Recently the hatred for Apple has grown to massive levels. Many of the pros sit on their CNBC pulpits suggest that the Apples era sits behind us. From my standpoint, I undoubtedly see many challenges facing the technology giant in the coming months. On the flip side of the coin, I still believe they have a one of a kind product. Often times I sit wondering what the next big thing is, what will capture the American shopper over the holiday shopping season, what the crazy consumers will stampede for in the coming months. It turns out, that once again the unruly citizens of the world sit awaiting the next round of Apple products. Apple has repeatedly failed to avoid the seasonality of their premier product, the iPhone. On top of the pressure of timing, Apple has many products sitting in the pipeline. That combination of challenges may scream disaster for the technology giant, as Apple rushes out the next round of evolution in the technological world. As we all know, the more products you launch (in particular when it comes to technology), the more chances of failure.
Yes, Apple recently missed its earnings. They still moved massive amounts of product and the growth in the Apple iPads was just monumental. I am not concerned with the previous quarter, I sit fearful of what is yet to come. When it comes to Apples stock, investors have certain expectations, often lofty. In the past Apple has beat earnings but missed selling a certain number of other products, in turn devastating the stock. My concerns sit on the possibility that Apple will not be able to meet expectations when their portfolio of products becomes more diversified, as it will in the coming months. Apple has for the longest time been able to push out great products and continually beat expectations. What happens when they are unable to sell as many products, because they are unable to be first-in-class in all their product offerings?
This may strike you as an unrealistic expectation. Why would Apple not sell more than expected? People always expect the most and best of the tech giant. I see why these high expectations are justified, but times, they are a-changin’. For years now the staple Apple product has been the iPhone. It has revolutionized they way we interact with the world and most importantly it makes my daily life that much easier. As Apple branches out into other arenas and attempts to change the way we interact with other household electronics, the Apple iPhone story may fall by the wayside. Not only that, but today’s competition is not going out without a fight. With the possibility of three top of the line products for sale by Christmas, what happens if one of these products flops, with minimal sales?
Could Apple stock now have too much risk associated with it?
Apple has served as investors bank for a long time. It has been the safe haven when the storms that is Europe came crashing down with its hurricane force winds and massive flooding. Those that held Apple during the storm of the last few years, were rewarded with an amazing return. The game for Apple may have just gotten a lot harder and much more realistic. Apple now has some real challenges ahead of it. Real challenges exist when launching any new product, in particular in the technology space. Look at the issues that the new iPad had with heat, the 4S had with its battery and software, and the iPhone 4 with its antenna issue. These issues were remedied easily, what if the next issue cannot be? Yes, the win could be huge with record revenues, record profits, and record percentage return for investors. One must ask him or herself, are the rewards worth the risk?
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