Apple Inc.'s earnings are always a big-time financial event, but this time, the company's numbers will be followed more closely than ever before. Why? Worries about a recession, concerns over a lackluster holiday shopping season, insecurity about how the company's products are selling.
And there are questions about whether consumers will reach deep to pay for Apple's pricey products even as they worry whether they'll have a job this quarter or next, leaving some head-scratching over Apple's precipitous decline these last few weeks. Are you kidding me?
Apple reports earnings next Tuesday, and while the shorts and naysayers continue to beat the uncertainty drum, the company is probably sitting prettier than any other big name in big name tech nowadays. We can harp on recession worries, though Steve Jobs himself tells me that it's a non-issue for his company. (I know, name-dropper, but if you got the exclusive, you'd name drop, too!)
Further, he scoffed at my suggestion that Apple is pricing itself out of competition with high-priced Macs, the iPhone and Apple's iPods since all have seen noticeable price drops and the company, for the first time in its history, offers a broad array of products with a broad range of price tags. It's a good and fair point.
So let's get down to it: Apple guided to $9.2 billion in revenue; the Street is looking for $9.4 billion. The whisper is as high as $9.6 billion. On earnings per share, Apple sandbagged the Street again, expecting $1.42. Analysts aren't buying it, anticipating $1.59 instead, though Citigroup is looking for $1.75. On individual products, expect Mac sales in the 2.1 million to 2.3 million range; 24.7 million iPods and 2.26 million iPhones.
There's been a lot of debate about the iPhone sales figures. I've read the blistering comments about my coverage of Steve Jobs' announcement at Macworld that Apple sold a staggering 4 million iPhones in its first 200 days on sale--which apparently was a disappointment to some because there was a 5-million figure floating around.
Listen, from the very beginning I said the 5-million figure, when it first started making the rounds, was a pipedream at best. But the mere fact that it was indeed "around," and that Apple reported 4 million instead was the likely reason for the stock decline on the news. Jobs tells me he's thrilled with iPhone sales thus far, and he should be. The figure is extraordinary, no two ways about it.
Apple sits at the center of the digital entertainment revolution, and it's only just beginning. Forget about the short-term vagaries plaguing tech and the macro environment. Longer term, I can't see a company better positioned to take advantage of the biggest trends entertainment and tech have seen since the net itself.