The moral of the story when it comes to the Apple investor is that no good deed goes unpunished. Expect Apple stock to get hammered on Tuesday for what is a very real shortfall in the projections of analysts.
Of course, the moral of the story here is that Apple specifically told its investors a year ago that it was no longer going to "manage" earnings expectations with pre-ordained beats.
So what happened in the most recent quarter? Apple hit its own sales projections, which if you take the company's specific proclamations at face value, was the real, achievable goal.
Given Apple's unparalleled track record, you'd think that they've earned some benefit of the doubt. Namely, that they actually know what they are doing.
But, purely as a stock, Apple is seen as the iPhone company.
And the picture there is decidedly more complex. At a minimum, iPhone sales growth is flattening (for now). China Mobile could be anything from a moonshot to mediocre.
Footnote: China Mobile is the largest network in the world, with over 750 million customers.
From the tenor of the call, it seems clear that the company misread consumer sentiment (and demand) for the iPhone 5c. What does that say about the Apple innovation engine post Steve?
Domestic sales were very strong, but flat, and there were some rumblings of carriers stretching out the time periods on consumer refresh cycles.
A lot of the attention shifts to emerging markets and Asia driving growth. Very possible, but not guaranteed.
At the same time, you have to be pretty dense to diminish what 51M iPhones in a quarter means in terms of the depth of the iOS platform.
This completely discounts the potential for Apple to culitvate an ewallet (read this story on Starbucks $1.4 billion in quarterly gift cards).
I'm starting to feel pretty strongly that mobile payments will be a front seat item for Apple very soon.
Oh, and there's iPad, which did pretty well too. If there's a device that embodies post pc computing, it's the iPad.
I would love to see the company put more energy towards developing integrator channels.
That way it can penetrate more enterprise-scale verticals, like medical, pharma, field sales, retail and training, where it already has footholds.
The other big variable is that the Apple retail stores are still humming along.
They host 144 million visitors at their stores each quarter, or about 21,000 visitors per store, per week.
With ~420 stores open, average revenue per store was $16.7 million, compared to $16.3 million in the year ago quarter.
By design, Apple's end-to-end-ness remains its biggest advantage.
The company with $158.8 billion in cash (or equivalents), after adding $12 billion in the quarter should get hammered on Tuesday.
It's small thanks for being transparent, disciplined, prolific and purpose-driven.
Speaking of which, let me end this post with this answer from Apple CEO Tim Cook on whether the company is actively pursuing the Mobile Payments space:
"Let me sort of avoid the last part of your question, but in general, we’re seeing that people love being able to buy content, whether it’s music or movies or books, from their iPhone, using Touch ID. It’s incredibly simple and easy and elegant, and it’s clear that there’s a lot of opportunity there.
The mobile payments area in general is one that we’ve been intrigued with, and that was one of the thoughts behind Touch ID. But we’re not limiting ourselves just to that. So I don’t have anything specific to announce today, but you can tell by looking at the demographics of our customers and the amount of commerce that goes through iOS devices versus the competition that it’s a big opportunity on the platform."
Seems near term.
UPDATE: With rumors heating up about Apple’s Mobile Payments plans, PayPal wants in as an Apple partner (highly unlikely to happy).
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