I should stop here to declare my interests. I don't own Apple shares. My household is 100% Mac, including three MacBook Airs, but we're atypical Apple customers. None of our four smartphones is an iPhone. We don't own iPads or any other tablets (Kindles don't count); I'm still waiting for Apple to make the case that I need one. I've written about Apple in all its various incarnations since 1995. In that time I've read a lot of valid reporting about Apple, and a lot of hooey. The hooey usually gets more widely circulated.That comes close to describing our family. My wife has an iPhone only because our son-in-law bought it for her and pays the monthly data fee as part of a family plan. I don't have an iPhone. In fact, I don't have a smart phone. However, one big difference: both my wife and I love the iPad. I do wonder about someone who writes about Apple who doesn't understand the iPad. I don't need Apple "to make the case that I need one." I figured that out on my own. I can't imagine using an iPhone or MacBook Air in bed to read the news before I get up or before I fall asleep. With grocery stores right across the street, I don't need a freezer either, but I have one. No marketer/advertising agency had to make the case that I need a freezer.
A few notable points should be kept in mind when pondering Apple's stock market behavior. One is that the slide in its shares coincided with a period in which it became the most profitable company in the United States, and by no small margin. In the last quarter of 2012, Apple racked up more than $13 billion in net income. The next two names on the list were ExxonMobil and Chevron, oil companies that rise and fall with the price of crude. To find another industrial company you had to go to No. 4: Microsoft, which reported profit less than half of Apple's.That was incredible.
A key error here is the notion that a Samsung or Android user is the equivalent of an iPhone user. The latter are willing to pay more for their phones and use them far more vigorously than the former. They buy more apps and spend more time with them. Market analysts figure that the iPhone, despite being outsold, generates roughly 70% of all operating profit in the mobile device industry, Samsung's devices almost all the rest.
This imbalance confuses pundits. "Rather than see Apple as being in a strong position, and being very good at what it does, a lot of people look at these numbers and think Apple's just had fluke good luck," John Gruber, a technologist and former software developer who blogs about Apple at his website daringfireball.net, told me by email.A long article by a well-informed writer, but still no mention of the best thing going for Apple: the Apple eco-system.
The second best thing going for Apple: the aesthetics. Once one has an Apple product, they tend to replace their next tech device with an Apple. Example: all those folks on PCs who bought the iPad when it came out. When their PC needed upgrading, they migrated to a MacBook. MacBooks really can't do anything more than a PC, and one can still get "more PC" for a buck. Apocryphal or not, Meg Whitman, when given a company computer when she took over HP, was said to have said, "No, thanks. This is a clunky brick. Get me a MacBook" or something to that effect.
So, a nice long article, but the writer missed an opportunity to talk about the Apple eco-system, and Apple aesthetics. And the writer failed to mention how Apple controls its "apps." All that gibberish about the Steve Jobs myth and Tim Cook is old, and getting older by the minute. That may be the reason that the Ashton Kutcher film on Steve Jobs may have been delayed, and risks coming out at all -- perhaps direct to DVD.
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This morning, in Starbucks, while typing the above, two elementary school-age children sat at the table across from me while their parents sat elsewhere. She looked about 9 years old; he about 7 years old. She was checking her iPhone, while he was on his iPad. I assume he didn't need Apple to "make the case that he needed one." Now while waiting for my wife's car to be serviced, two of the three people waiting are on their computers or tablets. Both of them are using Apples.