Tuesday, July 22, 2008

The Rise of the Mac and Apple's Big, Big Quarter Blowout

Apple is on a roll these days with exploding iPhone, iPod and Mac sales. This has resulted in Apple just posting it's best third quarter in it's entire 30 year history! Yet, despite all of the good news, bad news resulted as Apple stock plummeted by a whopping 10 percent, because it issued a soft guidance for the next quarter. In addition, doubts about Steve Jobs health also weighed heavily on investor's minds, further driving the stock lower.

Regarding Steve Job's health, Apple's CFO, Oppenheimer stated that, "He has no plan to leave Apple, and that, "Steve's health is a private matter." None-the-less, despite this assurance, others are still continuing to question Mr. Job's health for the simple reason that he is so intertwined with the company and also because there seems to be no real succession plan in place should Mr. Jobs were to suddenly be forced to leave the company.

Regarding Apple's blow-out quarter, Mr. Oppenheimer stated that, "The quarter was a home run," but even more interestingly, he also teased reporters by saying that Apple had, "state of the art new products that our competitors just aren't going to be able to match.... ", which, no doubt, will further stoke ever higher the rumor flames from the many Apple rumor sites. I must admit, that, I, for one, am certainly curious as to what they might include. Unfortunately, since Mr. Oppenheimer wasn't at liberty to divulge any more info on the matter, I guess people like myself will just have to keep on guessing. Hopefully, however, we shall not have to wait too long to find out exactly what those new products are. New laptops are certainly hotly anticipated, but, I also think that by the sound of it, it will include more than just new laptops. How about multi-touch Macs?

Personally, I'm at a complete loss to understand the reasoning behind Wall Street's reaction to Apple's great quarter. Apple sold more Mac's in the past quarter than at any other time in it's history, and yet the stock nose dives. The same happened recently to other companies such as Microsoft and Google which, at one point, was down more than $100 dollars or so per share after announcing great results! If great financial news is really bad news to Wall Street, what on earth would actually happen if Apple actually posted bad news? I shudder to even think of the consequences of that scenario!

Back to the Mac, the fact that some 2.5 million Mac's were sold in the last quarter is significant, especially when considering that approximately one half of those numbers were Windows switchers. Not only are more Window users switching over to the Mac, some of them happen to be long time Window experts like Scot Finnie, Chris Pirillo and still others, like one of the former chief architects of Windows 95,  Satoshi Nakajima ! After purchasing a new Mac two years ago out of curiosity, Mr. Nakajima was so impressed with it that he recently started a new Mac software company called, Big Canvas, in April to start developing new software for the OS X based iPhone.

Despite the crazy reaction of Wall Street, Apple's recent blow out quarter was absolutely amazing and indicates that the Mac, the iPhone and iPod platforms all remain fundamentally solid and should, barring a major recession or worse, continued to grow and pick up steam in the days ahead. The Mac's side of the equation is especially interesting because it clearly shows that the Mac's growing market share is coming at the expense of Windows.  I found it especially interesting to note that the growth rate for desktop Mac's was actually higher than that on the portable side, some 49 percent for desktops, versus 47 percent for laptops! Recently, laptops on all platforms, Windows, Linux and the Mac, were generally growing significantly faster for laptops. Is this a reversal, I don't know, but it is certainly interesting to see.

So, again, in conclusion, let me congratulate Apple on a quarter well done, and let me add that I believe that the Mac's continuing growth in sales and market share is just a harbinger of  better things coming regarding the Mac's future market share, and this should be especially true if next year's Windows 7 turns out to be anything like last years Vista roll out.

With Mr. Oppenheimer's tease about upcoming Apple products, one's that it's competitor's simply won't be able to match, I also predict that Apple's next quarter could and should be even far bigger than the one that just passed. 

And that's my 2 cents 4 this Tuesday, July 18 , 2008.

Image of Apple's Head Quarter # 1 Infinite Loop, via: Wikipedia

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