Apple fails to wow Wall Street
Steve Jobs may be the master of event marketing, but lately he seems to have lost his touch.
Case in point: The “Let’s Rock” special event Tuesday to which the press and analysts were invited with great fanfare - advised in at least one case by Apple PR that this was a big one, worth flying across the country to see.
There were, to be sure, a couple new products and some new price points - a redesigned iPod nano starting at $149, a slightly thinner iPod touch starting at $229 - and a some new features that drew admiring applause.
The biggest crowd pleaser seemed to be the iPod nano’s “shake to shuffle” feature, by which listeners can switch to a randomly chosen tune just by jiggling their iPod in the air. Jobs also got a warm reception for the new Genius features on iTunes, which puts songs together that go together and creates digital mix-tapes with a click.
“These are revolutionary products and revolutionary features,” says Jupitermedia’s Michael Gartenburg. “I think Apple has positioned itself well for the fourth quarter and the holiday season.”
But Wall Street wasn’t so impressed. Apple (AAPL) shares fell more than 7.5 points (4.7%) during the course of the event, from $159.64 at 1:06 p.m. to $152.12 at 1:56 p.m. [UPDATE: The stock closed at 151.68, down nearly 4% for the day.]
Part of the problem was that Jobs had few surprises up his sleeve. Spy photos of the new iPod nano had been widely circulated before the event, and the iPod touch’s price cut was long overdue. Even details of the Genius feature had leaked in advance. Only “shake to shuffle” seem to catch the crowd unawares.
The event was an “overall negative” for the stock because the Street was hoping for more new products, wrote Piper Jaffray’s Gene Munster in a report to clients posted an hour after the event.
But it may also be that Apple has gone to this well too often. Other companies are content to introduce new products with a press release and an ad campaign. Apple seems to feel it has to throw a whiz bang media extravaganza.
That may work when what’s being unveiled is an iPhone. For yet another iPod? Not so much.
For a blow-by-blow account of the event, see the live blog here from Fortune’s Jon Fortt.
First of all, we all nee to have a correct notion of why apple stocks are dropping? To begin, there are “stock speculators”, not “investors”. So apple stocks hit lows today, and hit highs tomorrow, then what should people say? It’s funny how one day of drop can cause so many individuals to be so irrational. Second, CREDIT CRUNCH? I am sure everyone knows all stocks are suffering. Take a look at HP, Dell, and other tech stocks. I don’t see their price any higher in the market. Please think before you speak next time because it makes one look like a fool. One more thing, according to my friend, apple has no long term debts whereas other companies owe millions? Great investment if you tell me.
Second, people who hates apple are defintely not following the current trend. I recently downloaded anti-virus for mac. I scanned it and see 0 bugs! I’ve had my mac for over a year whereas my windows desktop, I have 200 bugs everyday. I also know many apple fans who’s had their mac since the early 90’s and still are thriving despite Apple’s innovation. It’s pricey, but hey, take 10 years for instance, you bought how many windows compared to a mac? If you had bad impressions due to the mac’s performance in the late 90’s(Like myself). Go to an Apple store today, and see a professional to be diagnosed. Simply put, you guys are missing out!
Apple’s set the bar high over the past few years, so this was mostly a dud when it comes to Apple Special Events for the iPod. But really, Apple only has itself to blame. They’ve devoted most of their resources to the iPhone, which immediately impacted their computers by delaying Leopard and now it’s apparently impacting the iPods with lackluster updates.
Wow there sure are a lot of people reading Apple articles that don’t like Apple. I’m not a big fan of Microsoft, but the last thing I want to do is search out Microsoft articles just so I can post negative comments about them. Some of you must really hate Apple and Steve Jobs if you are willing to spend so much time and effort into talking smack about them.
They had an event to kick off their new iPods like they so for all new products. No the new iPods don’t allow you to teleport or end world hunger so they were a disappointment to many. Life goes on.
I am a diehard Apple user that is very satisfied with all my Apple products. My post here is written on my iPhone that I wouldn’t trade for ten phones from any other maker. Some of you think Apple is all glitz and no substance. You guys obviously don’t use Apple products to be making such comments. I make my living using Mac computers and haven’t once considered going back.
Yep, I agree with the column. Apple’s products are good, they are priced correctly and with the exception of the over-hyped iPhone, are the best on the market.
Computers are computers. If they do the job you want the brand is irrelevant. All you’re asking for is they do it with the minimum of fuss and bother. I don’t rate Macs as better than any other computer, but certainly not any worse either. The prices seem to make sense now too, still a tad overpriced, but not grossly so.
But to have a media extravaganza over a few new iPods and price changes was obviously going to backfire. An announcement and the current ad campaign is more than sufficient.
Apple have good products, they just need to learn to turn off the glitz and glamour for unspectacular news.
Shake to shuffle, that’s like GE throwing a giant event for the addition of the clock to the toaster oven. It does nothing really for the product except to say wow, look a clock. If apple were to have added intergrated wi-fi to the Ipos (sorry Ipod) line then that would have been a big wow momment. However apple will never add wi-fi to the ipod line because they don’t want to be seen copying a feature that is available on other mp3 players like the Zune. Its time people see apple for what it is an elitist company only interested in its bottom line profits.
With Apple, you’re pretty much guaranteed a firework display, sentimental or passionate.
This is a supremely clever and well run product development machine.
Apple is not just an innovator, it’s a market maker, par excellence.
