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So Are the Apple Haters Giving Up?

As Apple’s stock price approached the highest levels in a year, you had to wonder what happened to the company many industry analysts thought to be beleaguered. Was Tim Cook replaced? Well, obviously not. Did Apple deliver a cheap iPhone? Another no. Was there a new Apple branded TV set with the “magic” interface predicted by Steve Jobs? No, not that either.

So is there some significant change in Apple’s current sales or future prospects that seems to have fueled a huge turnaround for everyone’s favorite, or not-so-favorite, fruit company? This is the question of the ages, and actually Apple hasn’t really done anything so different, except for granting stock dividends and buying back some shares. Indeed, activist investor Carl Icahn is pressing Apple to do even more, but that’s not necessarily a valid reason for the stock price to rise. Besides, Apple will probably just say no to Icahn, as they have so far.

Now I wouldn’t presume to have any pithy comments to make about the actual mechanics of Wall Street. A lot of what investors do or not do is based on perceptions more than reality. In the case of Apple, some believed that the company had run out of steam. Part of that was due to the obvious fact that Steve Jobs is no longer around to steer the helm, and Tim Cook is surely not a product person. Thus Apple must lose its direction.

What appears to have happened is that every little bit of potential negative data was used to demonstrate that Apple was on the skids. There were published reports last year about the supposed lack of demand for the iPhone 5, but it all started when the product was first introduced. Apple sold five million as of the first weekend, a record to be sure, but some industry pundits who must have been drunk with power predicted it would be ten million. Since Apple didn’t meet such exaggerated expectations, it must have been a huge failure. The iPhone was dead, may Android live on.

In the real world, the iPhone 5 did quite well, even in quarters where industry pundits suggested otherwise.

Indeed, I sometimes wonder whether some people in the financial industry make a living by talking Apple down. A few negative comments here, a few unfounded rumors there, and the stock price dips. It’s actually possible to make money by anticipating a stock price dip. I could be even more conspiratorial and suggest that maybe some of Apple’s competitors are happy to spread misinformation to hurt the company. When billions of dollars of sales are at stake, you can expect cutthroat competition. It’s also true, for example, that Samsung has had a less-than-stellar record for corporate honesty, and has been known to play dirty tricks against the competition. And don’t forget how some Samsung smartphones have code that deliberately makes benchmark apps run faster to deliver better ratings. How does that improve the user experience?

Sure, some might argue the finer points of Apple’s own competitive information, since the material is clearly designed to put the company in the best light. But a little exaggeration or selectivity here and there is not the same as lying.

As I was writing this article, I heard an interview with some unspecified analyst on Bloomberg Radio, who explained why Apple’s major growth cycle was in the past. The theory went that Apple has made deals with Japan’s largest wireless carrier, NTT DoCoMo, where the iPhone is doing very nicely thank you, and China Mobile, the world’s largest carrier. This will mean more sales, but where does Apple go from there? Clearly the growth rate has to decline.

Evidently the analyst didn’t consider that there are other parts of the world, such as India, where there’s still great potential. More to the point, what does Apple do from here? Will there be no more category busting products? What about the long-rumored iWatch, or the possible solution to living room entertainment? What about market segments and products that aren’t even mentioned on the rumor sites? Does Apple rest on its laurels?

Yes, it’s true that Apple can’t grow the smartphone and tablet market by 100% every single year, and Mac sales are eroding somewhat. But that doesn’t mean future upgrades won’t reinvigorate these markets, or that there won’t be something new and different from the company that can grow at an accelerated rate. The long and short of it is that, so long as Apple continues to make high profits with steady revenue growth, year after year, what should investors complain about?

The stock price? We forget that this roller coaster syndrome has happened before to Apple. What’s different? Well, this time the amounts are far higher, and thus appear to be more significant. In each case, the price dips way down before resuming a growth curve. Of course, I’m in no position to predict what is going to happen this time as the price continues to soar. By the time you read this article, things may change. Or maybe Apple will first reach new heights before the price drops. If that happens, you can bet that the critics will be pronouncing doom and gloom as vigorously as ever.