Apple’s Performance Not So Sweet
Apple (AAPL) had their Q2 2013 earnings conference call last night. The after-hours pop and drop was a mix of investor denial drowned by a flood of savvy investors taking profits. But it’s also a clear indicator that the inflection point I’ve been talking about in previous articles has happened.
My thesis has been that Apple is changing into a different type of company. What happened last night is strong evidence that I’m right. And I’m sorry about that. I’ve been an Apple user, developer, and investor for nearly three decades. From the day the first Mac launched in 1984 I’ve been on-board. I’ve ridden the roller-coaster and fully enjoyed the ride. But it’s over.
Last night, Apple presented an earnings announcement that had some good news but a significant amount of bad-news for those who still haven’t let go of the dream.
So let’s take a look at what happened.
When Apple (AAPL) launched the Mac in 1984 I was one of the first to by the Inside Mac developer series and started leveraging my skills as an Apple developer. I’ve been a fan ever since that time. In the beginning, it was all about the Steves. Steve Jobs and Steve Wozniak. You couldn’t really determine who was key to Apple’s creative direction. But it soon became clear that Steve Jobs was the wizard behind the curtains.
In this article, i’d like to present a mostly qualitative argument that without Steve Jobs there is no Apple. Instead you are left with a boring company that hit its maturity prematurely and will be the subject of plenty of debates, internal and external, on how it should be operated. For example, due to its recent momentum from the sales of iPhone and iPad sales, Apple recently (August 2012) hit a market capitalization of $623.5 billion making it the largest company in the world against this measure surpassing Microsoft (MSFT).
My whole family, including myself, are movie buffs. We’ve been Netflix members from almost the beginning. We have Rokus on every TV and I’m not at all unhappy with my Netflix (NFLX) account. But the relationship with Netflix has not always been easy. We started by having a combined DVD and Streaming plan that costs (to the best of my memory) about $14.95 per month. At the time, we had unlimited Streaming and no limit on the number of DVDs per month with a maximum of 3 out at a time.
My wife and I used to go our local Borders Bookstore and have coffee and read magazines and books. Inevitably, we’d leave with a bag of our favorite books and magazines. Sometime in 2009, that all changed. We’d still go to bookstore to read and have our coffee but I had purchased T-Mobile G1 smartphones and I started checking the prices of each book I liked by scanning the bar-code on the back. To my surprise, I found that in the majority of cases, I could buy the book on Amazon (AMZN), shipping included, for less than half the retail price in the bookstore. Our purchasing pattern changed quickly to coffee only with the books showing up a week later by mail.