Why the pundits are wrong, wrong, wrong about Apple

Can a company that sells 9 million iPhones in 72 hours really be under siege? In a word: No

On Sept. 23, Apple "warned" investors about likely financial results in the current quarter. The bad news? There wasn't any. Because sales of the iPhone 5s and 5c were so strong -- more than 9 million were purchased in just three days -- the results would be better than expected.

The SEC requires companies to tell investors when anything happens that's likely to change the company's financial results, and those warnings are almost always bad news, as we saw so dramatically with BlackBerry recently. But coming as it does close to the second anniversary of Steve Jobs' death this past Saturday, this good-news alert is altogether symbolic.

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Once the darling of fanboys and investors alike, Apple and CEO Tim Cook now can do nothing right in the eyes of some on Wall Street and legions of pundits. The stock has been pummeled, and word of mouth (or, more properly, word of blog) always seems to be negative.

But wait a minute. Think about what it means to sell 9 million units in three days, one of the most (if not the most) successful product launches in history. Apple sold 2,083 new iPhones every minute, or 34 every second. And don't, as one Apple-hating pundit likes to do, natter on about sell-in versus sell-through. The difference between the two is only significant if units are shipped back to the manufacture from the channel (by and large, that means carriers and retailers). I have yet to hear about any returns from the channel and am willing to bet that there haven't been and likely won't be any. In fact, Apple is one of the few mobile makers (Motorola Mobility is the other) that reports units actually purchased by customers, not stuffed into the channel in hopes they might sell later.

So is Apple facing stronger competition from Google and Samsung? Of course. Has it lost market share? Obviously, though its sales have far from declined. Has it invented an entirely new category of device this year? No. But none of that means that Apple is in trouble. Here's why.

Apple's a profit machine

Apple, say pundits like Business Insider's Henry Blodget, has lost market share and is being "shortsighted" and obsessed with "short-term profits."

Short-term? Seriously? Apple has consistently invested heavily in R&D and in building an unmatched global supply chain. The profits that made it the most valuable company in the world (measured by market cap) didn't fall out of the sky. One small but telling illustration: The cover for an iPhone 5c case sells for $29 on Apple's website. The cost to Apple is a couple of bucks at most, says Trip Chowdhry, principal analyst at Global Equities Research. The rest is margin. Tim Cook may not have the panache of Steve Jobs, but the man knows how to run a supply chain.

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