Apple: America's Most Fragile Company

MY DREAM

My dream was to have an iPhone with a camera of 5 megapixels with flash and zoom through that led

serious video in HD, with OLED screen, with camera front, with a processor

1 GHz with 512 RAM, with bluetooth compatible with all mobile phones with

AVRCP, which pass the phone to the car radios, to replace a

external hard drive without installing anything on it or the computer, with 60 GB of

memory. I do not think we get to see it as Apple does things

little by little and am already old.

I have a Nokia e66 (see its technology) and a 3G 16GB, I am satisfied

partly with the new software, I just wanted AVRCP and passing to

phone book for the car radio to the effect using e66.

António Cabral Aguiar @ Jun 27, 2009 11:33:02 AM

Do your research

It seems to me that Mr. Newman has not done his research. If he did he would realize that Steve Jobs in not one of your typical CEOs. Steve Jobs is the muse at Apple which has some of the brightest minds in the industry. What he and the team at Apple have done since the start of the industry has set the course of where technology is today. Apple and it's leader Steve Jobs have lead the industry unlike the Redmond affect. Mr. Newman step away from your PC and write your next article on a Mac while listening to music on what I can only guess be is an iPod.

Steve, we wish you well and are in our prayers. We support you and everyone at APPLE.

S

Seth Hanson of ME @ Jan 14, 2009 19:12:38 PM

good article

As a Mac user since the early 90's (though I have now moved on, at least partially), I think this has a lot of relevance. A lot of people don't remember how aimless Apple was without Steve Jobs. It stumbled on just about everything it did and was only saved because Microsoft threw them a life line.

I really do hope the best for Steve Jobs. His vision has lead the computer industry for decades now, and even with the iPhone, he has shown that not only is he a master showman, but a visionary creator as well.

BUT, with all that said. We've experience Apple without him before, and the picture is not pretty. Using the comparrison to Warren Buffett, he has built an empire using regular brick and mortar businesses that need very little of his oversight to run. Most are fully autonomous, merely sending their excess cash back to Berskhire to reinvest elsewhere. So, should he pass, Berkshire will remain one of the top rated insurers, with plenty of cash and marektable securities. One would doubt that it will continue to outperform the S&P as it has while he's been at the helm, but once the P/E ration adjusts for his absence, it will still be a profitable company. They may not employ the same strategy once his time is up, but if they can continue to earn market like returns on their investments, they'll still be a force with huge earnings for a long time.

THEN take Apple. They've experienced life without Steve before and nearly lost it all. And with reports saying that even the most minor of details needing to meet his approval, a future without him is downright scary. Not only for the company and its shareholders, but for the rest of the computer industry that follows his lead. ANd with product life cycles the way they are, it would only be a year or two tops before Apple was out of his ideas.As an occassional Mac user, but every day iPhone user and iPod listener, I don't look forward to that day.

And well wishing aside. The money i'm putting away now is for my future, and I just can't see Apple being a safe bet anymore. Maybe this whole scare is just a passing thing (and I hope it is), but regardless, Apple may as well be Steve Jobs, Inc and I just can't fathom what the company would do without him.

lucas of FL @ Jan 09, 2009 08:04:36 AM

Learn from mistakes

Remember William Norris, Control Data?

Rolland Heywood of MN @ Jan 09, 2009 07:39:09 AM

Pay Attention: Jobs Picked A

Jobs is trying to make option A, that is diversify to make sure the entire fate of the company doesn't depend on you. The evidence is pretty overwhelming: Phil Schiller delivers the MacWorld keynote, previous Jobs speeches included presentation by a lot of subordinates, the CFO running the financials calls, and Jobs increasingly giving credit for key Apple projects to his top lieutenants. What more can he do?

If we remember the first time Jobs left Apple, the Mac's market share grew substantially under John Sculley's leadership. Whether the stock market appreciates it or not, Apple will survive and thrive if Jobs disappeared tomorrow. I'm not arguing that things wouldn't change, just that the panic over his health is to miss the point of Apple's incredible portfolio of current products, the enormous momentum these products have, and the huge revenues they get from them.

Jason James of NC @ Jan 08, 2009 11:56:22 AM

Geesh

Hey Newman...

You're looking a little pale in that photo. Must be health problems. I guess if you care deeply about USNWR you'll step down, before you pull it under.

Billy Bob of AZ @ Jan 08, 2009 08:57:28 AM

Unbelievably Bad Post

If this is the qualify of work readers should expect from US News and World Report's "Chief Business Correspondent", then I may as well stop reading this publication.

There is no substance in this entire post - just whimsical pettiness from what I thought would be a respectable writer. If you're going to post about Apple's stock under the guise of "Chief Business Correspondent", then do your readers a favor and research the facts to support your opinions.

Here are some facts that readers can actually chew on to form their own opinions:

1) Apple holds $25 billion in cash & cash equivalents with no debt

2) The company generated free cash flow of over $8.4 billion in fiscal 2008, up from $4.5 billion in 2007.

3) You're right about one thing - don't look at Apple's P/E ratio. It lies. After you subtract out $25 billion in cash from the Company's market cap, the P/E ratio is even cheaper.

4) Additionally, revenue from iPhone sales are recognized over 8 quarters due to GAAP accounting rules. Adjusted net income in Q4 2008 was $2.44 billion but Apple reported $1.14 billion - the latter number was used to calculate the P/E. The former number is the real amount of cash the company took in.

5) Since Timothy Cook, Apple's COO has been on board, Apple's gross margin has increased from around 29% to over 34%. This has a lot to do with the product mix, but it is in no small part to a leaner operating structure. Steve Jobs isn't even normally on the quarterly investor conference call (though he made an exception last quarter)

6) iPhone sales represented 39% of Apple's revenue in Q4 2008, and iPhone sales outpaced Research in Motion, which has a market cap of $25 billion but lacks the stickiness factor of an iTunes music and app store.

With these facts in mind, your rant about Steve Jobs conspiracy theories seems unfounded and completely unconstructive for your readers.

Unbelievable of CA @ Jan 07, 2009 03:23:09 AM

Offensive Article by Dimwitted Twit

Steve Jobs is a genius, an innovator, a guy who has changed the world again and again. His health is a private matter. Apple will be fine without him. Why must US News & World Report publish the petty, cheap shots of a tiny, narrow mind? We don't know how much longer Mr. Jobs will be able to keep contributing his genius to the world. Rick Newman needs to get a life. Apple is down because the market is unstable. Apple will come roaring back within a year.

Nunuvyer Bizniz of CA @ Jan 06, 2009 23:39:30 PM