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%.