Normally it is cause for celebration when a company’s revenue increases 18 percent, from $46 billion to $54 billion, in one year. And when a company sells 47.8 million units of its capstone product, compared to 37 million a year ago, it usually leads to several empty champagne bottles, hugs and congratulatory speeches. Though all the aforementioned happened for Apple Inc. in the last fiscal year, the tech behemoth saw its stock prices free fall from over $500 before its Q1 2013 financials were released on Jan. 23, to under $450 through the rest of the month. To put this in a broader perspective, Apple stocks rose to a record $702.10 last September, thus the company has lost about 36 percent of its total value in four months. Apple is not hanging on by its core just yet, but executives have to be scratching their heads and wondering what more they can possibly do after a record-breaking quarter.
The Rumor Mill
Anytime billions of dollars are lost, speculation about a company’s future is sure to follow. The Wall Street Journal reported in mid-January that Apple ordered only half the number of iPhone 5 screens for the current fiscal quarter. There have also been many in the financial world, including Forbes, who suggest Apple needs to release a cheaper iPhone to boost its market share. Samsung, one of several Android makers, has over 50 percent of the smartphone market, compared to Apple’s 25 percent (which, by the way, is up from 18.8 percent in 2011). Finally, the L.A. Times reported Apple spent $1 billion on research alone in the December quarter, possibly to develop new products like the Apple TV.
Tim Cook Still Building His Identity
Cook is the highest-paid CEO in the world, according to CBSnews.com, banking $378 million in 2012. He replaced the legendary Steve Jobs in August 2011 and has since seen his company peak to unprecedented levels, and subsequently drop like a rock shortly thereafter. The inevitable comparisons to Jobs have already began and are unlikely to subside anytime soon. Cook will ultimately have to design and market new technologies similar to what Brian Ferdinand of Liquid Holdings did with his company’s Green Mountain Analytics platform for stock trading. Former Boston Red Sox General Manager and Executive Vice President Theo Epstein made several key acquisitions for his team and won the World Series two years after taking the lead role. Neither Cook, nor Apple, have spoken publicly about any potential business acquisitions or even any new technologies, which may be why investors have cooled on the company.
Positive Vibes From CEO
Despite the bad news on Wall Street, Cook put things in perspective at an employee town hall meeting in late January. Cook, truthfully, told the company that Apple had the best quarter ever for a technology company and only oil companies do better, according to 9to5mac.com. He specifically addressed retail employees, saying their job satisfaction is low and that he’s still searching for a new head of that division. Cook also informed employees of deeper discounts on iPhones.