Apple’s Stock on the Rise: What’s Wall Street Telling Us?

March 25th, 2009

As most of our regular readers know, I’m no fan of Wall Street. It’s not that I have ever had enough money to play the market, but I rather think that I’d do as well or better in Las Vegas. On the other hand, my budget at the gambling tables has never exceeded $20, so who am I to talk?

Certainly in the current economic climate, I am even less inclined to want to entrust any stock broker with my hard-earned money for investment purposes. But I’ve been wondering about Apple’s stock price, which has shown a steady rise since the iPhone 3.0 SDK was unveiled earlier this month.

Now it’s not that Wall Street loves Apple. Usually it’s the reverse. Indeed, in the past, you’ve no doubt seen Apple’s stock price dip even though the company is reporting record sales. Go figure.

This time, maybe the market is just trying harder to find reason to be optimistic, and perhaps that explains it. Or maybe they are carefully looking at Apple’s ongoing game plan for once, what little anyone knows about it outside the company, and seeing lots of future earnings potential.

Certainly the new Macs have evidently been well received. There was a report, unconfirmed of course, that Apple boosted their production of the latest models because of unexpectedly high demand. You just know that COO Tim Cook keeps close tabs on inventory, and he isn’t going to ask for more product if there’s no compelling reason to do so. Unlike Microsoft and the auto industry for that matter, Apple doesn’t believe in flooding the channels with excess product just to deliver good sales figures. That’s the sort of game that can come back to bite a company in bad times.

All this excitement seems to be happening despite the fact that the average price of a Mac is higher than the average price of a PC. May I remind our readers, though, that I still maintain that Apple is price competitive, particularly when you equip models from both platforms with similar options, or as similar as you can make them. But I have no patience right now to resume that age-old argument.

But if you look at Apple’s online store — and the tallies may have changed by the time you read this article — the iMac is the top-selling Mac, even ahead of the MacBook and MacBook Pro. Number four is the Mac mini, ahead of the Mac Pro and MacBook Air.

I rather suspect that lots of people who may have dismissed the mini are now giving it serious consideration. Not just because it’s small and cute, but because its new integrated NVIDIA graphics hardware makes it even a passable game machine for casual gamers. Imagine that! More to the point, unless you are doing some fairly demanding tasks on your Mac, it is surely fast enough for most people.

Yes, the mini’s hard drives are slow, since they are similar to the ones in a MacBook. Sure, adding RAM is a pain, but that’s something you can do at the outset with your dealer’s help and be done with it. Besides, if you already have a decent display and keyboard, it’s a great bargain. Maybe if Apple would spend a small amount promoting this sleeper of a product at long last, more people would realize that simple fact.

But I think Wall Street is happiest about the potential of the iPhone 3.0 software for business. Yes, consumers will appreciate cut, copy and paste, multimedia messaging and such, but the ability to tap an extraordinary number of external peripherals via the Dock connector will yield great potential for lots and lots of industries.

Certainly the demonstrration of a small part of its health care potential during Apple’s rollout of the iPhone SDK upgrade is just a small sample. Being able to check blood pressure and blood glucose levels are just part of what the medical industry can do with an iPhone. You will be able to plug it into a host of diagnostic tools, and the information can easily be compared to a patient’s medical history. That can help reduce the number of mistakes a doctor or nurse might make during their rounds, and it would also help speed proper diagnosis and treatment of a patient.

Imagine emergency techs examining someone on scene who has suffered a seizure. Plug in some basic information about the patient in question, and the medics will have a ton of information that they can use to provide critical on-the-spot care that will save lives.

And, no doubt, reduce the number of malpractice claims in the health care industry.

I will leave it to you to contemplate other possibilities for the iPhone in the business world. Just having an efficient point-of-sale device is the beginning. Consider the car dealer who meets you in front of his showroom, and can immediately consult inventory to see if the model you want is available, and deliver a competitive price on the spot. Certainly managing production in auto factories may also be rendered more efficient.

Tons of iPhones may be sold to the enterprise as a result. RIM has to be shaking in their boots. Microsoft? Forget about them. They still haven’t a clue that the world has passed them by.

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One Response to “Apple’s Stock on the Rise: What’s Wall Street Telling Us?”

  1. iPhone 3 looks to be huge.

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