Keep watching.
The reason AAPL dropped 7.5 points not because of AAPL, because of the Financial sector trouble. It took Apple 2 years to do iphone. Wow doesn’t come every year. But you should expect something awesome at MWSF. You will be “WoW” for a long time.
I agree with the article. I’ve been an Apple user for two decades now and that was probably the most underwhelming product event I’ve seen. They had an event for *that*? What’s next week - iToilet? iHairbrush? iKitchenSink?
Apple has never been a technology company perse, and never will be. Apple is a style company and has been a company who tries to go against its perception of the establishment, by offering trendy products and selling an experience. Its products do well to early adopters of Apple products and fashionistas looking to make a bold statement. It will of course attract other users for its “WoW” factor but will only disgust and put off people who see past its glitz and smoke and mirrors for what it really is an ugly phone with a pretty dress on.
You might say that quality is the best for when it comes to Apple, but as time as suggested that Apples computer products may do well to the fact that its a closed system with mininum to no customization. Strict development standards leads to no true innovation just gimmicks.
Gimmicks are what seems to be Apples strong suit as they seem to be gleefully throwing out novelty products such as “shake to Shuffle” is Apple running out of steam? It does definitely appear that way. Where is the quality and craftmanship that they touted as the mainstay to there platform….
Gratefully on the decline Apples’ Quality has been increasingly been a problem and is creating and even more lackluster reputation. Apple is finally approaching a plateau and will only start to a decline. With out any true innovation left to be had for any forseeable future…
This one trick pony needs to find a new show.
Aren’t some of you guys a little overly dramatic about your postings? It’s a company, like any other. It has good products, and has done well with them. Not all companies wow everytime a new product is introduced. I think what may be more important is the performance of that product. What kind of money is the product making? Is it positioned to be outdated quickly, or will it have an appeal in the future? Apple looks good on all these fronts. The fact they cut into others’ marketshare on products in which the competition has a ten or fifteen year jump is credible. Those of you who sound like a raving lunatic on some morning zoo show talking about an investment need to grow up a little. You look silly.
I think its great that wallstreet is finally seeing Apple for what it truely is. That being a 1 Trick Pony. Without the ipod this company is doomed to fail. To a point made earlier in this thread, no one needs to buy a 2nd ipod if their firts one is tiny and has 120gb of space. There is a statistic out there that something like 65% of all memory on portable music devices remains emtpy, that being said no one needs “another ipod” to go to the gym. They are barely using the first.
Surely the problem for the Street was that Apple had promised investors a “major product transition” that would explain a 4% drop in their margins between this quarter and last. I don’t imagine many expected this to consist of a ‘new’ nano, a tweak to the touch and another gimmick in iTunes.
Clearly there’s more to come from Cupertino, but should they have kept their powder dry for more meaty Mac product announcements?
Apple has enough cash, let them throw little shindigs if they want and pay lots of money to top artists to have them perform……
To all the Apple bashers: anyone with a brain will recognize a buying opportunity for long-term growth. I bought my first Apple stock at $5/share and have been acquiring it ever since. Look at the big picture, people.
Is anyone else laughing at the clowns who just said Apple were doing better than Nokia or RIM? This is the same Nokia that holds just under 50% of the smartphone market and the same RIM who increased their share by about 120% isn’t it?
There are two words for this event: Epic fail.
Ooooh, ooooh, and ooooh…shake and shuffle. Now there is a solution to war, disease, and world hunger. What was Wall Street thinking when they did not fall face down before mighty Apple and Odd-Jobs.
So…if Apple-Dahling and Moses Jobs merely shake their asses, Wall Street is supposed to swoon? Make that snicker and barf! What the hell is the matter with you fawning freaks? Shake to shuffle. Muffle to duffle. Piffle to triffle.
You are right Charanis, Apple still leads the way in technology and they are certainly doing better than Nokia, HTC, Motorola, LG and some of its other competitors. I think the price drop is just right and the new colorful nanos look really attractive to have as a second ipod to take to the gym, etc plus the new shuffle feature and new itunes features make it even better. I dont see why they have failed to wow wall street. They lowered prices, made the ipods more attractive and they added cool new features They are also ahead of their competitors in technology and their are tons of cool games for ipod touch as well. It seems like they will have a great holiday. I am tired of all the negativity about businesses and the economy lately. Apple is right where they need to be and I am sure they will very well this christmas.
Since the opening music was all classic rock, I was expecting the complete Beatles anthology to finally be sold on iTunes! Where was the “Let’s Rock” at this event?
Well, I am sure the stock would have also gone down if Apple did not hold a media event for this because everybody would think Steve was too sick to present one.
There is no reasons to wow Wall Street expectation since smartphone/musical players makers like Nokia, LG, Sony Erricsons, Blackberry, Samsung, HTC, Zune etc., are all in unfavorable market condition except Apple seams to be at the best possible position.
Which company not mentioned can do better then Apple, let us know.
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I totally agree with Sean. This stock is so volatile because of speculation investors. Apple never misses guidance and isn’t stupid enough to over extend their forcasts. For some reason the street treats this as a negative. I think the best point Sean brought up was the debt factor. Apple has no long term debt and tons of cash reserves on hand. Also no competing company, no matter how hard they try to mimic the ipod, has come even close to wowing or swaying consumers their way. I feel Apple is trading at a big discount right now and I for one and going to buy more shares.