The gap between reality and the iPhone 4S commentary makes the Macalope go all sarcastic. But will he have enough sarcasm left for Wall Street analysts? Click “read more” for the surprising answer (which is “yes”)! Finally, it’s time to gird your loins as Steve Jobs’s biography hits the shelves next week.
iPhone 4S disappoints
Can we talk for a minute about what a fail this iPhone 4S is? Ugh, mega-fail. Total disappointment fest. Lackluster-o-rama. Lame-a-palooza.
Of course, we knew this when it was announced. Despite the fact that it had all the features we reasonably expected of an “iPhone 5,” it was in the same boring form factor as the iPhone 4 and the number “5” is literally nowhere on the device, which simply highlights the tremendosity of the über-fail we’re talking about.
But now we have actual proof of the failtastrophy.
Apple on Monday announced that it sold more than four million of its new iPhone 4S since the device went on sale on October 14.
Now, wait. Wait, wait, wait. The Macalope hears all you Apple fanbois getting ready to complain about how utterly spectacular that is, because the iPhone 4S clobbered sales of the iPhone 4 by an eye-popping 135 percent. And the iPhone 4 was the best selling smartphone! How is this a fail? And must you keep on with that overused expression that’s sooo 2005?
Well, you see, Apple acolyte, the answer to this is simple. As Paul Thurrott notes (tip o’ the antlers to Harry Marks):
Apple’s fans are more interested in spending money than they are with facts.
So true. Clearly the iPhone 4S is just another example of a handful of 4 million Apple iZombies shuffling to the Apple store and mindlessly buying iPhones. Seen it a million times. Well, five.
Even if you think 4 million is still a lot no matter who they are, you’re clearly blinded by the gospel as told by Phil Schiller. See, it doesn’t matter how many units the iPhone 4S sold compared to the iPhone 4. What matters… what matters, Apple monkey, is how many units it would have sold if it had been the iPhone 5.
Using a back-of-the-napkin analysis, the Macalope estimates Apple would have sold, let’s see… carry the two… find the least squares… 47 million iPhone 5s compared to the 4 million iPhone 4Ss it sold.
That’s just an estimate, of course. It could have been more like 300 million. The most important take-away from this is that the iPhone 4S is a colossal Failzilla that is laying waste to Cupertino as we speak.
This would be a good time to go back and review the prophetic words of Gartner analyst C.K. Lu, quoted in Zach Epstein’s coverage of the iPhone 4S announcement which was aptly titled “Apple’s fall from grace.”
“Apple no longer has a leading edge, its cloud service is even behind Android; it can only sell on brand loyalty now,” Gartner analyst C.K. Lu told Reuters on Wednesday. “Users may wait to buy the next iPhone; if they can’t wait, they may shift to brands with more advanced specs.”
Oh, please, Apple nerd! Please don’t try to bring up the fact that it was Gartner that suggested Apple should get out of the hardware business just four years ago! Like that has any relevance here! You’re only putting your zealotry even more on display, if that’s possible.
Clearly we’re witnessing what Epstein called “the beginning of the end” for Apple. And just in time, too. The Macalope’s all out of religious metaphors.
A surfeit of bad analysis
Despite this being the territory he was born to patrol, it’s sometimes astounding to the Macalope how bad some of the analysis of Apple is, even after all these years and all these public pantsings.
Sigh. Maybe it’s our fault. Maybe we haven’t pantsed these analysts enough. Or maybe we focused too much on pantsing and neglected other forms of explaining to someone how they’re wrong. Like wedgies. Or snicker-snagging.
Whatever the case, it’s completely wasted on some of these people. Paul Thurrott, for instance, says things like “Apple’s fans are more interested in spending money than they are with facts” when the iPhone 4S sets sales records primarily because that’s just his shtick. He’s playing to his audience. The other reason he does it is because those grapes are sour: Paul’s pals in Redmond can’t seem to give away Windows Phone Plays For Sure Enterprise Edition for Workgroups 7 units.
You can explain to people until you’re blue (or red) in the face why Apple only makes iPhones with 3.5-inch screens (tip o’ the antlers to Daring Fireball) and you’ll still get size queens going on and on about how the iPhone will eventually fail because it doesn’t have a 4-inch screen. Even though this day never comes, it’s always out there, waiting in the wings, and the fact that you Apple fans can’t see that is, well, pff, it’s just, well, dur, pssh.
It’s not only on the business side that we’re inundated with herds of analysts loudly mooing the same conventional wisdom, it’s also—as we saw on Tuesday—on the finance side.
The idea is that the market had baked in the assumption that Apple would meet Wall Street analysts’ estimate of $7.39 per share and is now correcting because the company reported earnings of $7.05 per share. Here’s the horny one’s problem with this.
First is the charmingly farcical verbiage that Apple “missed estimates.” Whose estimates did the company miss, Bud Fox? Not its own. Apple’s guidance was for $5.50. In a normal world the headlines would be “NOTORIOUSLY BAD ANALYSTS MISS AGAIN.” Instead, it’s supposedly somehow Apple’s fault. Whatever.
But, more importantly, let’s look at what Apple said about next quarter:
Oppenheimer told analysts to expect December quarter revenues of $37 billion—that’s a 38 percent jump from the $26.74 billion Apple recorded last year. Apple expects earnings per share of $9.30, up from $6.43 last year.
Holy crap. That’s a monster quarter, and we already have evidence Apple can do it since the iPhone 4S is blowing away sales records.
So, there’s two ways to react in this situation. You can take a company that consistently beats its guidance at its word and hang on to your shares, giggling to yourself like a gleeful miser…
Or, you can sell your shares because Apple didn’t hit the made-up estimates of a bunch of nitwits who never get the company’s earnings right.
Your choice, Wall Street geniuses.
Saturday Special: Coming un-attractions
The Macalope hopes you’re resting up this weekend, because next week is going to be another punch in the gut. Already details from Steve Jobs’s biography, which comes out on Monday, are spilling all over the Web like an overturned tanker full of honey. And while it may be tempting to bears and bees, the Macalope knows for sure it’s attracting flies.
He had a bad relationship with his kids! He set Jony Ive up as some kind of god! He wanted to crush Android! He choked a stagehand to death during Macworld 2005! It’s terrible!
All true. Except for the stagehand part. Well, probably.
Steve Jobs was not a saint. Shocking.
The thing that the serial jerkbags who will attempt to make hay with all these revelations next week will never mention is “Who cares?”
The Macalope doesn’t know about you, but he never wanted to work for Steve Jobs. He values his various body parts too much for that. He never even really wanted to have the clichéd beer with him. Or green tea, or refined essence of Himalayan blackberry nectar, or Moscone Center stagehand blood, or whatever Jobs actually drank.
He would have loved to have seen him in a meeting with Eric Schmidt or Jonathan Ive or Tim Cook or anyone who he could have gotten fired up talking to.
No one said Steve Jobs was perfect. We said he forged a company that makes damn near perfect things.
(Disclosure: the Macalope holds an insignificant number of Apple shares.)
[Editors’ Note: In addition to being a mythical beast, the Macalope is not an employee of Macworld. As a result, the Macalope is always free to criticize any media organization. Even ours.]