Apple: One Year After Steve Jobs’ Death, iPhone Sales Disappoint Wall Street

It's time to look again to the future. But the fundamental question is: What if Jobs already introduced all of Apple’s breakthrough products?

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Kin Cheung / AP

Staff members welcome customers to Hong Kong's Apple Store on Sept. 21, 2012, as the iPhone 5 goes on sale

Only Apple could sell 5 million iPhones in three days and still disappoint Wall Street’s number crunchers. The Cupertino-based cash machine’s new mobile phone debuted last Friday, and consumers lined up around the block — around the world — to purchase the new device. In the SoHo neighborhood of New York City on Friday, a line more than 100 deep snaked around the corner at noon. “The iPhone 5 didn’t make my iPhone obsolete,” a New York tech reporter remarked to me. (She was granted anonymity because she is not authorized to speak to the press.) “All the people who are upgrading on the first weekend are cell-phone junkies.”

She’s right. The people who line up overnight with camping gear and sleeping bags days in advance to buy new Apple products are fanatics — or what we would call fanboys. They must have the newest device as soon as possible. Not me: I’m only now learning how to use an iPad, thanks to a friend’s instructions.

Apple has reeled off one of the most profitable runs in the history of capitalism. This company, founded by a Reed College dropout and a Bay Area geek-genius, is sitting on over $100 billion cash. For perspective, that’s $30 billion more than New York City’s annual budget.

(MORE: How Google’s Chief Innovator Sergey Brin Is Making Science Fiction Real)

But the clouds over Cupertino, Calif., will hang especially low next Friday, on the first anniversary of Steve Jobs’ death. The Apple community has been in mourning for one year. Now it’s time to look again to the future. There’s a fundamental question here: What if Jobs already introduced all of Apple’s breakthrough products?

After all, during his too-brief, once-in-a-century career, Jobs radically disrupted at least seven industries: personal computing, desktop software, music, mobile phones, publishing, tablet computers and Hollywood animation. (Joe Nocera at the New York Times approaches the issue from a different angle. Here’s Vivek Wadhwa’s response.)

Millions of us revere the memory of Jobs, but what if that era is over? Apple shares closed down 1.3% on Monday, after the company’s first-weekend iPhone 5 sales failed to impress Wall Street. (The company’s stock dropped another 2.47% on Tuesday.) Still, Apple shares have risen 70% this year, and the company’s market value constitutes an estimated 5% of the S&P 500. Overall iPhone sales are expected to rival the GDP of small Caribbean countries.

“We are not overly concerned with this ‘disappointing’ number, as we believe this is a classic case of near-term expectations getting out of touch with reality,” Sterne Agee’s Shaw Wu said (via Fortune) in a note titled “Classic Case of Unrealistically High Expectations.” “We find it unfortunate that some analysts continue to publish irresponsible estimates without taking into account realistic demand trends and potential supply constraints on new in-cell touchscreens.”

(MORE: Is Apple Losing Its Shine After Steve Jobs?)

Apple’s management team is led by a brilliant operational thinker: Tim Cook. He’s trying to preserve, maintain and extend the glory of his predecessor, a visionary marketing genius, Steve Jobs. Jobs was a tyrant. He demanded perfection. Nothing less was acceptable. Whenever Apple appears in the headlines — which is almost daily, at this point — Wall Street analysts try to divine the meaning of that day’s stock move. But Jobs didn’t think quarter-to-quarter about earnings. What did he care about? Delivering the best device to the user. In this way, Yahoo CEO Marissa Mayer is a kindred spirit with Jobs: both are utterly obsessed with the user experience.

On Wall Street, owning Apple ($AAPL) is de rigueur. Hedge funds, mutual funds, pension funds, money-management firms, investment banks and other financial actors must own Apple. Why? Because it’s the largest and most successful American company of the new millennium. Apple is America’s new blue-chip firm, the Big Blue for the 21st century.

Here’s the bottom line: Apple has become a symbol of American success. Until the end, Jobs was completely focused on a company he co-founded — a firm that is now worth $650 billion. But Jobs was always about much more than just money. He was a billionaire several times over, but his focus always remained on the user experience. The one-year anniversary of Steve Jobs’ death is a bittersweet moment for Apple shareholders: the stock is reaching new heights, but the company’s hero is gone.

Note, Sept. 25, 4 p.m.: This post has been updated with Apple’s Tuesday stock performance, down 2.47%.

