Apple just can’t catch a break. Rather, AAPL can’t catch one.
The iPad was a smash hit, and redefined computing for millions. The iPhone 5 was Apple’s best-selling smartphone ever. But the iPad doesn’t have Mac’s fat profit margins (although they’re still plenty thick). And the iPhone 5’s tricky manufacturing led to smaller profit margins, too. Wall Street looked at those smaller profit margins and shouted SELL!
Never mind that sales are still up — Wall Street wants big, fat margins and it wants them now. And never mind that Apple’s products define the freaking high end of every single product category Apple sells. Apple’s average selling prices are the envy of its competitors, of which there are hardly any.
So what did Apple do with the iPhone 5C? The company found a way to much more cheaply manufacture a phone so good, that they will protect their average selling price and fatten up those profit margins. Meanwhile, demand for the all-new iPhone 5S is so high that Apple won’t even take any pre-orders — I, and jillions like me, will stay up super late this Thursday night, so we can place our orders at exactly 12:01AM on Friday. At Apple’s retail stores, buyers are lining up already.
So what has Wall Street done? Shouted SELL!
About a month from now, Apple will almost certainly introduce the world’s first 64-bit tablet, with what is still the world’s best portable display, and running the world’s best portable operating system. Everything about it will be improved, and the competition will again be forced to “compete” by selling their crap at cost. As a result, AAPL shares will probably take another massive hit.
As I’ve said many times before, “Go home, Wall Street — you’re drunk.”