Apple, Please Surprise Us on Sept. 10


Source: Apple.

In a new report from Bloomberg today about Apple's new Tokyo retail store, some big news almost went under the radar. MacRumors discovered that buried in the report a person "familiar with the matter" told Bloomberg that the Sept. 10 Apple media event is about more than iPhones. In fact, Apple will introduce a new version of its tablet, too, wrote Bloomberg.

Bloomberg has since deleted the reference to the iPad in the article. Addtionally, the always accurate Jim Dalrymple from The Loop has said that there will be no iPads unveiled at the event.

Bummer. Investors could use a big surprise from Apple. Here's why.

Can Tim Cook deliver?
It's tough to shine in the shadow of one of most iconic CEOs the world has ever known. Under Steve Jobs' leadership, entire categories were revolutionized. Think iMac, iPod, iPhone, and iPad. But what does Cook have under his name? The iPad Mini?

Source: Mashable. 

After two years at the helm, investors are wondering whether or not Apple can deliver the same type of revolutionary products under Cook's leadership. Sure, he's had a tough job. As Reuters pointed out, he was placed at the helm when the company needed a leader to help Apple transition into the "mature corporate behemoth" that it is today.

When Cook started as CEO, the company's cash hoard was the hot topic of the time. But initiating a dividend and a share repurchase program wasn't enough to get investors excited about the stock. To get the Street on board, Cook is going to need to surprise investors (and consumers) with great products.

Even Apple's board of directors has said they are concerned about the company's "pace of innovation," according to Fox Business Network's Charlie Gasparino.

Apple has always been about revolutionary products. With about 70% of Apple's revenue coming from two products -- the iPhone and iPad -- you can bet the Street has a close eye on Apple's product line. But can Cook deliver?

Investors and analysts alike must also acknowledge Apple's very tough year-over-year comparisons, or comps. For the last three quarters in a row, the company's EPS comps actually declined.

Analysts don't expect this trend to improve in the next few quarters, either. On average, they expect more EPS declines in both this quarter and the next quarter.

What's the next game changer?
Though an iPad won't make it to the stage on Sept. 10, it would be nice to see at least some sort of surprise. Over the long haul, Apple is going to need one at some point to really get the Street excited again. The company needs a jolt to the arm -- and Cook needs a flagship product to bolster his reputation.

Do you think Apple has any surprises up its sleeve? Or are investors going to have to wait for the "several more game changers" the company has hinted are in its product pipeline?

Do you want to learn more about Apple's stock? In The Motley Fool's special free report, "5 Secrets to Apple's Future," we outline the key factors every Apple investor needs to watch. Just click here now for your free report.


Read/Post Comments (9) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 28, 2013, at 5:44 PM, rusticguy wrote:

    Google slashed price of Nexus 4 by $100.

    Eric said it long back ... Apple has to rethink about its criminally high profit margin.

  • Report this Comment On August 28, 2013, at 5:47 PM, henrystar wrote:

    I take it you are not a stockholder! You think Apple is a charity?

  • Report this Comment On August 28, 2013, at 5:55 PM, H3D wrote:

    ". But initiating a dividend and a share repurchase program wasn't enough to get investors excited about the stock."

    Who do you think you're fooling? After the run up from the high $300s late 2011 to $500 after earnings in Jan 2012 it was initiating a dividend that pushed the price on through $600 and not many months later to $700.

    Maybe you were asleep?

  • Report this Comment On August 28, 2013, at 6:15 PM, TMFDanielSparks wrote:

    @henrystar

    "Fool contributor Daniel Sparks owns shares of Apple."

    @H3D,

    It may also have had something to do with Apple's enormous year-over-year EPS and revenue comparisons and sky-high 40% gross profit margin. It wasn't until year-over-year comps and gross profit margins began their deceleration in the fourth quarter of 2012 (right when Apple's stock peaked) that Apple's stock began to fall.

    And it wasn't until April of 2013 that Apple really boosted its share repurchase program to the point that it was meaningfully significant.

    All this yet Apple's stock remains $200 lower than its 52-week high. There's no way around it: Apple needs blockbuster products to reward investors.

  • Report this Comment On August 28, 2013, at 6:24 PM, marv08 wrote:

    Sep. 10th will be all about iPhones and iOS 7, maybe some iCloud stuff, computer refreshes and the 10.9 release date.

    The really big story, from a revenue and EPS point of view, will be the specifics of the new mid-level phone and its price point, and the effects on Apple's pricing strategy (which phones will take the $99 and $0 subsidized price points from now on, what will the unsubsidized prices for the new model be). The biggest potential effect on EPS comes from the mid-level iPhone.

    Everything iPad will happen in October.

  • Report this Comment On August 28, 2013, at 7:22 PM, Michael865975 wrote:

    Well, stockholders short term needs (mine included) are not compatible with a perfectionist company that has never been successful rushing products out. My IMac iPad iPhone are all superior to my other products I've bought over the years, probably because they took their time and made sure it was right.

    I have call options expiring in a while and am beyond frustrated at the lack of new innovative products, but still know you can't rush greatness.

    So, if they are committed to doing it right, it will take time. Not helping short term stock price though.

  • Report this Comment On August 28, 2013, at 7:46 PM, TMFDanielSparks wrote:

    @marv08

    @Michael865975

    Excellent comments! Thanks!

    I agree, I have my eyeballs on the iPhone 5C... or whatever its called. I think it has potential to move the needle.

    And Michael, great thoughts -- Better do it right than rush a product to market and possibly get it wrong.

  • Report this Comment On August 28, 2013, at 9:30 PM, rgardner101 wrote:

    I have a twelve year time horizon till retirement,

    Short term moves don't concern me

  • Report this Comment On August 29, 2013, at 12:45 AM, Bobrossta wrote:

    Let's all give the best company in the world some advice because clearly they need it since they apparently don't make great products that millions of people buy putting billions of $ into there banks with jam packed stores that sell out of anything new for months straight. Instead of fixing the companies, fix the investors.

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