Having sent Apple Inc.’s stock steadily skyward in recent months, Wall Street turned on the company like a wounded hyena last week after CEO Steve Jobs issued a handful of product announcements at the MacWorld 2008 conference that apparently failed to sustain the momentum.
After Jobs’ keynote speech, in which he offered a suite of new software for the iPhone, a skinny notebook with limited features and an intriguing movie-rental play, traders sent the stock on a crazy, up-and-down ride that went mostly down, then steadied out after three days at $163.30 midday Friday, below its pre-keynote high of about $177.
Jobs told CNBC last week that his company’s stock price “goes up one day and down the next day” and was “not what we live and die for.” Consumers would continue to buy Apple products “even if there’s a downturn,” Jobs said.
Dashed expectations
“The market was expecting something spectacular, but didn’t see it,” said analyst Rob Enderle at Enderle Group.
Certainly, AT&T Inc. CEO Randall Stephenson’s remark late last year that a 3G iPhone would arrive in 2008 had stoked expectations. Enderle said that when that refresh comes, it will be parsed for implications for Apple’s direction in wireless. The analyst said he expected a multi-pronged approach to iPhone-related products about mid-year.
“As soon as that product is fully cooked, they’ll bring it out,” Enderle said.
“Look, going with 3G means that the iPhone’s dimensions will have to grow to accommodate a larger battery,” Enderle continued. “They’re working through that right now.”
The analyst said that Apple “dodged a bullet” last year when Jobs announced the insufficiently baked iPhone in January, shortly thereafter named June 29 as a launch date and managed to meet its own goal. Now, the company is “being more pragmatic about preannouncing a product that’s not ready,” Enderle said.
The analyst said that he expected Apple to produce a 3G phone for AT&T Mobility and possibly an iPod Nano-like version that relies on Bluetooth and Wi-Fi for data connectivity that would sell at mass market prices and circumvent the exclusivity clause in its contract with AT&T Mobility. A launch at T-Mobile USA Inc. would not be out of the question, as plying the CDMA market at Verizon Wireless or Sprint Nextel Corp. didn’t make much sense, he said.
Software?
As for the software suite Jobs announced for the current iPhone model, Enderle said:
“I worry that they’re going in the wrong direction. They could be making the classic Microsoft mistake – more complexity, the Swiss Army knife approach. The iPhone’s phone function isn’t great and its e-mail capabilities are deficient. Close that gap first, before you make the device more complex, especially for developers.”
Jobs seized the opportunity in his keynote address, however, to trot out metrics that he said reflected how successful his first iPhone has been – though even the metrics for “success” for the high-profile company were instantly debated by pundits. Jobs said Apple has sold four million iPhones in 200 days, from its June 29 launch in the United States to its November launches at operators in the United Kingdom, Germany and France. That equated to 20,000 units sold per day worldwide, on average.
While that is an enviable rate by any standards, Jobs last year set a goal of selling 10 million units globally by the end of 2008. Some Web-based pundits had suggested that to reach the 10 million mark, iPhone volumes should have reached five million by now.
