Why would anyone be wary of Apple right now?
I started posting this on my Tumblelog, and then it turned into a complete blog post, so I'm re-posting it here. I apologize if you are reading it a second time!
I’ve been thinking about the drop in Apple’s stock prices lately. Just because Steve Jobs is sick, and he’s temporarily on leave from the CEO position, investors are losing faith in Apple. Does anyone else find this dumb? Let’s examine Apple’s current position:
- iTunes now has DRM-free music as a STANDARD, meaning that many of their competitors no longer have an advantage & their detractors no longer have a reason to avoid it. Apple is winning the war against DRM, putting them in the favor of consumers. Amazon, Microsoft, etc. are falling further behind in the competition.
- iPhone 3G remains the most popular & stable mobile platform. Google launched & marketed their competitor, and Apple still remains miles ahead. Most importantly, developers continue to choose & develop for the iPhone, and wherever the developer community is putting their best work, that’s the platform that will succeed! Just think about the PS2 vs. Xbox vs. Gamecube wars. Good apps = happy consumers. It even makes people want to switch. And while the App store has its problems, it’s still a game-changer.
- Macs continue to gain increased market share. The new line of Macbooks is great. It’s not losing steam any time soon.
Basically, while Apple may not have any “new products” this year, they are clearly solidifying their platforms and continuing to show both promise & potential in each one. Who cares if Steve Jobs is sick? Who wouldn’t want to invest in this company? In the past I’ve said that Apple is overvalued, but right now I think it’s undervalued!
And let's not forget about the (quiet) success of the retail stores.
As an AAPL investor, I was excited to actually be able to pick up more shares under $80 in that brief window when panic ensued after-hours in the market.
But anyway, Apple is a smart company and I'm sure that they have contingencies in place after the cancer scare. Plus, they have very competent people to take Jobs' place should he step down permanently. Furthermore, Jobs did say that he'll still be part of any major strategic decisions that have to be made, he's just ceding his day-to-day role to the COO.
Lastly, Jobs does not equal Apple. Please just let the man spend some quiet time away to get better. This obsession over his health is completely unnecessary. Besides, what's the current health status of the CEO of the companies you invest in and what's their succession plan for the officers? crickets Um, that's what I thought.
All this energy should be used to weed out the incompetent and crooked CEOs as opposed to the one's who need a little time off to get well.
That made me think of something I forgot to mention: Jobs may be the "attitude" of the company that we currently know, but all the innovations are a team effort. Jobs didn't invent the iPod alone. He didn't retire to a secret lab to code up iTunes. I think a lot of people actually think of Jobs as the way he was portrayed in the Simpsons: a Wizard-of-Oz-esque mastermind that runs a central control console in the deep ocean that is entirely responsible for all the inner working at Apple. It's a joke.
Don't forget though that the average investor is dumb. They sell when it's low and buy when it's high.