53 comments
Igor K.
Igor K.

Anyone else thinks making smaller iPad is a dumb idea? I mean iPad itself isn't that large, it is very heavy and leaves you to desire for more functionality. Initially bought it for business and frankly I was disappointed. Apple though can make good products, once they have been redone, people who owned iPhone 3G had problems with it until 3GS came out and everyone just loved that phone, then iPhone 4 came out, which had the looks but was pretty slow by spring time with all the updates, when 4S came out - it was a glory again fast snappy, good quality night shots etc. iPhone 5 came out with the same exact design, just stretched and made out of plastic for it to work apple had to rewrite its software, which is hard to do when its only been modified under two sizes thus far, soon it will be 4 with the iPad mini. iPhone was years ahead with its previous design of iPhone 4, it was glassy, luxurious, fancy.. New iPhone doesn't make me "wow" it looks like Galaxy S2 black, which I own right now. To compare - iPhone has MUCH better "touch script" where it guesses where you tapped with your finger, while on Android you have to be a "finger sniper" which sometimes can get very annoying. Another annoying thing about android is that software, is majorly just converted from iPhones' platform, which causes problems because iPhone apps are specifically designed for iPhone processor, and Apple pays developers not to assign the converted software the ability of using Android phone processors to their full potential, hence in the end you get higher grade hardware on Android, but lower grade software, which equals to lower performance than that of iPhone's. If at least Android fixed their beyond retarded "touch script" i would not even consider iPhone's anymore.

akpat
akpat like.author.displayName 1 Like

There are far better men out their to revere than the narcissistic Steve Jobs, the man who refused to recognize for years he had fathered a daughter and tried over and over to get out of it.

If Apple want to move forward its time to start manufacturing here in the US 

Shuruppag
Shuruppag like.author.displayName 1 Like

Meanwhile, just yesterday they had to suspend operations at the Foxconn plant in China, to put down a SLAVE REVOLT...press Ctrl+F and you won't find any mention of that in the article or the comments. But hey, them phones sure are nifty!

gitoffmenuts_google
gitoffmenuts_google

yeah, too bad Samsung is driving so many workers at the Foxconn plant to near-suicide.

theNewDanger
theNewDanger

The manufacturing process of the iPhone is what is driving Foxconn workers batty. Other Foxconn clients don't have as purely inane requirements as Apple. Even with their requirements, Apple devices still show defects in their assemblies. Maybe they should hire those Toyota Lean guys to solve their problem and simplify the assembly within Foxconn.

Droidfan
Droidfan like.author.displayName 1 Like

Sterne Agee’s Shaw Wu says unrealistic expectations are not Apple's fault and it is unfair to punish Apple stock for that.  But remember there has been a run up in the value of Apple stock....based on those unrealistic expectations.  The Market giveth and the Market taketh away.

jnffarrell1
jnffarrell1

Only Apple could sell 1.7 million smart phones a day, but Android sells 1.3 million phones a day every day not just on its first weekend. Wall Street knows where the Apple/Google feud will end. Apple market share 20%.

justmeblue5ft3
justmeblue5ft3

iPhone 5 sold more than any smartphone so far on a weekend or 3 day time period if reports are true. The market throws out a figure it dreamt up, which was not met and Apple is said to have faltered. I don't believe that is true. I've seen Apple go from the 40 billion it had when Jobs died to the new high of $110+ it has now, which shows they have done extremely well since Jobs died about a year ago. 

sixtymile
sixtymile

Maybe it's tech-analyst's soothsaying that has faltered? That shouldn't be a big surprise now that the sooth-to-say-about has left the building.

Frank McEvoy
Frank McEvoy

For the record, in one light, Steve Jobs was a unique genius.  With a glance at his Chinese factories, he just ran a bunch of 21st-century sweatshops.  Just a high-tech robber barron after all.

gitoffmenuts_google
gitoffmenuts_google

Wow, you Fandroids are so butthurt.  You do realize that all those Android phones are made in Foxconn right?  Android has the bigger market share meaning ANDROID is driving the pathetic working conditions there.  

Google should feel shame for all the misery they have wrought at Foxconn.

Polimon
Polimon

Steve Jobs brought a mismanaged Apple back from the brink of bankruptcy. He did not invent outsourcing. American business had long since gone down that road. He had to compete in the environment of the time, in which, just like today, every major computer brand is built in China. When those jobs return to the USA, it will be Apple leading the way, not Dell, not HP.

