instead of calling a newspaper reporter, chewing him out, and then giving him the information he wanted on background, he should have acted rationally. How so? Well, why couldn’t he just deliver all the juicy details for full attribution?
Better yet, why not send a letter and some medical records over to Apple’s board of directors — assuming they don’t have such documents already — and give them permission to disclose at least a summary of the basic information?
Now I do understand that a private citizen should not be compelled to disclose personal medical information except, perhaps, to law enforcement in connection with a criminal inquiry. But when someone is a public figure, as Steve Jobs happens to be, and is also CEO of a multibillion dollar multinational corporation, different rules apply. Sure, Apple may be complying with the letter of the law as far as the SEC is concerned, as they always do. Unfortunately, questions about Jobs’ health clearly took on a life of their own, and this is a climate where personal gossip gets far too much emphasis.
On the other hand, even coming clean on the health of Steve Jobs may not be sufficient. When Apple lowered its guidance as far as profit margins are concerned, it was actually good news, not bad. Unfortunately, far too many financial analysts don’t see it that way, or perhaps they are going to benefit if the stock price is knocked down to their preferred level. But I really don’t have the patience to discuss such nefarious efforts at financial manipulation. I think you get the picture.
You see, Apple is promising a major product transition. When a newly-designed product is released, a company has to recoup its development costs and startup production ramp expenses. Initial purchase prices can be set higher as a result, and they would gradually come down as those expenses are amortized. Apple, however, doesn’t really cut prices very often. So, they would take the hit up front and then, over time, wait for profit margins to catch up.
If this new product is as big a deal as Apple implies, then this all makes sense. As I said, it should be good news, not bad. It’s not the same thing, for example, as a company cutting prices as a form of fire sale to move product that’s catching dust on the shelves. That’s something the financial world has a right to be concerned about, because it means the business in question may be suffering and is desperately seeking a solution to their financial woes.
Apple doesn’t have financial woes. They just keep making fatter profits, and they have plenty of cash on hand to fund acquisitions and, if need be, emergencies should they arise.
So that takes us to this spectacular new product that everyone’s talking about. Just what is it that Apple is being so coy about? In not saying anything several times during their session with the financial community, they, of course, fueled all sorts of speculation about what might be forthcoming.
Certainly there are existing product lines that might be in store for major upgrades. The MacBook and MacBook Pro, for example, have case designs that haven’t changed much from the original iBook and PowerBook versions.
But would new models that have more of the beveled look of the MacBook Air amount to major product transitions? Even something with a touch screen could still look very much the same as existing models, with perhaps larger trackpads to accommodate additional MultiTouch features.
All right maybe that’s not it, so where do we go next?
I can see where Apple might want to revise the iPod touch, to make it more affordable in light of the changes in pricing policy for the iPhone, but the look wouldn’t change significantly, would it? Or would Apple add a nano-based alternative with a lower price of admission and a smaller touch screen? But that doesn’t seem to represent something earth-shattering.
Some tech pundits are even suggesting that Apple has a new flat panel TV under development, which would integrate Apple TV and perhaps even incorporate some sort of built-in audio system that eliminates the need for a third-party product. But Apple doesn’t have a compelling history in providing great-sounding speaker systems.
But what if also Apple licensed TiVO technology, and integrated the new two-way CableCard capability, so you wouldn’t need your cable company’s set top box?
I’m not sure. I’m still having difficulty digesting a fully-integrated flat panel TV solution as something Apple ought to consider as a major product line. Of course, I also felt that the mobile phone market was over-saturated too, and then the iPhone changed the paradigm.
But I don’t mind when I’m proven wrong. Regardless, they sure got my curiosity.
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