The Expectations Issue
To recap: Growth, competition and margins are all legitimate challenges – but the numbers don't show them to be the sort of intractable problem that so many people seem to be suggesting.
Growth? Slowing, but not dramatically when you factor in quarter length. Competition? Not eroding Apple's position. Margins? Holding up perfectly well in Apple's flagship product. (Read More: Rumors of Apple's Demise May Be Greatly Exaggerated)
So perhaps the bigger problem is that Apple failed to get ahead of this story. Think about it:
Apple knew in the summer, before the most dramatic part of the stock's upward climb, that the story was going to get tricky at the end of the year with a massive multiproduct rollout. Apple could have signaled then, while investors were still feeling good about the stock, that this would be a different kind of year as the company prepared for the future.
It seems that perhaps Apple realizes that in the absence of information, chaos takes over – and now that it's the most valuable company in the world, investor chaos can be awfully distracting.
The new revenue and gross margin guidance, if Apple keeps it honest, should really help stabilize things. No longer should we have a range of iPhone estimates, like we did for the holiday quarter, between 43 million and 63 million units. No longer should supply chain rumors have the same kind of impact on the stock. Apple will have to be creative about not giving away product launches in guidance – but there are ways to do that.
Take a look at Facebook. There's another stock that got crushed on the uncertainty surrounding its IPO. But as it began to report numbers and tell its story, things have brightened a bit.