Shadano
Shadano

Be honest in your evaluation and name any electronics company that does not utilize the exact same factories and operates the same way. Scrutiny is always a good thing, but apply the same standards to everyone fairly. 

rachel19955
rachel19955

wow are you just deleting comments you don't like???

LeonelAdam
LeonelAdam

Johnny responded I am shocked that a single mom able to earn $8307 in a few weeks on the network. did you look at this(Click on menu Home)

Gary McCray
Gary McCray

Author of this article Sam Gustin does not invite fair discussion in this panel, but censors it totally!

rachel19955
rachel19955

I have no idea where you were headed with this article and where it ended up going. You started talking about faltering.. and then proceeded to gush about Apple's status as the best company ever, then you mention something about Steve Jobs and "let's do him proud" (?!). That last paragraph with the random Quatar mention and vague reference about massive numbers is a complete mess. I'm not sure there was a cohesive train of though behind this article.

ddfletch
ddfletch like.author.displayName 1 Like

Based on the headline you come in expecting an honest analysis. You then get hit with what amounts to a cheer-leading ad. The last line is particularly embarrassing for a "news" organization.

Top Scientist
Top Scientist

 If you think there is any "cheerleading" here, you are dumber than a stump.

ddfletch
ddfletch

I wouldn't dream of contradicting such a well-formed and cogent argument. I only hope you allow me to dwell happily in my ignorance as intellectual giants such as yourself keep the internet safe from the riff-raff.

Clara D. Pare
Clara D. Pare

I love the new lightning connector. I hated the old 30 pin connector. Nuff said, buy new accessories people,. http://Zap21.com

Gary McCray
Gary McCray

The IPhone hiccup is nothing more and will disappear in a couple of days.

The upcoming (or not) IPad Mini is a different kettle of fish entirely.

If they announce it in October as expected and at a price between $200.00 and $300.00 for the entry model and if it does everything the full sized one does, their stock will skyrocket.

If the price is too high or the specs are off or there is no Mini, Apple's stock will plunge.

AnonymousViews
AnonymousViews

I admire Apple, I admire Steve Jobs. All the craziness surrounding Apple like iPhone, iPad and most specially the stock price mania. *yaaawwwwnnnn*.

KeithRVA
KeithRVA

The things that people are complaining most about in the new iPhone (maps, lightning connector, same old iOS) are the things that I love most about my iPhone 5. I never liked Google Maps on iOS (or on Android much, either). I always bought a 3rd party navigation subscription like Telenav. I no longer need to now that turn-by-turn is built into iOS 6. It may not be perfect yet, but its free and it works pretty well so far. I love the new lightning connector. I hated the old 30 pin connector. Nuff said, buy new accessories people, time marches on. And iOS looks exactly the same as it did on my iPhone 3G from 2008. Only on the surface. Swipe down from the top of the screen, or double tap the home button, or hold down the home button for a few seconds. There is a lot of new functionality. Anyone that says "it's the same stale OS" is a hater, and they know it.

jimmy kraktov
jimmy kraktov

If Apple really cared about their customers, they would have shipped each of their new smartphones with an adaptor. As it is, they've simply created another need for their customers to fork over cash, just to keep pace.

Atlant
Atlant

Ship with an adapter?

Why?

Many of us, even though we have existing Apple gear with the existing dock connector, have no need at all for any adapters. In my family, Apple AirPlay mitigated any need for adapters.

Gary McCray
Gary McCray

The IPhone hiccup is nothing more and will disappear in a couple of days.

The upcoming (or not) IPad Mini is a different kettle of fish entirely.

If they announce it in October as expected and at a price between $200.00 and $300.00 for the entry model and if it does everything the full sized one does, their stock will skyrocket.

If the price is too high or the specs are off or there is no Mini, Apple's stock will plunge.

Gary McCray
Gary McCray

Wall street is a unpredictable and often unrealistic master.The IPhone hiccup is nothing more and will disappear in a couple of days.The upcoming (or not) IPad Mini is a different kettle of fish entirely.If they announce it in October as expected and at a price between $200.00 and $300.00 for the entry model and if it does everything the full sized one does, their stock will skyrocket.If the price is too high or the specs are off or there is no Mini, Apple's stock will plunge.

Gary McCray
Gary McCray

Wall street is a unpredictable and often unrealistic master.

