Apple cobbler
Like clockwork, Apple (NASDAQ:AAPL) blew past Wall Street's profit targets, as it has in each of the past 21 quarters. Like clockwork, it sandbagged its near-term guidance. Like clockwork, Wall Street believed the serial lowballer and sent shares lower the next trading day.
Apple reports are starting to get predictable. Cynics may argue that this time is different, because Apple indicated that its gross margin would dip in the current quarter and drop yet again in fiscal 2009.
Really? And the market is worried about Apple? Keep in mind that Apple doesn't need to whack margins. It sold a million 3G iPhones in a single weekend. Desktop and MacBook sales are growing several times faster than the rest of the industry. Even its iPod, which had come in flat during the previous quarter, delivered double-digit revenue growth on a year-over-year basis.
So what does it really mean if margins diminish? Since consumers have no problem paying current asking prices for Apple products, the company is clearly making a play to price its products even more aggressively, in hopes of taking over the planet.
I wouldn't be worried if I owned Apple. But I'd be quivering in my booties if I owned a rival smartphone maker, PC giant, or portable music player.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- XM Satellite Radio (NASDAQ:XMSR) isn't dead. The company posted quarterly results that found it narrowing its deficit, landing a record number of new subscribers on the automotive side, and closing in on its merger with Sirius Satellite Radio (NASDAQ:SIRI). Finally, a reason to tune in!
- TiVo (NASDAQ:TIVO) struck a deal with Amazon.com (NASDAQ:AMZN) allowing TiVo subscribers to purchase tagged items in select shows via Amazon. You know, things like a rapper's CD on The Colbert Report, or an author's book on Oprah. This could really be a needle mover for TiVo, as long as consumers don't mind the subtle prodding. Now, if only non-TiVo owners could order a TiVo through their television sets, we'd be good to go.
- Someone replaced the guacamole with whack-a-mole in the latest earnings report for Chipotle Mexican Grill (NYSE:CMG) (NYSE:CMG-B). The stock plummeted 20%, despite growing earnings by 23% and posting a 7% gain in comps. Yes, it's short of what the market wanted -- and what Chipotle is used to delivering -- but few chains, if any, can top that kind of performance.
Until next week, I remain,
Rick Munarriz
