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  • Do You Still Believe the Experts?

    June 22nd, 2009

    Ahead of this past weekend’s introduction of the iPhone G3 S, some analysts who should know better tried yet again to speculate upon how many units Apple would sell through Sunday. Most of the numbers were in the half million range, but were expanded to as high as 750,000 after AT&T announced they had receivedseveral hundred thousand preorders before the weekend madness.

    As usual, the analysts were all wrong.

    As you’ve heard, Apple reported over one million units sold through weekend number one, and that doesn’t include the $99 iPhone 3G. In fact, their official press release covering the announcement included quotes from Steve Jobs, still the CEO, despite what some analysts have also suggested.

    Of course, the precise figures won’t be known until the latter part of July, when Apple holds its quarterly financial conference with analysts and details the numbers, more or less. In fact, I wouldn’t be surprised if Jobs himself appeared just to show up the folks who thought he’d never return. Of course it doesn’t mean he’s putting in a 40 or 50 hour work week, but if he’s there for the key decisions, that ought to be sufficient to silence most of the skeptics.

    As far as those industry analysts are concerned, they have always tended to underestimate Apple. I am not about to suggest this is some sort of deep-seated plot to make Apple look bad, although it does seem some media people have that agenda. But consider some of the false statements spread over the years.

    One notable example occurred in 2007, that Apple failed to sell one million iPhones as planned the first weekend the new smartphone went on sale. This claim, after months of advance publicity, was designed to make Apple look bad. Worse, Apple never made any advance prediction about expected sales. They generally don’t do such things, so the analysts who suggest success or failure on that basis were already completely wrong.

    Despite the positive developments and the clear indications that Jobs is back at Apple, the company’s stock price dipped Monday. However, that may be more the result of Wall Street’s pessimism over the state of the global economy than the financial shape of any single company.

    But if you look over the experience of past years, you’ll see a tendency of the financial community to underestimate Apple’s sales and profits. I can’t tell you how often I’ve used the phrase “beat the street” in reporting on Apple’s quarterly financials. What concerns me most is why those alleged financial experts can’t seem to get it right about Apple, and why their numbers tend to be on the low side of the ledger.

    You see, it’s not as if they traditionally deliver conservative figures for other companies. A number of tech firms, including such large players as Dell and Microsoft, are known to miss expectations from time to time. Sometimes they even beat the estimates, which leads you to believe that the analysts are behaving in a fair and balanced fashion.

    Why not Apple?

    In part, it seems that a lot of members of the media and financial community still view Apple as the beleaguered computer maker of the mid-1990s that was losing market share and bleeding red ink. Some analysts had an Apple death wish in those days, where they’d repeatedly pronounce the company dead and buried, even though it never seemed to happen.

    The false claims about an Apple Tax are recent examples of regurgitating old news. At one time you paid a lot extra to buy any Apple product. Even though the company still makes great profits on its gear, you can’t say the iPhone is overpriced, nor iPods. When it comes to Macs, I suppose you can consider the fact that Apple doesn’t play in the entry-level sandbox, and thus there are no $599 Apple note-books to be had. But if you actually compare the hardware and the software, Apple almost always comes in at a competitive price.

    The recent price reduction on most Apple note-books may actually make Macs cheaper in some respects. At the high end of the ledger, Dell seems to be unable to figure a way to sell one of their workstations for less than a similarly outfitted Mac Pro. Indeed, Apple’s professional model is often hundreds of dollars cheaper.

    Between now at the release of the next quarterly financial report, you will be reading a number of stories as to just how well Apple is surviving in the midst of worldwide financial chaos. Even a small dip in sales can be considered a tremendous success. But there are positive developments. Apple is shoring up the current quarter with the early introduction of a new iPhone. The price cuts for the note-books will also reflect a potential sales boost. Whether sufficient to compensate for apparent sales dips earlier in the quarter is anyone’s guess.

    As the date of the release of those financials comes closer, you’ll see various and sundry estimates as to the actual numbers Apple will report. As usual, when it comes to Apple, they’ll be dead wrong!



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    8 Responses to “Do You Still Believe the Experts?”

    1. Yacko says:

      This is all much ado about nothing. What experts are we talking about? There are software, hardware, networking experts. Experts in aerospace and weapons. Animation experts. Musical production experts. Food research experts and food safety experts. It’s a planet full of experts. But the experts you speak of are none of these, right? They are financial experts, an oxymoron if there ever was one, just one step more credible than bigfoot or astrology experts. Just move on and ignore.

    2. @ Yacko: It’s a nice job if you can get one. Too bad there are no tests to determine if the expert knows what he or she is talking about. 🙂

      Peace,
      Gene

    3. John Dingler says:

      Hi Gene,
      I love being an Apple enthusiast; Apple befuddles the best minds, the worst Apple haters, and makes lovable but powerful products.

      On another topic, should Tim Cook replace Jobs, let’s hope that the vision that gives birth to inspired products continues, but I am afraid the Jobian vision is Jobian only, and will lessen as time goes on, likely not to be replaced by one that is as creative and commercially successful.

    4. @ John Dingler: As a practical matter, Cook is already doing a lot of the heavy lifting over there, so that move may already be in progress.

      Peace,
      Gene

    5. win39 says:

      I think you have it wrong concerning the reasons why. It is not incompetence. It is political hostility, pure and simple. It goes back to the founding with two kids in a garage building the first personal computer as opposed to the guy with family money buying his way to a business. It goes back to the first Mac with the slogan that it was the computer for the rest of us. It was the anti-IBM commercial. MS became the darling of business, and business pundits, and they have predicting the failure of Apple from the beginning, over and over, not because it was close to failure, but because they hated it. Employee benefits for partners of gay employees at Apple raised the antipathy meter even higher. Apple pushing innovations that were copied by the PC industry just rubbed salt in the wound. It was the use of design. Bright colors. The iPod. How dare they! The pundits have never thought Apple is unsuccessful and going to fail, it is just wishful thinking and if their writing about it can help it along so much the better.

    6. @ win39: An agenda? Didn’t want to touch the conspiracy aspects, but I think some of what I wrote has to convey that possibility.

      Peace,
      Gene

    7. @ win39: “The pundits have never thought Apple is unsuccessful and going to fail, it is just wishful thinking and if their writing about it can help it along so much the better.”

      And the weird thing? They were often using Macs to write their epitaphs.

    8. John Dingler says:

      Hi Gene Steinberg:
      I wonder whether the “heavy lifting” that you mention means that Cook is simply carrying out the Jobian plan mechanically, not introducing any substantive vision/methodology of his own that would be on the same creative level as Jobs,’ because it could mean that he, Cook, is simply carrying out future plans already laid out by Jobs and, once the Jobian roadmap runs out, Cook would need to splice his own in at that point in the future.

      It is this at very juncture that problem could arise as Apple’s history has shown that a replacement does not do well, yes? But this time, with Cook, it seems different in that he seems to have been closely groomed and shaped by Jobs’ supervision, which did not occur when Jobs put previous CEOs in charge. I can only hope that Cook is indeed different from them, and way better.

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