The IPhone hiccup is nothing more and will disappear in a couple of days.The upcoming (or not) IPad Mini is a different kettle of fish entirely.If they announce it in October as expected and at a price between $200.00 and $300.00 for the entry model and if it does everything the full sized one does, their stock will skyrocket.If the price is too high or the specs are off or there is no Mini, Apple's stock will plunge.

justmeblue5ft3
justmeblue5ft3

I think it's a shame that a company's reputation rides on rumors such as the rumored iPad mini. Look at the rumors prior to the iPhone 5, 4S, iPad 2 and more. It's ridiculous.

Gary McCray
Gary McCray

Wall street is an extremely fickle (and often completely unrealistic) master.Overall I don't like Apple very much as a company because they represnt the Acme of the greedy, ruthless, self serving at any cost American Company that the entire world truly hates.But they do make some really neat, well packaged, well thought out and easy to use stuff, so at least you get something of value for your not inconsiderable expense.The IPhone hiccup is nothing more and will disappear in a couple of days.The upcoming (or not) and completely unverified IPad Mini is a different kettle of fish entirely however.If they announce it in October as expected and at a price between $200.00 and $300.00 for the entry model and if it does everything the full sized one does, their stock will skyrocket.If the price is too high or the specs are off or there is no Mini, Apples stocks will plunge like they never have before.

Gary McCray
Gary McCray

I wrote a considerate response to this article and get nothing but a Discus waiting for approval response.

No bad or misconstruable words, nothing and none of the comments tagged waiting for approval ever show up.

Why do you capriciously waste our time, Time.

Gary McCray
Gary McCray

Wall street is an extremely unpredictable (and often completely unrealistic) master.Overall I don't like Apple very much as a company because they represnt the Acme of the greedy, ruthless, self serving at any cost American Company that the entire world truly hates.But they do make some really neat, well packaged, well thought out and easy to use stuff, so at least you get something of value for your not inconsiderable expense.The IPhone hiccup is nothing more and will disappear in a couple of days.The upcoming (or not) and completely unverified IPad Mini is a different kettle of fish entirely however.If they announce it in October as expected and at a price between $200.00 and $300.00 for the entry model and if it does everything the full sized one does, their stock will skyrocket (again).If the price is too high or the specs are off or (God Forbid there is no Mini) Apples stocks will plunge like they never have before.(And the joke will really be on Apple).

Gary McCray
Gary McCray

Wall street is an extremely fickle (and often completely unrealistic) master.The IPhone hiccup is nothing more and will disappear in a couple of days.The upcoming (or not) and completely unverified IPad Mini is a different kettle of fish entirely however.If they announce it in October as expected and at a price between $200.00 and $300.00 for the entry model and if it does everything the full sized one does, their stock will skyrocket (again).If the price is too high or the specs are off or there is no Mini, Apples stocks will plunge like they never have before.(And the joke will be on Apple).

Gary McCray
Gary McCray

Wall street is an extremely fickle (and often completely unrealistic) master.The IPhone hiccup is nothing more and will disappear in a couple of days.The upcoming (or not) and completely unverified IPad Mini is a different kettle of fish entirely however.If they announce it in October as expected and at a price between $200.00 and $300.00 for the entry model and if it does everything the full sized one does, their stock will skyrocket (again).If the price is too high or the specs are off or (God Forbid there is no Mini) Apples stocks will plunge like they never have before.(And the joke will really be on Apple).

Gary McCray
Gary McCray

Wall street is an extremely fickle (and often completely unrealistic) master.Overall I don't like Apple very much as a company because they represnt the Acme of the greedy, ruthless, self serving at any cost American Company that the entire world truly hates.But they do make some really neat, well packaged, well thought out and easy to use stuff, so at least you get something of value for your not inconsiderable expense.The IPhone hiccup is nothing more and will disappear in a couple of days.The upcoming (or not) and completely unverified IPad Mini is a different kettle of fish entirely however.If they announce it in October as expected and at a price between $200.00 and $300.00 for the entry model and if it does everything the full sized one does, their stock will skyrocket (again).If the price is too high or the specs are off or (God Forbid there is no Mini) Apples stocks will plunge like they never have before.(And the joke will really be on Apple).

Gary McCray
Gary McCray

Wall street is an extremely fickle (and often completely unrealistic) master.

