Fruity cargo cult Apple is having a few reality distortion fields problems after its financial results failed to meet over-hyped expectations for the first time in years.
Apple turned in profits of $6.6 billion on revenues of $28.27 billion, which no-one in their right mind could describe as bad. But compared to its fourth quarter results in the same period last year, that apparently is hardly brilliant.
Since Steve Jobs returned, Apple has relied on its tame press to hype its products to the nines and play down any faults. The hype about a product will start several months in advance with the press speculating what the company was going to flog next.
But for the first time yesterday, the outfit stunned Wall Street by reporting results that missed expectations for the first time in years and it was all the press’s fault.
According to Apple the reason it did not do so well was because the press hyped the iPhone 4S too much. Eh? What?
The way we saw it was that the press whipped fanboys into a frenzy so that they queued for a product which was the same as the old product. The press did a damn fine job given that the only real difference between the iPhone 4S and the iPhone 4 was a slightly faster chip and some beta software which breaks the gizmo and is only available in the US.
So why is the bloke to whom Jobs gave the keys to his walled garden, Tim Cook moaning? Why did shares of Apple fell seven percent in extended trading on Tuesday, wiping some $27 billion off the value of the world’s largest technology company?
Apple claims it is because the press hyped the iPhone 4S as an iPhone 5, which it clearly wasn’t. But that is a fairly rubbish excuse given that the phone sold well.
Many analysts seem to think that Apple’s poor results are a glitch which will go away when the iPhone 4S sales kick in. But according to Wall Street the problem with Apple is people expect far too much from it. BGC Partners analyst Colin Gillis told Reuters that for Apple to meet expectations they have to sell their quarter’s worth of revenue every 90 days which is tricky. In short, the reality distortion field is starting to crumble.
Normally Apple has been very conservative about its future expectations. Now we are starting to see Apple actually talking up its future expectations.
Cook said he was “very confident” of posting record iPhone sales in the current quarter. The company moved 4 million iPhone 4S units, more than double its predecessor, in its first three days, despite lukewarm reviews.
The iPad was another area where Apple did well, particularly as the only significant rival can be kept off the shelves with patent trollage.