Water's wet; sky's blue; investors baulk at Apple launches.
Whatever it is that investors mouth off about while
screaming "Sell," down the phone (I wonder how many of them are using an
iPhone), Apple did what it was supposed to do with the iPhones: improve on the
last ones. Come on, these were S models; notches in the upgrade path rather
than milestones, so give Timmy & Co a break. Faster processors, double the
RAM, hardier base materials, a new OS with (ever-so-slightly) smarter Siri,
Force Touch, and so on, and so on.
The iPad Pro might be worth a longer conversation. To
capture more slate revenue, Apple has built something that is meant to appeal
to the productivity user. It is meant to be a substitute for a PC. This is no
intuitive leap. Apple states it outright when it claims the Pro outperforms 80%
of portable PCs and inviting a Microsoft executive on stage during the launch was
not exactly subtle.
Apple wants a big fat chunk of the enterprise market and
knows the Pro, with its optional extras of the plug-and-play Smart Keyboard and
the inventively named "Pencil", is the way to go about it. Cupertino has seen
the figures: the PC and tablet are locked in something of a stalemate of late.
Both are showing flat growth and analysts suspect PC shipments might start to "normalise"
in the second half of 2015. Apple has probably gambled that no millennial would
brook a conventional PC if their tablet could only do those day-to-day things
better: the Microsoft Word things; the CAD things; the desktop things.
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Investors' teeth-grinding may lie in consideration of the
fact that for Apple to take a sizeable share of what it's after, Windows 10
will need to fail. Windows, insufferable as it may be to some, has a solid
place in the enterprise. As a desktop system, it is easier and cheaper to
support because Windows support is not a niche talent. And the learning curve, expense
and administrative headache involved in rolling out Apple iPad Pros will be too
great to bear, as long as Windows 10 proves to be at least tolerable.
Apple TV is harder to gauge. Apple is looking to play in the
video-streaming space, but has also stepped up the focus on gaming with its
latest TV boxes, reportedly pushing up their price by beefing up the hardware
to handle richer gaming experiences.
So investors have taken a look at the field of products and
been, as usual, less than impressed. Apple's first iPhone had investors
frothing at the mouth. Stock closed up 8% at close of trading on launch day, according
to Bloomberg archive figures. But subsequent launches underwhelmed the market
and day-one trading hovered between 1% and 2% drops and, since the iPhone 5,
meagre 1% gains. The iPhone 6 showed gains and drops while the launch was still
in play: drops for the Watch, iPhone 6 and iPhone 6 Plus, but gains for the
announcement of Apple Pay, even though the after-launch reaction from analysts for
the devices was positive, and Apple enjoyed a record-breaking Q4 turnover.
After the launch of the iPhone 6S range and associated
products/services (Apple TV, iPad Pro and mini 4) the same financial shoulder-shrug
occurred. Reuters reported a 1.9% drop by close.
The problem is trust. Apple's story is frenetic and investors
have long memories. The company's early years were a patchwork of game-changers
and trend-setters (Apple I and II, the first Mac) followed by other, less
notable offerings. The iPod and OS X changed all that. And then came the
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After Steve Jobs death, many thought the company would spiral
downwards. The co-founder's return, after all, had heralded a new era and what
would the company do now? It relied on a mere handful of high-margin, premium
products released annually. If those products were not up to scratch,
shepherded by Jobs' infamous cantankerousness, then surely Apple would be
punished by a consumer market packed with competitors offering also-ran kit
that was considerably cheaper.
I don't know what goes through the heads of short-sellers,
but I can tell you this: Apple has more strings to its bow than just devices.
It continues to make money from its very-healthy-thank-you-very-much App Store and
the wearables market is just getting started, so any fears about the Apple
Watch should be shelved until the third iteration of that device tanks.
In the meantime, if you want to worry about something,
consider this: Apple is in a recruitment war with Google and others to recruit
machine-learning PhDs. This is because everyone is trying to cobble together
the truly smart smart-device. Once that sentient handset emerges, its vendor
will be drowning in patents and first-to-market revenue.
But Apple (and this is where the worry arises, is at a disadvantage).
Its internal privacy policies, which I hold to be highly laudable, currently prevent
it from using its data the way info-gobbler Google does. Machine learning needs
a lot of processing juice and that comes from servers, which Google has and is
not afraid to use. In Apple World, it is the devices where all the Smart gets
done. Only by processing the copious amounts of iCloud data at its fingertips,
can Apple hope to emulate the kind of info-crunching required to build
intelligent semantic models. And if it breaks from its traditions in order to
do so, it will have to brave the torrents of rebukes from huffy iFans.
So there, something to worry about. But since none of that
was mentioned yesterday, we can only assume that the markets grumbled because
investors were not happy with the products they saw. I can only give my own
shrug and point to Apple's recent past. The real stock price will be decided
when the holiday quarter has come and gone.
[c] 2015 ITP Business Publishing Ltd. All Rights Reserved. Provided by SyndiGate Media Inc. ( Syndigate.info ).
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|Date:||Sep 10, 2015|
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