Apple is dead. Long live Apple!

You know how athletes — and definitely professional wrestlers — always talk about being gunned for when you’re No. 1 / the champion? If you want a real-life application of that, look no further than Apple, the undisputed cash-on-hand king of American corporations. Yesterday, in advance of their earnings report, everyone was ready to drop an anvil on ’em: “Why Apple Has Stopped Growing,” for example. And then — from the same publication, in fact — Apple still has some gas in the tank!

Here’s what happened: estimates for iPhone sales in the quarter were 38.5 million. In fact, they sold over 43 million. There is a concern around tablets — they sold 16 million, but that area may be eroding (even though their applications may save the world, er, or at least the restaurant industry). There’s no real concern around Apple; they’re planning on returning $130 billion to stockholders by 2015, which is $30 billion more than originally anticipated. They ended yesterday trading up about eight percent. This was supposed to be the first time in 11 years that an Apple quarterly revenue report declined from the previous year’s same quarter. That didn’t happen, and oh, Apple made (profit) $10.2 billion this quarter. They have strong growth in China (very strong) and Japan, and they have $151 billion — billion — cash on hand. By contrast, the next largest major American company for cash-on-hand might be Microsoft, at about $84 billion. That’s almost double.

This pretty much sums it up, from a friend of this blog:

Essentially, the lesson is: treat Apple like you treat a really good baseball team during a slump in May. It doesn’t matter, so long as they’re playing well in September/October. They’re massive, they have cash, they sell a lot of phones. There are concerns, for sure. But money-wise and product-wise (well, at the very least iPhone-wise), they’re dominant.


Ted Bauer