This time investors fled. Apple stock dropped 4 percent the day of the China event, hitting a 10-month low.
What’s happened to many investors’ favorite stock? Apple is still the world’s largest company by market capitalization by a comfortable margin, and shareholders can hardly complain: even after last week’s decline, its shares have gained 29 percent this year through Thursday, compared to 15 percent for the Standard Poor’s 500-stock index. But since reaching a peak above $700 in September, Apple shares are now barely above $500 — deep into bear market territory — and their luster has dimmed.
Apple’s situation is one of the topics I wrote about this year that warrant an update as the year ends. In February, I pointed out that Apple’s huge market capitalization and exponential growth might cause it to confront the law of large numbers, which posits that variables — in this case, exceptional share gains — tend to revert to a mean. That seemed to hit a raw nerve with Apple enthusiasts, and many responded with furious e-mails.
Hardly anyone was raising any doubts about Apple shares then. Of 57 Wall Street analysts covering the company, 52 rated it a buy or strong buy in February, and only one — Edward Zabitsky, the chief executive and founder of ACI Research in Toronto — rated it a sell. Mr. Zabitsky specializes in telecommunications and has been something of a Cassandra about Apple for years. He’s a favorite target of the Web’s “iPhone death watch,” which takes aim at anyone who questions the Apple juggernaut.
“I can’t say I’m getting any more respect, but there’s definitely less hostility, that’s for sure” Mr. Zabitsky told me this week. “I was all alone out there. People make fun of things they don’t understand. I guess it made them feel better to insult someone like me. But the factors I warned about have been coming to the fore. People are starting to understand what I’m saying.”
What he’s been saying is that Samsung has surpassed Apple as the leading handset maker; apps have become more important than the devices that carry them; and handsets are increasingly being evaluated on their ability to access the cloud and interact with other devices — trends that he believes put Apple at a long-term disadvantage. “When I predicted Samsung would be the market leader in unit sales, people wanted to sue me for slander,” Mr. Zabitsky said. “But Samsung has not only surpassed Apple in sales, it’s out-innovating Apple. Have you seen the new Galaxy Note II? It’s amazing.”
And Apple’s stumble over its maps application for the iPhone 5, which led to a rare apology in September, illustrated both the growing power of apps and the company’s fallibility. Mr. Zabitsky said he didn’t fault Apple for developing its own maps app, but criticizes its decision to supplant Google Maps on the iPhone 5. “It wasn’t ready for prime time,” he said of Apple’s version. (Google said iPhone users downloaded 10 million copies of Google maps app for the iPhone in just 48 hours after it became available last week.)
Of course, the recent slide in Apple’s shares could turn out to be a rare buying opportunity, a mere blip in the stock’s rise to new heights. Fifty of 57 analysts still rate it a strong buy or buy, and Mr. Zabitsky remains the lone analyst with a sell recommendation. His target price is $270, unchanged since February. “The trends I’ve mentioned still haven’t played out,” he said. “I know people don’t want to hear that, but my job as an analyst isn’t to make people feel good.”
‘THE VOICE’ There were plenty of skeptics when NBC introduced its singing competition “The Voice” in April 2011. No wonder: NBC was the long-struggling fourth-place network, and the reality-competition juggernaut “American Idol” on Fox was firmly ensconced at the top of the ratings, with Simon Cowell’s hotly anticipated “X-Factor” waiting in the wings.
“The Voice” proved a surprise hit, displacing “Idol” last March as network television’s No. 1 show. But even then, critics dismissed it as a fluke that benefited from the halo effect of the Super Bowl, which ran on NBC. And some TV executives ridiculed NBC’s decision to use “The Voice” as a lead-in for a new dramatic series, “Smash,” about the making of a Broadway musical, which they deemed too sophisticated to appeal to a broad network audience. NBC executives were cautious. “We’re not going to move to second place, let alone first, just on this show,” Steve Burke, NBCUniversal’s chief executive, told me in March.
“The Voice” completed its latest season with a two-hour live installment on Tuesday and delivered an average of 14.1 million viewers, a record for the show’s finale. Against long odds, and thanks in large part to “The Voice,” NBC was the No. 1 network during the November ratings sweeps for viewers 11 to 49 years old, the group most sought-after by advertisers. NBC had a 23 percent gain in viewers compared to a decline at every other network. NBC has now been the top network for viewers 11 to 49 for 10 of the last 12 weeks, something that hadn’t happened in nearly a decade.
Article source: http://www.nytimes.com/2012/12/22/business/some-columns-revisited-apple-the-voice-and-gay-marriage.html?partner=rss&emc=rss
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