I've consistently said that Apple's margins and market share were wholly unsustainable,
Personally, I think the hate has gotten a little ahead of itself. Where is there any evidence that this is happening? Stock price aside, Apple's business has never been better, especially the iPhone business, where they continue to grow volume while exhibiting unbelievable pricing power. There's nothing in Apple's report that indicates that these metrics are not being sustained.
On the iPad side, obviously, ASP has come down with the $330 mini and the $400 iPad2. There's little doubt in my mind that Apple sold fewer full cost models in the X-mas quarter in 2012 vs. 2011, so there's some degree of cannibalization going on. Still, iPad revenue grew, so the lower cost models seem to be doing their job, and presumably, at a decent margin.
Apple's stock price is being punished because it didn't meet the Street's expectations for growth. Maybe it isn't the type of company that can generate $60 billion in annual profit. Maybe it should only be expected to make an Exxon-like $40B a year. And the valuation now reflects that. You obviously think Apple's profits will inevitably decline. But we haven't seen any evidence of that. |