Overall I don't like Apple very much as a company because they represnt the Acme of the greedy, ruthless, self serving at any cost American Company that the entire world truly hates.But they do make some really neat, well packaged, well thought out and easy to use stuff, so at least you get something of value for your not inconsiderable expense.The IPhone hiccup is nothing more and will disappear in a couple of days.The upcoming (or not) and completely unverified IPad Mini is a different kettle of fish entirely however.If they announce it in October as expected and at a price between $200.00 and $300.00 for the entry model and if it does everything the full sized one does, their stock will skyrocket (again).If the price is too high or the specs are off or (God Forbid there is no Mini) Apples stocks will plunge like they never have before.(And the joke will really be on Apple).

Polimon
Polimon

Time really stepped in it this morning. iPhone 5 has hardly faltered. Out the gate, it is already the most successful iPhone ever.  Launch figures have already crushed the iPhone 4S launch, and Tim Cook is apologizing because Apple can't make iPhone 5 fast enough to meet demand. This is known as massive success. What is wrong with you people?

jimmy kraktov
jimmy kraktov

When the iPhone first hit the street, they had virtually no competition. Now, they have plenty. Samsung's unit sales are leaving Apple far behind. Now that Android has a solid foothold in the smartphone market, Apple's sales figures might not ever be "first" again.

Atlant
Atlant

And Chevy's unit sales leave Porsche's far behind. But which would you rather own?

Igor K.
Igor K.

not exactly a fair comparison considering both of them cost the same with contract - $200, a better comparison would be professional music writers and DJ's who buy headphones, for example BOSE unit sales probably leave Audio Technica headphones far behind, in N. America at least. But, which one would you rather own? (if you are not an idiot and value sound quality over brandname)

conet
conet

The 5M figure was below analyst predictions, thus AAPL has been dropping. It's an idiotic system, but that's public trading. Also, iPhone 5's tech is a generation behind. It's fine for a mid-level smartphone, but some people don't realize this.

Dan Andersen
Dan Andersen

Also, iPhone 5's tech is a generation ahead. Its Apple-designed A6 CPU is the fastest mobile processor available--by far. Its single layer touch screen is the thinnest and most accurate display on any mobile device. And its metal case and sapphire camera lens cover make its the most rugged smartphone available.

Come to think of it, it may be *two* generations ahead of its would-be rivals...

Top Scientist
Top Scientist

 Its tech is no such thing, half-wit.

And neither was the 5M below predictions. Tech stocks in general have been slightly off the past few days. And that's all Apple is doing.

Polimon
Polimon

AAPL won't drop for long. iPhone 5 is about to become the world's most popular and successful phone. Why, because it's well designed amp; built, and extraordinarily usable. It doesn't matter how many functions a phone has, if only gadget hounds can figure out how to use it. Apple delivers what most people want, in an extremely well done package, and they know to use it as soon as they look at it. No manual needed.

Gary McCray
Gary McCray

Wall street is an extremely fickle (and often completely unrealistic) master.Overall I don't like Apple very much as a company because they represnt the Acme of the greedy, ruthless, self serving at any cost American Company that the entire world truly hates.But they do make some really neat, well packaged, well thought out and easy to use stuff, so at least you get something of value for your not inconsiderable expense.The IPhone hiccup is nothing more and will disappear in a couple of days.The upcoming (or not) and completely unverified IPad Mini is a different kettle of fish entirely however.If they announce it in October as expected and at a price between $200.00 and $300.00 for the entry model and if it does everything the full sized one does, their stock will skyrocket (again).If the price is too high or the specs are off or (God Forbid there is no Mini) Apples stocks will plunge like they never have before.(And the joke will really be on Apple).

Atlant
Atlant

Your headline doesn't seem to correspond with your article.

Nothing about the iPhone 5 has faltered except that it didn't meet some analysts unrealistic expectations. Maps? The defects and omissions only affect a few people and Apple and Tom-Tom, their data provider, will fix what's wrong. The new Lightning connector? It's a definite improvement over the old dock connector. And the new phone is much faster than the phone it replaces.

And Apple as a whole isn't faltering either; if we can believe the rumors, the pipeline is still full of products including new iPads, new iMacs, new MacBook Pros and/or Airs, and maybe even a TV or set-top box. And the stock certainly isn't faltering, either.

Yes, some day, Apple will falter, but that day is not today.

Atlant
Atlant

(For the record, the headline has now been modified.)